The question of which law is applicable to the insolvency of a party in an international commercial arbitration is a topical issue, particularly in the current financial crisis.Whether it be a desire to initiate arbitration; an arbitration that is already underway or where an award is to be enforced, the situation may arise where one party is, or will be, declared insolvent.

One of the primary fights underlying assumption of an unexpired lease or executory contract has long been over whether any debtor breaches under the agreement are “curable.” Before the 2005 amendments to the Bankruptcy Code, courts were split over whether historic nonmonetary breaches (such as a failure to maintain cash reserves or prescribed hours of operation) undermined a debtor’s ability to assume the lease or contract.