The respective questions can best be illustrated by a typical case. Prior to the opening of insolvency proceedings, the debtor has purchased a machine and has paid a part of the purchase price. The sales contract contains an arbitration clause which covers all disputes arising from or in connection with this contract. Meanwhile, insolvency proceedings have been commenced and an Insolvency Practitioner has been appointed. The Insolvency Practitioner challenges the payments made by the debtor to the vendor as preferences. Since the vendor, who has already delivered the machine, refuses to satisfy the transactions avoidance claim, the Insolvency Practitioner considers litigation. Vice versa, the vendor demands payment of the remaining purchase price. The question arises whether these claims can be brought in a state court (which the Insolvency Practitioner would prefer) or whether arbitration must be invoked (which the opponent would prefer). Dealing with the answer illustrates the obstacles to arbitration in insolvencies.

First, there must be a valid arbitration clause between the procedural parties. In the example case, the parties to the sales contract (debtor and creditor) have agreed on such an arbitration clause. However, the opening of insolvency proceedings against the