SYSKA V VIVENDI UNIVERSAL SA

[2008] EWHC 2155, Comm, Queen’s Bench Division, Commercial Court, Mr Justice Christopher Clarke, 2 October 2008

Arbitration – Jurisdiction – Respondent becoming insolvent in Poland – Polish law operating to terminate arbitration proceedings – Whether effect of Polish bankruptcy governed by Polish law or English law – European Parliament and Council Regulation 1346/2000/EC on Insolvency Proceedings, articles 4 and 15 – Arbitration Act 1996, section 67

The claimant commenced arbitration proceedings in England against the respondent. In the course of the proceedings the defendant became bankrupt in Poland. Under Polish law, any arbitration clause is declared null and void at the date of the bankruptcy. The issue was whether the effect of the insolvency was governed by Polish law (in which case it the arbitration clause became a nullity) or by English law as enshrined in European Parliament and Council Regulation 1346/2000/EC on Insolvency Proceedings, art 15 of which provides that the effect of insolvency on “lawsuits pending” “governed solely by the law of the Member State in which that lawsuit is pending.” The court held that an arbitration was a “lawsuit pending” and that the effect of Polish insolvency was governed by English law.