In brief
Even with the fiscal stimulus and other measures taken by the Federal and State governments in Australia, corporate insolvencies are likely to increase in coming months.
Under Australia’s insolvency regimes, a distressed company may be subject to voluntary administration, creditor’s voluntary winding up or court ordered winding up (collectively, an external administration). Each of these processes raises different issues for the commencement and continuation of court and arbitration proceedings.
In this alert, we consider the potential impact of an external administration of an Australian company on arbitration proceedings brought against that company. We also consider the options available to the respondent if a claimant in arbitration proceedings becomes subject to an external administration and whether or not an arbitral award can be enforced.
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