The decision confirms that an arbitration agreement will be upheld in the face of insolvency proceedings only if it can be shown that the petition debt is genuinely disputed on substantial grounds.
By Martin Davies, Dominic Geiser, and Oliver Middleton
The Privy Council’s decision in Sian Participation Corp (in liq) v. Halimeda International Ltd [2024] UKPC 16 (Sian Participation) is the latest in a series of judgments clarifying the common law position on whether the court can
“Non-exclusive” arbitration clauses provide that disputes “may” be referred to arbitration (rather than “shall” or “should” be so referred). The Privy Council clarified the nature of these clauses in a recent case but uncertainties about their effect still remain.
Ultimately, parties would be well-advised to avoid “non-exclusive” arbitration clauses and opt for exclusive arbitration clauses, if what they really want is for their disputes to be resolved by arbitration. If the parties choose a “non-exclusive” arbitration clause, then they should make sure that they avoid issues by making express provision for the litigation costs in the event of a stay and expressly naming a litigation forum.