Abstract

Comparing the function and goal of insolvency proceedings with arbitration proceedings it should be stated that the individual nature of arbitration is subordinated to the group nature of insolvency proceedings. Pursuant to Art. 142 and 147 of the Bankruptcy and Reorganization Act of 28 February 2003 as of the declaration of insolvency date the arbitration agreement given by the bankrupt becomes void and pending proceedings are discontinued. If the arbitration court fails to discontinue the proceedings, than the award passed is set aside in the proceedings initiated as a result of an appeal (Art. 1206 of the Code of Civil Procedure). On the other hand, pursuant to Art. 206.1.6 of the Bankruptcy and Reorganization Act there are no obstacles to include an arbitration clause in an agreement concluded after the declaration of insolvency. Analysing the subject of the article in the light of the EU law, in accordance with the regulation contained in Regulation no. 1346/2000 of 29 May 2000 on insolvency proceedings, if the arbitration proceedings were initiated after the insolvency proceedings were opened, then the applicable jurisdiction is of the state in which those proceedings are conducted. Nevertheless, if the arbitration proceedings have not been initiated yet, the existing arbitration agreement, as well as permissibility of initiating arbitration proceedings, is assessed pursuant to the laws of the country where the insolvency proceedings were opened.