When ‘Where’ Matters: Anchoring Jurisdiction in Insolvency

Suchita Bhojwani

In April 2015, INSOL International published its Special Report “When ‘Where’ Matters: Anchoring Jurisdiction in Insolvency” authored by Lipman Karas’ Jason Karas, Madeleine Harland and Scott Foreman. The report provides a comparative examination of evolving judicial attitudes on the increasing intersection and potential conflict between forum selection clauses and public policy in cross-border insolvency proceedings, and the resulting impact on the rights of insolvent companies, their creditors and liquidators.

Forum selection clauses can be decisive in multi-jurisdictional disputes and are often determinative of key substantive issues such as the applicable governing law, limitation periods and the availability of statutory causes of action. The principles of freedom of contract and party autonomy which underpin forum selection clauses generally results in their enforceability in most jurisdictions. But what if one of the parties becomes insolvent after executing a contract containing a forum selection clause? Can a forum selection clause prevent liquidators from exercising their statutory powers and obligations in their home jurisdiction? Or do policy considerations, including centralized asset collection and distribution and the investigation of the company’s affairs in the public interest trump considerations of freedom of contract?

The report considers the impact of these and other important public policy questions on insolvency proceedings in common law and civil code jurisdictions. Whilst evolving, a number of clear themes have emerged from the case law, including a trend to prioritise statutory insolvency claims over the enforcement of jurisdiction clauses and uphold the non-fragmentation principle, which prevents disputes being split across different jurisdictions, absent necessity or impossibility.

Please click here to view the full report.


Email | Linkedin | Print


LK Law Pty Ltd
Level 23, 25 Grenfell Street
Adelaide SA 5000
Visit us | Email us
Telephone: +61 8 8239 4600


33 Black Friars Lane
London EC4V 6EP
United Kingdom
Visit us | Email us
Telephone: +44 20 7400 2180
Back to top