If a party to a contract containing an arbitration clause becomes bankrupt, his bankruptcy does not have any automatic effect on the contract or on the arbitration clause. Under the provisions of the Insolvency Act 1986, the trustee in bankruptcy has the power to disclaim unprofitable contracts1.
Where a bankrupt became party to a contract containing an arbitration agreement2 before the commencement of his bankruptcy3, if the trustee in bankruptcy adopts the contract, the arbitration agreement is enforceable by or against him in relation to matters arising from or connected with the contract4. If the trustee in bankruptcy does not
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