Stephan Wilske is a partner at Gleiss Lutz, Stuttgart (Germany) and a member of the Chartered Institute of Arbitrators. He is admitted to the German and New York bars as well as to the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit. He holds Master of Law degrees from the Université d’Aix- Marseille III and the University of Chicago, and a doctorate from the University of Tübingen in Germany. This is an abridged and updated version of an article published in the Contemporary Asia Arbitration Journal (vol. 2 no. 2, November 2009).
The author explores whether there is a boon in international arbitration as a result of the financial crisis.
The current financial crisis has been called the most serious of its kind since the Great Depression.11 The crisis peaked in the fall of 2008 when, as a result of the subprime mortgage debacle, several major financial institutions faced massive liquidity problems. This resulted in the largest bankruptcy in U.S. corporate history with Lehman Brothers, the fourth-largest investment bank in the United States, filing for Chapter 11 protection.22 Other landmark institutions, including Merrill Lynch, Bank of America, Chase, Citibank, and insurance giant AIG, accepted bailout money from the U.S. government under emergency legislation called TARP (the Troubled Asset Relief Program). This allowed the U.S. government to purchase shares in these institutions in order to provide them with capital.