The credit crunch has seen the public sector increasingly dealing with insolvent companies and individuals. Many commentators believe this trend is likely to increase throughout 2010 and 2011. Correspondingly there has been an increase in the number of arbitration cases on projects where at least one party’s insolvency is an issue. This article examines the implications of dealing with insolvency on arbitration agreements and proceedings in public sector projects in light of the Arbitration Act 2010.