Ipso facto clauses in cross‐border insolvency: From STX Pan Ocean to Hanjin Shipping and beyond

This article examines the enforceability of ipso facto clauses in cross‐border insolvency, with a focus on the landmark STX Pan Ocean case. This case highlighted divergent judicial approaches and the critical role of legal frameworks in conflict‐of‐laws scenarios, as evidenced by the contrasting outcome in the Hanjin Shipping case. In Fibria Celulose S/A v Pan Ocean Co Ltd , an English court ruled that the Korean administrator had failed to demonstrate that Korean law would render the ipso facto clause invalid. This outcome exposes a fundamental question: should the effect of insolvency on contracts be governed by the contract's governing law ( lex contractus ) or the law of the insolvency forum ( lex fori concursus )? This article addresses the scholarly debate surrounding South Korean law's treatment of ipso facto clauses. It highlights the challenges and potential solutions to the lex contractus versus lex fori concursus dilemma.