STX Offshore Court Rehabilitation

On 27 May 2016, South Korea's STX Offshore & Shipbuilding Co. ("STX OS"), once the country's fourth-largest shipbuilding firm by revenue, filed for court-supervised rehabilitation, in the Seoul Central District Court.

The global maritime and shipbuilding industry has been reeling since 2008, hit by what has been called a "perfect storm" of factors such as a glut of vessels and low freight rates. Multi-billion dollar financial bailouts have failed to rescue companies such as STX OS and it appears that until structural changes are implemented to the industry, the wave of insolvency and rehabilitation proceedings will continue.

It is therefore apposite to revisit the effect of such insolvency and rehabilitation proceedings on contractual counterparties.