Plaintiff SMP Ltd. is a Korean corporation that was established as a joint venture between SunEdison's Singapore affiliate and Samsung Fine Chemicals. In connection with the joint venture, SunEdison and SMP entered into a supply and licensing agreement whereby SunEdison granted license to SMP to use certain technology. In April 2016, SunEdison filed for bankruptcy in the Southern District of New York. SMP shut down nearly simultaneously, and entered into bankruptcy in Korea. As a part of the New York bankruptcy, SunEdison sought to terminate the agreement; SMP objected, arguing the executory contract remains valid during bankruptcy under Korean law.
The court first noted the parties chose New York law as the governing law. The court also rejected SMP's comity-based argument, noting it would mean "giv[ing] extraterritorial effect to all of the Korean insolvency law."
Along with international family law cases, cross-border insolvency cases are a pet favorite of mine. Look at all the complex private international law principles at play here, for a fact pattern that is rather common in international business. Ultimately, however, the parties' choice of law remains supreme, and Samsung perhaps should have considered whether Korean law would have been more advantageous for its joint venture in case of an insolvency event.