UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 01-31028

 

In Re: In the Matter of the Complaint of: 

CENTRAL GULF LINES, INC., Owner; WATERMAN STEAMSHIP CORPORATION,

Owner Pro Hac Vice, Operator, and Bareboat Charterer of the Lash

Barge CG-F70, Praying for Exoneration from and/or Limitation of

Liability, 

CENTRAL GULF LINES, INC., Etc.; ET AL.,

Petitioners,

CENTRAL GULF LINES, INC., Owner; WATERMAN STEAMSHIP CORPORATION, 

Owner Pro Hac Vice, Operator,

Petitioners-Third Party Defendants-Appellees-Cross-Appellants,

versus

R. L. BARON SHIPPING S.A.; ET AL.,

Third Party Defendants,

R. L. BARON SHIPPING S.A., 

Third Party Defendant-Claimant-Appellant-Cross-Appellee,

and

MASAHIRO TOYODA; HAJIME ONO; TOSHIAKI TAKEUCHI; DOOYANG LINE 

COMPANY LIMITED; DOOYANG SHIP MANAGEMENT COMPANY LIMITED; UNITED

KINGDOM MUTUAL PROTECTION AND INDEMNITY ASSURANCE ASSOCIATION

(BERMUDA) LTD.,

Third Party Defendants-Cross-Appellees,

and

SUN ALLIANCE AND LONDON INSURANCE PLC,

Movant-Cross-Appellee-Appellant,
2

and

BOTO COMPANY LIMITED,

Claimant-Cross-Appellee-Appellant, 

and

ROYAL & SUN ALLIANCE INSURANCE (HONG KONG) LIMITED,

Claimant-Cross-Appellees,

versus

MINGTAI FIRE & MARINE INSURANCE COMPANY; CHIN LING STEEL COMPANY,

Claimants-Appellants.

R. L. BARON SHIPPING S.A.,

Plaintiff-Appellant-Cross-Appellee,

versus

WATERMAN STEAMSHIP CORPORATION, 

as the time charterer of the Tug KAMRUP,

Defendant-Third Party Plaintiff-Appellee-Cross-Appellant,

versus

DOOYANG LINE COMPANY LIMITED; DOOYANG SHIP MANAGEMENT COMPANY 

LIMITED; UNITED KINGDOM MUTUAL STEAMSHIP ASSURANCE 

ASSOCIATION (BERMUDA) LIMITED,

Third Party Defendants-Cross-Appellees.

Appeals from the United States District Court

for the Eastern District of Louisiana

(97-CV-3829-E and 99-CV-1888-E)

March 3, 2003
*Pursuant to 5TH CIR. R. 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

3

Before SMITH, BARKSDALE, and EMILIO M. GARZA, Circuit Judges.

PER CURIAM:*

These matters arise out of a collision in India between a

barge and an ocean-going vessel. For the underlying Rule 54(b)

judgment, primarily at issue is whether the district court erred in

granting summary judgment to Central Gulf Lines, Inc. (CGL; barge

owner), and Waterman Steamship Corporation (Waterman; barge

bareboat charterer). Also at issue, concerning R. L. Baron

Shipping (Baron; vessel owner), are: (1) choice of law; and (2)

standing to appeal. We hold: Baron has standing; United States

law applies, with reference to Indian law for issues of

navigational error; and summary judgment was proper. AFFIRMED and

REMANDED.

I.

The collision occurred in June 1997, near Calcutta, India, on

the Hooghly River (tributary of the Ganges River). It involved the

M/V GREEN OPAL, an ocean-going vessel, and a dumb, unmanned LASH

Barge, CG-F70 (“LASH” is an acronym for “Lighter Aboard Ship”),

towed by the tug KAMRUP. As noted, Baron owned the GREEN OPAL; CGL

owned the barge; and Waterman bareboat chartered it.

Waterman operates a LASH shipping system, which involves

loading LASH barges, containing cargo, directly onto a mother
4

vessel. That vessel transports the barges to a deep water port,

where the barges are unloaded and towed to inland ports not

accessible to the mother vessel. The mother vessel takes on new

barges, again loaded with cargo, and proceeds to a new port. See

Wirth, Ltd. v. S/S Acadia Forest, 537 F.2d 1272, 1274 (5th Cir.

1976) (providing more detailed description). 

Like most international shipping companies, Waterman hires

local agents at various ports to conduct its business. Waterman’s

general regional agent for Southeast Asia is Marco Shipping Company

(Marco); its local agent in India is Oceanic Shipping Agency Pvt.

Ltd. (Oceanic). Through its agents, Waterman negotiated, at armslength, with Eastern Navigation Private Limited (Eastern) in March

1974 to provide towage of its LASH barges (1974 Contract). The

1974 Contract was effective in June 1997, when the collision

occurred. The pertinent provisions follow: 

WHEREAS the said Principal [Waterman]

carries on business in Calcutta through its

Agents [Oceanic, in 1997] ... AND WHEREAS ...

Waterman ... intends to operate their Lash

vessels (hereinafter called the “Mother Ship”)

to Calcutta Port which vessels due to their

size and draught will normally anchor in the

vicinity of Haldia,

AND WHEREAS [Waterman] has approached the

said Contractor [Eastern] for undertaking the

towage work of the Lash barges ..., 

AND WHEREAS [Eastern] has agreed to

undertake the said work on the following terms

and conditions:
5

NOW IT IS HEREBY AGREED AND DECLARED as

follows:

1. For the purpose of carrying out the

aforementioned towing operation [Eastern]

shall purchase and/or procure suitable tugs as

may be approved by the Agents in writing for

the various stages of the operation. The

entire operation is required to be performed

with the help of three tugs – of which one tug

should be a very powerful one of a capacity of

minimum 1500 h.p., another of a capacity of

500 to 700 h.p. or more and a third one may be

a small launch mainly for moving the said Lash

barges from one place to another inside the

docks. It is understood that all those tugs

will be under the sole approval of the Agents

as aforesaid.

* * *

3. [Eastern] will not be entitled to use the

said tugs and equipments for Lash vessels of

any company other than those belonging to or

chartered by [Waterman]. Those tugs are meant

to be operated within the area of Calcutta

Port i.e. between sandheads and Calcutta.

However, when free from Lash operations

[Eastern] may with the prior permission in

writing of the Agents, do some other work in

Calcutta Port.

4. Ordinarily, but not exclusively, barge

operation will mean and include the following

under direction of the Agents:

a) Receiving the Lash barges at the water

level from Mother Ship as and when they

are lowered.

b) Safe handling and controlling of Lash

Barges as soon as they are floated on the

water. 

c) To tow the Lash barges to a floating

area or areas in or around Haldia or to

any other place as may be found suitable.
6

d) To tow from the said floating area in

Haldia, loaded or empty lash barges, to

floating areas inside the Calcutta Docks

as may be directed by the said Agents.

e) To move the Lash barges from one place

to another inside the Calcutta Docks, as

may be required, for the loading and/or

unloading purposes to and from the

floating area as mentioned in Clause (d)

above.

f) Likewise to tow the Lash barges from

the floating area in Calcutta Docks to

the floating area in Haldia and from

there to tow the Lash barges to the side

of the Mother Ship for loading them on to

the Mother Ship as and when required,

strictly under the schedule chalked out

by the Agents.

* * *

10. The Contractor [Eastern] shall ensure

safe towing and handling of the barges in tow.

(Emphasis added.)

As renewed in February 1985, the contract (Renewal Contract)

provides specific provisions relating to the HOLLAND, the 1500

horsepower tug required by the 1974 Contract and referenced in its

paragraph 1:

It was clearly understood that Holland will be

kept in perfect working condition all the time

for the use of Waterman work only and, if at

all, it is held up for repairs and/or for any

other reasons (which must be discussed with

us) Eastern will make alternate suitable

arrangements for towage operation in place of

Holland at their own cost. 

Over and above Holland or tug/tugs replacing

Holland as stated above, in the event a second

tug is required, Eastern will ensure that such
7

service is so provided for which they will be

paid for extra. For this purpose, it is

clarified that a suitable good tug capable of

operation and towage will be made available

whenever required.

(Emphasis added.)

At the time of the June 1997 collision, and because the

HOLLAND was being repaired, Eastern bareboat chartered the KAMRUP

to perform Waterman’s LASH towage. Oceanic knew of these

circumstances. Waterman and Marco had no knowledge of any serious

collisions occurring before that June and were satisfied with

Eastern’s work.

In June 1997, the mother vessel, GREEN ISLAND, carried LASH

barge CG-F70 and others to Haldia, India. Before arriving in

Haldia, the GREEN ISLAND contacted Marco and Oceanic. Oceanic

alerted Eastern of the new arrival. 

In the morning of 16 June 1997, the LASH barges, including CGF70, were placed in the water and taken into Eastern’s possession.

The LASH barge discharge was completed in the early afternoon on 17

June, and the GREEN ISLAND departed. The KAMRUP’s tugmaster waited

one and one-half days for appropriate tidal conditions and decided

how many barges to tow. (Haldia is approximately 80 miles from

Calcutta.) 

The KAMRUP towed five loaded barges, as it had often done.

For this tow, the KAMRUP pushed the barges upriver with the tug
8

attached to the port side of the last barge (“on-the-hip”). CG-F70

was the lead barge.

Although there is some dispute as to the exact events, in the

morning of 19 June, the KAMRUP rounded a river bend outside the

navigable channel of the Hooghly River. The GREEN OPAL had been

proceeding down river, full ahead, for an hour before the

collision. Visibility was clear. The GREEN OPAL cut to half; and,

30 seconds later, the lead barge, CG-F70, and the GREEN OPAL

collided. The GREEN OPAL sank in the navigable channel. The

Indian Government ordered wreck removal. Baron’s sole capital was

the GREEN OPAL; because of its loss, Baron was dissolved

approximately one year later.

Baron, its directors, and the United Kingdom Mutual Steamship

Assurance Association (Bermuda) Ltd. (GREEN OPAL’s insurer and

subrogated underwriter of its cargo) seek damages for the lost

ship, its cargo, and the wreck removal. Chin Ling Steel Company;

its insurer, Mingtai Fire & Marine Insurance Company; Boto Company

Limited; and its insurer, Sun Alliance and London Insurance Plc

(collectively, Cargo Claimants) seek damages for cargo that sank

with the GREEN OPAL. Waterman and CGL seek exoneration or

limitation of liability. And, Baron filed an action against

Waterman as the time charterer of the barge, contending that, as a

time charterer, limitation does not apply. 

On 25 June 2001, through an extremely detailed and

comprehensive opinion, the district court granted summary judgment
9

to Waterman and CGL for both the limitation and time charterer

actions. It held Indian law applied to issues of navigational

error and United States law applied to all other issues; reiterated

CGL was awarded summary judgment because its motion was unopposed;

held that, even if Eastern or the KAMRUP were negligent, this could

not be imputed to Waterman; held Waterman was not independently

negligent; and, finally, held the 1974 and Renewal Contracts were

towage contracts, not time charters, and limitation law applied.

That July, the district court issued an order dismissing as

moot various motions, including Waterman’s motion to dismiss for

Baron’s failure to comply with discovery orders and vexatious

litigation tactics. The district court, pursuant to Rule 54(b),

directed entry of a final judgment of the 25 June order (with two

amendments).

II.

Baron appeals from that judgment. (Waterman and CGL contend

we lack jurisdiction because Baron, as a dissolved corporation,

lacks legal capacity to sue.) Waterman cross-appeals the denial,

as moot, of its motion to dismiss concerning claimed vexatious

litigation and discovery.

As hereinafter discussed: (1) Baron has legal capacity to

appeal because it filed this action within the time limit, provided

by Panamanian corporate law, for dissolved corporations to conclude

their affairs; (2) United States law, with reference to Indian law

regarding navigational error, is applicable; (3) summary judgment
10

for CGL and Waterman was proper; (4) Baron abandoned, through

inadequate briefing, its challenge to cost allocation; and (5) we

lack jurisdiction to review the denial, as moot, of Waterman’s

motion to dismiss concerning claimed vexatious litigation and

discovery.

A.

Waterman and CGL contend this controversy is moot because

Baron lacks legal capacity to sue. Needless to say, Article III of

the Constitution permits federal courts to adjudicate only actual

cases or controversies. E.g., Lewis v. Cont’l Bank Corp., 494 U.S.

472, 476 (1990). “A controversy becomes moot where, as a result of

intervening circumstances, there are no longer adverse parties with

sufficient legal interests to maintain the litigation. Mootness

can arise in one of two ways: First, a controversy can become moot

when the issues presented are no longer live. A controversy can

also become moot when the parties lack a legally cognizable

interest in the outcome.” Chevron U.S.A. Inc. v. Traillour Oil

Co., 987 F.2d 1138, 1153 (5th Cir. 1993) (internal quotations and

citations omitted). 

A corporation’s dissolution abates all pending litigation,

absent a contrary provision under the law where that corporation

was formed. Oklahoma Natural Gas Co. v. State of Oklahoma, 273

U.S. 257, 260 (1927). Federal Rule of Civil Procedure 17(b)

incorporates this concept: “The capacity of a corporation to sue
11

or be sued shall be determined by the law under which it was

organized”. Because Baron was incorporated in Panama, we look to

Panamanian corporate law to determine Baron’s legal capacity to

sue.

Panamanian law provides a three-year period post-dissolution

for a corporation to conclude its affairs. PANAMANIAN LAW OF

CORPORATIONS, Art. 85 (Law No. 32, 26 February 1927). Baron

dissolved on 22 June 1998. Therefore, that three-year period ended

on 22 June 2001. Waterman and CGL contend Baron lacks capacity to

appeal because that three-year period has run. Baron counters:

Panamanian law only requires an action to be initiated within the

three-year period; thereafter, a dissolved corporation maintains

legal capacity to complete the action.

Articles 85 and 86 of the Panamanian Law of Corporation are

relevant. Article 85 provides:

A corporation the existence of which

terminates by the expiration of the period

fixed in the Articles of Incorporation or by

dissolution is, nevertheless, continued body

corporate for a term of three years

thereafter, for the express purpose of

maintaining special proceedings which may be

deemed convenient; of defending its interest

as defendants, settling and closing its

affairs, disposing and conveying its

properties and dividing its capital stock; but

under no circumstances shall the corporation

continue the business for which its was

established.

(Emphasis added.) In Spanish, Article 85 reads:

Toda sociedad anónima cuya existencia termina

por vencimiento del período fijado en el pacto
12

social o por disolución, continuará no

obstante por el término de tres años desde esa

fecha para los fines específicos de iniciar

los procedimientos especiales que consideren

convenientes defender sus intereses como

demandada, arreglar sus asuntos, traspasar y

enajenar sus bienes, y dividir su capital

social, pero en ningún caso podrá continuar

los negocios para los cuales fue constituida.

(Emphasis added.) 

The parties submitted differing translations of this article.

CGL and Waterman’s translation, quoted above, reads: “for the

express purpose of maintaining special proceedings which may be

deemed convenient; of defending its interest as defendants ....”

Baron’s translation reads: “for the specific purpose of

prosecuting or defending suits by or against it ....” (Emphasis

added.) We have adopted the CGL/Waterman translation because it

better tracks the original Spanish. See also Tryforos v. Icarian

Dev. Co. S.A., 47 F.R.D. 191, 193 (N.D. Ill. 1969) (translating

Article 85 as CGL/Waterman does), modified on other grounds in

Tryforos v. Icarian Dev. Co. S.A., 518 F.2d 1258 (7th Cir. 1975),

overruled on other grounds in Felzen v. Andreas, 134 F.3d 873 (7th

Cir. 1998).

Article 86 states:

Whenever the existence of a corporation shall

terminate by the expiration of its duration

period, or by dissolution, the Directors shall

serve as Trustee of the corporation with power

to settle its affairs, collect all sums or

owing [sic], sell and transfer all class of

its properties, divide its properties among

shareholders, when the debts of the
13

corporation have been satisfied and they shall

also have the authority to sue for, in the

name of the corporation, and recover debts and

assets and to represent the corporation in

proceedings against it which may be

maintained. 

(Emphasis added.) In Spanish, Article 86 reads:

Cuando la existencia de una sociedad anónima

termine por vencimiento del período de su

duración, o por disolución, los directores

actuarán como fiduciarios de la sociedad con

facultades para arreglar sus asuntos, cobrar

sus créditos, vender y traspasar sus bienes de

todas clases, dividir sus bienes entre sus

accionistas, una vez pagadas las deudas de la

sociedad; y además tendrán facultad para

iniciar procedimientos judiciales en nombre de

la sociedad con respecto a sus créditos y

bienes, y para representarla en los

procedimientos que se inicien contra ella.

(Emphasis added.)

As earlier discussed, Article 85 only authorizes “defending [a

corporation’s] interest as defendants”. (Emphasis added.)

Nonetheless, Article 86 provides that the directors, as trustees

post-dissolution, may sue in the corporation’s name. See also

Tryforos, 47 F.R.D. at 194 (recognizing Article 86 authorizes

action in the name of corporation, but also allows trustees to sue

in own name). Baron’s legal expert confirms this reading: “Among

the acts of liquidation, the company is entitled to commence legal

actions to collect moneys owed to the company arising out of ...

tortious acts commited [sic] against the company or it’s [sic]

property”. (Emphasis added.) See also A. Halcoussis & Co. v.

Coastal States Gas Corp., No. 82 Civ. 4963-CSH, 1985 U.S. Dist.
14

Lexis 14417 at *6 (S.D.N.Y. 29 October 1985) (considering Articles

85 and 86 and citing expert testimony that Panamanian corporation

“can sue and be sued” during the three-year period). We hold,

therefore, that, post-dissolution, Baron can bring, as well as

defend, an action.

Nevertheless, Article 85 authorizes continued legal action for

only three years after dissolution. Although more than three years

have passed, we hold that Baron has legal capacity to appeal

because it initiated this action within the three-year period.

First, the uncontroverted testimony of Baron’s Panamanian

legal expert supports our conclusion: 

Whatever actions the company takes, as part of

the liquidation process, should be commenced

within a period of three years from the date

of it’s [sic] dissolution. ... Eventhough

[sic] a litigation process, to which the

dissolved company is a party, may last more

than three years, the statute only requires

that the judicial proceeding in question be

initiated within said period ....

(Emphasis added.)

Second, the Panamanian Corporation Code is based on Delaware

law. Features of Panama Corporations, at

http://www.geocities.com/WallStreet/4245/sa.htm; Panama

International Business Corporations, a t

http://www.offshorexplorer.com/panama.htm; Panama Offshore Company

Incorporations, at http://www.milonline.com/mil-panama1.html.

Under Delaware law, litigation pending during the three-year period
15

can be continued after that period ends, but no new actions can be

initiated. In re Citidel Indus., Inc., 423 A.2d 500, 503 (Del. Ch.

1980) (“[E]xcept with regard to pending proceedings or litigation,

three years from the date of dissolution established the outside

limit after which the corporation could no longer act or be sued in

a corporate capacity”. (emphasis added)). Finally, this reading

comports with interpretations of similar statutes. E.g., Chicago

Title & Trust Co. v. Forty-One Thirty-Six Wilcox Bldg. Corp., 302

U.S. 120, 128 (1937) (under Illinois statute, no new proceedings

may be initiated, but pending proceedings initiated within

statutory dissolution period may be litigated to completion).

B.

Baron and the Cargo Claimants maintain Indian law applies to

substantive issues; Waterman and CGL, United States law. The

district court held the latter applies, with reference to the

Indian Rules of Inland Navigation to determine navigational errors.

A choice of law determination is reviewed de novo. Fogleman v.

ARAMCO, 920 F.2d 278, 282 (5th Cir. 1991). 

Waterman and CGL contend that, as a matter of law, limitation

proceedings apply both procedural and substantive United States

law. We disagree. 

While United States law governs the procedural

issues of the limitation proceeding, this

Court must decide what substantive law applies

to the underlying cause of action. The fact

that United States law determines limitation

does not automatically mean that United States
16

law should supply the substantive law for the

underlying claim.

Karim v. Finch Shipping Co. Ltd., 94 F. Supp. 2d 727, 735 (E.D. La.

2000) [Karim I], aff’d, 265 F.3d 258 (5th Cir. 2001) [Karim II].

See Oceanic Steam Navigation Co. Ltd. v. Mellor, 233 U.S. 718, 732

(1914) [The Titantic] (applying British substantive law to United

States limitation of liability action).

We determine what substantive law applies by evaluating the

eight factors set forth in Lauritzen v. Larsen, 345 U.S. 571

(1953), and Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970):

(1) place of the wrongful act; (2) law of the flag; (3) allegiance

or domicile of the injured; (4) allegiance of the defendant

shipowner; (5) place of contract; (6) inaccessibility of the

foreign forum; (7) law of the forum; and (8) base of operations.

Although these factors were first enunciated in a Jones Act

context, they are applicable to maritime law generally. Romero v.

Int’l Terminal Operating Co., 358 U.S. 354, 382 (1959). 

“These principles do not depend upon a mechanical application

.... The controlling considerations are the interacting interests

of the United States and of foreign countries ....” Id. at 383.

Courts have weighed the factors differently in different contexts.

E.g., Fogleman, 920 F.2d at 282 (“[T]he significance of each factor

in a nontraditional maritime context like offshore oil production

may vary from that in the traditional shipping context in which the
17

Lauritzen-Rhoditis test arose”.); Carbotrade S.p.A. v. Bureau

Veritas, 99 F.3d 86, 91 (2nd Cir. 1996) (noting several factors did

not apply because of the unique circumstances of that case).

Here, the eight factors, by themselves, point to numerous

possible choices of law. The place of the wrongful act is India.

The law of the flag yields three options: CG-F70 is United States;

GREEN OPAL, Panama; and KAMRUP, India. The allegiance of the

injured includes: Baron, a Panamanian corporation, with directors

from Japan, Korea, and China; the primary underwriter, a United

Kingdom corporation; and Cargo Claimants of Bermuda, Japan, Hong

Kong, and Norway. The allegiance of the defendants, CGL and

Waterman, is the United States. 

Baron and Cargo Claimants assert Waterman was negligent

because of a contract executed in India. Further, Baron and Cargo

Claimants assert Indian law should be applied and Indian courts are

accessible. The law of the forum in which Baron and Cargo

Claimants instigated this action, as hereinafter discussed, is

United States. 

Finally, the base of operations determination requires

consideration of both the ship’s and the shipowner’s contacts.

Rhoditis, 398 U.S. at 311. Courts have considered: the location

of corporate headquarters; the ownership interest in the

corporation; where the ship is regularly loaded; where the

management of operations occurs; where maintenance of the vessel is
18

performed; and where shipping agents are located. See, e.g., Sosa

v. M/V LAGO IZABAL, 736 F.2d 1028, 1032 (5th Cir. 1984).

Waterman’s home offices are in New Orleans, Louisiana,

although it has agents in Singapore and India. The CG-F70 was

registered by the American Bureau of Shipping from 24 August 1995

until 1 August 2000. It was loaded (grain for CARE) in Memphis,

Tennessee, and inspected by USDA representatives before its trip to

India. After the collision, the CG-F70 was repaired in the United

States. These facts indicate a United States base of operations.

We must now weigh these factors. The most significant factors

are: the place of the wrongful act; the allegiance of defendants;

the allegiance of the injured; the accessibility of the Indian

courts; and the law of the forum. We assign little weight to the

place of contract, because Baron and Cargo Claimants are not in

privity with Waterman or Eastern. E.g., Lauritzen, 345 U.S. at

588; Carbotrade, 99 F.3d at 90.

The place of the wrongful act is usually given little weight

for shipboard torts; a ship, by nature, passes through many

jurisdictions, and a territorial determination of law creates

little regularity. Lauritzen, 345 U.S. at 585. Therefore, “[t]he

law of the flag has traditionally been of cardinal importance in

determining the law applicable to maritime cases”. Fogleman v.

ARAMCO, 920 F.2d 278, 282 (5th Cir. 1991). 
19

Here, however, we are concerned with a collision between two

ships, not a personal injury accident aboard ship. Obviously,

India has a strong interest in ensuring the safety of its

waterways; application of Indian navigation regulations, where

relevant, is enough to protect India’s interests in this dispute.

Other factors weigh in favor of applying United States law to the

other substantive issues. 

In most cases, the law of the forum and accessibility of other

forums are not significant because it is the defendant, who is

involuntarily before United States courts, asserting application of

foreign law. Lauritzen, 345 U.S. at 591-92 (“Because a law of the

forum is applied to plaintiffs who voluntarily submit themselves to

it is no argument for imposing the law of the forum upon those who

do not.”). See, e.g., Rhoditis, 398 U.S. 306; Romero, 358 U.S.

354; Lauritzen, 345 U.S. 571; Karim II, 265 F.3d 258. Here,

however, the usual situation is reversed: Baron, and other

plaintiffs, seek to apply foreign law; defendants, United States

domicilaries, are asserting application of United States law.

Baron initiated an action against CGL on 26 June 1997, one

week after the collision. On 4 December, Baron attempted to

voluntarily dismiss the action and refile in Louisiana courts. CGL

opposed the dismissal and, with Waterman, filed, on 10 December, a

limitation action. The district court granted the voluntary

dismissal of Baron’s action. In June 1999, Baron filed a separate
20

action claiming the 1974 and Renewal Contracts were time charters

and, therefore, limitation law did not apply. 

In short, this is not a case where the law of the forum is

being “imposed on defendants who are involuntarily made party to a

suit in the forum”. Merren v. A/S BORGESTAD, 519 F.2d 82, 83

(1975). See also Karim I, 94 F. Supp. 2d at 736 (rejecting

application of United States law where the United States is

fortuitously host forum – injured plaintiff merely treated in

United States). Here, the defendants, Waterman and CGL, are

arguing for the application of United States law, and the

plaintiffs, Baron and Cargo Claimants, voluntarily submitted

themselves to United States courts. The Indian courts were

accessible to them, and they chose not to institute an action

there, even though Eastern operates in India. Moreover, although

not all are United States domicilaries, none of the Baron interests

are Indian domicilaries. E.g., Karim I, 94 F. Supp. 2d at 735-36

(applying Bangladeshi law where plaintiff is Bangladeshi). 

Baron and Cargo Claimants, who chose to sue a United States

corporation in the United States and accept United States

limitation law, cannot now receive Indian substantive law. The

United States has a strong interest in preventing such manipulation

of our choice-of-law jurisprudence. Therefore, United States law

applies to all issues but navigational error. See, e.g., Rhoditis,

398 U.S. at 309-10 (finding base of operations another factor and
21

preventing avoidance of application of United States law where

foreign corporation only a facade for United States operations).

C.

Summary judgment was awarded CGL and Waterman for the

limitation action and for Waterman for the time charterer action.

CGL was granted summary judgment because its motion was unopposed.

And, as discussed supra, the district court held: even if Eastern

were negligent in using the KAMRUP to tow Waterman’s LASH barges,

Waterman was not liable because it was not independently negligent;

and the agreement between Waterman and Eastern was a towage

contract, not a time charter, and therefore limitation law applies.

A summary judgment, reviewed de novo, is proper if there is no

genuine issue of material fact and the movant is entitled to a

judgment as a matter of law. E.g., GATX Aircraft Corp. v. M/V

COURTNEY LEIGH, 768 F.2d 711, 714 (5th Cir. 1985); FED. R. CIV. P.

56(c). The record, as well as inferences based on it, are viewed

in the light most favorable to the non-movant. E.g., GATX Aircraft

Corp., 768 F.2d at 714.

1.

For the limitation action, Baron and Cargo Claimants contend

the district court erred in exonerating Waterman. First, they

assert Waterman can be held liable for negligently employing

Eastern’s tug, the KAMRUP. Second, they maintain Waterman allowed
22

the claimed dangerous operation of the KAMRUP by failing to ensure

the 1974 and Renewal Contracts' terms were followed.

The Limitation of Liability Act provides shipowners a means to

limit liability to the value of their vessel: 

The liability of the owner of any vessel ...

for any loss, damage, or injury by collision,

or for any act, matter, or thing, loss, damage

or forfeiture, done, occasioned, or incurred,

without the privity or knowledge of such owner

or owners, shall not ... exceed the amount or

value of the interest of such owner in such

vessel, and her freight then pending. 

46 U.S.C. app. § 183(a). 

The shipowner is entitled to exoneration from, or limitation

of, liability when he shows his lack of knowledge or privity with

the negligent acts or conditions of unseaworthiness that caused the

collision. See Brister v. A.W.I. Inc., 946 F.2d 350, 355 (5th Cir.

1991). A shipowner free from fault will be exonerated. Tittle v.

Aldacosta, 544 F.2d 752, 755 (5th Cir. 1977). 

Waterman, as bareboat charterer of the LASH barge CG-F70, is

the owner of the tow; however, Waterman is not the owner of the

tug, KAMRUP. It is well-settled that a tow is not liable for the

acts of the tug:

When damage is caused by a casualty involving

the tow or by the whole flotilla, the courts

employ the concept of “dominant mind” to place

liability on the tug and to absolve the tow

from liability. This doctrine holds that only

that vessel is liable whose people are

actually in control of the operation, even

though the whole flotilla causes the damage.
23

T. Schoenbaum, ADMIRALITY AND MARITIME LAW § 12-7, at 258 (West 3d ed.

2001) (internal citations omitted). Therefore, Baron and Cargo

Claimants must show Waterman is negligent, independent of possible

negligence by Eastern or KAMRUP. They fail to do so. 

The record is devoid of evidence suggesting Waterman was

negligent for employing Eastern to tow its barges. In its eightyears' experience, Oceanic (Waterman’s Agent) knew of no problems

with Eastern’s towing practices. Likewise, in its 26-years'

experience, Waterman had no notice of any problems. To the

contrary, the KAMRUP towed barges as it did on the day of the

collision many times in the past without incident. There is no

evidence Waterman or Oceanic (its Agent) instructed Eastern on the

makeup or movement of the tug and tow. Likewise, Oceanic or

Waterman employees were not present on the tug during the tow

giving rise to this action. See, e.g., Dow Chemical Co. v. Tug

THOMAS ALLEN, 349 F. Supp. 1354 (E.D. La. 1972) (holding owners of

tow liable for accident where employee of tow owner was on board

tug and required tug to navigate dangerous waters). 

Further, Baron and the Cargo Claimants fail to show that,

under the 1974 or Renewal Contracts, Waterman had a duty to monitor

Eastern’s operations. Primarily, Baron and the Cargo Claimants

rely on two passages. First, they rely on the following from the

1974 Contract:

For the purpose of carrying out the

aforementioned towing operations the
24

Contractor [Eastern] shall purchase and/or

procure suitable tugs as may be approved by

the Agents [of Waterman] in writing for the

various stages of the operation. The entire

operation is required to be performed with the

help of three tugs – of which one tug should

be a very powerful one of a capacity of

minimum 1500 h.p., another of a capacity of

500 to 700 h.p. or more and a third one may be

a small launch mainly for moving the said Lash

barges from one place to another inside the

docks. It is understood that all those tugs

will be under the sole approval of the Agents

as aforesaid.

(Emphasis added). Second, the Renewal Contract specifically

addresses the HOLLAND (1500 h.p.; being repaired at time of

collision):

It was clearly understood that Holland will be

kept in perfect working condition all the time

for use of Waterman work only and, if at all,

it is held up for repairs and/or for any other

reasons (which must be discussed with us)

Eastern will make alternative suitable

arrangements for towage operation in place of

Holland at their own cost. 

Over and above Holland or tug/tugs replacing

Holland as stated above, in the event a second

tug is required, Eastern will ensure that such

service is so provided for which they will be

paid for extra.

(Emphasis added.)

These clauses establish no right on the part of Waterman or

its Agents to generally control Eastern’s operations. The 1974

Contract clause only provides Oceanic (Waterman's local Agent) with

a right to approve the purchase or other procurement of suitable

tugs. It says nothing about approval of the use of the tugs. The
25

Renewal Contract clause does not require Eastern to use an

alternative 1500 horsepower tug in the event the HOLLAND is being

repaired. It only requires Eastern to make “alternative suitable

arrangements” and establishes who bears the costs when “tug/tugs”

are used to replace the HOLLAND.

The Waterman corporate representative stated by deposition:

“The actual employment of those tugs is left to the contractor

[Eastern]. Waterman is concerned about the delivery of its cargo,

not the details of what equipment is used by the towage contractor

[Eastern].” Along this line, Baron and the Cargo Claimants ignore

paragraph 10 of the 1974 Contract: “The Contractor [Eastern] shall

ensure safe towing and handling of the barges in tow”. (Emphasis

added.)

2.

As noted, the district court granted Waterman summary judgment

against Baron's time charter action. Baron contends: the contract

between Oceanic and Eastern is a time charter; the Limitation on

Liability Act does not apply to such charters; and, therefore,

Waterman can be held liable. Waterman responds: the contract is

instead one for simple towage; and, in any event, Waterman is not

independently negligent. 

A time charter entitles the charterer to full possession and

control of the owner’s vessel for a specified period of time.

Agrico Chem. Co. v. M/V BEN W. MARTIN, 664 F.2d 85, 91 (5th Cir.
26

1981); Walker v. Braus, 995 F.2d 77, 80-81 (5th Cir. 1993). On the

other hand, a towage contract provides for one vessel, such as a

tug, to move another, such as a barge. Agrico Chem. Co., 664 F.2d

at 90. As Baron notes, these categories are not mutually

exclusive; for example, the purpose of a time charter could be

towage. Nevertheless, here, the character of the entire agreement

indicates it is solely a towage contract.

The 1974 Contract preamble states: “[T]he said principal

[Waterman] has approached the said Contractor [Eastern] for

undertaking the towage work of [Waterman's] Lash barges”.

(Emphasis added.) The contract is an agreement between the

“principal” and the “contractor”, not between the “charterer” and

the “owner”. In the preamble and throughout, the 1974 Contract

repeatedly refers to “towage”, never once mentioning “chartering”.

Finally, paragraph 4 of that contract enunciates Eastern’s duties,

which all specifically relate to towage.

Further, although the 1974 Contract, and its renewals, specify

a period of time after which the contract terminates, this period

relates to Eastern’s towage services, rather than a time over which

Waterman has possession and control of particular tugs. For

instance, unlike the typical time charter, the disputed contract

does not designate any specific chartered vessel. See generally

POOR ON CHARTER PARTIES AND OCEAN BILLS OF LADING, § 1, at 4-5 (5th ed.

1968); MICHAEL WILFORD ET AL., TIME CHARTERS 81-139 (4th ed. 1978).
27

Paragraph 1 of the 1974 Contract merely provides for the

procurement of three tugs. The evidence demonstrates this

paragraph was included only to describe the existing equipment

available at the time of contracting. 

Also, Waterman did not control tug operations. It merely gave

a time frame for Eastern to deliver its barges to a certain

destination. It did not direct how Eastern should use its vessels,

which ones should be used, or what route they should take.

Although the 1974 Contract, paragraph 3 (as emphasized earlier),

contains a non-competition clause, it was not meant to limit

Eastern’s general operations; Eastern did tow for others. 

Moreover, even were the 1974 Contract characterized as a time

charter, Waterman must still have been negligent in its direction

of the tugs. See Moore v. Phillips Petroleum Co., 912 F.2d 789,

792 (5th Cir. 1990). As discussed above, Waterman was not

negligent. 

D.

Baron and Cargo Claimants consented, in district court, to the

exoneration of CGL. Nevertheless, Baron appealed from the

allocation of costs awarded CGL. Baron did not provide any

briefing, however, on this issue in its original brief. “An

appellant abandons all issues not raised and argued in its initial

brief on appeal”. Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir.

1994) (emphasis in original). 
28

E. 

Waterman and CGL cross-appeal the district court’s denial, as

moot, of their motion to dismiss for Baron's failure to comply with

discovery orders and vexatious litigation tactics. The denial of

that motion is not included within the Rule 54(b) judgment.

Accordingly, we lack jurisdiction over this cross-appeal. See 28

U.S.C. §§ 1291 & 1292. 

III.

For the foregoing reasons, Waterman’s motion to dismiss Baron

for lack of jurisdiction is DENIED; Baron’s motion to dismiss the

cross-appeal by Waterman and CGL is GRANTED; the summary judgment

awarded Waterman and CGL is AFFIRMED; and this matter is REMANDED

to the district court for further proceedings consistent with this

opinion.