Legal Document

407 U.S. 1 92 Supreme Court Reporter 1907 32 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 513 M/S BREMEN and Unterweser Reederei, GmBH, Petitioners,v.ZAPATA OFF-SHORE COMPANY. Number 71—322. Argued March 21, 1972. Decided June 12, Syllabus Petitioner made an agreement to tow respondent's drilling rig from Louisiana Italy. The contract contained a forum-selection clause providing for the litigation of any dispute in High Justice London. When under was damaged storm, respondent instructed Tampa, nearest port refuge. There, brought suit admiralty against petitioners. invoked forum moving dismissal want jurisdiction English court, which ruled that it had contractual provision. District Court, relying on Carbon Black Export, Incorporated versus Monrosa, 5 Cir., 254 Federal Reporter, 2nd 297, held unenforceable, refused decline basis non conveniens. Appeals affirmed. Held: clause, vital part towing contract, is binding parties unless can meet heavy burden showing its enforcement would be unreasonable, unfair, or unjust. Pp. 8—20. 428 888 446 907, vacated remanded. David C. G. Kerr, Fla., James K. Nance, Houston, Tex., respondent. Mr. Chief BURGER delivered opinion Court. We granted certiorari review judgment Fifth Circuit declining enforce governing disputes arising international towage between petitioners circuits have differed their approach such clauses.1 For reasons stated hereafter, we vacate Appeals. 2 In November 1967, Zapata, Houston-based American corporation, contracted with petitioner Unterweser, German Zapata's ocean-going, self-elevating Chaparral point off Ravenna, Italy, Adriatic Sea, where Zapata agreed drill certain wells. 3 solicited bids towage, several companies including responded. low bidder requested submit did. submitted by following provision, at issue this case: 4 'Any must treated before London Justice.' addition two clauses purporting exculpate liability damages towed barge.2 After reviewing making changes, but without alteration exculpatory clauses, vice president executed forwarded Germany, accepted became effective. 6 On January 5, 1968, Unterweser's deep sea tug Bremen departed Venice, Louisiana, bound 9, while flotilla waters middle Gulf Mexico, severe storm arose. sharp roll caused elevator legs, been raised voyage, break fall into sea, seriously damaging Chaparral. emergency situation Bramen Florida, 7 ignoring promise litigate 'any arising' courts, commenced seeking $3,500,000 personam rem, alleging negligent breach contract.3 responded invoking moved dismiss lack conveniens grounds, alternative stay action pending submission 'London Justice'. Shortly thereafter, February, motion action, London, as provided. appeared court contest jurisdiction, challenge rejected, courts holding provision conferred juisdiction.4 8 meantime, faced dilemma Tampa. six-month period filing limit other potential claimants about expire,5 Tampa not yet action. July 2, confronted difficult alternatives, filed That entered customary injunction proceedings outside limitation refiled initial claim action.6 9 It only juncture, 29, after run, denied denying motion, relied prior decision 297 (CA5 1958), cert. dismissed, 359 180, 79 710, 723 (1959). case reiterating traditional view many 'agreements advance controversy whose object oust are contrary public policy will enforced.' F.2d, 300—301.7 Apparently concluding case, gave little, if any, weight. Instead, normal doctrine applicable absence citing Oil Corporation Gilbert, 330 501, 67 839, 91 L.Ed. 1055 (1947). Under 'unless balance strongly favor defendant, plaintiff's choice should rarely disturbed.' Id., 508, S.Ct., 843. concluded: 'the conveniences here (Unterweser) (Zapata's) 10 Thereafter, 1969, another determination restrain litigating further court. Judge that, having taken proceeding, he determine all matters relating controversy. He required 'do equity' refraining also previously first because court's obtain benefit Limitation Act. 11 appeal, divided panel affirmed, rehearing en banc adopted, six judges dissenting. As majority rested decision, "at very least" stood proposition "will enforced selected state provide more convenient than brought." From premise proceeded conclude apart did abuse discretion refusing noted (1) never 'escaped Circuit's mare nostrum, casualty occurred close proximity district court'; (2) considerable number witnesses, crewmen, resided Coast area; (3) preparation voyage inspection repair work performed (4) testimony crew available way deposition; (5) England no interest contact clause. citizen '(t)he remand foreign consequently limited'—especially since likely clauses.8 Appeals' view, Bisso Inland Waterways Corp., 349 85, 75 629, 99 911 (1955), Dixilyn Drilling Crescent Towing & Salvage Co., 372 697, 83 967, 78 (1963). Therefore, entitled consider remanding forum, practical controversy, could raise bar recovery own countenance.'9 12 hold, dissenting members Appeals, far too little weight effect were given resolving least decades witnessed expansion overseas commercial activities business enterprises based States. barrier distance once tended confine concern modest territory longer does so. Here see company special expertise contracting complex machine thousands miles across seas oceans. industry hardly encouraged if, notwithstanding solemn contracts, insist parochial concept resolved our laws courts. Absent considerations persuasive sense, era expanding world trade commerce, absolute aspects place hand indeed future development dealings Americans. cannot commerce markets exclusively terms, governed laws, 13 Forum-selection historically favored Many federal state, declined ground they 'contrary policy,' 'oust jurisdiction' court.10 Although apparently still has acceptance, tending adopt hospitable attitude toward clauses. This advanced well-reasoned instant prima facie valid shown resisting party 'unreasonable' circumstances.11 believe correct followed sitting admiralty. merely side recognized National Equipment Rental, Limited Szukhent, 375 311, 84 411, 354 (1964), may validly consent sued found service process through designation 'agent' receipt jurisdiction. so holding, stated: 14 '(I)t settled . agree permit notice served opposing party, even waive altogether.' 315—316, 414. 15 substantially common-law countries England.12 scholars adopted Restatement Conflict Laws.13 accords ancient concepts freedom reflects appreciation horizons contractors who seek parts world. Not surprisingly, businessmen prefer, do we, available, then neutral subject matter. Plainly, standards neutrality long experience litigation. arm's-length negotiation experienced sophisticated businessmen, absent some compelling countervailing reason honored 16 argument improper tend 'oust' vestigial legal fiction. appears rest core historical judicial resistance attempt reduce power particular when overloaded businesses essentially local now operate markets. something provincial regarding fairness tribunals. No one contends forumselection 'ousted' over threshold question whether exercised give legitimate expectations parties, manifested freely negotiated agreement, specifically enforcing 17 There why private unaffected fraud, undue influence, overweening bargaining power,14 involved here, full effect. example, concerned routine transaction different nations contemplating extremely costly piece equipment Mexico Atlantic Ocean, Mediterranean Sea final destination Sea. course traverse jurisdictions. along route, there countless possible ports accident barge mere fortuities. doubted moment sought resolution during tow. Manifestly much uncertainty possibly great inconvenience both arise maintained might occur left happen found.15 elimination uncertainties agreeing acceptable indispensable element trade, contracting. strong evidence agreement,16 unrealistic think conduct negotiations, fixing monetary consequences figuring prominently calculations. these circumstances, Karminski reasoned sustaining Justice, force country, competent seems me powerful.' Thus, light present-day realities control set aside. opinions altogether explicit, reasonably clear placed show although expressly issue. clearly unreasonable unjust, invalid fraud overreaching. Accordingly, remanded reconsideration. 18 note, however, nothing record presently us support refusal suggested prospect A choice-of-forum unenforceable contravene brought, declared statute decision. See, e.g., Boyd Grand Trunk W.R. 338 263, 70 26, 94 55 (1949). clear, whatever proper scope expressed Bisso,17 reach case. rasted respect strictly waters, those controlling agreement. Speaking Wisdom pointed out: 19 '(W)e careful overemphasize strength (Bisso) policy. (T)wo concerns underlie rejection agreements: produced power; sufficiently discourage negligence. occurring notion overreaching And know, dangers new field transoceanic oil rigs tower unwilling take financial responsibility risks, thus allocated equally price took factor account. N Dec. Immigration Nationality Decisions invalidate selection firmly convinced thereby significantly encourage within boundaries States.' 907 908. (Footnotes omitted.) 20 Courts though bargained contravenes important nevertheless chosen inconvenient trial Of course, said reasonable assurance time contemplated claimed inconvenience, heard render unenforceable. dealing Americans resolve remote alien forum. serious carry greater determining reasonableness remoteness suggest adhesive one, mind agreement; claiming bear proof.18 Similarly, apply differing law governs quite arguably avoid his towee. 21 involves corporation vessel noted, effort bring certainty capable Whatever 'inconvenience' suffer being forced foreseeable circumstances incumbent escape gravely purposes deprived day hold bargain. 22 ruling second make conclusory finding convenience 'strongly' However, erroneously proof favor.19 Moreover, falls short conclusion effectively Indeed, assumed expense transporting witnesses unusual issues cases dealt deposition. Both satisfied receive fair hearing using deposition distant places, use equal advantage itself do. Nevertheless, allow opportunity (that is, Tampa), manifestly meaningful proceedings. 23 remaining contentions require extended treatment. complaint was, concerned, solely defensive measure necessary response contract. statutory almost run Court's pursuant prudent protect liability.20 Its doing direct consequence failure abide purely preclude for. 24 litigation, construed exclusive include rem actions. language mandatory all-encompassing; different.21 25 consistent opinion. 26 Vacated 27 WHITE, concurring. 28 concur except insofar comments my best consideration instance. 29 DOUGLAS, 30 'forum clause' litigated England. While suffered. Bay, port, 31 Petitioners dismiss. Petitioners, dismiss, exoneration provided 46 Code KF62 § 185. Respondent proceedings, asserting same cause original objections counterclaimed respondent, claims embodied plus additional salvage claim. 33 petitioners' proceeding denied. 296 F.Supp. 733. 34 posture reached appealing last orders. 888, 907. 35 Taft Hartford Accident Indemnity Southern Pacific, 273 207, 214, 47 357, 358, 71 612 discussing Liability Act shipbuilding induce investment money branch limiting venture build ship loss her freight pending, damage wrong happening, privity knowledge owner, fault neglect master persons board; origin general maritime law; entirely constitutional grant Congress establish jurisdiction.' 36 went describe how owner who, fault, value 'into concourse monition' enjoined suing 215, 359. 37 '(T)his rules decisions broad equitable construction purpose carrying out purpose, facilitating settlement whole losses comprehended it, ease rights adjusted equity intended proceeding. administration partakes features bill enjoin multiplicity suits, nature interpleader, creditor's bill. looks complete just disposition cornered ship, well owner; extending owner's property person.' 215—216, 38 traditionally indicate prejudice Petitioners' petition subjects them powers 39 country. remitted substantive adversely affected. Exculpatory provisions petitioners, masters crews 'are responsible defaults and/or errors navigation tow' '(d)amages suffered account Owners.' 40 698, 968, 'a exempts negligence' enforceable, present enforceable announced 911; Boston Metals Winding Gulf, 122, 649, 933; Dixilyn, supra; Gray Johansson, 287 852 (CA5); California Jumonville, 327 988 S.S. Great Lakes 333 426 (CA7); D. R. Kincaid, Trans-Pacific Towing, Inc., 367 857 (CA9); L. Mechling Barge Lines, Derby 399 304 (CA5). Cf. Seckinger, 397 203, 90 880, 224. high seas, nonetheless applicable. Scotland, 105 24, 1001; Belgenland, 114 355, 860, 152; Gylfe Trujillo, 209 386 (CA2). 41 reside area, done there. tower's residing already depositions 42 All all, judge wisely enjoining pursuing England.* 43 affirm below. Compare, Central Contracting Maryland Casualty 341 (CA3 1966), Wm. Haw. Hawai‘i KFH45 A2 Muller Swedish Line Ltd., 224 806 (CA2), denied, 350 903, 76 182, 100 793 General Towage Conditions included following: '1. (Unterweser its) '2. 'b) Damages addition, insurance 'for of' Zapata. telegraphic bid offered 'arrange covering risk desired.' self-insured rigs, compensated insurance. arrested marshal acting immediately upon arrival subsequently released furnished security amount $3,500,000. specially aside enforced, factual 'fair right' showing, 'stick (its) bargain.' App. 206, 211, 213. Appeal dismissed appeal properly applied rule. Lord Willmer rule follows: 'The subject, think, open doubt .. always stipulate shall Here, chose referred Court,' meaning Prima bargain entered. But inflexible rule, shown, instance, Fehmarn, (1957) Lloyd's Rep. 511; (C.A.) 551 'I matter, therefore, way, discretion, which, ordinary contrary, favour sufficient exist desirable, grounds convenience, country ..' (1968) 158, 162—163. §§ 183, See generally Gilmore Black, Admiralty 10—15 (1957). complaint, 'reserve(d) rights' previous reasserted entire right limited liability, accord later counterclaimed, setting forth Bremen's services casualty. counterclaim, again asserted counterclaim. say event, unnecessary reject liberal position nexus Muller. contains undisputed affidavit British solicitor stating 'prima enforceable' alleged disputed fund amounts $1,390,000, slightly excess $80,000 law. indicated passing 'doubtful' deny relief 'entitled' 'seriously inconvenient' reflecting collected Annot., 56 Law Reports, 300, 306—320 (1957), Later Case Service (1967). leading early cases, see, Nute Hamilton Mutual 72 Mass. (6 Gray) 174 (1856); Nashua River Paper Hammermill 223 8, 111 Northeastern KF135 N59 678 (1916); Benson Eastern Bldg. Loan Assn., N.Y. 83, 66 627 (1903). accord. Wood Selick, Compagnie Generale Transatlantique, 941 (CA2 1930); Ciano, 58 65 (E.D.Pa.1944); Kuhnhold 251 KF105 F3 387 (S.D.N.Y.1918); Prince Steam-Shipping Lehman, 704 (S.D.N.Y.1889). Insurance Morse, Wall. 445, 365 (1874), broadly illegal void.' 451. State Wisconsin 'agree' surrender remove condition Wisconsin. understood requirement viewed imposing unconstitutional exercise removal. Philadelphia Reading Coal Iron 241 329, 563, 60 1027 (1916). Hand Krenger Pennsylvania 556 1949), date fact 'absolute taboo' Mittenthal Mascagni, 183 19, 425 (1903); Daley People's Bldg., Sav. 178 13, 59 452 (1901) (Holmes, J.). Cerro de Pasco Copper Knut Knutsen, O.A.S., 187 990 1951). E.g., 1966); Anastasiadis Little John, 346 281 1965) (by implication); (1955); 1951); E. Youngdahl 418 Pa. 810 (1965). overruled Indussa Ranborg, 377 200 1967), inconsistent 'lessening liability' Carriage Goods Act, 1303(8), transactions Muller, Indussa, Black. Reederei G.m.b.H. Off-Shore (The Chaparral), 158 (CA), Mackender Feldia A.G., (1967) Q.B. 590 (CA); (1958) W.L.R. 159 Garrett, (1878) Ch.D. Eleftheria, (1970) Pacific P2 94. statements Eleftheria supra, n. 4, calls discretion. Dicey Morris, Laws 979—980, 1087—1088 (8th ed. 1967); Cowen Mendes da Costa, Contractual Forum: Situation Commonwealth, Am.J.Comp.Law 179 (1964); Reese, States, id., 187, 190 13; Graupner, Stipulations Conferring Exclusive Jurisdiction Upon Foreign L.Q.Rev. 227 (1943). (Second) 80 (1971); Ehrenzweig, (1962). Model Choice Forum (National Conference Commissioners Uniform 1968). refutes power. Wisdom, dissenting, noted: 'Zapata neither presented nor bidding project. contradicts Managing Director's specified 'in Company half way.' Vice President specific negotiations concerning place. simply form boilerplate alter. business. alterations Unterweser. ignored. sentence preceding parties' signatures. .' At least, eliminate nature, location, outlook nationalities find themselves. applied, assumed, indication, designated Tzortzis Monark A/B, 406 T. Carver, 496—497 (12th 1971); Cheshire, Private International 193 (7th 1965); 705, 1046 Collins, Arbitration Clauses Selecting Laws: Some Recent Developments England, J.Mar.L. Comm. 363, 365—370 (1971). therefore Director considered 'overriding importance' transaction. contracts ordinarily application law, '(i)n (Zapata) proposed Justice. Had (Zapata), intended, designating applied. responsive Hoyt Taylor, discussions nn. 14—15, supra. but, out, unmerous changes altering escaped attention. unsophisticated matters. wholly owned subsidiary Italian operations arbitration 306—311. (1963) (per curiam), 'indeterminate exceptions' delicate analysis facts each U.S., 968 (Harlan, J., concurring). 3(3), comment: 'On rare occasions, state. If so, proceed. result presumably desires parties. consciously place.' Applying proof, findings, appear substantial record: '(Zapata) direction tried Florida probability most, necessarily American. answer, me, minority German. manned Where mow matter points duties move freely. homes Germany. probably numbers Americans, not, am inclined balance.' 212. questions negligence completely unnecessary. file 'affirmative' easily pleaded defense either period. risk, answer invalid. hazardous option character concerned. 712. * parcel mentioned text, avoiding hope evade doctrine. Judges hostile attempts circumvent agreements. specifying (which favors releases) regularly Kensington, 276, 102, 107, 190, void exemption despite Belgian tolerant. Gerli Cunard 48 115, 117 (CA2); Oceanic Steam Nav. Corcoran, 724, 731 re Lea Fabrics, 226 232, 237 (D.C.N.J.); Straus Canadian P.R. 407, 173 564; Siegelman White Star, 221 189, 199 (CA2) (Frank, dissenting). 6A Corbin Contracts 1446 stratagem circumvention requires travel ocean relief. Unless prepared overrule countenance devices designed evading prohibition. argued, rationales doctrine, 'to need goods overreached others drive hard bargains' (349 91, 633), stature. Yet often prophylactic rather sort marginal ones. objective 'discourage wrongdoers pay damages' (Ibid., 632) applies every regardless relative strengths

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