Court Opinion

ID: 195498
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:41:08+00
Date Added: 2024-06-11T09:50:00.701027
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July 18, 1994     UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT

                                     

No. 93-2179

              VIMAR SEGUROS Y REASEGUROS, S.A.,

                   Plaintiffs, Appellants,

                              v.

              M/V SKY REEFER, HER ENGINES, ETC.,
                   AND M.H. MARITIMA, S.A.,

                    Defendants, Appellees.

                                     

                         ERRATA SHEET

   The opinion of this court issued on July 7, 1994, is amended

as follows:

   On page 8, first full paragraph, line 1:  Replace "Moveover"

with "Moreover."

                UNITED STATES COURT OF APPEALS

                    FOR THE FIRST CIRCUIT

                                         

No. 93-2179

              VIMAR SEGUROS Y REASEGUROS, S.A.,

                   Plaintiffs, Appellants,

                              v.

              M/V SKY REEFER, HER ENGINES, ETC.,

                   AND M.H. MARITIMA, S.A.,

                    Defendants, Appellees.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

           [Hon. Mark L. Wolf, U.S. District Judge]
                                                  

                                         

                            Before

                     Breyer*, Chief Judge,
                                         

                Bownes, Senior Circuit Judge,
                                            

                  and Stahl, Circuit Judge.
                                          

                                         

Stanley  McDermott, III with whom Sharyn Bernstein,  Varet & Fink,
                                                                  

P.C., Alexander Peltz, and  Peltz Walker & Dubinsky were  on brief for
                                               

appellants.

John J. Finn with  whom Thomas H. Walsh, Jr., Jeffrey S. King, and
                                                             

Bingham, Dana & Gould were on brief for appellees.
                 

                                         

                         July 7, 1994

                                         

                

*Chief Judge Stephen Breyer heard oral argument in this matter but did

not  participate  in  the drafting  or  the  issuance  of the  panel's

opinion.   The  remaining two panelists  therefore issue  this opinion

pursuant to 28 U.S.C.   46(d).

          BOWNES, Senior Circuit Judge.   This appeal asks us
          BOWNES, Senior Circuit Judge.
                                      

to  decide whether a foreign arbitration clause in a maritime

bill of lading governed by the  Carriage of Goods at Sea Act,

46  U.S.C.    1300  et seq.  (COGSA),  is invalid  under that
                          

statute, or  whether such a  clause is enforceable  under the

Federal Arbitration Act,  9 U.S.C.    1  et seq.  (FAA).   We
                                               

conclude  that the  FAA  controls, and  that the  arbitration

clause is  valid.   Accordingly,  the order  of the  district

court  staying this  action pending  arbitration in  Tokyo is

affirmed.

                              I.

                          BACKGROUND
                                    

          Plaintiff-appellant   Bacchus   Associates   is   a

wholesale fruit  distributor in the Northeast  United States.

Bacchus was  the owner of  a shipment  of oranges  travelling

from  Agadir,  Morocco  to  New  Bedford,  Massachusetts,  in

February  1991 aboard the SKY REEFER,1 a vessel owned by M.H.

Maritima,  S.A.   Maritima had  time-chartered the  vessel to

Honma Senpaku Co.,  Ltd., who  in turn  time-chartered it  to

Nichiro Corp.   Bacchus  entered into a  voyage charter  with

Nichiro for the February 1991 voyage.

                    

1.  The subrogated underwriter of the oranges,  Vimar Seguros
Y Reaseguros,  is also a plaintiff-appellant  in this action.
Hereafter,   references  to   Bacchus  include   Vimar  where
applicable.

                             -2-
                              2

          The  oranges were  shipped under  a bill  of lading

issued in Morocco by Nichiro.  The bill of lading constitutes

the contract  of carriage between  Bacchus and Maritima.   En

route to New Bedford, numerous boxes of oranges were crushed.

Bacchus filed an  action in the United  States District Court

for the  District of Massachusetts,  in rem  against the  SKY
                                           

REEFER, and in personam  against Maritima, seeking to recover
                       

approximately $1 million in damages.

          Maritima  moved  to  stay  the  action  and  compel

arbitration  in Tokyo  pursuant to  a clause  in the  bill of

lading:

          Governing Law and Arbitration
          (1)   The   contract   evidenced  by   or
          contained in this Bill of Lading shall be
          governed by Japanese Law.

          (2) Any dispute arising from this Bill of
          Lading shall be  referred to  arbitration
          in   Tokyo   by   the    Tokyo   Maritime
          Arbitration  Commission  (TOMAC)  at  the
          Japan   Shipping   Exchange,   Inc.,   in
          accordance  with the  Rules of  TOMAC and
          any  agreement  thereto,  and  the  award
          given by  the arbitrators shall  be final
          and binding on both parties. 

The district court held that the arbitration clause contained

in subsection (2) was enforceable, granted Maritima's  motion

for a  stay pending arbitration, and  certified the following

question  for interlocutory  appeal pursuant  to 28  U.S.C.  

1292(b):   "[W]hether 46 U.S.C.    1303(8) [   3(8) of COGSA]

nullifies an arbitration clause contained in a bill of lading

                             -3-
                              3

governed by COGSA."  With this question in mind, we begin our

journey through unsettled statutory waters.

                             II.

                          DISCUSSION
                                    

          COGSA was passed in  1936 as the American enactment

of the Hague Rules,  and was part of an  international effort

to achieve uniformity  and simplicity in bills of lading used

in  foreign trade.  Union Ins. Soc'y  of Canton, Ltd. v. S.S.
                                                             

Elikon,  642 F.2d 721,  723 (4th Cir. 1981).   COGSA was also
      

intended    to    reduce    uncertainty     concerning    the

responsibilities     and     liabilities     of     carriers,

responsibilities and rights of  shippers, and liabilities  of

insurers.   State Establishment  for Agric. Prod.  Trading v.
                                                          

M/V  Wesermunde,  838  F.2d  1576, 1580  (11th  Cir.),  cert.
                                                             

denied, 488 U.S. 916 (1988) ("Wesermunde");  S.S. Elikon, 642
                                                        

F.2d  at 723; see generally Grant Gilmore & Charles L. Black,
                           

The Law of Admiralty   3-25 at 145 (2d ed. 1975).
                    

          COGSA applies  to "[e]very  bill of  lading  . .  .

which is evidence of  a contract for the carriage of goods by

sea to or from parts of the United States, in foreign trade .

. . .  "  46 U.S.C.   1300.   The parties agree that the bill

of  lading at  issue  here is  covered  by COGSA  ex  proprio
                                                             

vigore, in  other words, as  a matter  of law.   The bill  of
      

lading also contains the following provision:

                             -4-
                              4

          Local Law
          In case  this Bill  of Lading covers  the
          Goods moving to or from the U.S.A. and it
          shall be adjudged  that the Japanese  Law
          does not govern this Bill of Lading, then
          the  provisions of  the U.S.  Carriage of
          Goods at Sea Act 1936 shall govern before
          the Goods are  loaded on  and after  they
          are  discharged  from   the  vessel   and
          throughout the entire  time during  which
          the Goods  are in  the actual  custody of
          the carrier.

Bacchus argues  that the Tokyo arbitration  clause is invalid

under    3(8) of COGSA which prohibits the "lessening" of the

carrier's obligation as imposed by COGSA's other sections.2 

          In Indussa Corp. v. S.S. Ranborg, 377 F.2d  200 (2d
                                          

Cir. 1967)  (en  banc),  the Second  Circuit  held  that  all

foreign forum  selection clauses in bills  of lading governed

by COGSA  are necessarily invalid  under   3(8)  because they

tend  to lessen the  carrier's liability.   Id. at  204.  The
                                               

court reasoned as follows:

          From a practical  standpoint, to  require
          an American plaintiff to assert his claim
          only  in  a  distant  court  lessens  the

                    

2.  This provision provides as follows:

          Any  clause, covenant  or agreement  in a
          contract   of   carriage  relieving   the
          carrier  or the  ship from  liability for
          loss or  damage to or  in connection with
          the   goods,  arising   from  negligence,
          fault,   or  failure  in  the  duties  or
          obligations provided in this  section, or
          lessening  such liability  otherwise than
          as  provided in this  Act, shall  be null
          and void and of no effect.

46 U.S.C.   1303(8).

                             -5-
                              5

          liability    of    the   carrier    quite
          substantially,   particularly  when   the
          claim is  small.   Such a clause  puts "a
          high  hurdle" in  the  way  of  enforcing
          liability, and thus is an effective means
          for carriers to secure  settlements lower
          than  if  cargo  [sic]  could  sue  in  a
          convenient forum.

Id.  at 203.3  Moreover,  "[a] clause making  a claim triable
   

only  in  a  foreign  court  would  almost  certainly  lessen

liability  if the  law which  the court  would apply  was not

[COGSA]."  Id.  Furthermore,
              

          [e]ven when the foreign court would apply
          [COGSA],  requiring  trial  abroad  might
                                                   
          lessen  the   carrier's  liability  since
          there could be no assurance that it would
          apply [COGSA] in the same way as would an
          American tribunal subject to  the uniform
          control  of the Supreme Court . . . .  We
          think that Congress  meant to  invalidate
          any  contractual provision  in a  bill of
          lading  for a  shipment  to  or from  the
          United  States  that would  prevent cargo
          [sic] able to  obtain jurisdiction over a
          carrier in an American court  from having
          that court entertain  the suit and  apply
          the   substantive   rules  Congress   had
          prescribed.

                    

3.  The court also concluded  that COGSA, wherever it governs
a  bill  of lading,  requires  application  of American  law.
Indussa, 377 F.2d at 203; see generally Thomas J. Schoenbaum,
                                       
Admiralty  & Maritime Law    9-18 at 326-27  (Pra. ed. 1987).
                         
Bacchus contends  that the  Japanese choice-of-law  clause in
its bill of lading, in addition to the arbitration clause, is
null and void under   3(8) of COGSA, and, alternatively, that
the  "Local Law" clause in  the bill of  lading requires that
COGSA, and  not Japanese law, governs,  because COGSA applies
ex proprio vigore.   Although both of  these arguments appear
                 
to  be  substantial, only  the  validity  of the  arbitration
clause is at issue on this interlocutory appeal.  In light of
our holding,  the choice-of-law question must  be decided, in
the first instance, by an arbitrator.

                             -6-
                              6

Id.  at  203-04 (emphasis  in  original)  (citations omitted)
   

(footnote omitted).

          Since Indussa,   3(8) has been consistently used by
                       

federal courts to invalidate forum selection clauses in bills

of lading governed by  COGSA.  See, e.g., Conklin  & Garrett,
                                                             

Ltd.  v. M/V Finnrose, 826 F.2d 1441, 1442-44 (5th Cir. 1987)
                     

(forum  selection clause  designating  Finland  invalid  even

where  bill of lading  provided for  application of  COGSA in

Finland);  Union Soc'y  of Canton,  Ltd., 642 F.2d  at 723-25
                                        

(choice  of  forum  clause  requiring  litigation  in Germany

invalid  under   3(8)); cf. Fireman's Fund Amer. Ins. Cos. v.
                                                          

Puerto Rican  Forwarding Co., 492  F.2d 1294 (1st  Cir. 1974)
                            

(distinguishing  Indussa and  upholding New  York City  forum
                        

selection  clause).    Indussa  has  also  been  approved  by
                              

commentators.   See Gilmore &  Black, supra    3-25 at 145-46
                                           

n.23;  Schoenbaum, supra   9-18 at 327; Charles L. Black, The
                                                             

Bremen, COGSA and the Problem of Conflicting  Interpretation,
                                                            

6  Vand. J.  Trans. L.  365,  368-69 (1973).   But  see Note,
                                                       

Kenneth M. Klemm, Forum Selection in Maritime Bills of Lading
                                                             

Under COGSA,  12 Fordham  Int'l L.J. 459  (1989); Stephen  M.
           

Denning, Choice of  Forum Clauses  in Bills of  Lading, 2  J.
                                                      

Mar. L. & Com. 17 (Oct. 1970).

          While we need not fully  explore the issue, we note

that the  Supreme Court's recent decision  in Carnival Cruise
                                                             

Lines, Inc. v. Shute, 499 U.S. 585 (1991), in which the Court
                    

                             -7-
                              7

held that the Limitation of Vessel  Owners' Liability Act did

not  invalidate forum selection  agreements, casts some doubt

upon Indussa's continuing viability.   See Fabrica De Tejidos
                                                             

La  Bellota S.A.  v. M/V Mar,  799 F.  Supp. 546,  560-61 (D.
                            

Virgin  Islands 1992);  see also  Patrick J.  Borchers, Forum
                                                             

Selection  Agreements in  the Federal  Courts After  Carnival
                                                             

Cruise:   A Proposal  for Congressional  Reform, 67 Wash.  L.
                                               

Rev.  55,  77 (1992)  (Carnival  Cruise  implicitly overruled
                                       

Indussa and its progeny).  But see Underwriters at Lloyd's of
                                                             

London v. M/V Steir,  773 F. Supp. 523, 526-27  (D.P.R. 1991)
                   

(invalidating forum  selection clause under    3(8) of COGSA,

holding that Indussa survives Carnival Cruise).
                                             

          Moreover, in Fireman's  Fund we questioned  whether
                                      

Indussa  even survived  the Supreme  Court's decision  in The
                                                             

Bremen v. Zapata  Off-Shore Co., 407  U.S. 1 (1972).   In The
                                                             

Bremen, the Supreme Court  enforced a foreign forum selection
      

clause in a maritime contract not covered by COGSA.  In doing

so,   the   Court  focused   on   whether   the  clause   was

"unreasonable" under the circumstances.  The Bremen, 407 U.S.
                                                   

at 10.  We remarked as follows:

          Although    the    Supreme   Court    has
          acknowledged the Indussa decision and has
                                  
          not  formally rejected it, see The Bremen
                                                   
          v. Zapata Off-Shore Co.,  407 U.S. 1,  10
                                 
          n.11,  92  S.Ct.  1907,  32  L.Ed.2d  513
          (1972),  several  passages in  the Bremen
          opinion cast some doubt on the underlying
          rationale of  Indussa.   See,  e.g.,  407
                                             
          U.S.   at  9,  92  S.Ct.  at  1912  ("The
          expansion   of   American  business   and

                             -8-
                              8

          industry  will  hardly be  encouraged if,
          notwithstanding   solemn  contracts,   we
          insist  on a  parochial concept  that all
          disputes  must be resolved under our laws
          and in our courts.") . . . .

Fireman's Fund, 492 F.2d at 1296 n.2.  Because The  Bremen is
                                                          

not a COGSA case, however,  it is easily distinguishable from

Indussa and its progeny.  See S.S. Elikon, 642 F.2d at 724-25
                                         

(holding that The  Bremen did not involve COGSA and therefore
                         

did not disturb Indussa).
                       

          Notwithstanding  the  arguably tremulous  ground on

which Indussa and its progeny currently  sit, we will assume,
             

arguendo, that, for the reasons set forth in Indussa, foreign
                                                    

forum selection clauses are invalid under   3(8) of COGSA.

          The other  statute implicated  in this case  is the

FAA.  Section 2 of that act provides:

          A  written  provision  in   any  maritime
          transaction   .   .   .   to   settle  by
          arbitration   a   controversy  thereafter
          arising out of such  contract . . . shall
          be  valid, irrevocable,  and enforceable,
          save upon such grounds as exist at law or
          in  equity  for  the  revocation  of  any
          contract.

9 U.S.C.    2.   "[B]ills  of lading  of water  carriers" are

explicitly  included as  "maritime  transactions"  under  the

statute.   9  U.S.C.    1.   Furthermore, the FAA  requires a

federal district  court, on  the application  of  one of  the

parties,  to stay  litigation and  grant an  order compelling

arbitration of  any issue referable to  arbitration under the

agreement.  Id.    3, 4.
               

                             -9-
                              9

          Where there  is an agreement to  arbitrate, the FAA

reflects  a strong,  well-established, and  widely recognized

federal policy  in favor of  arbitration.   Shearson/American
                                                             

Express,  Inc.   v.  McMahon,  482  U.S.   220,  226  (1987);
                            

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473
                                                        

U.S. 614,  625 (1985);  Securities Indus. Ass'n  v. Connolly,
                                                            

883 F.2d  1114, 1118-19  (1st Cir.  1989), cert. denied,  495
                                                       

U.S. 956 (1990).   Arbitration  agreements are  unenforceable

under    2  of the  FAA  only where  the agreement  would  be

revocable  under  state contract  law.    Southland Corp.  v.
                                                         

Keating,  465 U.S.  1, 11  (1984)  (party may  assert general
       

contract  defenses,  such  as  fraud  and  duress,  to  avoid

enforcement of arbitration agreement); McAllister Bros., Inc.
                                                             

v. A  & S Transp.  Corp., 621  F.2d 519, 524  (2d Cir.  1980)
                        

(same).4

          Although this  court  has never  decided whether  a

foreign  arbitration clause in  a bill of  lading governed by

COGSA  is invalid under    3(8) of that  statute, courts that

                    

4.  Bacchus argued  below  that  the  bill of  lading  was  a
contract  of adhesion,  and that  the arbitration  clause was
therefore unenforceable.   This  defense was rejected  by the
district  court,  and that  ruling is  not  before us  on the
present appeal.   We recognize, however,  that maritime bills
of  lading have been viewed  as contracts of  adhesion.  See,
                                                            
e.g., Organes  Enters., Inc. v. M/V Khalij Frost, 1989 A.M.C.
                                                
1460, 1465-66 (S.D.N.Y. 1989);  Pacific Lumber & Shipping Co.
                                                             
v. Star Shipping  A/S, 464  F. Supp. 1314,  1315 (W.D.  Wash.
                     
1979).  Accordingly, if the adhesion issue had been a subject
of  this   interlocutory  appeal,  it   would  warrant  close
scrutiny.

                             -10-
                              10

have  reached the question are divided.  A handful of courts,

including  the Eleventh Circuit,  have employed the reasoning

articulated  in  Indussa  to invalidate  foreign  arbitration
                        

clauses.   See,  e.g., Wesermunde, 838  F.2d at  1580-82; M/V
                                                             

Khalij Frost,  1989 A.M.C. at  1462-66; Siderius v.  M.V. Ida
                                                             

Prima,  613  F.  Supp.  916,  920-21  (S.D.N.Y.  1985);  Star
                                                             

Shipping A/S, 464  F. Supp.  at 1314-15; see  also Gilmore  &
                                                  

Black, supra,   3-25 at 146 n.23; Schoenbaum, supra   9-19 at
                                                   

329.

          In  Wesermunde,  the Eleventh  Circuit  declined to
                        

enforce a  foreign arbitration agreement contained  in a bill

of lading governed by  COGSA.  Relying on Indussa,  the court
                                                 

explained as follows:

          While we do not believe  that arbitration
          in and of itself is per  se  violative of
                                     
          COGSA's  provisions, especially  in light
          of Congress' encouragement of arbitration
          by  its enactment of the Arbitration Act,
          9 U.S.C.     1-14  (1970) the  court does
          believe   that   a  provision   requiring
          arbitration in a foreign country that has
                                  
          no connection with either the performance
          of  the  bill of  lading contract  or the
          making of  the bill of lading contract is
          a  provision  that  would  conflict  with
          COGSA's general purpose  of not  allowing
          carriers   to   lessen   their  risk   of
          liability.

Wesermunde, 838 F.2d at 1581 (footnote omitted).  Some courts
          

have gone one step  further, holding that foreign arbitration

clauses in bills  of lading  are per se  invalid under  COGSA
                                       

because  "[t]he  considerations   [stated  in  Indussa]   are
                                                      

                             -11-
                              11

substantially similar  where the bill of  lading requires the

consignee  to arbitrate in a foreign country."  Siderius, 613
                                                        

F. Supp. at  920; accord  Khalij Frost, 1989  A.M.C. at  1462
                                      

(Indussa rationale "appl[ies] with equal force in the case of
        

a foreign arbitration clause in a bill of lading").

          On  the other  side of  the coin,  numerous federal

courts have  upheld foreign  arbitration clauses in  bills of

lading  subject to COGSA.  See, e.g., Nissho Iwai Amer. Corp.
                                                             

v. M/V Sea  Bridge, 1991  A.M.C. 2070 (D.  Md. 1991);  Citrus
                                                             

Mktg.  Bd. v.  M/V Ecuadorian  Reefer, 754  F. Supp.  229 (D.
                                     

Mass. 1990); Travelers Indem., Co. v. M/V Mediterranean Star,
                                                            

1988 A.M.C.  2483 (S.D.N.Y. 1988);  Mid South Feeds,  Inc. v.
                                                          

M/V Aqua Marine, 1988 A.M.C. 437 (S.D. Ga. 1986); Midland Tar
                                                             

Distillers,  Inc.  v. M/T  Lotos,  362  F. Supp.  1311,  1315
                                

(S.D.N.Y. 1973);  Mitsubishi Shoji Kaisha Ltd.  v. MS Galini,
                                                            

323 F. Supp.  79, 83-84 (S.D. Tex.  1971); Kurt Orban  Co. v.
                                                          

S/S Clymenia, 318 F. Supp. 1387, 1390 (S.D.N.Y. 1970).
            

          We  join  those courts  upholding  the validity  of

foreign  arbitration clauses  in bills  of lading  subject to

COGSA.  In reaching this result, we are  guided by our belief

that  the  FAA  alone  governs the  validity  of  arbitration

clauses, both foreign and domestic,  and consequently removes

them from the grasp of COGSA.5

                    

5.  We recognize,  however, that absent the  FAA, COGSA might
operate to  nullify foreign  arbitration clauses in  bills of
lading.

                             -12-
                              12

          We   begin   with    two   canons   of    statutory

interpretation.   First,  a later  enacted statute  generally

limits  the scope  of  an earlier  statute  if the  two  laws

conflict.  Davis  v. United  States, 716 F.2d  418, 428  (7th
                                   

Cir.  1983); Tennessee  Gas  Pipeline Co.  v. Federal  Energy
                                                             

Regulatory  Comm'n, 626  F.2d  1020, 1022  (D.C. Cir.  1980);
                  

Indussa, 377 F.2d  at 204  n.4;6 see generally  2B Norman  J.
                                              

                    

6.  Footnote four of Indussa states:
                            

          Our ruling does not touch the question of
          arbitration  clauses  in bills  of lading
          which  require  this to  be  held abroad.
          The  validity  of  such  a  clause  in  a
          charter  party, or  in a  bill of  lading
          effectively  incorporating such  a clause
          in a charter  party, have been frequently
          sustained.       Although   the   Federal
          Arbitration Act adopted in 1925 validated
          a written arbitration  provision "in  any
          maritime transaction,"    2, and  defined
          that phrase to  include "bills of  lading
          of  water carriers,"   1.  COGSA, enacted
          in 1936, made  no reference to that  form
          of   procedure.     If   there   be   any
                                                   
          inconsistency   between  the   two  acts,
                                                   
          presumably  the   Arbitration  Act  would
                                                   
          prevail by virtue  of its reenactment  as
                                                   
          positive law in 1947.
                              

Indussa, 377  F.2d at  204 n.4 (citations  omitted) (emphasis
       
added).   Although a later  Second Circuit opinion  sought to
narrow  the scope of this dictum, see Aaacon Auto Transp. Co.
                                                             
v. State Farm Mut. Auto Ins. Co., 537 F.2d 648,  655 (2d Cir.
                                
1976) (explaining that footnote four of Indussa was concerned
                                               
"primarily  . . .  upon those commercial  situations in which
the economic strength and bargaining power of the parties  is
roughly equal"),  courts have  continued to rely  on footnote
four  in enforcing  foreign arbitration  clauses in  bills of
lading  governed by COGSA.   See Fakieh Poultry  Farms v. M/V
                                                             
Mulheim, No. 85 Civ. 26577, slip op. at 2 (S.D.N.Y.  Oct. 24,
       
1986); M/V  Mediterranean Star,  1988 A.M.C. at  2484-85; see
                                                             
also Kaystone Chem., Inc. v. Bow-Sun, 1989 A.M.C. 2976, 2981-
                                    

                             -13-
                              13

Singer, Sutherland Statutory Construction   51.03 at 141 (5th
                                         

ed. 1992).   Second, where two  statutes conflict, regardless

of the priority of enactment, the specific statute ordinarily

controls  the  general.   See  Watson v.  Fraternal  Order of
                                                             

Eagles, 915 F.2d 235,  240 (6th Cir. 1990); see  generally 2B
                                                          

Sutherland Statutory Construction,   51.05 at 174.
                                 

          With  respect to the former  canon, the FAA must be

given priority over COGSA in  light of the FAA's  reenactment

in 1947, eleven years after COGSA was passed.  Similarly, the

latter  canon suggests that the FAA be given effect.  Section

3(8) of  COGSA, which voids  any clause  in a bill  of lading

that "lessens" the carrier's liability, makes no reference to

arbitration, or  for that  matter, forum  selection clauses.7

Conversely,  the  FAA   specifically  validates   arbitration

clauses  contained in maritime bills of lading.  See 9 U.S.C.
                                                    

   1, 2.

                    

82 (S.D.N.Y. 1989) (stating  that Indussa footnote "probably"
                                         
requires enforcement of  foreign arbitration clause  in COGSA
bill  of lading).  But  see Siderius, 613  F. Supp. at 920-21
                                    
(holding Aaacon  substantially undercuts scope of the Indussa
                                                             
footnote);  Khalij  Frost,  1989  A.M.C.  at 1463-64  (same).
                         
While  we  agree  with  the rule  of  statutory  construction
expressed  in the footnote, we take no position on the effect
of Aaacon on that note.
         

7.  In fact,  up until Indussa, the  Second Circuit regularly
                              
enforced foreign  forum selection clauses in  bills of lading
governed  by COGSA.   See, e.g., William  H. Muller  & Co. v.
                                                          
Swedish Amer.  Line  Ltd.,  224  F.2d 806  (2d  Cir.),  cert.
                                                             
denied, 350 U.S. 903  (1955); Cerro de Pasco Copper  Corp. v.
                                                          
Knut Knutsen, O.A.S., 187 F.2d 990 (2d Cir. 1951).
                    

                             -14-
                              14

          Next,  and  perhaps  of  paramount  importance,  we

believe  that the strong  federal policy favoring arbitration

supports the primacy of the  FAA over COGSA where arbitration

agreements  are concerned.    See Ecuadorian  Reefer, 754  F.
                                                    

Supp. at 233-34.  The  existence of this policy distinguishes

the present  case from foreign choice-of-forum  cases because

in those cases "there was no compelling congressional mandate

in  favor of giving  effect to agreements  to litigate before

foreign tribunals."  MS Galini, 323 F. Supp. at 83.
                              

          Furthermore, American courts'  mistrust of  foreign

courts,  a driving force  in the Indussa  court's decision to
                                        

invalidate   foreign   choice-of-forum    clauses,   is    an

inappropriate  consideration in  the context  of arbitration.

See  Mitsubishi Motors, 473 U.S. at 626-27 (We are "well past
                      

the time when judicial suspicion of . . . arbitration  and of

the   competence  of   arbitral   tribunals   inhibited   the

development of arbitration as an alternative means of dispute

resolution."); Connolly, 883 F.2d  at 1119 ("[C]ourts must be
                       

on  guard  for artifices  in which  the ancient  suspicion of

arbitration  might reappear.").   Finally,  unlike a  foreign

forum selection  clause, an  agreement to arbitrate  does not

deprive  a  federal  court   of  its  jurisdiction  over  the

underlying dispute.  S/S  Clymenia, 318 F. Supp. at  1390; MS
                                                             

Galini, 323 F. Supp. at 83.
      

                             -15-
                              15

          For  the  foregoing  reasons,  the   order  of  the

district court is Affirmed.
                  Affirmed.
                          

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                              16