Keesal, Young & Logan

KYL obtains Ninth Circuit ruling that a vessel sued in rem may invoke the forum selection clause of a bill of lading

On May 8, 2009, KYL obtained a ruling from the United States Court of Appeals for the Ninth Circuit that a ship sued in rem for cargo damage can invoke the foreign forum selection clause in a bill of lading issued by the carrier. The litigation arose out of an unusual incident in July 2006. The car carrier COUGAR ACE rolled and held a heavy list to port off the shore of Alaska while en route from Japan to the United States and Canada to deliver its cargo of new vehicles. A challenging and dangerous salvage operation ensued, and it unfortunately claimed the life of one salvor. The ship was eventually brought upright, but cargo interests claimed that many of the vehicles were damaged and had to be destroyed. The carrier's bill of lading included a forum selection clause which required claims against it to be filed in court in Japan. Seeking to have their claims determined in the United States, cargo interests sued the ship itself in rem. Both the trial court and the Ninth Circuit agreed with KYL's argument on behalf of the ship that the Himalaya clause in the bill of lading allowed the ship to invoke the Japanese forum selection clause, thereby leading to dismissal of the lawsuit in the United States.

You can read the full opinion here.