Opinion
CASE NO C02-1931C
March 25, 2003
ORDER OF DISMISSAL
This matter comes before the Court on defendant Mitsui O S K Lines, Ltd's ("Mitsui") motion to dismiss (Dkt No 13) The Court has considered the papers submitted by the parties and determined that oral argument is not necessary For the following reasons, Mitsui's motion to dismiss is hereby GRANTED
Mitsui moves the Court to dismiss this action for improper venue pursuant to Fed R Civ P 12(b)(3) Plaintiff opposes Mitsui's motion (Dkt No 19). Mitsui directs the Court's attention to the following "LAW AND JURISDICTION" provision in the bill of lading.
The contract evidenced by or contained in this Bill of Lading shall be governed by Japanese law except as may be otherwise provided for herein. Unless otherwise agreed, any action against the Carrier, the owner or demise charterer of the Vessel or Mitsui O S K Lines Ltd, thereunder must be brought exclusively before the Tokyo District Court in Japan
Defendant Stevedoring Services of America, Inc joins in plaintiffs opposition (Dkt No 22).
The facts relevant to the instant motion are undisputed.
In response, plaintiff identifies other relevant provisions. For example, the face of the bill of lading reads "SUBJECT TO ALL TERMS, CONDITIONS AND EXCEPTIONS OF THE GOVERNING CHARTER PARTY ARBITRATION CLAUSE DEEMED TO BE FULLY INCORPORATED HEREIN" One such charter party includes the following arbitration clause
Unless otherwise indicated in Box 17, any dispute arising from this Charter shall be submitted to arbitration held in Tokyo by the Tokyo Maritime Arbitration Commission (TOMAC) of the Japan Shipping Exchange, Inc in accordance with the Rules of TOMAC and any amendment thereto, and the award given by the arbitrators shall be final and binding on both parties
Another relevant charter party includes a similar arbitration clause
Any dispute arising from this Charter shall be determined m accordance with the laws of Japan and submitted to arbitration by the Japan Shipping Exchange, Inc and the award given by the arbitrators appointed thereby shall be final and binding upon the parties The appointment of arbitrators and any matters relating to arbitration procedures shall be conducted in accordance with the rules of the Japan Shipping Exchange, Inc Any suit relating to this article shall be subject to the Jurisdiction of the Tokyo District Court
Although plaintiff suggests a charter-party addendum also requires reconciliation in Vancouver, British Columbia, that provision is voluntary and inapplicable here
A forum selection clause m a bill of lading is prima facie valid, this Court must enforce it unless plaintiff demonstrates that the clause is unreasonable under the circumstances Fireman's Fund Ins Co v. M/V DSR Atlantic, 131 F.3d 1336, 1338 (9th Cir 1998) (citations omitted) A forum selection clause is unreasonable if its enforcement would contravene a strong public policy of this forum Id. (citations omitted) (unavailability of in rem proceedings insufficient to invalidate clause on public policy grounds) Because a forum selection clause in a bill of lading is a contract of adhesion, the Court must construe any ambiguities strictly against the drafter Id (quotations and citations omitted) However, if no ambiguity exists, the clause remains enforceable despite being a contract of adhesion Id at 1339 (citations omitted).
Mitsui argues that the parties intended to resolve all disputes arising in connection with the bill of lading in Japan In opposition, plaintiff argues that the forum selection clause and arbitration clauses are contradictory and ambiguous Thus, plaintiff asserts that these clauses are unreasonable and unenforceable. For example, plaintiff avers that the forum selection clause is "patently ambiguous" due to the incorporation of the arbitration clauses However, Mitsui correctly notes that the forum selection clause is a default provision With respect to the application of Japanese law, it states "except as may be otherwise provided for herein" Similarly, with respect to venue lying in Tokyo District Court, it states "Unless otherwise agreed" The arbitration clauses are consistent in designating arbitration before and in accordance with the rules of the Japan Shipping Exchange, Inc Moreover, one of the arbitration clauses explicitly provides that "[a]ny suit relating to this article shall be subject to the Jurisdiction of the Tokyo District Court" Plaintiff proffers no authority for the proposition that the mere presence of both a forum selection clause and arbitration clause in a bill of lading renders the clauses contradictory, ambiguous, unreasonable, or unenforceable
Mitsui notes that a Japanese company issued the bill of lading, the vessel M/V Rubin Kobe was bound for Japan when the logs were lost, and a Japanese company was the purchaser and consignee of the lost logs.
The Court finds it particularly relevant that the clauses uniformly identify Tokyo as the proper venue to litigate or arbitrate disputes Plaintiff identifies no contractual provision suggesting the parties intended to resolve disputes anywhere except Tokyo In addition, the cases cited by plaintiff to demonstrate the absence of any "meeting of the minds" with respect to venue bear little similarity to the instant caseSee Bauhima Corp v. China Nat'l Mach Equip. Imp Exp Corp, 819 F.2d 247, 248-50 (9th Cir 1987) (arbitration clauses wholly fail to mandate any specific venue for arbitration), Falcoal, Inc v. Turkiye Komur Isletmeleri Kurumu, 660 F. Supp. 1536, 1538, 1542 (S D Tex 1987) (two forum selection clauses — one in Turkish, one in English — directly contradict each other) Here, the bill of lading presents no such direct contradiction or obvious ambiguity Likewise, the Court concludes that the forum selection clause and arbitration clauses do not offend the policy of certainty, articulated by the U S Supreme Court inM/S Bremen v. Zapata Off-Shore Co, 407 U S 1 (1972) The clauses at issue do not create uncertainty or confusion such that their enforcement becomes unreasonable
Next, plaintiff argues that there is a substantial risk that a Japanese court would enforce the demise clause in the bill of lading and impermissibly limit Mitsui's liability in violation of U S COGSA In support, plaintiff submits the expert opinion of a Japanese admiralty law practitioner In reply, Mitsui notes that the bill of lading expressly incorporates U S COGSA in this case because carriage originated from Grays Harbor, Washington The relevant provision states
"In applying COGSA, the question is not whether the foreign forum will apply COGSA itself, but whether the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees" Fireman's Fund Ins Co, 131 F.3d at 1339 (quoting Vimar Seguros v. Reaseguros. S A v. M/V Sky Reefer, 515 U S 528, 538 (1995)).
Plaintiff's surreply asks the Court to strike this argument from Mitsui's reply brief (Dkt No 24) Plaintiff argues that Mitsui contradicted itself by first representing that Japanese law governs the contract and then representing that U S COGSA is applicable Plaintiff is simply incorrect The fact that Japanese law governs the contract does not preclude the application of U S COGSA unless, for some reason, Japanese contract law or a Japanese court refuses to honor this provision of the bill of lading, which expressly incorporates U S. COGSA by reference Plaintiff does not address this issue.
If the Carriage covered by this Bill of Lading includes Carriage to or from a port or place in the United States of America, this Bill of Lading shall be subject to the United States Carriage of Goods by Sea Act 1936 (US COGSA), the terms of which are incorporated herein and shall govern throughout the entire time during which the Goods are in the actual custody of the Carrier
As plaintiff notes, U S COGSA forbids the enforcement of demise clauses Therefore, the issue is not whether a Japanese court would enforce the demise clause, but rather, whether a Japanese court would disregard the provision expressly incorporating U S COGSA, which overrides the demise clause Plaintiff suggests that "the facts of the instant case are identical" to those presented in Nippon Fire Marine Ins Co. v. M/V Spring Wave, 92 F. Supp.2d 574 (E D La 2000). In that case, citing The Jasmine, the district court refused to enforce a Tokyo District Court forum selection clause because there was a "real risk" that a Japanese court would enforce a demise clause and impermissibly limit the carrier's liability. Id. at 575-77 However, that case did not address a bill of lading which explicitly incorporates U S COOSA by reference Thus, the Court finds Nippon Fire Marine Ins Co unpersuasive. In conclusion, neither plaintiff nor its expert demonstrates a substantial risk that a Japanese court would disregard the terms of U S COGSA — expressly incorporated into the bill of lading — and impermissibly limit Mitsui's liability
On different facts, Japanese courts in The Jasmine and The Camfair reached opposite conclusions regarding the enforceability of demise clauses Neither case addressed the situation presented here, where the bill of lading expressly incorporates a statute that prohibits the enforcement of demise clauses.
In sum, plaintiff fails to demonstrate that enforcement of the forum selection clause and arbitration clauses are unreasonable under the circumstances Accordingly, the Court GRANTS defendant Mitsui O S K Lines, Ltd's motion to dismiss and DISMISSES this action without prejudice for improper venue Venue is proper in Tokyo, Japan.
Whether the claims asserted in this action are subject to arbitration is not an issue properly before this Court.