Opinion
Civ. No. 99-1242, SECTION "K" (5).
February 11, 2000.
ORDER AND REASONS
Before the court is a Motion to Dismiss filed by defendants Daiichi Chuo Kisen Kaisha, Daiichi Chuo Kisen K.K., Daiichi Kosan Kaisha, and Mars Shipping Co. S.A. (collectively "the movants"). The plaintiff, Nippon Fire Marine Insurance Co. ("Nippon Fire") opposes the motion. For the reasons set forth below, the court finds that the Motion to Dismiss should be granted.
Daiichi Chuo Kisen Kaisha, Daiichi Chuo Kisen K.K., Daiichi Kosan Kaisha will be collectively referred to as "Daiichi."
"Mars Shipping"
1. Background
This case arises from the transportation of 232 wrapped spring wire rod coils from Muroran, Japan to New Orleans. The coils were sold by Nippon Steel Corporation to Okaya (U.S.A.), Inc. ("Okaya"). On April 15, 1998, after inspecting the coils, Daiichi issued clean onboard bills of lading for carriage to New Orleans aboard the M/V CORAL HALO, which was owned by Mars Shipping and managed by Daiichi. In New Orleans, defendant Transocean Terminal Operators, Inc. ("TTO") discharged and stored the coils at its facility from May 26 to June 10, 1998. TTO then reloaded the coils onto the Barge AT-641B, which was owned by defendant American River Transportation Company ("ARTCO"). Okaya contracted with defendant Combined Transport Systems, Inc. ("CTS") for the barge transport agreement, and CTS, in turn, contracted with ARTCO for use of the barge. From New Orleans, the coils were carried upriver to Cincinnati, Ohio. When the barge was opened in Cincinnati, it was determined that the coils had sustained extensive damage, including torn covers, scrapes, and rust. Consequently, Nippon Fire, insurer of the cargo, paid damages to Okaya and became subrogated to its claims against defendants.
Nippon Fire then brought this action against The M/V CORAL HALO, Barge AT-641B TTO, CTS, DAIICHI, Mars Shipping, and ARTCO. In addition, ARTCO has filed cross claims against Daiichi and Mars Shipping. Daiichi and Mars Shipping now move the court to dismiss Nippon Fire's complaint against them, arguing that the foreign forum selection clause in the bill of lading deprives this court of jurisdiction.
2. Legal Analysis
a. Presumptive Validity of Forum Selection Clause
Generally, a forum selection clause is entitled to a presumption of validity and will be upheld unless the opponent can show that the clause is "unreasonable under the circumstances." M/S BREMEN v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). A forum selection clause may be unreasonable if 1) it was incorporated into the agreement through fraud or overreaching; 2) the opponent to the clause will for all practical purposes be deprived of his day in court because of grave inconvenience or unfairness; 3) the chosen law is unfair and will deprive plaintiff of a remedy; or 4) enforcement of the forum selection clause would contravene a strong public policy. Haynesworth v. The Corporation, 121 F.3d 956, 963 (5th Cir. 1997).
Where, as in this case, the forum selection clause is incorporated into a bill of lading, the clause is "null and void and of no effect" if it relieves the carrier of liability or lessens its liability. 46 U.S.C. § 1303 (8).
Until 1995, nearly thirty years of jurisprudence dictated that a forum selection clause in a bill of lading was per se invalid if the forum selected was a country other than the United States, See Indussa Corp. v. S.S. Ranborg, 377 F.2d 200 (2nd Cir. 1967). In Indussa, the Second Circuit reasoned that: (1) forum selection clauses interfere with the enforcement of liability and allow carriers to secure lower settlements than if they were sued in a forum convenient to the shippers; (2) "[a] clause making a claim triable only in a foreign court could almost certainly lessen liability if the law which the court would apply was neither [COGSA] nor the Hague Rules;" and (3) even where COGSA will be applied, there is a risk that the foreign tribunal will apply COGSA differently than would an American court subject to the uniform control of the Supreme Court. Id. at 202-04. The Second Circuit viewed § 3(8) of COGSA "as covering a potential and not simply a demonstrable lessening of liability," and held that Congress had "outlawed clauses prohibiting American courts from deciding cases otherwise properly before them." Id. at 204; see also Sun Oil Co. of Pa. v. M/T Carisle, 771 F.2d 805, 814 (3d Cir. 1985) ("So strong is COGSA's policy to preclude clauses lessening the carrier's liability that [the Second Circuit] . . . held that section 3(8) precluded a clause that required an American plaintiff to assert his claim only in a foreign court.").
After Indussa, the courts of appeals "without exception" invalidated foreign forum selection clauses under COGSA until a 1995 Supreme Court decision. Vimar Seguros y Reaseguros S.A. v. M/V Sky Reefer, 515 U.S. 528, 533 (1995). In Sky Reefer, the Supreme Court held that foreign arbitration clauses are not invalid under COGSA in all circumstances. Id. at 541. Where such a clause is challenged, the controlling question is "whether the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees." Id. at 539.
The Sky Reefer Court began its analysis by observing that Indussa was the leading case for invalidation of foreign forum selection clauses. It summarized two parts of Indussa's rationale for treating foreign forum selection clauses as invalid per se: 1) the inconvenience of the foreign forum to shippers might allow carriers to secure lower settlements, and 2) the a lack of assurance that the foreign forum will apply COGSA as an American tribunal would. The Court then stated:
As foreign arbitration clauses are but a subset of foreign forum selection clauses in general . . . the Indussa holding has been extended to foreign arbitration clauses as well. . . . The logic of that extension would be quite defensible, but we cannot endorse the reasoning or the conclusion of the Indussa rule itself.515 U.S. at 534, (citations omitted).
The Court rejected the view that the inconvenience and cost of foreign litigation "lessens liability" within the meaning of COGSA. Id. at 535-37. The Court also criticized "skepticism over the ability of foreign arbitrators to apply COGSA or the Hague Rules," stating that reliance on Indussa "must give way to contemporary principles of international comity and commercial practice." Id. at 537. Furthermore, the court noted that the objective of maintaining the role of the United States in international legislative endeavors "counsels against . . . insular distrust of the ability of foreign arbitrators to follow the law." Id. at 539.
The Court next turned to the argument that foreign arbitrators might not apply COGSA and that COGSA liability might be diminished in a foreign forum. The Court stated that it is not necessary that the foreign forum apply COGSA. "The relevant question" under § 3(8) of COGSA, the Court explained, "is whether the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees." Id. The Court went on to find that the appellant's claim was premature: it was not known what law the arbitrators would apply or that the petitioner would receive diminished protection as a result. Therefore, the Court never conducted a comparative study of COGSA and its Japanese counterpart.
The Sky Reefer respondents sought only to have the arbitration clause enforced. Because the district court retained jurisdiction to enforce the arbitration award, "mere speculation that the foreign arbitrators might apply Japanese law which . . . might reduce respondents' legal obligations, d[id] not in and of itself lessen liability under COGSA § 3(8)." Id. at 540-41. The Court also cautioned:
Were there no subsequent opportunity for review and were we persuaded that the choice-of-forum and choice-of-law clauses operated in tandem as a prospective waiver of a party's rights to pursue statutory remedies . . ., we would have little hesitation in condemning the agreement as against public policy.Id. at 540 (internal quotes omitted, alteration in original).
In his dissent, Justice Stevens presumed that the majority's view that COGSA liability is not reduced by the increased costs would apply to forum selection as well as arbitration. Id. at 548 n. 7. Justice O'Connor concurred in the judgment but chided the majority for rejecting the reasoning and conclusion of Indussa without qualification, since it was unnecessary to reject Indussa in its entirety to reach the holding. Id. at 542.
Although Sky Reefer dealt with an arbitration clause, courts have almost universally found that the Sky Reefer rule is equally applicable to foreign selection clauses. See, e.g., Mitsui Co. (USA), Inc. v. Mira M/V, 111 F.3d 33, 36 (5th Cir. 1997) (per curiam); Fireman's Fund Ins. Co. v. M.V. DSR Atlantic, 131 F.3d 1336, 1339 (9th Cir. 1997); Talatala v. Nippon Yusen Kaisha Corp., 974 F. Supp. 1321, 1324 n. 4 (D.Haw. 1997); Tradearbed v. M/V Agia Sofia, 1997 WL 769525 (D.N.J. 1997); Great American Ins. Co. v. Kapitan Byankin, No. 96-0258, 1996 WL 756863, *1 (N.D.Cal. Aug. 1, 1996); Pasztory v. Croatia Line, 918 F. Supp. 961, 965 (E.D.Va. 1996); Nippon Fire Marine Ins. Co. v. M.V. Egasco Star, 899 F. Supp. 164, 170 n. 8 (S.D.N.Y. 1995), aff'd, 104 F.3d 351, (2nd Cir. 1996) (table).
These courts have relied on the majority's rejection of Indussa's reasoning and conclusion — and in some cases on the statements of Justices O'Connor and Stevens as well — to conclude that foreign forum selection clauses are presumptively valid. See, e.g. Mira, 111 F.3d at 35. Faced with claims concerning the application of foreign law, these courts, including the Fifth Circuit, have asked the Sky Reefer question — i.e., "whether the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees." Id. The Fifth Circuit has held that the presumption of validity may be overcome upon a showing that the clause is unreasonable under the circumstances. Id. ( citing BREMEN, 407 U.S. 1, 15).
Some commentators argue that Sky Reefer did not overrule Indussa entirely. One critic has suggested that while the Sky Reefer Court did accept the risk that a foreign arbitrator would apply COGSA incorrectly or apply foreign law which is not equivalent to COGSA, it did so only because the district court would be able to review, and perhaps reject, the arbitration decision. Stanley L. Gibson, Sky Reefer Muddies the COGSA Waters, 9 U.S.F. Mar. L.J. 1, 21-23 (1996). In contrast, no such opportunity for review exists when a party is forced to litigate in a foreign forum.
Under this reading of the case, Indussa's concern that "[a] clause making a claim triable only in a foreign court could almost certainly lessen liability if the law which the court would apply was neither [COGSA] nor the Hague Rules," 377 F.2d at 203, is still viable. In addition, Sky Reefer did not address the Indussa court's concern that a district court might be "obligated to forecast the result of litigation in a foreign court or attempt other expedients to prevent a lessening" of rights, where "there can be no real assurance that the prophecy will be validated by the result." Indussa, 377 F.2d at 202. Even after Sky Reefer, argues one observer, "the best way to comply with Congress' mandate and to avoid the uncertainties associated with enforcing foreign forum selection clauses is not to enforce them at all." Gibson, Sky Reefer, at 26.
Indeed, the Sky Reefer Court admonished that it "would have little hesitation in condemning" a forum selection clause if it operated "as a prospective waiver of a party's rights to pursue statutory remedies." 515 U.S. at 540. The argument, then, is for continued adherence to the rule that foreign forum selection clauses are per se invalid under COGSA because of the inherent risk that foreign law will make the carrier's liability less than what COGSA guarantees.
At least one court, after carefully considering Sky Reefer and its progeny, has concluded that the rule of Indussa is no longer viable, although Sky Reefer did not entirely overrule the case. Union Steel America Co. v. M/V Sanko Spruce, 14 F. Supp.2d 682, 691 (D.N.J. 1998). The Sanko Spruce court noted that Sky Reefer expressed concern about a reduction in COGSA liability by stressing the availability of district court review of the foreign forum's conclusions in the arbitration context. Id. at 691 The court further recognized that "district court statements about how a foreign law might operate to reduce a carrier's COGSA liability always will be mere predictions." Id.
Despite these arguments to the contrary, the Sanko Spruce court held that forum selection clauses are not per se invalid for several reasons.
First, since [ BREMEN], the Supreme Court consistently has articulated a strong preference for enforcing contractual forum selection clauses. The Supreme Court never adopted the Indussa rule. Second, the animating concerns of COGSA are not implicated in this type of case. COGSA, like other countries' carriage of goods on the sea acts, is in most pertinent respects simply the 1924 Hague Rules. The impetus for these rules was the international community's experience with carriers using `their superior bargaining power to insert into bills of lading clauses which exempted them from liability for loss of or damage to the cargo even if caused by their own negligence.'Sanko Spruce, 14 F. Supp.2d at 691 (footnotes and citations omitted).
Like the carrier in Sanko Spruce, Daiichi's bill of lading does not evidence an attempt to ensure that the law to be applied will relieve it of COGSA liability. To the contrary, Daiichi selected Japan to ensure a convenient forum. In fact, the bill of lading provides that, "where specifically adjudged to apply hereto, the law governing carriage to or from U.S. ports . . ., shall be [COGSA]." Bill of Lading, clause 2.
Finally, the Sanko Spruce court noted:
[m]any countries have enacted carriage of goods on the sea acts which, like COGSA, are lifted from the Hague Rules or which reflect the principles of carrier liability embodied in COGSA. The Korean Commercial Code fits in the latter category. A principal theme in Sky Reefer is respect for foreign tribunals and their laws. Under these circumstances, it stretches § 3(8) of COGSA too far to say that it flatly invalidates a forum selection clause simply because there exists the potential that the foreign forum will apply its own law to the detriment of the shipper's COGSA rights.
In sum, while Sky Reefer did not render Indussa a dead letter in all regards, this Court will not breathe new life into the rule that foreign forum/law selection clauses are per se invalid. The better view is that such clauses are presumptively valid, and that the burden is on the party seeking to avoid enforcement of the clause to show that there is a likelihood that `the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees.'14 F. Supp.2d at 691 (citations omitted).
For these same reasons, this court will presume that the forum selection clause at issue is valid. See also Mira, 111 F.3d at 36. In this case, the foreign forum selection clause at issue reads, "Japanese law shall apply except as may be otherwise provided herein, and any dispute arising under this bill of lading shall be decided by the Tokyo District Court in Japan." Bill of Lading, clause 3. The burden is on the plaintiff to overcome the presumption of validity. The court must now consider whether Nippon Fire has demonstrated that the carrier's liability will be lessened in Japan, or has shown that enforcement of the forum selection clause would be unreasonable for some other reason. See, e.g., Jewel Seafoods Ltd. v. M/V Peace River, 39 F. Supp.2d 628, 631 (D.S.C. 1999).
b. Carriage of Goods By Sea-in the U.S. and Japan
The United States enacted COGSA in 1936 and, in doing so, incorporated the Hague Rules governing the carriage of goods into domestic law. The purpose of COGSA was to achieve international uniformity. 2 Thomas J. Schoenbaum, Admiralty and Maritime Law § 10-15 (1994). To redress the unequal bargaining power enjoyed by carriers over shippers and cargo interests, Congress enacted § 1303(8), which reads:
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 and obligations provided in this section, or as lessening such liability otherwise than as provided in this chapter, shall be null and void and of no effect.
46 Apr. U.S.C.A. § 1303(8).
Other countries, including Japan, have enacted the Hague Rules. When the Hague Rules were amended in 1967 and 1968, they became known as the Hague-Visby Rules. The United States did not adopt the Hague-Visby Rules, but Japan incorporated the Visby changes into its own version of COGSA in 1992.
The Japanese counterpart to § 1303(8) is Article 15(1), which reads, "Any special agreement which is contrary to the provisions of Articles 3 to 5, Article 8, Article 9 or Articles 12 to 14 and is not in favor of the shipper, receiver or holder of the bill of lading, shall be null and void."
Article 3(1) states that "[t]he carrier shall be liable for the loss, damage or delayed arrival of the goods which is caused by his own or his servant's negligence for the receipt, loading, stowage, carriage, custody, discharge and delivery of such goods."
Article 4(1) states that "[t]he carrier shall not be relieved from the liabilities under the preceding Article unless he proves the exercise of due diligence under the same Article."
Article 5 states:
(1) The carrier is liable for damages resulting from the loss, damage or delayed arrival of the goods which arrives from the carrier's own or his servant's failure at the beginning of the voyage to exercise due diligence to:
1) Make the ship seaworthy; 2) Man, equip, and supply the ship; 3) Make the holds, refrigerating chamber, and other parts of the ship in which the goods are carried, fit and safe for their reception, carriage, and preservation.
(2) The carrier shall not be relieved from the liabilities under the preceding paragraph unless he proves the exercise of due diligence under the same paragraph.
Article 8 concerns shipper's notice.
Article 9 prohibits the carrier from asserting against a bona fide holder of the bill of lading a defense that an item in the bill of lading is untrue.
Article 12 concerns the receiver's and holder's duty to give notice of damage.
Article 13 sets forth the rules governing the carrier's per package limitation of liability.
Article 14 provides a one year statute of limitations on the carrier's liability.
c. Would litigating in a Japan limit the carrier s liability in excess of what COGSA permits?
In this case, Nippon Fire argues that dismissal is improper because the forum selection clause is unreasonable under the circumstances. Although Japan has enacted its own version of COGSA, plaintiff argues that a Japanese court might interpret clauses 4, 6, and 34 of the bill of lading in such a way as to limit the carrier's liability in violation of § 1308(8).
To bolster its opposition, Nippon Fire has supplied the court with the affidavit of Akira Nakada ("Nakada"), who attests that a Japanese court would uphold clauses 4, 6, 8, and 34 of the bill of lading. Movants, on the other hand, offer the affidavit of Seiichi Nakamura ("Nakamura"), who states that a Japanese court would apply the Japanese version of COGSA, which is similar in all material respects to U.S. COGSA. The court will address each of the suspect clauses in turn.
i. Clause 4 of the Bill of Lading
Clause 4 of the bill of lading provides:
Validity: It is intended that the terms of this contract shall be valid, enforceable, and available to the carrier so far as and whenever permitted by law even when there has been negligence for which the carrier is chargeable, and that in all instances where it may be possible to contract against the consequences of negligence, the carrier, although negligent, shall not be under any liability whatsoever. In case any one or more of the provisions contained shall be invalid, illegal or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions herein shall not in any way be affected or impaired thereby. Furthermore, no delay or failure by the carrier in exercising any right hereunder shall impair any such right or be construed as a waiver thereof.
(emphasis added).
Nakada opines that the liability of the carrier in a Japanese court would be determined according to Japanese COGSA, and that clause 4 is enforceable to the extent allowable under Japanese COGSA. In other words, Daiichi/Mars, as "carriers" will have successfully contracted against liability to the fullest extent permissible under Japanese COGSA.
On the other hand, Nakamura believes that clause 4 of the bill of lading, if enforced, will not lessen the carrier's liability if Japanese law is applied. Nakamura points out that like COGSA, Japanese COGSA prohibits a carrier from contracting against liability for losses attributable to its negligence.
The court agrees that Article 15 of Japanese COGSA accomplishes the same purpose as § 3(8) of COGSA, that is, to prevent the carrier from limiting its liability beyond that permissible under the law of each respective forum. However, both affidavits beg the question: to what extent do Japanese and U.S. COGSA permit a carrier to limit its liability? Stated otherwise, may a carrier contract away more liability under Japanese law than under U.S. law?
The court notes that a certain aspects of a carrier's liability might be limited under Japanese law. For example, although not briefed by the parties, the carrier might urge the per package limitation on liability contained in the bill of lading, clause 29. Clause 29 of the bill of lading limits the carrier's liability to the full extent permitted by Japanese COGSA. Under COGSA § 4(5), a carrier may not contract to lessen his liability below $500 per package. In contrast, Article 13 of Japanese COGSA provides that the carrier's liability for the loss of or damage to the goods shall be the higher of "1) An amount equivalent to 666.67 units of account; 2) An amount equivalent to 2 units of account per kilo of gross weight of the goods lost, damaged, or delayed . . ."
In this case, however, neither party has urged the per-package limitation of liability under Japanese COGSA. The court has found one case in which the court determined that the Chinese Maritime Code, which contains a provision identical to Japanese COGSA Article 13, benefited the plaintiff, rather than diminishing its rights under COGSA. Peace River, 39 F. Supp.2d at 632. The case is only illustrative, however, and the court is unable to make the same determination on the facts before it. Nippon Fire has not suggested to the court that it risks recovering less in Japan than it would in the U.S. with the $500 per package limitation. The plaintiff has not demonstrated that enforcement of clause 4 would limit the carrier's liability in any way.
ii. Clause 6 of the Bill of Lading
Clause 6 of the bill of lading, the demise clause, provides, in pertinent part:
If the ship is not owned or chartered by demise to Daiichi Chuo Kosen Kaisha, (as may be the case notwithstanding anything that appears to the contrary) this bill of lading shall take effect only as a contract with the owner or demise charterer, as the case may be, as principal, made through the agency of Daiichi Chuo Kosen Kaisha, which acts as agent only and shall be under no personal liability whatsoever in respect thereof.
Nakada asserts that a Japanese court, interpreting clause 6, "would most certainly consider that the shipowner, and not Daiichi, was the carrier of the bill of lading and completely exonerate Daiichi as a carrier under the bill of lading, regardless of their liability under U.S. COGSA." Nakamura maintains that under Japanese law, Daiichi, which chartered the CORAL HALO, would be liable in the same capacity as the shipowner, Mars Shipping. The court need not resolve this dispute, however. Counsel for Daiichi has represented to the court that Daiichi is willing to waive the demise clause altogether and has agreed to file a stipulation to that effect. Hence, Daiichi will be liable as a carrier to the same extent that the shipowner is liable, and clause 4 will not serve to lessen its liability in Japan.
iii. Clause 8 of the Bill of Lading
Nakada also opines, without explanation, that a Japanese court would also enforce clause 8 of the bill of lading. Nakamura admits that he is puzzled by Nakada's statement regarding clause 8, which relates to the description of the goods. Even if clause 8 were enforced in a Japanese court, the liability of Daiichi and Mars Shipping would not be lessened thereby. Under U.S. COGSA, § 3(3)(c), the carrier is responsible for issuing a bill of lading to the shipper showing:
Clause 8 reads:
(Description of Goods) The description of the goods and the particulars of the packages mentioned herein are those furnished by the shipper who warrants the accuracy thereof. The carrier shall not be concluded as to the correctness of the marks, numbers, quantity, weight, gauge, measurement, contents, nature, quality, or value. Weight and measurement are stated on the face hereof for the purpose of freight computation only and carrier assumes no responsibility for their accuracy.
[t]he apparent order and condition of the goods: Provided, That no carrier, master, or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has no reasonable means of checking.
Based on the foregoing provision, a U.S. court would likewise enforce clause 8 of the bill of lading. Under U.S. COGSA, the carrier is not responsible for the shipper's errors in the bill of lading which it reasonably could not or should not have discovered. Japanese COGSA apparently permits carriers to contract against liability for its failure to report errors in the description of goods. Thus, there is some distinction between the carrier's responsibility to correct errors in the shipper's description of the goods in Japan and the U.S.
Nonetheless, in this case, the plaintiff has not alleged that any loss was due to an inaccurate description of the goods. Therefore, enforcement of clause 8 will not lessen the liability of Daiichi and Mars Shipping in a Japanese forum.
iv. Clause 34 of the Bill of Lading
Clause 34 of the bills of lading provides:
It is hereby expressly agreed that no servant or agent of the carrier . . ., shall in any circumstances whatsoever be under any liability whatsoever to the shipper, consignee, or owner of the goods or to any holder of this bill of lading for any loss, damage, or delay of whatsoever kind arising or resulting directly or indirectly from any neglect or default on his part while acting in the course of or in connection with his employment [but] without prejudice to the generality of the foregoing provisions in this clause, every exemption, limitation, condition, and liberty-herein contained and every right, exemption from liability, defence and immunity of whatsoever nature applicable to the carrier or to which the carrier is entitled hereunder shall also be available and shall extend to protect every such servant or agent of the carrier acting as aforesaid and for the purpose of all the foregoing provisions of this clause the carrier is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servants or agents from time to time (including independent contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to the contract in or evidenced by the bill of lading.
Clause 34, which is commonly referred to as the "Himalaya clause," purports to limit the liability of agents and servants of the carrier and to entitle the agent and servant to any defenses and immunity available to the carrier under the bill of lading. Nakada asserts that he is uncertain whether the Himalaya clause would operate to limit the liability of a ship manager, in this case, Daiichi. He also opines that he is uncertain whether a Japanese court would even assert jurisdiction over Daiichi as ship-manager or U.S.-based subcontractors.
As stated above, Daiichi has agreed to waive the demise clause and be subject to liability as carrier. Therefore, the Himalaya clause will not relieve Daiichi or Mars Shipping of liability. in addition, because Daiichi will accept liability as carrier, the Japanese court should exercise jurisdiction over Daiichi and Mars Shipping. Finally, the court is uncertain whether any U.S.-based subcontractors exists in this case. However, even if Daiichi or Mars Shipping had contracted with a U.S. company, the lack of jurisdiction in a Japanese court does not prevent this court's assertion of jurisdiction.
c. Dismissal Pursuant to the Forum Selection Clause Will Not Contravene Public Policy So as to Render the Forum Selection Clause "Unreasonable Under the Circumstances."
As discussed above, the plaintiff in this case bears the burden of demonstrating that the carrier's liability in Japan will be lessened in such a way that the forum selection clause becomes "unreasonable under the circumstances." Mira, 111 F.3d at 35. The plaintiff has not persuaded the court that the carrier's liability will be lessened at all if the matter were adjudicated in Japan. For the foregoing reasons, this court will enforce the forum selection clause and dismiss Nippon Fire's complaint against Daiichi and Mars Shipping. Accordingly,
IT IS ORDERED that the motion of Daiichi Chuo Kisen Kaisha, Daiichi Chuo Kisen K.K., Daiichi Kosan Kaisha, and Mars Shipping Co. S.A. to dismiss the complaint of Nippon Fire Marine Insurance Company is hereby GRANTED.
Having determined that there is no just reason for delay,
IT IS FURTHER ORDERED that judgment be entered in accordance with Federal Rule of Civil Procedure 54(b).
IT IS FURTHER ORDERED that the Clerk of Court mark this action closed for statistical purposes pending the outcome of proceedings in the Tokyo District Court or any appeal taken in the Fifth Circuit.
IT IS FURTHER ORDERED that the court shall retain jurisdiction and that any party may motion the court to reopen the matter upon resolution of proceedings in Japan or any appeal taken in the Fifth Circuit. This order shall not prejudice the rights of the parties to this litigation.
IT IS FURTHER ORDERED that the plaintiff shall bring an action in Japan within ninety days following entry of final judgment pursuant to rule 54(b).
New Orleans, Louisiana, this 11th day of February, 2000.