Lloyd's Maritime and Commercial Law Quarterly
BILL OF LADING FORUM SELECTION CLAUSES IN THE UNITED STATES: THE SUPREME COURT CHARTS A NEW COURSE
The Sky Reefer
In The Sky Reefer
1 the United States Supreme Court overruled almost 30 years of lower court authority and held that s. 3(8) of the U.S. Carriage of Goods by Sea Act (“COGSA”)2 does not automatically prohibit forum selection clauses requiring cargo claims to be resolved overseas.
Prior U.S. decisions on forum selection clauses
Since 1967, the lower courts in the U.S. had uniformly held that COGSA, s. 3(8) imposes a per se rule prohibiting the enforcement of bill of lading forum selection clauses that require overseas litigation in cases subject by law to the U.S. statute.3 The influential Court of Appeals for the Second Circuit established this principle in Indussa Corp. v. S.S. Ranborg,4 an en banc decision written by the late Judge Henry J. Friendly (one of the nation’s most respected judges). Professors Gilmore and Black, the authors of the leading treatise in the field, both inspired5 and endorsed6 the Indussa rule. And lower courts consistently followed it.7 Although there were some unresolved issues at the margins,8 U.S. observers quite naturally considered the Indussa rule to be part of the “[r]eceived wisdom”9 of U.S. cargo law.
One of the unresolved issues was the extent to which the Indussa rule applied to arbitration clauses. The Indussa court, which did not itself decide the issue, suggested that the Federal Arbitration Act (“FAA”)10 might validate overseas arbitration clauses that would otherwise have been invalid under COGSA.11 In the first appellate decision on
1. Vimar Seguros y Reaseguros S.A. v. The Sky Reefer (1995) 515 U.S.—; 115 S. Ct. 2322; 1995 AMC 1817.
2. COGSA, s. 3(8), 46 U.S.C. app., s. 1303(8), corresponds to Art. III, r. 8, of the Hague and Hague-Visby Rules.
3. For a more complete discussion, see Sturley, “Bill of lading choice of forum clauses: Comparisons between United States and English law” [1992] LMCLQ 248, 253–255.
4. (1967) 377 F.2d 200; 1967 AMC 589 (2d Cir. en banc).
5. See Grant Gilmore & Charles Black, The Law of Admiralty, 1st edn (1957), 125, fn. 23, which the Indussa court quoted to help justify its conclusion: 377 F.2d, at p. 203; 1967 AMC, at p. 595.
6. Grant Gilmore & Charles Black, The Law of Admiralty, 2d edn (1975), 146, fn. 23. See also Black, “The Bremen, Cogsa, and the Problem of Conflicting Interpretation” (1973) 6 Vanderbilt J. Transnat’l L. 365, 365–369.
7. See, e.g., cases cited in Sturley [1992] LMCLQ 248, 254, fn. 50.
8. See, e.g., ibid., 254–255, 257–260.
9. Ibid., 248.
10. 9 U.S.C. ss 1–14.
11. 377 F.2d, at p. 204, fn. 4; 1967 AMC, at p. 595, fn. 4.
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