Kyla Shipping, Co. v. Shanghai Zhenhua Heavy Industry Co., Ltd. et al
ORDER granting 39 Motion to Dismiss upon the conditions set forth in this order. Signed by Senior Judge Charles R. Butler, Jr on 4/30/2012. (adk)
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF ALABAMA
KYLA SHIPPING CO.,
SHANGHAI ZHENHUA HEAVY
INDUSTRY CO., LTD, et al.
CIVIL ACTION NO. 09-00765-CB-N
This matter is before the Court on a motion to dismiss filed by the Defendants, Shanghai
Zhenhua Port Machinery (Hong Kong) Co., Ltd. , f.k.a Shanghai Zhenhua Heavy Industry (Hong
Kong) Co., Ltd., Shanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd., Shanghai Zhenhua
Heavy Industry, Shanghai Zhenhua Shipping co., Ltd and Zhen Hua 27 Shipping (Hong Kong)
Co., Ltd. (collectively “Zhenhua” or “Defendants”). (Doc. 39.) After a lengthy stay of
proceedings granted at the joint request of the parties, Plaintiff Kyla Shipping Co. filed a
response in opposition to the motion. (Doc. 62.) The Defendants have filed a reply brief. (Doc.
67.) After due consideration of the issues raised, the underlying facts and the applicable law, the
Court finds that this action is due to be dismissed based on the doctrine of forum non conveniens.
Two Ships Collide—Port of Santos, Brazil, May 4, 2009
The dispute arises from an incident that occurred on May 4, 2009 in the Port of Santos,
Brazil when the M/V ZHEN HUA 271 collided with the M/V KYLA, owned by Plaintiff Kyla
Shipping Co. The M/V ZHEN HUA 27 is a Hong Kong-flagged vessel. It is owned by Zhen
Hua 27 Shipping, a Hong Kong company, and managed by Zhenhua Shipping, a Chinese
company. The M/V KYLA is a Liberian-flagged vessel. It is owned by Kyla Shipping Co., a
Greek company headquartered in Liberia.
The accident occurred when the M/V KYLA was berthed alongside the TGG Terminal,
loading a cargo of bulk soybeans and also loading fuel from a barge alongside the M/V KYLA.
The M/V ZHEN HUA 27 entered the harbor carrying large container cranes for delivery in
Santos and moored at the TECON terminal. Within an hour after the M/V ZHEN HUA 27
entered the harbor, a thunderstorm moved in. During the storm, the M/V ZHEN HUA 27’s
mooring lines broke, and the ship allided with the TGG terminal, then collided with the M/V
KYLA, and finally allided with the TECON Terminal. After the incident, both Zhenhua and
Kyla issued letters of undertaking to various parties for damages related to cargo and to the
terminals. These letters provided that the matters would be litigated in Brazilian courts in
accordance with Brazilian law.
Brazilian Maritime Investigation
Under Brazilian law, the Admiralty Tribunal (also referred to as the Maritime Court)
investigates and adjudges facts and issues related to maritime accidents. The Admiralty Tribunal
is an independent body whose findings can be used as evidence in civil court, but it does not
The vessel seized in this district, the M/V ZHEN HUA 25, and the vessel involved in
the collision in Brazil, the M/V ZHEN HUA 27, have similar names but are not the same vessel.
The complaint alleges that the two have the same beneficial owner, albeit through a tangled web
of interrelated corporations.
adjudicate civil liability. (Sampaio Decl. ¶ 18; Siano Decl. I ¶ ¶ 26-43.) Its findings are
accorded weight but are not necessarily determinative of any issue in a civil trial. On March 29,
2010, the Port Captain concluded the initial investigation into the accident and issued a 20-page
report in conjunction with the Admiralty Tribunal. After interviewing numerous witnesses (at
least seven of whom were Brazilians employed at the port) and reviewing security camera
footage of the event, the Port Captain determined that “[the] collision between vessels, and the
collisions with the terminals, arose from a natural phenomenon of an exceptional character, or
rather tied to an abrupt alteration of unforeseeable, logical meteorological conditions; and which
became irresistible. . . [i.e.] a ‘fortune of the sea’, fortuitous case or ‘act of God’.” (Ex. A, Siano
Decl., 41.) The TGG terminal and others representing cargo interests have challenged those
findings in the Admiralty Tribunal, and those proceedings are ongoing.2 (Siano Decl. II, Doc.
68, ¶ 7.)
Procedural Fencing--International Style
Because Kyla was threatening to attach Zhenhua’s assets in other jurisdiction, Zhenhua
made a preemptive strike. On October 2, 2009, Zhenhua filed a declaratory lawsuit in the 11th
Civil Court for the District of Santos, Sao Paulo, Brazil, seeking a declaration that it is not liable
to Kyla because the collision was the result of unforeseen heavy weather. Kyla subsequently
filed a defense to that action, although it “reserved the right not to submit to the jurisdiction of
the Brazilian courts.” (Sampaio Decl., Doc. 62-1, ¶ 7.) If Kyla had failed to defend the lawsuit,
In response, Zhenhua filed a counterclaim in that court, “asserting that in the event the
[Tribunal] determines that there was no force majeure event that caused the collision, TGG and
Kyla were solely responsible therefor.” Id.
Zhenhua has also presented a private charge
against Kyla to the Tribunal which was accepted on June 7, 2011.
it would have run the risk of having a default judgment entered against it and all facts alleged by
Zhenhua would have been accepted as true and correct. (Id. ¶ 8.)
On November 19, 2009, Plaintiff Kyla Shipping Co. (“Kyla”) filed the instant in
personam action against the Zhenhua Defendants. In addition, “[b]ecause Defendants cannot be
found within this District” Kyla sought a writ of attachment against the M/V ZHEN HUA 25
pursuant to Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims.
(Compl., Doc. 1, 9.) A warrant of arrest was issued and the M/V ZHEN HUA 25 was seized by
the United States Marshal for the Southern District of Alabama. On December 9, 2009, by
agreement of the parties, the Defendants posted bond, and the M/V ZHEN HUA 25 was released.
(Doc. 25.) As far as the Court is aware, none of the parties have any connection with this district
other than the fortuitous seizure of the M/V ZHEN HUA 25.
In this action, Plaintiff alleges that the damage to the M/V KYLA was the result of “the
willful and reckless sole fault, neglect, and want of due care of the M/V ZHEN HUA 27 and
those in charge of her, and were within privity or knowledge of defendants.” The alleged willful,
reckless, negligent or careless conduct included the following:
(1) The ZHEN HUA 27 was unseaworthy
(2) The ZHEN HUA 27 was manned by persons who were careless and
incompetent and inattentive to their duties;
(3) The ZHEN HUA 27 failed to maintain a proper watch;
(4) The ZHEN HUA 27 failed to keep a proper lookout under the circumstances,
visually, by radar, or otherwise;
(5) The ZHEN HUA 27 dismissed the pilot and assisting tugs in advance of
(6) In view of the fact that ZHEN HUA 27 was carrying large post-panamax
container cranes for discharge in Santos[,] her crew. . . should have [ ] call[ed]
back the tugs that they had wrongly dismissed and instruct[ed] those tugs to assist
with holding the vessel on the berth during the thunderstorm;
(8) The ZHEN HUA 27 should not have attempted to come pierside so quickly in
advance of inclement weather;
(9) Those in charge of the ZHEN HUA 27 disregarded basic principles of good
(10) The ZHEN HUA 27 failed to use due care under the circumstances; and
(11) The ZHAN HUA 27 negligently failed to take timely precautionary or
corrective actions to avoid the aforesaid collision and/or to minimize its
destructive effect in the face of inclement weather.
(Compl., Doc. 1, 7-8.) Kyla seeks to recover for the damage to the M/V KYLA, for loss of use
and loss of hire of the vessel and for business interruption. (Id. 8-9.) In addition, Kyla seeks
“other damages” including damages for claims against it by TGG, local shippers and cargo
The Brazilian Court System
Kyla could bring its claims against Zhenhua in Brazilian civil court, though the parties
disagree as to whether Kyla must file a new action or whether a counterclaim in the declaratory
judgment would be permitted. If a new lawsuit is filed, “Kyla [as a foreign company with no
assets in Brazil] would be required to provide security in the amount of up to 25% of its claim in
the form of a cash deposit with the court or bank guaranty, since Brazilian courts do not
recognize Protection & Indemnity Club letters as valid security absent agreement of the parties.”
(Sampaio Decl., Doc. 62-1, ¶ 27.) The parties also disagree over the amount of time it would
take to litigate these claims in a Brazilian court. Kyla, pointing to the declaration of its Brazilian
counsel, estimates that it would take as long as 10 to 12 years for a final decision. (Id. ¶¶ 2122.) Zhenhua counters, by declaration of its Brazilian counsel, that a more reasonable estimate is
5 to 7 years. (Siano Decl. II, Doc. 68, ¶ 5.) Moreover, Zhenhua points out that Kyla’s estimate
fails to take into account two important factors. First, the Admiralty Tribunal proceedings are
parallel to the civil proceedings; therefore, the time estimate for those proceedings should not be
counted.3 Second, the Superior Court of Justice (the equivalent of our Supreme Court) accepts
only ten percent of the appeals presented to it, making the likelihood of review by that court
remote. If the Admiralty Tribunal and Superior Court time frames are discounted, the estimate
of Kyla’s expert is reduced to 7 to 9 years. (See Sampaio Decl. ¶ 22.)
Brazilian Maritime Law
If this claim is litigated in Brazil, Brazilian courts will apply Brazilian law. However,
whether Brazilian courts, applying that country’s law, would recognize a shipowner’s right to
limit liability remains to be seen. Brazil was a signatory to the International Convention for the
Unification of Certain Rules Relating to the Limitation of the Liability of Owners of Seagoing
Vessels, signed at Brussels, August 25, 1924 (“the Brussels Convention”). Brazilian maritime
law incorporates the limitation of liability provision set forth in the Brussels Convention. In
2002, Brazil adopted a new civil code which requires a claimant be receive full compensation
for damages. The new law has given rise to an argument, as yet unresolved, that Brazil no
longer recognizes a shipowner’s right to limit liability. (Sampaio Decl. ¶¶ 25-26.)
Witnesses and Evidence
The witnesses in this matter are primarily of three nationalities. The crewmen who were
on board the M/V KYLA are Filipino. The crewmen who were on board the M/V ZHEN HUA
27 are Chinese. The port employees who witnessed the accident, as well as those who
investigated it, are Brazilian. More than 4,000 pages of court documents, in Portuguese, are
located exclusively in Brazil and can only be copied during the hours court is open for business.
(Siano Decl. II ¶ 21.) Numerous documents from the vessels and the Terminals, along with
In any event, the Admiralty Tribunal (an estimated 4- to 5-year proceeding) is under
way and already into its third year.
witness statements and various other relevant documents are located in Brazil. (Id. ¶¶ 2229.) Furthermore, a DVD of recordings of the incident made by the terminal security cameras is
in Brazil. (Id. ¶ 24.) Finally, the voice data recording from the ZHEN HUA 27 is currently in
the exclusive custody of the Admiralty Tribunal, and no procedures have been established by
which it can be removed. (Id. ¶ 31.)
The issue presented is whether this action should be dismissed based on forum non
conveniens,4 a doctrine that recognizes a court’s inherent “power to decline jurisdiction in
exceptional circumstances.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 504 (1947). Zhenhua
contends that the Southern District of Alabama is not the appropriate forum primarily because
the accident occurred Brazil whose courts have jurisdiction and are better equipped to apply
Brazilian law. Further, Zhenhua points out that much of the evidence and some of the witnesses
are located in Brazil, while no evidence and no witnesses are located in this district (or even in
the United States). In response, Kyla argues that its choice of forum is entitled to deference and
that the factors cited by Zhenhua are insufficient to overcome that deference. To further counter
Zhenhua’s argument, Kyla asserts that the evidence and witnesses are as accessible in the United
States are they are in Brazil, that this Court is capable of applying international law, and that
Brazil has no great interest in resolving a dispute between two foreign ship owners. For reasons
discussed below, the Court finds that this is one of those exceptional cases where public and
private interests outweigh the Plaintiff’s choice of forum.
Defendants also rely the doctrines of international comity and alibi lis pendens as
grounds for dismissal. The Court does not address those grounds since dismissal is warranted for
other reasons. Initially, Defendants also asserted lack of personal jurisdiction as an alternative
grounds for dismissal, but they have since withdrawn that argument.
Standard of Review
In Gilbert, the Supreme Court explained the reasoning behind the doctrine of forum non
The principle of forum non conveniens is simply that a court may resist
imposition upon its jurisdiction even when jurisdiction is authorized by the letter
of a general venue statute. These statutes are drawn with a necessary generality
and usually give a plaintiff a choice of courts so that he may be quite sure of some
place in which to pursue his remedy. But the open door may admit those who
seek not simply justice but perhaps justice blended with some harassment. A
plaintiff sometimes is under temptation to resort to a strategy of forcing the trial at
a most inconvenient place for an adversary, even at some inconvenience to
Id. at 507. A defendant seeking dismissal on the basis of forum non conveniens bears the burden
of establishing that “’(1) an adequate alternative forum is available, (2) the public and private
interests weigh in favor of dismissal, and (3) that plaintiff can reinstate his suit in the alternative
forum without undue inconvenience or prejudice.’” Tazoe v. Airbus S.A.S., 631 F.3d 1321, 1330
(11th Cir. 2011) (quoting Leon v. Million Air, Inc., 251 F.3d 1305, 1310-11(11th Cir. 2001)).
Plaintiff’s choice of forum is afforded deference, but the amount of deference is weaker “when
the plaintiff is a foreigner litigating far from home.” Leon, 251 F.3d at 1315. Moreover, when
foreign interests are at stake, the first step in the forum non conveniens analysis “is to determine
whether United States law should be applied to the case.” Membreno v. Costa Crociere S.p.A,
425 F.3d 932, 936 (11th Cir. 2005).
Choice-of-Law: Brazilian Law Applies
When determining whether United States law applies in a Jones Act or general maritime
case, the Court must consider the following factors:
(1) the place of the wrongful act; (2) the flag under which the ship sails; (3) the
allegiance or domicile of the injured party; (4) the allegiance of the defendant
shipowner; (5) the place of the contract between the injured party and the
shipowner; (6) the accessibility of a foreign forum; (7) the law of the forum; and
(8) the shipowner's base of operations.
Id. These factors overwhelming point to application of Brazilian law.5 The wrongful act
occurred in Brazil. Neither vessel is American-flagged. Both shipowners are foreign, with no
base of operations in the United States. The accident took place in Brazil which, for reasons
discussed immediately below, the Court finds to be an accessible forum.6
Brazil is an Adequate & Available Alternative Forum
The adequacy of the alternative forum and the availability of that forum (i.e., that
plaintiff can reinstate his case there without undue in convenience or prejudice) are separate
concepts. “Available” means that the foreign court can assert jurisdiction over the plaintiff’s
claim. Leon, 251 F.3d at 1311. “Ordinarily, this requirement will be satisfied when the
defendant is ‘amenable’ to process in the other jurisdiction.” Piper Aircraft Co. v. Reyno, 454
U.S. 235, 255 n. 22 (1981). Zhenhua points out that judicial proceedings arising from the
accident, including its own declaratory action against Kyla, are pending in Brazilian courts.
Kyla’s response is a non sequitir—i.e., that Kyla has, in its defense to the Brazilian declaratory
action, “reserved the right to challenge the jurisdiction” of the Brazilian courts. Kyla’s statement
in the Brazilian pleadings has no bearing on that court’s actual ability to exercise jurisdiction.7
The factors were adopted by the Supreme Court in Lauritzen v. Larsen, 345 U.S. 571
(1953), which was a Jones Act action involving an injured seaman. However, the “broad
principles of choice of law and the applicable criteria [announced in Lauritzen] were intended to
guide courts in the application of maritime law generally.” Cliffs-Neddrill Turnkey Internat’lOranjestad v. M/T Rich Duke, 734 F. Supp. 142, 148 (D. Del. 1990) (quoting Romero v.
International Terminal Co., 358 U.S. 354, 382 (1959)).
The law of the forum is the only factor that does not weigh against application of United
States law, but that factor “is entitled to little weight because ‘fortuitous circumstances . . . often
determine the forum.’” Sigalasv. Lido Maritime, Inc., 776 F.2d 1512, 1517 (11th Cir. 1985)
(quoting Lauritzen, 345 U.S. at 590-91)).
Reserving the right to challenge jurisdiction is not, in itself, a challenge to jurisdiction,
and it is certainly not evidence that Brazil lacks jurisdiction over Kyla’s claims against Zhenhua.
Moreover, since the inquiry is normally focused on the defendant’s amenability to service, the
relevant party is Zhenhua, not Kyla. Zhenhua has “agree[d] to be bound by and to submit to the
jurisdiction of the final judgment of the Brazilian courts, to waive any applicable statutes of
limitation therein, to be bound by the letter of undertaking (‘LOU”) already obtained and
accepted by Kyla and to make available to the Brazilian forum all relevant witnesses and
documents under their control.” (Def.’s Brf., Doc. 67, 9-10.) This is sufficient to satisfy the
Court that Brazil is an available alternative forum.
Whether Brazil is an adequate forum is the subject of intense debate between the parties.
Adequate means “that the alternative forum offers at least some relief.” Leon, 251 F.3d at 1311.
While there is no dispute that Brazilian law would permit Kyla to recover damages if it should
prevail, Kyla argues that the remedy is nonetheless inadequate due to delay in the Brazilian court
system. In Piper Aircraft, the Supreme Court noted that “[i]n rare circumstances” the remedy
may be so “clearly unsatisfactory” as to render the alternative forum inadequate. Piper Aircraft,
454 U.S. 265 n. 22 (emphasis added). The Eleventh Circuit has recognized that “’[a]n adequate
forum need not be a perfect forum,’ and courts have not always required that defendants do
much to refute allegations of partiality and inefficiency in the alternative forum.” Leon, 251
F.3d at 1311-12 (quoting Satz v. McDonnell Douglas Corp., 244 F.3d 1279, 1283 (11th Cir.
2001)). Nevertheless, “extreme amounts of partiality or inefficiency may render the alternative
forum inadequate.” Id. (emphasis added). A plaintiff cannot rely on unsubstantiated allegations
of delay. Id. Only “where plaintiff produces significant evidence of . . . delay (in years)
typically associated with the adjudication of similar claims, and these conditions are so severe as
to call the adequacy of the forum into doubt,” does the defendant have “the burden to persuade
the District Court that the facts are otherwise. “8 Id. at 1312.
Kyla has presented evidence from its Brazilian counsel, Antonio Francisco Sobra
Sampaio, regarding the delay in Brazil’s court system. Mr. Sampaio states that “it would be
surprising if there is a final decision in any action filed against Z[henhua] any sooner than 2022
and it is more likely to take until at least 2024.” (Sampaio Decl., Doc. 62-1, ¶ 21.) To support
this estimate, Mr. Sampaio first cites two ship collision cases. Neither of those is particularly
helpful. He provides the date of the collision giving rise to each case and the dates of the final
(or most recent) court action, but there is no indication when the cases were filed. 9 In addition,
Mr. Sampaio cites the stages of litigation in Brazilian courts and provides estimates of the time
frames for each stage of litigation. These do not align with his overall estimated time frame for
resolution of this case. His initial estimate for conclusion of a newly-filed action in Brazil is 10
to 12 years, but the estimated times for the litigation stages add up to 14 to 17 years. In light of
the lack of specificity regarding the “similar” cases and the internal inconsistency in the litigation
estimates (i.e., 10 to 12 years versus 14 to 17 years), Plaintiff has failed to substantiate its
assertion of delay.
Even if Mr. Sampaio’s assessment is correct, this delay does not render Brazilian courts
inadequate. Delay is rarely the basis for declaring a forum inadequate. See Tazoe, 631 F.3d at
331 (rarely is alternative forum so inadequate that it amounts to no remedy). Indeed, the Court is
This approach “forbids dismissal to alternative forums that realistically are not capable
of producing a remedy for the plaintiff’s injuries, without crediting cursory attacks on legal
systems simply because they are somewhat slower or less elaborate than ours.” Id. at 1312-13.
Furthermore, the first case provides little basis for comparison because the decision of
the Admiralty Tribunal was not disputed, and the claims were then referred to an arbitrator.
aware of only one case in which a foreign forum was found to be inadequate on the basis of
delay alone. In that case, Bhatnagar v. Surrendra Overseas, Ltd., 52 F.3d 1220 (3d Cir. 1995),
the Third Circuit upheld that district court’s determination that a 25-year delay caused by a
backlog in the Indian court system was an “egregious delay” that clearly fell “on the intolerable
side” of the line “separating tolerable delay from intolerable.” Id. at 1228. On the other hand,
numerous courts have found Brazil to be an adequate alternative forum for a variety of claims
despite arguments of delay. See In re Air Crash Near Peixoto, De Avezeda Brazil, 574
F.Supp.2d 272, 284-85 (E.D.N.Y. 2008) (collecting cases). The type of claim asserted also
makes this case distinguishable from Bhatnagar. In contrast to the personal injury claims
asserted in that case, the instant action involves monetary damages sustained by international
shipping companies. Furthermore, a lengthier delay is tolerable in this type of action because
ship collision/allision cases do not lend themselves the speedy resolution no matter where they
are filed.10 Finally, Kyla’s delay argument is considerably weakened by the fact that it chose to
do business in Brazil. “There is a substantial temerity to the claim that a country where a party
has chosen to transact business . . . is inadequate. . . . ‘[I]t should be remembered that parties do
not enter into civil relations in foreign jurisdictions in reliance upon our courts. They could not
complain if our courts refused to meddle in their affairs and remitted them to the place that
Based on this Court’s informal review of ship collision/allision actions filed in this
district over the past 10 years, two to three years is the norm for resolving litigation involving
local incidents in this district. See, e.g., Liberty Surplus Ins. Corp. v. Patriot Asphalt, L.L.C., 0600456 (appeal dismissed 2 ½ years after complaint filed); In re Atlantic Marine, 06-00100-CG-B
(case settled more than 3 years after complaint filed); In re Cenac Towing, 04-00625-CB-L (final
judgement on appeal approximately 3 years after complaint filed); In re the Complaint of Arden
A. Johnson, 04-00128-WS-B (case settled after 2 years). The Court would venture an educated
guess that an action involving foreign law, foreign witnesses and discovery located in a foreign
country (none of which appear to be applicable in the foregoing cases) would require
significantly more time.
established and would enforce their rights.’” Eastman Kodak Co. v. Kavlin, 978 F. Supp. 1078,
(S.D. Fla. 1997) (quoting Cuba R.R. Co. v. Crosby, 222 U.S. 473, 480 (1912)).
Balancing Private & Public Interest Factors
In Gilbert the Supreme Court identified both private and public factors relevant to the
forum non conveniens analysis. The private interest factors to consider include “ease of access to
sources of proof; availability of compulsory attendance of unwilling, and the cost of obtaining
attendance of willing, witnesses. . . and all other practical problems that make trial of a case easy,
expeditious and inexpensive.” Gilbert, 330 U.S. at 508. Considerations of public interest
include “[a]dministrative difficulties for courts” in which the action is brought, the burden of
jury duty on local citizens, “[the] local interest in having localized controversies decided at
home,” and the problems posed by the application of foreign law. Gilbert, 330 U.S. at 508-09.
In this case, one fact overshadows the balancing of private and public interests. This case
has no nexus to the United States. This action was filed here only because a different Zhenhua
vessel made a fortuitous call at the Port of Mobile. The collision occurred in Brazil. None of the
witnesses are here. The parties are foreign corporations whose headquarters are in foreign
countries. The ships are foreign-flagged vessels and their crews were foreign nationals. A
Brazilian port was damaged in the accident. None of the evidence is located in the United States.
Brazilian law applies. In Compania Naviera Joanna S.A. v. Koninklijke Boskalis Westminster
N.V., 569 F.3d 189 (4th Cir. 2009), the Fourth Circuit upheld a forum non conveniens dismissal
under very similar circumstances. After discussing the Supreme Court’s decision in Piper
Aircraft, which upheld dismissal of a case brought by Scottish plaintiffs against a U.S. company
arising from an airplane accident in Scotland, the Compania Naviera court held:
In this case, the facts weigh even more clearly in favor of dismissal. The collision
occurred in Chinese territorial waters and was investigated by Chinese officials.
Both ships were arrested in China in furtherance of damage claims filed there.
The parties are foreign corporations-from Panama, Switzerland, and The
Netherlands-and neither ship had any American national on board. All of the
evidence is located in China or some other foreign jurisdiction. And attempting to
secure the attendance of witnesses, procure relevant documents and other
evidence, and provide translators for virtually every witness able to attend would
administratively tax the court system, as would the effort at applying Chinese law.
These facts all weigh in favor of affirming the district court's ruling.
Indeed none can be found to weigh in favor of trying this case in the United
States. . . .
Id. at 201. The same is true in this case.
Kyla makes a valiant effort to support its choice forum. First, it points to the ease with
which the parties can produced documents in their possession. Some relevant documents may be
in the possession of the parties and easily produced in this Court, as Kyla points out, but many
documents (as well as other evidence) are in the possession of the Brazilian courts. Those must
be obtained, copied and translated from Portuguese to English. Kyla also points out that the
crewmember witnesses can be brought to the United States as easily they can be brought to
Brazil.11 But Kyla ignores the existence of Brazilian witnesses. The cost of their attendance and
their amenability to compulsory process in Brazil is certainly a consideration that favors the
Defendants.12 Kyla’s suggestion that this case will pose no administrative difficulties for this
Kyla points to an incident involving the M/V ZHEN HUA 24, a sister ship to the M/V
ZHEN HUA 27, that it would like to investigate. Because that incident occurred in Portsmouth,
Virginia, Kyla asserts that it would be difficult to obtain evidence regarding that incident, which
occurred in Portsmouth, Virginia, if is required to litigate the instant action in Brazil. The
tenuous possibility that potential discovery might be located in the United States is not even a
feather on Kyla’s side of the forum non conveniens scale.
Regarding the attendance of witnesses, Kyla argues that the United States is a signatory
of the Hague Convention and Brazil is not. That fact has nothing to do with compulsory
attendance. Perhaps Kyla’s point is that the Hague Convention makes it easier to obtain
testimony from a foreign witness. Whatever minimal weight that argument might carry is
overcome by the Zhenhua’s pledge to make available all witnesses within its control.
Court is overly optimistic. Cases involving foreign parties and witnesses, not to mention
substantial amounts of evidence located in a foreign country, are significantly more complex and
time-consuming than most cases and require a disproportionate amount of judicial resources.
Though Kyla asserts that Brazil has no particular local interest in resolving a case between two
foreign shipowners, this case is more complex than a simple collision between two foreign ships.
Two terminals at the Brazilian port were damaged in the accident, and apparently Brazilian cargo
was lost as well. Litigation arising from this accident already exists in Brazil, and it involves
terminal owners, cargo owners and insurance companies in addition to the parties in this case.
Brazil does have a substantial interest in adjudicating this action. Finally, Kyla’s argument that
this Court can apply foreign law holds little sway. A Brazilian court is quite obviously in a
better position to interpret and apply Brazilian law.13
Plaintiff Can Reinstate this Lawsuit in Brazil Without Undue Inconvenience or
There are no impediments to Kyla’s ability to bring suit in Brazil. Zhenhua has agreed to
waive any statute of limitations defense that might exist and to submit to the jurisdiction of
Brazilian courts. Kyla does not contest Zhenhua’s assertion that it can file suit in Brazil.
Instead, it argues that it would suffer prejudice if it is required to do so. Kyla’s assertions of
prejudice are unpersuasive.
The first, and primary, argument regarding prejudice is that “Kyla would be required
under Brazilian [law] to provide security in the amount of 25% of its claim in the form of a cash
In its brief, Kyla creates a rabbit trail regarding applicability of the Brussels
Convention, and this Court’s ability (or capability) to apply international law. This argument
ignores the obvious starting point--whether the Brussels Convention applies is a question of
Brazilian law in the first instance. Moreover, when Kyla’s argument is read carefully, it is clear
that the Brussels Convention, if applicable, would apply only to one specific issue, i.e., a
shipowner’s ability to limit liability.
deposit with the court or bank guaranty, since Brazilian courts do not recognize Protection &
Indemnity Club letters as valid security absent agreement of by the parties.” (Pl.’s Brf., Doc. 62,
18.) If Kyla were required to post security in cash and the full 25% was required, a cash deposit
of $10 million would be required. However, the form and amount of security that would be
required is far from certain. Kyla relies on the declaration of its Brazilian counsel, Mr. Sampaio.
who states that Kyla would be required under Brazilian law “to provide security in the amount of
up to 25% of its claim.” (Sampaio Decl., Doc. 62-1 ¶ 27 (emphasis added)). Hence, the amount
of the security would be a maximum of 25%, but the specific amount that would be required in
this case is unknown. Also, Kyla’s evidence shows that a bank guaranty is acceptable alternative
to a cash deposit, but the cost of such a guaranty is also unknown. Moreover, whether a
requirement for posting security would prejudice Kyla depends upon Kyla’s financial condition,
yet another unknown factor. In sum, the evidence does not support Kyla’s claim that the security
requirement is prejudicial.
The remainder of Kyla’s prejudice arguments are equally unavailing. Kyla contends that
the Admiralty Tribunal’s findings “warrant further examination and discovery” and that Kyla
“should be afforded the benefit of the Federal Rules of Civil Procedure and due process . . . to
investigate the facts so that a meaningful determination of liability can be made.” (Pl.’s Brf.,
Doc. 62, 20.) That argument does not identify any undue prejudice to Kyla. Kyla’s remaining
prejudice arguments—substantial delay resulting from a new lawsuit and lack of compulsory
process—have already been addressed with regard to other forum non conveniens considerations.
Suffice it to say that these factors do not rise to the level of undue inconvenience or prejudice.
For the reasons discussed above, this action is due to be dismissed based on the doctrine
of forum non conveniens. This dismissal is, however, conditioned on Defendants’ agreement
“to be bound by and to submit to the jurisdiction of the final judgment of the Brazilian court(s),
to waive any applicable statutes of limitation therein, to be bound by the letter of undertaking
(“LOU”) already obtained and accepted by Kyla, and to make available to the Brazilian forum all
relevant witnesses and documents under their control[.]” (Def.’s Reply Brf., Doc. 67, 9-10.)
Accordingly, it is ORDERED that the motion to dismiss be and hereby is GRANTED upon the
conditions set forth above.
DONE this the 30th day of April, 2012.
s/Charles R. Butler, Jr.
Senior United States District Judge
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