Thyssenkrupp Materials NA, Inc. v. M/V Kacey et al
OPINION AND ORDER re: 22 MOTION to Dismiss filed by Technomar Shipping Co. Inc., M/V Kacey, SPV 1 LLC. For the reasons stated above, Defendants' motion to dismiss is GRANTED and Plaintiff's Complaint is dismissed. The Clerk of the Court is respectfully directed to terminate the motion, Doc. 22, and close the case. (Signed by Judge Edgardo Ramos on 2/16/2017) (cla)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
THYSSENKRUPP MATERIALS NA, INC.,
– against –
OPINION AND ORDER
M/V KACEY, her engines, boilers, tackle, etc.,
SPV 1 LLC, TECHNOMAR SHIPPING CO. INC.,
15 Civ. 3800 (ER)
Thyssenkrupp Materials NA, Inc. (“Plaintiff”) brings this admiralty action against M/V
Kacey, SPV 1 LLC (“SPV 1”) and Technomar Shipping Co. Inc. (“Technomar” and together, the
“Defendants”) for loss and damage to its cargo. Before this Court is the Defendants’ motion to
dismiss for forum non conveniens pursuant to Fed. R. Civ. P. 12(c), on the basis of a forum
selection clause in the bills of lading issued for the shipment of Plaintiff’s cargo.
For the reasons discussed below, the Defendants’ motion is GRANTED.
Plaintiff is the owner or duly authorized representative of the owners of 447 pieces of
steel pipe shipped on board the vessel M/V Kacey. Complaint at ¶ 2, Complaint Schedule A.
The M/V Kacey is owned by SPV 1 and managed by Technomar. Notice of Motion at ¶ 3.
On November 14, 2014, two bills of lading 1 were issued for carrying the cargo on the
M/V Kacey from Subric, Philippines to Houston, Texas. Complaint Schedule A, Notice of
Motion Exhibit C. The bills of lading contained a forum selection clause which states that “[a]ny
dispute arising under this Bill of Lading shall be decided in the country where the Carrier has his
principal place of business, and the law of such country shall apply except as provided elsewhere
herein.” Notice of Motion Exhibit C (Bills of Lading) at ¶ 32. The bills of lading define
“carrier,” inter alia, as the owner of the vessel, in this case, SPV 1. Id. at ¶ 1.
Plaintiff filed the instant case on May 15, 2015, bringing an in rem action against the
M/V Kacey, and in personam actions against SPV 1 and Technomar for the loss and damage of
the steel pipes. The precise cause of the damage is not stated. On August 13, 2015, Defendants
filed an answer asserting twenty-one affirmative defenses. On May 6, 2016, Defendants filed the
instant motion to dismiss for forum non conveniens pursuant to Rule 12(c).
Rule 12(c) Motion to Dismiss
A party may move for judgment on the pleadings “[a]fter the pleadings are closed—but
early enough not to delay trial.” Fed. R. Civ. P. 12(c). A Rule 12(c) motion should be granted
“if, from the pleadings, the moving party is entitled to judgment as a matter of law.” Burns Int’l
Sec. Servs., Inc. v. Int’l Union, United Plant Guard Workers of Am. (UPGWA) & Its Local 537,
47 F.3d 14, 16 (2d Cir.1995) (per curiam).
A bill of lading “records that a carrier has received goods from the party that wishes to ship them, states the terms
of carriage, and serves as evidence of the contract for carriage.” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 18–19
In deciding a 12(c) motion, the Court may consider “the complaint, the answer, any
written documents attached to them, and any matter of which the court can take judicial notice
for the factual background of the case.” L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422
(2d Cir. 2011) (quoting Roberts v. Babkiewicz, 582 F.3d 418, 419 (2d Cir. 2009)). The Court
may also consider documents incorporated into the complaint by reference or integral to the
complaint, provided there is no dispute regarding their authenticity, accuracy, or relevance. Id.;
see also Piazza v. Florida Union Free Sch. Dist., 777 F. Supp. 2d 669, 677 (S.D.N.Y. 2011)
The appropriate procedural mechanism for filing a motion to enforce a forum selection
clause designating a foreign forum is a motion to dismiss for forum non conveniens. Atl. Marine
Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S.Ct. 568, 580 (2013). The doctrine of
forum non conveniens allows a court to dismiss an action “even if the court is a permissible
venue with proper jurisdiction over the claim.” LaSala v. Bank of Cyprus Pub. Co. Ltd., 510 F.
Supp. 2d 246, 254 (S.D.N.Y. 2007) (quoting Carey v. Bayerische Hypo– und Vereinsbank AG,
370 F.3d 234, 237 (2d Cir. 2004)). “A decision to grant or deny a motion to dismiss a cause of
action under the doctrine of forum non conveniens lies wholly within the broad discretion of the
district court.” Scottish Air Int’l, Inc. v. British Caledonian Grp., PLC, 81 F.3d 1224, 1232 (2d
Ordinarily, a three-step analysis guides the exercise of this discretion. 2 If there is a forum
selection clause at issue, however, the calculus is altered because a valid forum selection clause
The Second Circuit has “outlined a three-step process to guide the exercise of that discretion.” Norex Petroleum
Ltd. v. Access Indus., Inc., 416 F.3d 146, 153 (2d Cir. 2005) (citing Iragorri v. United Techs. Corp., 274 F.3d 65, 73
(2d Cir. 2001) (en banc)). First, “a court determines the degree of deference properly accorded the plaintiff’s
choice of forum.” Id. Second, “it considers whether the alternative forum proposed by the defendants is adequate to
is given “controlling weight in all but the most exceptional cases.” Atlantic, 134 S.Ct. at 581; 3
see also M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 10 (1972) (forum selection clauses
are “prima facie valid” and should be enforced unless demonstrated to be “unreasonable” under
the circumstances). In such instances, the Court must determine: (1) whether the forum
selection clause is valid, and (2) whether public interest factors nevertheless counsel against its
enforcement. Atlantic, 134 S.Ct. at 581-82; Midamines SPRL Ltd. v. KBC Bank NV, No. 12 CIV.
8089 (RJS), 2014 WL 1116875 at *3 (S.D.N.Y. Mar. 18, 2014).
Forum Non Conveniens
In the Second Circuit, a forum selection clause is presumptively valid if it was reasonably
communicated to the party resisting enforcement, is mandatory and not merely permissive, and
covers the claims and parties involved in the suit. Phillips v. Audio Active Ltd., 494 F.3d 378,
383 (2d Cir. 2007). To overcome this presumption of enforceability, Plaintiff has the burden to
make “a sufficiently strong showing that ‘enforcement would be unreasonable or unjust, or that
the clause was invalid for such reasons as fraud or overreaching.’” Id. at 383–84 (citing Bremen,
407 U.S. at 15). Additionally, when the Carriage of Goods by Sea Act (“COGSA”) applies to
the bill of lading at issue, a forum selection clause is unenforceable if “the substantive law to be
applied will reduce the carrier’s obligations to the cargo owner below what COGSA guarantees.”
Vimar Seguros v. Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 539 (1995). The parties
adjudicate the parties’ dispute.” Id. And third, “a court balances the private and public interests implicated in the
choice of forum.” Id.
Although Atlantic primarily addresses a motion to transfer under 28 U.S.C. § 1404(a), its analysis is equally
applicable to motions to dismiss under forum non conveniens. See 134 S.Ct. at 583 n. 8 (“For the reasons detailed
above . . . the same standards should apply to motions to dismiss for forum non conveniens in cases involving valid
forum selection clauses pointing to state or foreign forums.”).
agree that COGSA applies to this case. Defendants’ Motion to Dismiss at 12, Plaintiff’s
Opposition at 4.
The two bills of lading issued for Plaintiff’s cargo, which are incorporated by reference in
the Complaint and appended to the Defendants’ Notice of Motion, states that “[a]ny dispute
arising under this Bill of Lading shall be decided in the country where [SPV 1] has his principal
place of business.” Notice of Motion Exhibit C (Bills of Lading) at ¶ 32. The parties disagree
on whether SPV 1’s principal place of business is the Marshall Islands or Greece. Since
Defendants assert that this disagreement is irrelevant for purposes of their motion, this Court will
presume that SPV 1’s principal place of business is Greece as Plaintiff contends. Defendants’
Motion to Dismiss at 10.
Plaintiff does not dispute that the forum selection clause was reasonably communicated,
is mandatory, and that the claims and parties involved in the instant action are subject to the
clause. It argues that the Court should nevertheless deny the motion because Greek law does not
recognize the in rem action against the M/V Kacey or the in personam action against Technomar.
Plaintiff’s Opposition at 5. Plaintiff also “does not oppose the proposed litigation in Greece,”
but requests this Court to stay the instant action and retain jurisdiction to ensure that the Greek
litigation complies with applicable U.S. law. Id. at 2. 4
Plaintiff fails to show that it will lose its in rem action to the detriment of its
Plaintiff asserts that its substantive rights under COGSA will be reduced because Greek
law does not recognize in rem actions. This argument fails for two reasons. First, the weight of
authority in this district holds that the inability to proceed in rem in the chosen forum is not
Alternatively, Plaintiff requests this Court to allow the in rem action against the M/V Kacey and the in personam
action against Technomar in this Court, and stay the in personam action against SPV 1 while it is litigated in Greece.
Plaintiff’s Opposition at 2.
sufficient by itself to defeat the presumed enforceability of the forum selection clause. Uniwire
Trading LLC v. M/V Wladyslaw Orkan, 622 F. Supp. 2d 15, 22 (S.D.N.Y. 2008) (collecting
cases); Salim Oleochemicals, Inc. v. M/V SHROPSHIRE, 177 F. Supp. 2d 159, 161 (S.D.N.Y.
2001) (same). The majority view is that in rem actions are generally “duplicative of the in
personam claims against the carrier(s),” and do not confer any further benefit other than
providing an additional mechanism for enforcement. Uniwire Trading LLC, 622 F. Sup. 2d at
22-23. This Court agrees. Plaintiff has not demonstrated that the in rem action against the M/V
Kacey will confer to Plaintiff any substantive benefits in addition to those in its in personam
action against SPV 1.
Second, while Plaintiff explains that Greek domestic law does not recognize in rem
actions, it fails to account for the application of the Hague-Visby Rules. The Hague-Visby
Rules, which is an amended version of the original Hague Rules, is a set of international rules
governing bills of lading. Kreta Shipping, S.A. v. Preussag Int’l Steel Corp., 192 F.3d 41, 46 n.5
(2d Cir. 1999). Notably, the Hague-Visby Rules contain a provision similar to Section 3(8) of
COGSA, which appears to keep in rem actions intact by stating, “[a]ny clause . . . in a contract of
carriage relieving the carrier or the ship from liability . . . or lessening such liability . . . shall be
null and void.” See Hague–Visby Rules, Art. III, § (8) (emphasis added); see also Man
Ferrostaal, Inc. v. M/V Akili, 704 F.3d 77, 85 (2d Cir. 2012) (noting that the Hague-Visby Rules
prohibit waiver of in rem liability). In other words, in the context of this case, the rule would
serve to insure that Plaintiff is not deprived of its in rem cause of action because it is being made
to litigate in a foreign forum. The bills of lading at issue require application of the Hague-Visby
Rules. See Notice of Motion Exhibit C (Bills of Lading) at ¶ 2 (the second clause of the bills of
lading provide that they “shall have effect subject to any national law making . . . the Hague
Rules as amended by the Protocol signed at Brussels on 23rd February 1968 (the Hague/Visby
Rules) compulsorily applicable to this Bill of Lading.”). Moreover, while not explicitly
discussing the Hague-Visby Rules, Plaintiff’s own Greek law expert concedes that International
Conventions are “rules of superior legal power” that will prevail over domestic Greek legislation.
Declaration of Dimitrios J. Dimitriou at 2. In any event, Greece has also ratified the HagueVisby Rules. Spyridon Vrellis, Private International Law in Greece, 96 (2011); Greek Law No.
This Court accordingly finds that Hague-Visby Rules will not prevent Plaintiff from
bringing in rem claims to the detriment of its statutory rights under COGSA. Other courts in this
district have agreed with the result reached here. For example, in Reed & Barton Corp. v. M.V.
Tokio Exp., No. 98 CIV. 1079 (LAP), plaintiff also argued that the forum selection clause should
not be enforced because German law does not recognize in rem actions. 1999 WL 92608, at *3
(S.D.N.Y. Feb. 22, 1999). Judge Preska found that because German law applies the HagueVisby Rules, the “fraternal equivalent” of COGSA, the carrier’s obligations would not be
reduced below that which COGSA guarantees. Id. In light of the foregoing, Plaintiff has failed
to meet its burden to show that its substantive rights will be reduced if the matter is litigated in
Plaintiff would also be prohibited from bringing litigation against
Technomar in this Court
Plaintiff further alleges that it will lose its in personam action against Technomar if the
action is litigated Greece. However, the applicable bills of lading already prevent Plaintiff from
bringing an action against Technomar. Specifically, the bills of lading at issue here contain a
clause that channels all liability to the owner of the M/V Kacey, SPV 1. The clause, labeled
“Identity of Carrier,” states that “the contract . . . is between the Merchant and the carrier of the
vessel . . . and it is therefore agreed that said shipowner only shall be liable for any damage or
loss due to any breach or nonperformance of any obligation arising out of the contract of carriage
whether or not relating to the vessel’s seaworthiness.” Notice of Motion Exhibit C (Bills of
Lading) at ¶ 30 (emphasis added). This clause plainly prevents the instant action from being
brought against anyone except for the shipowner. As the manager of the M/V Kacey,
Technomar is not a shipowner or a carrier under the bills of lading.
The Second Circuit has held that these so-called exoneration clauses in bills of lading that
channel the claims to one entity and prevents other parties from liability are enforceable. Sompo
Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165, 181-82 (2d Cir. 2014) (citing Fed. Ins.
Co. v. Union Pac. R.R. Co., 651 F.3d 1175, 1180 (9th Cir.2011) (“The requirement that all suits
be brought against [the ocean carrier] is an enforcement mechanism rather than a reduction of the
carrier’s obligations to the cargo owner below what COGSA guarantees.”) (internal quotation
marks omitted)); see also St. Paul Travelers Ins. Co. v. M/V MADAME BUTTERFLY, 700 F.
Supp. 2d 496, 505 (S.D.N.Y. 2010), aff'd sub nom. St. Paul Travelers Ins. Co. v. Wallenius
Wilhelmsen Logistics A/S, 433 F. App’x 19 (2d Cir. 2011) (enforcing the forum selection clause
even though plaintiff would not be able to sue all of the defendants in the preselected forum
because the bill of lading prohibited suits against persons other than the carrier). The Second
Circuit noted that the exoneration clause was simply an ordering mechanism that regulates who
will be responsible to whom rather than lessening any substantive rights. The plaintiff may bring
an action against the common carrier for damage to the cargo, and the common carrier may then
sue the underlying carriers. Sompo Japan, 762 F.3d at 182-83.
Plaintiff further suggests that such limitation of liability would run afoul of the Harter Act
which prohibits a carrier from “avoiding its liability for loss or damage arising from [its]
negligence or fault.” 46 U.S.C. § 30704. The Harter Act actually defines “carrier” more
expansively than the bills of lading to include the manager of a vessel, which in this case would
include Technomar. 46 U.S.C. § 30701. However, though the Harter Act voids provisions
absolving liability, it does not void provisions limiting a carrier’s liability. Fed. Ins. Co. v. Great
White Fleet (US) Ltd., No. 07 CIV. 2415 (GEL), 2008 WL 2980029, at *11 (S.D.N.Y. Aug. 1,
2008) (citing The Ansaldo San Giorgio I v. Rheinstrom Bros. Co., 294 U.S. 494, 496-97 (1935)).
The bills of lading do not absolve the shipowner’s agents, such as Technomar, of liability since
the shipowners can bring a subsequent litigation against their agents as the Second Circuit noted
in Sompo Japan. Thus, the Identity of Carrier clauses in the instant bills of lading are
enforceable and prevent Plaintiff from bringing an in personam claim against Technomar, even
in this Court.
In sum, Plaintiff has not met its burden of establishing that enforcement of the forum
selection clause would be unreasonable or unjust. Nor does Plaintiff point to any public interest
factors that would counsel against enforcing the clause in this case. Plaintiff may assert its in
rem action in Greece, and while it may not assert its in personam action against Technomar
there, neither could it do so in this Court. Accordingly, this Court finds that the forum selection
clause is valid and enforceable.
Plaintiff cites to Vimar Seguros v. Reaseguros, S.A. v. M/V Sky Reefer 515 U.S. 528
(1995) in requesting this Court to retain jurisdiction for subsequent review in the event it directs
that the action be litigated in Greece. The Court rejects this request because the facts that existed
in Sky Reefer do not exist here. In Sky Reefer, the Supreme Court acknowledged that if the
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