Friday, March 9, 2018

Milestones: APL Co. Pte v. UK Aerosols Ltd., 582 F.3d 947 (9th Cir. 2009)


A California company purchased containers of hair products from UK Aerosols, a British which requested a Singaporean shipper APL Co. to transport the products from Turkey to California. Upon arrival, the shipper noticed the container leaked in a hazardous manner, and spent approximately $700,000 in the clean up. The shipper then sued UK Aerosols for breaching the indemnification obligation under the bill of lading. The district court held in APL's favor, rejecting the argument from the defendant that the bill of lading violated the Carriage of Goods by Sea Act (COGSA). The shipper then filed a motion for attorneys' fees, which was also provided for in the bill of lading. The district court rejected this motion, holding COGSA governed the dispute over attorneys' fees and did not provide for attorneys' fees. The district court also alternately denied the motion for attorneys' fees on the grounds that the plaintiff did not give adequate notice under Federal Rules of Civil Procedure 44.1, which requires a notice of planned reliance to a foreign law. Both parties appealed.

The Ninth Circuit first affirmed the district court's opinion on the merits: because UK Aerosols is not a "shipper," COGSA does not apply to it, and at any rate the bill of lading does not violate COGSA. The court then reversed the district court on the Rule 44.1 point, because the Singaporean law did not become an issue until the attorneys' fees became an issue. The court also reversed the district court and held Singaporean law, and not COGSA, was the correct choice of law, because the bill of lading provided Singaporean law governs any issue not "dealt with" in the bill of lading.


Choice of law thrillsville! This case gives a nice guide as to how to draft your choice of law provision to avoid any ambiguity--which triggers the choice of law analysis in the first place. Like an integration clause, include a provision that says "any issue not dealt with in this agreement is governed by [JURISDICTION] law." The point on Rule 44.1 is highly notable as well.

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