Case of the Day: Liberty Woods Int'l v. Motor Vessel Ocean Quartz, 2018 U.S. App. LEXIS 11667 (3d Cir. May 4, 2018)

Summary:

Plaintiff received a shipment of plywood veneer sheets in New Jersey that were damaged during shipment. The bill of lading for the shipment has a forum selection clause designating South Korea as the forum for any dispute. Plaintiff sued instead in the federal court in New Jersey, claiming the forum selection clause violates the Carriage of Goods by Sea Act because South Korea does not allow in rem suit against vessels.

The Third Circuit affirmed the district court's dismissal. The court first found that although COGSA prohibits forum selection clauses that lessen ship liability, the lack of in rem suit is not such a lessening. The court further found that under Korean law, it is possible to obtain security against the vessel in an in personam action, effectively giving an equivalent relief.

Takeaway:

This appears to be the correct result, and consistent with the general trend in the U.S. law that favors forum selection clause, even in situations involving a statute that seems to disfavor one.