Vimar Seguros v. M ( 1994 )


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    July 18, 1994 UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT

    ____________

    No. 93-2179

    VIMAR SEGUROS Y REASEGUROS, S.A.,


    Plaintiffs, Appellants,

    v.

    M/V SKY REEFER, HER ENGINES, ETC.,
    AND M.H. MARITIMA, S.A.,

    Defendants, Appellees.


    ____________


    ERRATA SHEET


    The opinion of this court issued on July 7, 1994, is amended

    as follows:

    On page 8, first full paragraph, line 1: Replace "Moveover"

    with "Moreover."






































    UNITED STATES COURT OF APPEALS
    UNITED STATES COURT OF APPEALS

    FOR THE FIRST CIRCUIT
    FOR THE FIRST CIRCUIT

    ____________________

    No. 93-2179



    VIMAR SEGUROS Y REASEGUROS, S.A.,



    Plaintiffs, Appellants,



    v.



    M/V SKY REEFER, HER ENGINES, ETC.,

    AND M.H. MARITIMA, S.A.,



    Defendants, Appellees.



    ____________________



    APPEAL FROM THE UNITED STATES DISTRICT COURT



    FOR THE DISTRICT OF MASSACHUSETTS



    [Hon. Mark L. Wolf, U.S. District Judge]
    ___________________



    ____________________



















    Before

    Breyer*, Chief Judge,
    ___________

    Bownes, Senior Circuit Judge,
    ____________________

    and Stahl, Circuit Judge.
    _____________

    ____________________



    Stanley McDermott, III with whom Sharyn Bernstein, Varet & Fink,
    _______________________ ________________ _____________

    P.C., Alexander Peltz, and Peltz Walker & Dubinsky were on brief for
    ____ _______________ _______________________

    appellants.

    John J. Finn with whom Thomas H. Walsh, Jr., Jeffrey S. King, and
    ____________ ____________________ _______________

    Bingham, Dana & Gould were on brief for appellees.
    _____________________



    ____________________



    July 7, 1994

    ____________________



    ____________________



    *Chief Judge Stephen Breyer heard oral argument in this matter but did

    not participate in the drafting or the issuance of the panel's

    opinion. The remaining two panelists therefore issue this opinion

    pursuant to 28 U.S.C. 46(d).





















    BOWNES, Senior Circuit Judge. This appeal asks us
    BOWNES, Senior Circuit Judge.
    ____________________

    to decide whether a foreign arbitration clause in a maritime

    bill of lading governed by the Carriage of Goods at Sea Act,

    46 U.S.C. 1300 et seq. (COGSA), is invalid under that
    __ ___

    statute, or whether such a clause is enforceable under the

    Federal Arbitration Act, 9 U.S.C. 1 et seq. (FAA). We
    __ ___

    conclude that the FAA controls, and that the arbitration

    clause is valid. Accordingly, the order of the district

    court staying this action pending arbitration in Tokyo is

    affirmed.

    I.
    I.

    BACKGROUND
    BACKGROUND
    __________

    Plaintiff-appellant Bacchus Associates is a

    wholesale fruit distributor in the Northeast United States.

    Bacchus was the owner of a shipment of oranges travelling

    from Agadir, Morocco to New Bedford, Massachusetts, in

    February 1991 aboard the SKY REEFER,1 a vessel owned by M.H.

    Maritima, S.A. Maritima had time-chartered the vessel to

    Honma Senpaku Co., Ltd., who in turn time-chartered it to

    Nichiro Corp. Bacchus entered into a voyage charter with

    Nichiro for the February 1991 voyage.





    ____________________

    1. The subrogated underwriter of the oranges, Vimar Seguros
    Y Reaseguros, is also a plaintiff-appellant in this action.
    Hereafter, references to Bacchus include Vimar where
    applicable.

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    2















    The oranges were shipped under a bill of lading

    issued in Morocco by Nichiro. The bill of lading constitutes

    the contract of carriage between Bacchus and Maritima. En

    route to New Bedford, numerous boxes of oranges were crushed.

    Bacchus filed an action in the United States District Court

    for the District of Massachusetts, in rem against the SKY
    __ ___

    REEFER, and in personam against Maritima, seeking to recover
    __ ________

    approximately $1 million in damages.

    Maritima moved to stay the action and compel

    arbitration in Tokyo pursuant to a clause in the bill of

    lading:

    Governing Law and Arbitration
    Governing Law and Arbitration
    (1) The contract evidenced by or
    contained in this Bill of Lading shall be
    governed by Japanese Law.

    (2) Any dispute arising from this Bill of
    Lading shall be referred to arbitration
    in Tokyo by the Tokyo Maritime
    Arbitration Commission (TOMAC) at the
    Japan Shipping Exchange, Inc., in
    accordance with the Rules of TOMAC and
    any agreement thereto, and the award
    given by the arbitrators shall be final
    and binding on both parties.

    The district court held that the arbitration clause contained

    in subsection (2) was enforceable, granted Maritima's motion

    for a stay pending arbitration, and certified the following

    question for interlocutory appeal pursuant to 28 U.S.C.

    1292(b): "[W]hether 46 U.S.C. 1303(8) [ 3(8) of COGSA]

    nullifies an arbitration clause contained in a bill of lading




    -3-
    3















    governed by COGSA." With this question in mind, we begin our

    journey through unsettled statutory waters.

    II.
    II.

    DISCUSSION
    DISCUSSION
    __________

    COGSA was passed in 1936 as the American enactment

    of the Hague Rules, and was part of an international effort

    to achieve uniformity and simplicity in bills of lading used

    in foreign trade. Union Ins. Soc'y of Canton, Ltd. v. S.S.
    _________________________________ ____

    Elikon, 642 F.2d 721, 723 (4th Cir. 1981). COGSA was also
    ______

    intended to reduce uncertainty concerning the

    responsibilities and liabilities of carriers,

    responsibilities and rights of shippers, and liabilities of

    insurers. State Establishment for Agric. Prod. Trading v.
    ______________________________________________

    M/V Wesermunde, 838 F.2d 1576, 1580 (11th Cir.), cert.
    _______________ _____

    denied, 488 U.S. 916 (1988) ("Wesermunde"); S.S. Elikon, 642
    ______ __________ ___________

    F.2d at 723; see generally Grant Gilmore & Charles L. Black,
    ___ _________

    The Law of Admiralty 3-25 at 145 (2d ed. 1975).
    ____________________

    COGSA applies to "[e]very bill of lading . . .

    which is evidence of a contract for the carriage of goods by

    sea to or from parts of the United States, in foreign trade .

    . . . " 46 U.S.C. 1300. The parties agree that the bill

    of lading at issue here is covered by COGSA ex proprio
    __ _______

    vigore, in other words, as a matter of law. The bill of
    ______

    lading also contains the following provision:





    -4-
    4















    Local Law
    Local Law
    In case this Bill of Lading covers the
    Goods moving to or from the U.S.A. and it
    shall be adjudged that the Japanese Law
    does not govern this Bill of Lading, then
    the provisions of the U.S. Carriage of
    Goods at Sea Act 1936 shall govern before
    the Goods are loaded on and after they
    are discharged from the vessel and
    throughout the entire time during which
    the Goods are in the actual custody of
    the carrier.

    Bacchus argues that the Tokyo arbitration clause is invalid

    under 3(8) of COGSA which prohibits the "lessening" of the

    carrier's obligation as imposed by COGSA's other sections.2

    In Indussa Corp. v. S.S. Ranborg, 377 F.2d 200 (2d
    _____________ ____________

    Cir. 1967) (en banc), the Second Circuit held that all

    foreign forum selection clauses in bills of lading governed

    by COGSA are necessarily invalid under 3(8) because they

    tend to lessen the carrier's liability. Id. at 204. The
    ___

    court reasoned as follows:

    From a practical standpoint, to require
    an American plaintiff to assert his claim
    only in a distant court lessens the


    ____________________

    2. This provision provides as follows:

    Any clause, covenant or agreement in a
    contract of carriage relieving the
    carrier or the ship from liability for
    loss or damage to or in connection with
    the goods, arising from negligence,
    fault, or failure in the duties or
    obligations provided in this section, or
    lessening such liability otherwise than
    as provided in this Act, shall be null
    and void and of no effect.

    46 U.S.C. 1303(8).

    -5-
    5















    liability of the carrier quite
    substantially, particularly when the
    claim is small. Such a clause puts "a
    high hurdle" in the way of enforcing
    liability, and thus is an effective means
    for carriers to secure settlements lower
    than if cargo [sic] could sue in a
    convenient forum.

    Id. at 203.3 Moreover, "[a] clause making a claim triable
    ___

    only in a foreign court would almost certainly lessen

    liability if the law which the court would apply was not

    [COGSA]." Id. Furthermore,
    ___

    [e]ven when the foreign court would apply
    [COGSA], requiring trial abroad might
    _____
    lessen the carrier's liability since
    there could be no assurance that it would
    apply [COGSA] in the same way as would an
    American tribunal subject to the uniform
    control of the Supreme Court . . . . We
    think that Congress meant to invalidate
    any contractual provision in a bill of
    lading for a shipment to or from the
    United States that would prevent cargo
    [sic] able to obtain jurisdiction over a
    carrier in an American court from having
    that court entertain the suit and apply
    the substantive rules Congress had
    prescribed.



    ____________________

    3. The court also concluded that COGSA, wherever it governs
    a bill of lading, requires application of American law.
    Indussa, 377 F.2d at 203; see generally Thomas J. Schoenbaum,
    _______ ___ _________
    Admiralty & Maritime Law 9-18 at 326-27 (Pra. ed. 1987).
    _________________________
    Bacchus contends that the Japanese choice-of-law clause in
    its bill of lading, in addition to the arbitration clause, is
    null and void under 3(8) of COGSA, and, alternatively, that
    the "Local Law" clause in the bill of lading requires that
    COGSA, and not Japanese law, governs, because COGSA applies
    ex proprio vigore. Although both of these arguments appear
    __ _______ ______
    to be substantial, only the validity of the arbitration
    clause is at issue on this interlocutory appeal. In light of
    our holding, the choice-of-law question must be decided, in
    the first instance, by an arbitrator.

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    6















    Id. at 203-04 (emphasis in original) (citations omitted)
    ___

    (footnote omitted).

    Since Indussa, 3(8) has been consistently used by
    _______

    federal courts to invalidate forum selection clauses in bills

    of lading governed by COGSA. See, e.g., Conklin & Garrett,
    ___ ____ ___________________

    Ltd. v. M/V Finnrose, 826 F.2d 1441, 1442-44 (5th Cir. 1987)
    ____ ____________

    (forum selection clause designating Finland invalid even

    where bill of lading provided for application of COGSA in

    Finland); Union Soc'y of Canton, Ltd., 642 F.2d at 723-25
    _____________________________

    (choice of forum clause requiring litigation in Germany

    invalid under 3(8)); cf. Fireman's Fund Amer. Ins. Cos. v.
    ___ ______________________________

    Puerto Rican Forwarding Co., 492 F.2d 1294 (1st Cir. 1974)
    ____________________________

    (distinguishing Indussa and upholding New York City forum
    _______

    selection clause). Indussa has also been approved by
    _______

    commentators. See Gilmore & Black, supra 3-25 at 145-46
    ___ _____

    n.23; Schoenbaum, supra 9-18 at 327; Charles L. Black, The
    _____ ___

    Bremen, COGSA and the Problem of Conflicting Interpretation,
    ____________________________________________________________

    6 Vand. J. Trans. L. 365, 368-69 (1973). But see Note,
    ___ ___

    Kenneth M. Klemm, Forum Selection in Maritime Bills of Lading
    ___________________________________________

    Under COGSA, 12 Fordham Int'l L.J. 459 (1989); Stephen M.
    ___________

    Denning, Choice of Forum Clauses in Bills of Lading, 2 J.
    _____________________________________________

    Mar. L. & Com. 17 (Oct. 1970).

    While we need not fully explore the issue, we note

    that the Supreme Court's recent decision in Carnival Cruise
    _______________

    Lines, Inc. v. Shute, 499 U.S. 585 (1991), in which the Court
    ___________ _____



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    held that the Limitation of Vessel Owners' Liability Act did

    not invalidate forum selection agreements, casts some doubt

    upon Indussa's continuing viability. See Fabrica De Tejidos
    _________ ___ __________________

    La Bellota S.A. v. M/V Mar, 799 F. Supp. 546, 560-61 (D.
    ________________ _______

    Virgin Islands 1992); see also Patrick J. Borchers, Forum
    ___ ____ _____

    Selection Agreements in the Federal Courts After Carnival
    _____________________________________________________________

    Cruise: A Proposal for Congressional Reform, 67 Wash. L.
    _______________________________________________

    Rev. 55, 77 (1992) (Carnival Cruise implicitly overruled
    ________________

    Indussa and its progeny). But see Underwriters at Lloyd's of
    _______ ___ ___ __________________________

    London v. M/V Steir, 773 F. Supp. 523, 526-27 (D.P.R. 1991)
    ______ _________

    (invalidating forum selection clause under 3(8) of COGSA,

    holding that Indussa survives Carnival Cruise).
    _______ _______________

    Moreover, in Fireman's Fund we questioned whether
    _______________

    Indussa even survived the Supreme Court's decision in The
    _______ ___

    Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972). In The
    ______ _____________________ ___

    Bremen, the Supreme Court enforced a foreign forum selection
    ______

    clause in a maritime contract not covered by COGSA. In doing

    so, the Court focused on whether the clause was

    "unreasonable" under the circumstances. The Bremen, 407 U.S.
    __________

    at 10. We remarked as follows:

    Although the Supreme Court has
    acknowledged the Indussa decision and has
    _______
    not formally rejected it, see The Bremen
    ___ __________
    v. Zapata Off-Shore Co., 407 U.S. 1, 10
    ____________________
    n.11, 92 S.Ct. 1907, 32 L.Ed.2d 513
    (1972), several passages in the Bremen
    opinion cast some doubt on the underlying
    rationale of Indussa. See, e.g., 407
    _______ ___ ____
    U.S. at 9, 92 S.Ct. at 1912 ("The
    expansion of American business and


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    8















    industry will hardly be encouraged if,
    notwithstanding solemn contracts, we
    insist on a parochial concept that all
    disputes must be resolved under our laws
    and in our courts.") . . . .

    Fireman's Fund, 492 F.2d at 1296 n.2. Because The Bremen is
    ______________ ___________

    not a COGSA case, however, it is easily distinguishable from

    Indussa and its progeny. See S.S. Elikon, 642 F.2d at 724-25
    _______ ___ ___________

    (holding that The Bremen did not involve COGSA and therefore
    ___________

    did not disturb Indussa).
    _______

    Notwithstanding the arguably tremulous ground on

    which Indussa and its progeny currently sit, we will assume,
    _______

    arguendo, that, for the reasons set forth in Indussa, foreign
    ________ _______

    forum selection clauses are invalid under 3(8) of COGSA.

    The other statute implicated in this case is the

    FAA. Section 2 of that act provides:

    A written provision in any maritime
    transaction . . . to settle by
    arbitration a controversy thereafter
    arising out of such contract . . . shall
    be valid, irrevocable, and enforceable,
    save upon such grounds as exist at law or
    in equity for the revocation of any
    contract.

    9 U.S.C. 2. "[B]ills of lading of water carriers" are

    explicitly included as "maritime transactions" under the

    statute. 9 U.S.C. 1. Furthermore, the FAA requires a

    federal district court, on the application of one of the

    parties, to stay litigation and grant an order compelling

    arbitration of any issue referable to arbitration under the

    agreement. Id. 3, 4.
    ___


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    Where there is an agreement to arbitrate, the FAA

    reflects a strong, well-established, and widely recognized

    federal policy in favor of arbitration. Shearson/American
    _________________

    Express, Inc. v. McMahon, 482 U.S. 220, 226 (1987);
    ______________ _______

    Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473
    _______________________ _____________________________

    U.S. 614, 625 (1985); Securities Indus. Ass'n v. Connolly,
    _______________________ ________

    883 F.2d 1114, 1118-19 (1st Cir. 1989), cert. denied, 495
    _____ ______

    U.S. 956 (1990). Arbitration agreements are unenforceable

    under 2 of the FAA only where the agreement would be

    revocable under state contract law. Southland Corp. v.
    _______________

    Keating, 465 U.S. 1, 11 (1984) (party may assert general
    _______

    contract defenses, such as fraud and duress, to avoid

    enforcement of arbitration agreement); McAllister Bros., Inc.
    ______________________

    v. A & S Transp. Corp., 621 F.2d 519, 524 (2d Cir. 1980)
    _____________________

    (same).4

    Although this court has never decided whether a

    foreign arbitration clause in a bill of lading governed by

    COGSA is invalid under 3(8) of that statute, courts that



    ____________________

    4. Bacchus argued below that the bill of lading was a
    contract of adhesion, and that the arbitration clause was
    therefore unenforceable. This defense was rejected by the
    district court, and that ruling is not before us on the
    present appeal. We recognize, however, that maritime bills
    of lading have been viewed as contracts of adhesion. See,
    ___
    e.g., Organes Enters., Inc. v. M/V Khalij Frost, 1989 A.M.C.
    ____ ______________________ ________________
    1460, 1465-66 (S.D.N.Y. 1989); Pacific Lumber & Shipping Co.
    _____________________________
    v. Star Shipping A/S, 464 F. Supp. 1314, 1315 (W.D. Wash.
    __________________
    1979). Accordingly, if the adhesion issue had been a subject
    of this interlocutory appeal, it would warrant close
    scrutiny.

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    10















    have reached the question are divided. A handful of courts,

    including the Eleventh Circuit, have employed the reasoning

    articulated in Indussa to invalidate foreign arbitration
    _______

    clauses. See, e.g., Wesermunde, 838 F.2d at 1580-82; M/V
    ___ ____ __________ ___

    Khalij Frost, 1989 A.M.C. at 1462-66; Siderius v. M.V. Ida
    ____________ ________ ________

    Prima, 613 F. Supp. 916, 920-21 (S.D.N.Y. 1985); Star
    _____ ____

    Shipping A/S, 464 F. Supp. at 1314-15; see also Gilmore &
    ____________ ___ ____

    Black, supra, 3-25 at 146 n.23; Schoenbaum, supra 9-19 at
    _____ _____

    329.

    In Wesermunde, the Eleventh Circuit declined to
    __________

    enforce a foreign arbitration agreement contained in a bill

    of lading governed by COGSA. Relying on Indussa, the court
    _______

    explained as follows:

    While we do not believe that arbitration
    in and of itself is per se violative of
    ___ __
    COGSA's provisions, especially in light
    of Congress' encouragement of arbitration
    by its enactment of the Arbitration Act,
    9 U.S.C. 1-14 (1970) the court does
    believe that a provision requiring
    arbitration in a foreign country that has
    _______
    no connection with either the performance
    of the bill of lading contract or the
    making of the bill of lading contract is
    a provision that would conflict with
    COGSA's general purpose of not allowing
    carriers to lessen their risk of
    liability.

    Wesermunde, 838 F.2d at 1581 (footnote omitted). Some courts
    __________

    have gone one step further, holding that foreign arbitration

    clauses in bills of lading are per se invalid under COGSA
    ___ __

    because "[t]he considerations [stated in Indussa] are
    _______



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    substantially similar where the bill of lading requires the

    consignee to arbitrate in a foreign country." Siderius, 613
    ________

    F. Supp. at 920; accord Khalij Frost, 1989 A.M.C. at 1462
    ______ ____________

    (Indussa rationale "appl[ies] with equal force in the case of
    _______

    a foreign arbitration clause in a bill of lading").

    On the other side of the coin, numerous federal

    courts have upheld foreign arbitration clauses in bills of

    lading subject to COGSA. See, e.g., Nissho Iwai Amer. Corp.
    ___ ____ _______________________

    v. M/V Sea Bridge, 1991 A.M.C. 2070 (D. Md. 1991); Citrus
    _______________ ______

    Mktg. Bd. v. M/V Ecuadorian Reefer, 754 F. Supp. 229 (D.
    __________ ______________________

    Mass. 1990); Travelers Indem., Co. v. M/V Mediterranean Star,
    _____________________ ______________________

    1988 A.M.C. 2483 (S.D.N.Y. 1988); Mid South Feeds, Inc. v.
    ______________________

    M/V Aqua Marine, 1988 A.M.C. 437 (S.D. Ga. 1986); Midland Tar
    _______________ ___________

    Distillers, Inc. v. M/T Lotos, 362 F. Supp. 1311, 1315
    _________________ __________

    (S.D.N.Y. 1973); Mitsubishi Shoji Kaisha Ltd. v. MS Galini,
    ____________________________ _________

    323 F. Supp. 79, 83-84 (S.D. Tex. 1971); Kurt Orban Co. v.
    _______________

    S/S Clymenia, 318 F. Supp. 1387, 1390 (S.D.N.Y. 1970).
    ____________

    We join those courts upholding the validity of

    foreign arbitration clauses in bills of lading subject to

    COGSA. In reaching this result, we are guided by our belief

    that the FAA alone governs the validity of arbitration

    clauses, both foreign and domestic, and consequently removes

    them from the grasp of COGSA.5


    ____________________

    5. We recognize, however, that absent the FAA, COGSA might
    operate to nullify foreign arbitration clauses in bills of
    lading.

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    We begin with two canons of statutory

    interpretation. First, a later enacted statute generally

    limits the scope of an earlier statute if the two laws

    conflict. Davis v. United States, 716 F.2d 418, 428 (7th
    _____ ______________

    Cir. 1983); Tennessee Gas Pipeline Co. v. Federal Energy
    ____________________________ _______________

    Regulatory Comm'n, 626 F.2d 1020, 1022 (D.C. Cir. 1980);
    __________________

    Indussa, 377 F.2d at 204 n.4;6 see generally 2B Norman J.
    _______ ___ _________


    ____________________

    6. Footnote four of Indussa states:
    _______

    Our ruling does not touch the question of
    arbitration clauses in bills of lading
    which require this to be held abroad.
    The validity of such a clause in a
    charter party, or in a bill of lading
    effectively incorporating such a clause
    in a charter party, have been frequently
    sustained. Although the Federal
    Arbitration Act adopted in 1925 validated
    a written arbitration provision "in any
    maritime transaction," 2, and defined
    that phrase to include "bills of lading
    of water carriers," 1. COGSA, enacted
    in 1936, made no reference to that form
    of procedure. If there be any
    _____________________
    inconsistency between the two acts,
    _________________________________________
    presumably the Arbitration Act would
    _________________________________________
    prevail by virtue of its reenactment as
    _________________________________________
    positive law in 1947.
    ____________________

    Indussa, 377 F.2d at 204 n.4 (citations omitted) (emphasis
    _______
    added). Although a later Second Circuit opinion sought to
    narrow the scope of this dictum, see Aaacon Auto Transp. Co.
    ___ _______________________
    v. State Farm Mut. Auto Ins. Co., 537 F.2d 648, 655 (2d Cir.
    _____________________________
    1976) (explaining that footnote four of Indussa was concerned
    _______
    "primarily . . . upon those commercial situations in which
    the economic strength and bargaining power of the parties is
    roughly equal"), courts have continued to rely on footnote
    four in enforcing foreign arbitration clauses in bills of
    lading governed by COGSA. See Fakieh Poultry Farms v. M/V
    ___ _____________________ ___
    Mulheim, No. 85 Civ. 26577, slip op. at 2 (S.D.N.Y. Oct. 24,
    _______
    1986); M/V Mediterranean Star, 1988 A.M.C. at 2484-85; see
    _______________________ ___
    also Kaystone Chem., Inc. v. Bow-Sun, 1989 A.M.C. 2976, 2981-
    ____ ____________________ _______

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    Singer, Sutherland Statutory Construction 51.03 at 141 (5th
    _________________________________

    ed. 1992). Second, where two statutes conflict, regardless

    of the priority of enactment, the specific statute ordinarily

    controls the general. See Watson v. Fraternal Order of
    ___ ______ ___________________

    Eagles, 915 F.2d 235, 240 (6th Cir. 1990); see generally 2B
    ______ ___ _________

    Sutherland Statutory Construction, 51.05 at 174.
    _________________________________

    With respect to the former canon, the FAA must be

    given priority over COGSA in light of the FAA's reenactment

    in 1947, eleven years after COGSA was passed. Similarly, the

    latter canon suggests that the FAA be given effect. Section

    3(8) of COGSA, which voids any clause in a bill of lading

    that "lessens" the carrier's liability, makes no reference to

    arbitration, or for that matter, forum selection clauses.7

    Conversely, the FAA specifically validates arbitration

    clauses contained in maritime bills of lading. See 9 U.S.C.
    ___

    1, 2.




    ____________________

    82 (S.D.N.Y. 1989) (stating that Indussa footnote "probably"
    _______
    requires enforcement of foreign arbitration clause in COGSA
    bill of lading). But see Siderius, 613 F. Supp. at 920-21
    ___ ___ ________
    (holding Aaacon substantially undercuts scope of the Indussa
    ______ _______
    footnote); Khalij Frost, 1989 A.M.C. at 1463-64 (same).
    _____________
    While we agree with the rule of statutory construction
    expressed in the footnote, we take no position on the effect
    of Aaacon on that note.
    ______

    7. In fact, up until Indussa, the Second Circuit regularly
    _______
    enforced foreign forum selection clauses in bills of lading
    governed by COGSA. See, e.g., William H. Muller & Co. v.
    ___ ____ _________________________
    Swedish Amer. Line Ltd., 224 F.2d 806 (2d Cir.), cert.
    _________________________ _____
    denied, 350 U.S. 903 (1955); Cerro de Pasco Copper Corp. v.
    ______ ____________________________
    Knut Knutsen, O.A.S., 187 F.2d 990 (2d Cir. 1951).
    ____________________

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    Next, and perhaps of paramount importance, we

    believe that the strong federal policy favoring arbitration

    supports the primacy of the FAA over COGSA where arbitration

    agreements are concerned. See Ecuadorian Reefer, 754 F.
    ___ __________________

    Supp. at 233-34. The existence of this policy distinguishes

    the present case from foreign choice-of-forum cases because

    in those cases "there was no compelling congressional mandate

    in favor of giving effect to agreements to litigate before

    foreign tribunals." MS Galini, 323 F. Supp. at 83.
    _________

    Furthermore, American courts' mistrust of foreign

    courts, a driving force in the Indussa court's decision to
    _______

    invalidate foreign choice-of-forum clauses, is an

    inappropriate consideration in the context of arbitration.

    See Mitsubishi Motors, 473 U.S. at 626-27 (We are "well past
    ___ _________________

    the time when judicial suspicion of . . . arbitration and of

    the competence of arbitral tribunals inhibited the

    development of arbitration as an alternative means of dispute

    resolution."); Connolly, 883 F.2d at 1119 ("[C]ourts must be
    ________

    on guard for artifices in which the ancient suspicion of

    arbitration might reappear."). Finally, unlike a foreign

    forum selection clause, an agreement to arbitrate does not

    deprive a federal court of its jurisdiction over the

    underlying dispute. S/S Clymenia, 318 F. Supp. at 1390; MS
    _____________ __

    Galini, 323 F. Supp. at 83.
    ______





    -15-
    15















    For the foregoing reasons, the order of the

    district court is Affirmed.
    Affirmed.
    ________

















































    -16-
    16







Document Info

Docket Number: 93-2179

Filed Date: 7/18/1994

Precedential Status: Precedential

Modified Date: 9/21/2015

Authorities (19)

Midland Tar Distillers, Inc. v. M/T Lotos , 362 F. Supp. 1311 ( 1973 )

union-insurance-society-of-canton-limited-v-ss-elikon-her-engines , 642 F.2d 721 ( 1981 )

mcallister-brothers-inc-petitioner-appellee-cross-appellant-v-a-s , 621 F.2d 519 ( 1980 )

Indussa Corporation v. S.S. Ranborg, Her Engines, Boilers, ... , 2 A.L.R. Fed. 953 ( 1967 )

ivory-watson-and-calley-watson-in-their-individual-capacity-and-as , 915 F.2d 235 ( 1990 )

tennessee-gas-pipeline-company-a-division-of-tenneco-inc-v-federal , 626 F.2d 1020 ( 1980 )

Fireman's Fund American Insurance Companies v. Puerto Rican ... , 492 F.2d 1294 ( 1974 )

Carnival Cruise Lines, Inc. v. Shute , 111 S. Ct. 1522 ( 1991 )

Fabrica De Tejidos La Bellota SA v. M/V MAR , 799 F. Supp. 546 ( 1992 )

Siderius, Inc. v. MV Ida Prima , 613 F. Supp. 916 ( 1985 )

Conklin & Garrett, Ltd. v. M/v Finnrose, Etc. , 826 F.2d 1441 ( 1987 )

Kurt Orban Company v. S/S CLYMENIA , 318 F. Supp. 1387 ( 1970 )

Securities Industry Association v. Michael J. Connolly, Etc. , 883 F.2d 1114 ( 1989 )

Underwriters at Lloyd's of London v. M/V STEIR , 773 F. Supp. 523 ( 1991 )

Pacific Lumber & Shipping Co. v. Star Shipping A/S , 464 F. Supp. 1314 ( 1979 )

Mitsubishi Shoji Kaisha Ltd. v. MS GALINI , 323 F. Supp. 79 ( 1971 )

Shearson/American Express Inc. v. McMahon , 107 S. Ct. 2332 ( 1987 )

The Bremen v. Zapata Off-Shore Co. , 92 S. Ct. 1907 ( 1972 )

in-the-matter-of-the-arbitration-of-certain-differences-between-aaacon-auto , 537 F.2d 648 ( 1976 )

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