Bunker Holdings, Ltd. v. Green Pacific A/S

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-1957
BUNKER HOLDINGS, LTD.,
Intervenor/Plaintiff - Appellant,
and
TRITON MARINE FUELS LTD., S.A.; BRIDGE OIL, LTD.,
Plaintiffs,
and
CRESCENT TOWING AND SALVAGE COMPANY, INC.; COOPER/T. SMITH
MOORING; CANTON PORT SERVICES LLC; ISS MARINE SERVICES,
INC., d/b/a Inchcape Shipping Services,
Intervenors/Plaintiffs,
v.
GREEN PACIFIC A/S,
Defendant – Appellee,
and
M/V PACIFIC CHUKOTKA, apparel, freights, etc., IMO No.
8800224; EMERALD REEFER LINES, LTD.; EMERALD REEFER LINES,
LLC; INTERTRANSPORT CO., LLC; INTERTRANSPORT, LTD.,
Defendants,
and
THE MASTER OF THE M/V PACIFIC CHUKOTKA,
Garnishee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. J. Frederick Motz, District Judge.
(1:06-cv-03346-JFM)
Argued: May 12, 2009 Decided: August 28, 2009
Before SHEDD, Circuit Judge, Joseph F. ANDERSON, Jr., United
States District Judge for the District of South Carolina,
sitting by designation, and Martin K. REIDINGER, United States
District Judge for the Western District of North Carolina,
sitting by designation.
Affirmed by unpublished per curiam opinion.
John Stephen Simms, SIMMS & SHOWERS, LLP, Baltimore, Maryland,
for Appellant. David W. Skeen, WRIGHT, CONSTABLE & SKEEN, LLP,
Baltimore, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
In this maritime action, Bunker Holdings, Ltd. (“Bunker
Holdings”) asserts in personam claims of conversion and unjust
enrichment against Green Pacific A/S (“Green Pacific”), arising
out of the consumption of fuel oil by Green Pacific’s vessel,
the M/V PACIFIC CHUKOTKA (“PACIFIC CHUKOTKA” or “Vessel”). The
district court granted Green Pacific summary judgment, holding
that the contracts between Bunker Holdings and the Vessel’s
charterer, pursuant to which Bunker Holdings supplied the fuel
bunkers to the Vessel, called for the application of Greek law,
and that Bunker Holdings had failed to show that Greek law
recognized such claims.
Bunker Holdings appeals, arguing that the Greek choice-of-
law provisions in the supply contracts with the Vessel’s
charterer do not control Bunker Holdings’ extra-contractual
claims against the Vessel’s owner, Green Pacific. Bunker
Holdings further contends that had the district court applied
traditional maritime choice-of-law rules to Bunker Holdings’
claims, the district court would have found that Russian law
governs this action. For the following reasons, we affirm.
I.
Bunker Holdings is a Cypriot corporation that sells marine
fuel (“bunkers”). Green Pacific is a Norwegian corporation and,
3
at all times relevant to this litigation, was the owner of the
Vessel.
In December 2005, Green Pacific leased the Vessel under a
bareboat charter 1 to Intertransport Company LLC
(“Intertransport”), a Russian company with its principal place
of business in Vladivostok, Russia. On September 28, 2006,
Intertransport sent an e-mail to Bunker Holdings requesting a
quote for a purchase of bunkers. On September 29, 2006, Bunker
Holdings replied by e-mail (“Bunker Confirmation”), confirming
Intertransport’s order. The Bunker Confirmation contains a
choice-of-law provision, which states as follows:
BUYERS ACCEPT AND AGREE THAT THIS AGREEMENT, FOR ANY
DISPUTES ARISING HEREIN IS SUBJECT TO GREEK LAW AND
THE EXCLUSIVE JURISDICTION OF THE COURTS OF PIRAEUS.
(J.A. 193). The bunker transaction was also subject to Bunker
Holdings’ “Standard Terms and Conditions for Sale of Marine
Bunker Fuels, Lubricants and Other Products,” which provides, in
pertinent part, as follows:
The Agreement is subject to the law and jurisdiction
of the courts of Greece. So whoever that nothing in
this clause shall, in the event of a breach of the
Agreement by the Customer, preclude the Company from
taking any such actions as it shall in its absolute
1
Under a bareboat charter, also known as a demise charter,
“the shipowner surrenders possession and control of the vessel
to the charterer, who then succeeds to many of the shipowner’s
rights and obligations.” Black’s Law Dictionary 250 (8th ed.
2004).
4
discretion consider it necessary to enforce, safeguard
or secure its rights under the Agreement in any Court
or tribunal or any state or country.
(J.A. 206). On October 5, 2006, Bunker Holdings confirmed
delivery of the bunkers to the Vessel in St. Petersburg, Russia.
Thereafter, Bunker Holdings sent an invoice to Intertransport
requesting payment for the bunkers by December 4, 2006.
On November 16, 2006, similar e-mail communications between
Bunker Holdings and Intertransport confirmed a second sale of
bunkers to be delivered to the Vessel in St. Petersburg, Russia.
The confirmation terms were identical to the terms of the
October 5, 2006 transaction, including the Greek choice-of-law
clause. This second transaction was also governed by the
Standard Terms and Conditions, which included a Greek choice-of-
law provision. On November 25, 2006 Bunker Holdings confirmed
delivery of this second set of bunkers to the Vessel in St.
Petersburg, Russia, and an invoice was sent to Intertransport
requesting payment for the fuel. Intertransport never paid for
either bunker delivery.
In December 2006, the PACIFIC CHUKOTKA was arrested in the
Port of Baltimore pursuant to a complaint filed by another fuel
supplier, Triton Marine Fuels Ltd. Bunker Holdings intervened
in that action to assert claims against the charterer and sub-
charterer of the Vessel for their failure to pay for the
bunkers. Bunker Holdings subsequently amended its complaint to
5
assert in personam claims against Green Pacific as the Vessel’s
owner. This amended complaint, without reference to the
applicable law, asserts in personam claims of conversion and
unjust enrichment against Green Pacific arising out of the
consumption of the fuel oil by the Vessel between October 5,
2006 and the date of the Vessel’s arrest. As part of its in
personam action, Bunker Holdings attached the Vessel as property
of Green Pacific, pursuant to Rule B of the Supplemental Rules
for Admiralty or Maritime Claims and Asset Forfeiture Actions.
Green Pacific moved to vacate Bunker Holdings’ attachment
and to dismiss Bunker Holdings’ in personam claims under federal
maritime law. 2 In response to Green Pacific’s motion to vacate,
Bunker Holdings stated for the first time its position that its
claims were made under Russian maritime law, and it submitted
the affidavits of three Russian lawyers in support of its
contention that Russian maritime law allows recovery on these
facts under a theory of unjust enrichment. Following an
expedited hearing, 3 the district court denied the motion to
2
In its motion to vacate, Green Pacific noted in passing
that the Standard Terms and Conditions contained a Greek choice-
of-law provision, but denied the application of such provision
to the present claims, noting that this agreement was only
between Bunker Holdings and Intertransport, not Green Pacific.
3
In its brief, Green Pacific discusses several arguments
advanced by counsel as well as oral findings made by the
(Continued)
6
vacate, and Green Pacific posted security to obtain the release
of the Vessel.
Thereafter, Green Pacific filed a motion for summary
judgment, arguing that Bunker Holdings was bound by its choice
of Greek law and that in the absence of any support for
liability under Greek law, Bunker Holdings’ claims based on
Russian law must be dismissed. In opposing Green Pacific’s
motion, Bunker Holdings again relied upon Russian maritime law
in support of its claims.
The district court entered an order granting Green
Pacific’s motion for summary judgment. In a letter to counsel 4 ,
the district court explained its ruling, holding that the
contractual choice of Greek law was enforceable and that Bunker
Holdings had failed to show the viability of its claims under
Greek law.
district court during these emergency proceedings. No
transcript of this proceeding, however, is contained in the
record on appeal.
4
The district court’s order does not set out the reasons
for its ruling. Those reasons are set out only in the informal
letter to counsel, which has been included in the record. (J.A.
401-05).
7
II.
We review the district court’s grant of summary judgment
de novo, applying the same standards as those applied by the
district court. Catawba Indian Tribe of S.C. v. City of Rock
Hill, 501 F.3d 368, 370-71 (4th Cir. 2007). Summary judgment is
proper “if the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue
as to any material fact and that the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(c).
III.
A.
We begin our analysis by determining whether the choice-of-
law provisions set forth in the contracts between Bunker
Holdings and Intertransport are enforceable. In determining the
enforceability of a choice-of-law provision, we look to
principles of federal maritime law. See generally M/S Bremen v.
Zapata Off-Shore Co., 407 U.S. 1 (1972); Richards v. Lloyd’s of
London, 135 F.3d 1289, 1292-93 (9th Cir. 1998) (en banc); but
see Trans-Tec Asia v. M/V HARMONY CONTAINER, 518 F.3d 1120, 1124
(9th Cir.) (applying traditional choice-of-law principles to
determine which country’s law determines the validity of choice-
of-law provision in contract), cert. denied, 129 S. Ct. 628(2008).
8
It is well-settled under United States law that absent a
compelling reason of public policy, a freely negotiated choice-
of-law clause in a maritime contract should be enforced. See
Bremen, 407 U.S. at 12-13 (“There are compelling reasons why a
freely negotiated private international agreement, unaffected by
fraud, undue influence, or overweening bargaining power, such as
that involved here, should be given full effect.”); Lauritzen v.
Larsen, 345 U.S. 571, 588-89 (1953) (“Except as forbidden by
some public policy, the tendency of the law is to apply in
contract matters the law which the parties intended to apply.”);
Bominflot, Inc. v. M/V HENRICH S, 465 F.3d 144, 148 (4th Cir.
2006) (“Because no ‘other law’ is specified on the face of the
contract, and public policy does not counsel against it, we will
respect the parties’ intentions and apply English law.”);
Hawkspere Shipping Co. v. Intamex, S.A., 330 F.3d 225, 233 (4th
Cir. 2003) (“Where the parties specify in their contractual
agreement which law will apply, admiralty courts will generally
give effect to that choice.”) (quoting Chan v. Soc’y
Expeditions, Inc., 123 F.3d 1287, 1297 (9th Cir. 1997)).
In the present case, Bunker Holdings drafted the terms and
conditions which governed the bunkers transactions, and its
deliberate inclusion of a Greek choice-of-law provision both in
the Bunker Confirmation and the Standard Terms and Conditions
reflects Bunker Holdings’ intent that the parties’ transactions
9
would be governed by Greek law. Bunker Holdings has not
demonstrated any compelling public policy that would prevent the
enforceability of the choice-of-law provisions in the supply
contracts, nor has Bunker Holdings shown that any fundamental
unfairness would result from enforcing the provisions.
Accordingly, we conclude that the district court was correct in
holding that the Greek choice-of-law provisions are enforceable
in this case.
B.
Having determined that the choice-of-law provisions are
enforceable, questions still remain as to whether Bunker
Holdings’ in personam claims of conversion and unjust enrichment
against Green Pacific fall within the scope of these provisions,
and whether such claims are viable under Greek law.
Bunker Holdings contends that because Green Pacific was not
a party to the agreements, the choice-of-law provisions
contained therein are not applicable to its in personam claims
asserted against Green Pacific. The Bunker Confirmation,
however, indicates that Bunker Holdings intended for Green
Pacific to be a party to the transaction, as Bunker Holdings
identified the “buyer” of the bunkers as the “M/V PACIFIC
CHUKOTKA AND JOINTLY AND SEVERALLY OWNERS/MANAGING
OWNERS/OPERATORS MANAGERS/DISPONENT OWNERS/CHARTERS AND VESSEL
10
IN REM AND INTERTRANSPORT CO., LLC.” (J.A. 197) (emphasis
added). The Bunker Confirmation further provides that “MERE
RECEIPT OF THIS CONFIRMATION SIGNIFIES ACCEPTANCE OF
RESPONSIBILITY FOR PAYMENT OF OUR BUNKER INVOICE BY EACH AND ALL
OF THEM.” (Id.). Having sought to bind Green Pacific to the
supply contract, Bunker Holdings cannot now be heard to claim
that the provisions of that contract should not be enforced as
to its claims against Green Pacific. Bunker Holdings’ argument,
therefore, must be rejected.
Bunker Holdings further contends that even if these choice-
of-law provisions are enforceable with respect to Green Pacific,
the provisions do not encompass Bunker Holdings’ extra-
contractual claims. The scope of the choice-of-law provisions,
however, being a matter of contract interpretation, must be
determined by the law of the state chosen by the parties in the
contract. See Milanovich v. Costa Crociere, S.p.A., 954 F.2d
763, 767 (D.C. Cir. 1992) (“If the choice-of-law provision is
enforceable, we will use the law that it selects to evaluate the
enforceability of the remainder of the contract terms.”);
Siegelman v. Cunard White Star, 221 F.2d 189, 193 (2d Cir. 1955)
(examining United States law to determine enforceability of
English choice-of-law provision, then applying English law to
interpret contract provision limiting the time for suit);
Jansson v. Swedish Am. Line Ltd., 185 F.2d 212, 218 (1st Cir.
11
1950) (“when the parties contract with the law of some
particular jurisdiction in view, the law of that jurisdiction
will be applicable in determining the interpretation and
validity of the contract”); Odin Shipping Ltd. v. Drive Ocean V
MV, No. 98-56794, 2000 WL 576436, at *1 (9th Cir. May 11, 2000)
(applying law selected in choice-of-law provision to determine
whether asserted tort claims arise within the scope of said
provision). Accordingly, whether the choice-of-law provisions
encompass the non-contractual claims asserted by Bunker Holdings
against Green Pacific is an issue that must be determined under
Greek law.
On this point, however, Bunker Holdings’ argument must
fail. Bunker Holdings has presented nothing to establish what
the relevant Greek law is or whether it would serve to preclude
the application of the parties’ contractual choice-of-law to
Bunker Holdings’ extra-contractual claims. It was due to Bunker
Holdings’ lack of proof on this issue that the district court
granted summary judgment to Green Pacific. On appeal, Bunker
Holdings does not challenge the district court’s conclusion in
this regard. 5 Having failed to address this issue in its opening
5
In its opening appellate brief, Bunker Holdings maintains
that the district court erred in failing to conduct a Lauritzen
analysis to determine the appropriate law to apply to Bunker
Holdings’ claims against Green Pacific. In a footnote, Bunker
Holdings contends that the district court “compounded its error
(Continued)
12
appellate brief, we consider Bunker Holdings to have abandoned
this issue on appeal, and we therefore will not further consider
it. See Edwards v. City of Goldsboro, 178 F.3d 231, 241 n.6
(4th Cir. 1999).
IV.
For the foregoing reasons, we affirm the judgment of the
district court.
AFFIRMED
even further” by failing to determine “how, if at all, the
supposedly controlling Greek law would affect Bunker Holdings’
claims (or even, what the supposedly controlling Greek law,
was).” (J.A. 13 n.5). This passing reference in a footnote
hardly satisfies the appellant’s obligation to set forth its
“contentions and the reasons for them, with citations to the
authorities and parts of the record on which the appellant
relies.” Fed. R. App. P. 28(a)(9)(A).
13