CALLIE V. S. GRANADE, District Judge.
A/S Dan-Bunkering Ltd. ("Plaintiff") initiated this maritime action on June 26, 2014, claiming it holds a maritime lien on the M/V Centrans Demeter, IMO No. 9445174 ("Vessel"). (Doc. 1). Based on this lien, Plaintiff asked the Court to authorize an arrest of the Vessel when it arrived in Mobile, Alabama. (Doc. 1, p. 6; Doc. 4). The Court granted Plaintiff's request, and on July 3, 2014, the U.S. Marshall arrested the Vessel. (Doc. 8). The Vessel's owner, Aries Shipping Co., Ltd. ("Aries"), subsequently moved the Court to vacate the arrest and release or reduce the security (Doc. 21), and dismiss the complaint. (Doc. 22). Plaintiff opposed the motions, and filed a motion for summary judgment. (Doc. 26). Aries responded and opposed the motion for summary judgment. (Doc. 33). Plaintiff then filed its reply to Aries' response. (Doc. 34).
After reviewing the initial motions, the Court denied the motions to vacate the arrest and dismiss the complaint, stayed the motion for summary judgment, and ordered supplemental briefing on the choice-of-law issues underlying the case. (Doc. 37, p. 16). Plaintiff and Aries filed their supplemental briefs and corresponding replies. (Docs. 38, 39, 42, 43).
The Court previously summarized this breach of contract dispute and the unique nature of maritime liens for necessaries under U.S. law. (Doc. 37). In essence, Plaintiff helped fuel the Vessel in the port of Hong Kong and never received payment for doing so. (Doc. 27, pp. 5 - 7). Plaintiff is a company organized under the laws of Denmark. (Doc. 27, p. 5). Aries is a Hong Kong company. (Doc. 39, p. 1). The Vessel is flagged under the laws of Hong Kong. (Doc. 33, p. 11). The Vessel's charterer, Zhenhua International Shipping Co., Ltd. ("Zhenhua"), is a Chinese company. (Doc. 33, p. 11).
Plaintiff and Zhenhua entered into a bunker fuel agreement dated November 15, 2011 ("Bunker Contract"). (Doc. 27, Exh. 1, pp. 6 - 7). Aries is not a party to the Bunker Contract, nor did it participate in contract negotiations. (Doc. 27, Exh. 1, pp. 6 - 7; Doc. 39, p. 2). The Bunker Contract stated: "Our General Terms and Conditions of March 2010, which are known to you, are to apply. Copy available on request and on our homepage www.dan-bunkering.com." (Doc. 27, pp. 5 - 6; Doc. 27, Exh. 1, p. 7). The General Terms and Conditions contain a choice-of-law clause. That clause reads:
The relevant portion of Section 9 reads:
Pursuant to the Bunker Contract, Plaintiff helped provide fuel for the Vessel on November 18, 2011. (Doc. 27, p. 4; Doc. 39, p. 2). Plaintiff then invoiced Zhenhua and the Vessel $593,484.00 for the fuel. (Doc. 27, p. 4; Doc. 27, Exh. 1, p. 19). The Vessel went on its way. Zhenhua made some payments for the fuel but never paid Plaintiff in full. (Doc. 27, p. 4; Doc. 27, Exh. 2, p. 30). When the Vessel sailed into Mobile, Alabama on July 1, 2014, Plaintiff had it arrested to enforce a maritime lien. (Docs. 4, 8, 9). Plaintiff claims it holds a maritime lien for necessaries pursuant to U.S. law based on the choice-of-law clause set forth above. (Doc. 27, pp. 7, 10 - 11).
After reviewing the motions and the Bunker Contract, the Court decided it could not "begin its inquiry by assuming the contract is governed by U.S. law and the choice-of-law clause is part of the contract. Instead, the Court must first determine which country's laws govern contract formation. . . ." (Doc. 37, p. 11). As a result, the Court ordered supplemental briefing on the choice-of-law questions, and the doctrine of forum non conveniens. (Doc. 37, p. 16). In the supplemental briefing, Plaintiff argues recent federal court decisions confronting similar maritime claims are compellingly persuasive, and U.S. law should similarly apply to its maritime claim. (Doc. 38, pp. 2 - 5). Aries argues Hong Kong law governs questions related to contract formation, as Hong Kong is the place with the most significant relationship to the transaction at issue. (Doc. 39, pp. 2 - 3). Aries further argues that the need to apply foreign law favors dismissing the case under a forum non conveniens analysis. (Doc. 39, pp. 14 - 17).
First, the Court must determine the choice-of-law issue and decide which country's laws control contract formation. If United States law is applicable, the Court may not dismiss the case on forum non conveniens grounds. If, however, foreign law is applicable, then the Court can exercise discretion in determining whether a forum non conveniens dismissal is appropriate.
The Court must consider several factors to determine which country's laws control the formation of the Bunker Contract.
Using the "most significant relationship" test, Hong Kong law controls issues related to Bunker Contract formation. The parties to the Bunker Contract, Plaintiff and Zhenhua, negotiated the contract terms in Hong Kong and China. (Doc. 39, p. 4). The order confirmation identified the port of Hong Kong as the place of performance. (Doc. 27, Exh. 1, p. 6). The subject matter of the Bunker Contract, both the fuel and the Vessel, are tied to Hong Kong. Plaintiff is a Danish company; Zhenhua is a Chinese company; Aries, though not a party to the Bunker Contract, is a Hong Kong Company. The Vessel carried the Hong Kong flag.
Additionally, the Restatement factors do not favor applying U.S. law. Only two of the Restatement factors, the relevant policies of the forum (factor (b)), and the ease in determining and applying the relevant law (factor (g)), clearly weight in favor of applying U.S. law. The needs of the international system (factor (a)), and the relevant policies of other interested states (factor (c)), weigh in favor of applying Hong Kong law. The remaining factors do not weigh significantly in favor of one country's laws over the other.
In sum, the facts involved do not warrant applying U.S. law to resolve Bunker Contract formation issues. Moreover, seizing the ship in Alabama does not by itself require application of U.S. law. The Court therefore finds Hong Kong law controls questions concerning the formation of the Bunker Contract, and the incorporation of the choice-of-law clause contained in the General Terms and Conditions.
When a district court is faced with applying foreign law, it must examine the traditional considerations of forum non conveniens in determining whether dismissal is appropriate. Forum non conveniens is the doctrine that an appropriate forum — even though competent under the law — may divest itself of jurisdiction if, for the convenience of the litigants and witnesses, it appears that the action should proceed in another forum in which the action might have been brought in the first place.
Analyzing the private factors first, there is almost no United States interest in this lawsuit. No party is a United States citizen, nor did any of the events of this suit (except the seizure of the Vessel) occur in the United States. The Vessel does not appear to sail in U.S. waters often. Zhenhua, a Chinese company, chartered the Vessel from Aries, a Hong Kong company. Zhenhua bought bunker fuel in Hong Kong from Plaintiff, a company registered in Denmark that does business in China. (Doc. 39, p. 4). The parties, witnesses, and documents are primarily in Hong Kong. Indeed, the only private interest that supports applying U.S. law is the presumption in favor of Plaintiff's choice of forum, though Plaintiff is not a citizen, resident, or corporation of this country.
The "private interests" favor dismissing this suit, but some deference must also be given to the "public interests" at stake.
Before a court dismisses an action for forum non conveniens, it must ensure, at the time of dismissal, that there is an available alternative forum for the continuation of the suit in which the plaintiff may pursue an adequate remedy.
Plaintiff nevertheless argues, "this Court is the proper and only forum to resolve Plaintiff's claims." (Doc. 43, p. 11). For purposes of forum non conveniens, Plaintiff conflates available claims and available remedies.
It is not apparent, however, whether Hong Kong is an "available" forum.
In this case, the primary issue concerns Hong Kong law, the private and public interests favor dismissal, and there is an alternative forum better suited to handle the facts alleged. Dismissing the action will allow the parties to file the suit in a more convenient forum. Accordingly, this action is dismissed on the basis of forum non conveniens.
The dismissal, however, is conditioned on Aries agreeing to proceed with the action in Hong Kong. Conditional dismissals are permissible in forum non conveniens cases.
After careful consideration, Plaintiff's motion for summary judgment is