467 F.3d 817 (2nd Cir. 2006), 05-5308, Asoma Corp. v. SK Shipping Co., Ltd.

Docket Nº:05-5308-cv.
Citation:467 F.3d 817
Party Name:ASOMA CORPORATION, Plaintiff-Appellant, v. SK SHIPPING CO., LTD., Defendant-Cross-Claimant-Appellee, Columbia Shipmanagement Ltd. and Pelagos Shipping, Ltd., Defendants-Cross-Claimants-Appellees, M/V Faros, her Engines, Boilers, Tackle, Etc., Defendant.
Case Date:October 24, 2006
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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467 F.3d 817 (2nd Cir. 2006)

ASOMA CORPORATION, Plaintiff-Appellant,

v.

SK SHIPPING CO., LTD., Defendant-Cross-Claimant-Appellee,

Columbia Shipmanagement Ltd. and Pelagos Shipping, Ltd., Defendants-Cross-Claimants-Appellees,

M/V Faros, her Engines, Boilers, Tackle, Etc., Defendant.

No. 05-5308-cv.

United States Court of Appeals, Second Circuit.

October 24, 2006

Argued: March 22, 2006

Appeal from a judgment of the United States District Court for the Southern District of New York (Swain, J.) dismissing claims based on a forum selection clause in bills of lading.

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Steven P. Calkins, Kingsley, Kingsley & Calkins, Hicksville, NY, for Plaintiff-Appellant Asoma Corporation.

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Randolph H. Donatelli, Cichanowicz, Callan, Keane, Vengrow & Textor, LLP, New York, NY, for Defendant-Cross-Claimant-Appellee SK Shipping Co., Ltd.

Peter J. Gutowski, Freehill, Hogan & Mahar, LLP, New York, NY, for Defendants-Cross-Claimants-Appellees Columbia Shipmanagement Ltd. and Pelagos Shipping, Ltd.

Before: Leval, B.D. Parker, Circuit Judges, and Sessions, District Judge.[*]

B.D. Parker, Circuit Judge:

This admiralty case arose from seawater damage to steel coils shipped from Taiwan to the United States, and we must decide in which country the case should be heard. Two separate contracts of carriage, with two different forum selection clauses, potentially govern. Defendant-Appellee SK Shipping Co., Ltd., as "time chartered owner," entered into a charter party (the "contract of charter," "voyage charter" or "charter party") leasing a vessel to Metall und Rohstoff Shipping London Ltd. ("MUR London") for shipment of the cargo. The contract identified the "charterer" as MUR London, or its "nominee." MUR London nominated Plaintiff-Appellant Asoma Corporation ("Asoma"). The charter party contains a forum selection clause which requires that claims for cargo loss or damage be litigated in the United States District Court for the Southern District of New York. When the steel coils were subsequently loaded onto SK Shipping's vessel, the M/V Faros, in Taiwan, SK Shipping issued bills of lading to Yieh Loong Enterprise Co., Ltd., the manufacturer, which consigned the cargo. The bills of lading require that litigation be brought in Seoul, South Korea.

Asoma brought this suit for damage to the coils under the charter party in the Southern District of New York. The court (Swain, J.) concluded that the bills of lading, and not the charter party, were the governing contract of carriage and that their South Korea forum selection clause controlled; it therefore dismissed the case. See fed. R. Civ. P. 12(b). For the reasons that follow, we conclude that in a suit under the charter party brought by Asoma as charterer under that contract, charging SK Shipping with breach of the terms of that contract, SK Shipping is bound to the terms of its contract, including the forum selection clause specifying that litigation for cargo damage be brought in the Southern District of New York. To the extent the district court came to the contrary conclusion, we reverse and remand for further proceedings. As to the other portions of the court's opinion, we affirm.

BACKGROUND

As is often the case in intercontinental ocean shipping, the litigants are connected to a network of affiliated companies.1 Asoma is apparently affiliated with four companies—MUR London, Metall und Rohstoff Shipping London USA Corp. ("MUR USA"), Macsteel International Far East Limited ("Macsteel Far East"), and Macsteel International USA Corp. ("Macsteel USA")—each of which played a role in the purchase and shipment of the coils.

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In late September 1999, Asoma's affiliate Macsteel Far East entered into a contract with Yieh Loong, a Taiwanese steel manufacturer, for the purchase of 10,000 metric tons of steel coils for approximately $2.75 million. A key price term was FOB Kaohsiung, Taiwan, and the steel was to be shipped to the United States during October or November 1999.

MUR London, another Asoma affiliate, entered into the voyage charter party in late December 1999 with SK Shipping. The contract provided for carriage of the steel by SK Shipping from Kaohsiung, Taiwan to three separate ports in the United States, on a ship to be nominated by SK Shipping. The charter party identified SK Shipping as the "time chartered owner," and named the charterer as MUR London "or nominee." Of particular importance here, the parties agreed in Clause 35 that cargo damage claims be litigated in the United States District Court for the Southern District of New York. The pertinent part of Clause 35 reads as follows:

Any arbitration clause in this contract shall not apply for cargo loss or damage but such claims shall be brought in the United States District Court for the Southern District of New York, to which jurisdiction owners hereby consent.

Clause 9 of the charter party also provided: "The Captain or Agents to sign Bills of Lading at such rate of freight as presented without prejudice to this Charter party." As MUR London's nominee and therefore a party to the contract of charter, Asoma brought this suit in accordance with the stated terms of the contract of charter requiring that suits for cargo damage be litigated in the United States District Court for the Southern District of New York.

On January 6, 2000, in a letter addressed to MUR USA, SK Shipping nominated the M/V Faros to carry the steel coils. The Faros was a vessel owned by Defendant-Appellant Pelagos Shipping, Ltd. ("Pelagos"), operated by Defendant-Appellant Columbia Shipmanagement Ltd. ("Columbia"), and subchartered to SK Shipping.

On January 11, 2000, Macsteel Far East sold the steel coils to its affiliate Asoma. Payment to Macsteel Far East was conditioned on the production of certain documents, including a "Full Set 3/3 Clean On Board Bills of Lading." Under a section on "loading," the contract also stated that the "[d]etention rate is to be as per charter party," though it did not explicitly reference the December 23, 1999 charter party between MUR London and SK Shipping.

On January 25, 2000, SK Shipping issued twelve bills of lading to Yieh Loong, the manufacturer and seller of the steel. Yieh Loong was designated as the shipper, and the "consignee" was designated as "To Order," rendering the bills negotiable. The front of each bill of lading contained the following statement:

IN ACCEPTING THIS BILL OF LADING the shipper, Owner and consignee of the goods and holder of this bill of lading expressly accept and agree to all its stipulations exceptions and conditions, whether written, stamped or printed as fully as if signed by such shipper, Owner, consignee and/or holder. No agent is authorized to waive any of the provisions of the within clauses.

Clause 33, on the reverse side, also contained a forum selection clause: "Any claim, dispute, suit or action concerning goods carried under this Bill of Lading, whether based upon breach of contract, tort or otherwise shall be brought before the Seoul District Court."

The front of each bill of lading also stated that the "FREIGHT PAYABLE AS PER CHARTER PARTY," and that the

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freight was payable at "DESTINATION". Asoma claims that in February 2000 it paid the freight charges for the steel coil cargo (roughly $264,000) directly to SK Shipping's bank account specified in Clause 18 of the charter party, in February 2000. The bills of lading were assigned by Yieh Loong to the purchaser, Macsteel, which in turn assigned them to Asoma.

Asoma claims that, at some point after Yieh Loong delivered the steel coils onto the M/V Faros at the dock in Kaohsiung, Taiwan, and before the March 2000 delivery of the coils to the United States, the coils were damaged by seawater. Asoma seeks in excess of $140,000 in damages from Defendants-Appellees SK Shipping, Pelagos, and Columbia.

On February 21, 2001, MUR London executed an Assignment, Ratification and Nomination, which nominated Asoma as the charterer under the charter party, assigned all MUR London's rights in the charter party to Asoma, and ratified Asoma's upcoming litigation against SK Shipping.

In May 2001, Asoma brought this suit against SK Shipping, Pelagos, and Columbia in the Southern District of New York. The defendants promptly moved to dismiss by reason of the South Korea forum selection clause in the bills of lading. The district court granted this motion because Asoma's original complaint mentioned only the bills of lading, not the charter party. The court refused to grant Asoma leave to amend its original complaint. See Asoma Corp. v. M/V FAROS, No. 01CIV3853 (LTS) (THK), 2001 WL 1588929, at *2 (S.D.N.Y. December 12, 2001). We...

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