Compania Naviera Joanna Sa v. Koninklijke Boskalis Westminster

• Decision Date: 26 June 2009
• Docket Number: No. 08-1031.,08-1031.
• Citation: 569 F.3d 189
• Parties: In re COMPANIA NAVIERA JOANNA SA, as Owner; MSC Mediterranean Shipping Company SA, Appellees, v. KONINKLIJKE BOSKALIS WESTMINSTER NV; Boskalis International BV; Westminster International BV, Claimants-Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

569 F.3d 189

In re COMPANIA NAVIERA JOANNA SA, as Owner; MSC Mediterranean Shipping Company SA, Appellees, v. KONINKLIJKE BOSKALIS WESTMINSTER NV; Boskalis International BV; Westminster International BV, Claimants-Appellants.

No. 08-1031.

United States Court of Appeals, Fourth Circuit.

Argued: March 24, 2009.

Decided: June 26, 2009.

ARGUED: Mary Campbell Broughton, Fowler Rodriguez Valdes-Fauli, Mobile, Alabama, for Appellants. Gordon D. Schreck, Buist, Moore, Smythe, McGee, PA, Charleston, South Carolina; Douglas M. Muller, Moore & Van Allen, PLLC, Charleston, South Carolina, for Appellees. ON BRIEF: Antonio J. Rodriguez, Alanson T. Chenault, IV, Fowler & Rodriguez, New Orleans, Louisiana; Paul F. Tecklenburg, Tecklenburg Law Firm, LLC, Charleston, South Carolina, for Appellants. Adriane M. Belton, Buist, Moore, Smythe, McGee, PA, Charleston, South Carolina, for Appellee MSC Mediterranean Shipping Company SA.

Before NIEMEYER and SHEDD, Circuit Judges, and THOMAS D. SCHROEDER, United States District Judge for the Middle District of North Carolina, sitting by designation.

Affirmed as modified by published opinion. Judge NIEMEYER wrote the opinion, in which Judge SCHROEDER joined. Judge SHEDD wrote a dissenting opinion.

OPINION

NIEMEYER, Circuit Judge:

During daylight hours on March 8, 2007, a large 107,849-ton containership, the MSC Joanna, owned by a Panamanian corporation and chartered by a Swiss corporation, collided with a 33,423-ton dredge, owned and chartered by Netherlands corporations, in Chinese territorial waters near the port of Tianjin, causing serious damage to both vessels. After Chinese authorities investigated the collision and legal proceedings began, with the arrest of both vessels, in the Tianjin Admiralty Court to resolve liability and damages, the Netherlands corporations commenced eight different actions in four separate district courts in the United States under Admiralty Rule B to resolve liability and damages issues under U.S. law. The owner and charterer of the containership commenced this limitation-of-liability action under Admiralty Rule F as a defensive strategy to enjoin the eight actions filed against them and then to have this action dismissed in favor of the Chinese proceedings under the doctrine of forum non conveniens.

The district court enjoined the U.S. actions and granted the motion to dismiss this action, even though the dredge owner and charterer may now be beyond the deadline for pursuing claims in the Tianjin Admiralty Court. The district court found that "the United States has absolutely no connection to the events giving rise to this action" and the dredge owner and charterer should not be allowed to proceed in U.S. courts. With respect to whether claims might now be barred in the Chinese court, the district court found that the dredge owner and charterer deliberately let the deadlines in the Chinese court pass, and it stated that "[a] party should not be allowed to assert the unavailability of an alternative forum when the unavailability is a product of its own purposeful conduct" in letting the deadline pass.

Even though the multiplicity of proceedings introduce complexity into this case and equities favor each side, we conclude that the district court did not, in the particular circumstances of this case, abuse its discretion in applying the doctrine of forum non conveniens and dismissing this action. Accordingly, we affirm, but with the modification that any applicable statute of limitations or defense based on a missed deadline may not be affirmatively asserted in the Chinese proceedings.

I

On March 8, 2007, while the world's largest dredge, the W.D. Fairway (approximately 770 feet long), was dredging the shipping channel leading through the Bohai Gulf to the port of Tianjin, China, it was hit broadside by a large containership (approximately 1,100 feet long), the MSC Joanna, which was departing from the port—or, the W.D. Fairway crossed the bow of the MSC Joanna causing the collision with the containership, depending on whose version of the facts is accepted. Both vessels suffered severe damage, but the hull of the dredge was breached, and the dredge sank to the bottom in shallow water. Both vessels, however, were salvaged and temporarily repaired in Chinese shipyards. The owner and charterer of the dredge now claim that their vessel sustained $326 million in damages, and the owner and charterer of the containership claim that their vessel sustained $10.5 million in damages.

The dredge is owned by Westminster International BV, a Netherlands corporation, and is chartered to Boskalis International BV, a related Netherlands corporation. Both corporations receive services from their common grandparent, Koninklijke Boskalis Westminster NV, a Netherlands corporation. These three corporations (hereafter "Boskalis") are part of the Boskalis group, headquartered in Papendrecht, The Netherlands. Boskalis subchartered the dredge in January 2007 to CCCC Tianjin Dredging Company, Ltd., a Chinese dredging firm, and at the time of the collision, the dredge was manned by a Chinese crew and was reflagged with the Chinese flag.

The containership, the MSC Joanna, is owned by Compania Naviera Joanna SA, a Panamanian corporation, and is chartered to MSC Mediterranean Shipping Company SA, a Swiss corporation and the second largest container-shipping company in the world. The MSC Joanna, which frequented ports in the Far East, was manned by a crew of Italian, Croatian, Indonesian, Polish, and "Yugoslav" nationals and was flying the Panamanian flag.

The collision occurred in Chinese territorial waters, which are under the jurisdiction of the Tianjin division of the Maritime Safety Administration, an entity "similar to the United States Coast Guard." The Tianjin Maritime Safety Administration conducted an investigation of the collision, interviewing witnesses, making diagrams, and retaining documents. Shortly after the collision, both the Boskalis entities and MSC Mediterranean Shipping filed petitions with the Tianjin Admiralty Court to obtain evidence-preservation orders, and the court granted the petitions.

About a week after the collision, the Chinese subcharterer of the dredge filed a claim in the Tianjin Admiralty Court for $19.5 million in damages, and in connection with that claim, it obtained an order arresting the MSC Joanna. Then on April 4, 2007, MSC Mediterranean Shipping and Compania Naviera Joanna (collectively "MSC Shipping") commenced two actions in the Tianjin Admiralty Court—a limitation-of-liability action and a claim for damages against Boskalis and the Chinese subcharterer in the amount of $10.5 million. In the limitation-of-liability action, MSC Shipping deposited approximately $20 million with the Tianjin Admiralty Court as the properly calculated limitation fund, and the Court accepted the fund and directed all claimants to file claims for any damages arising out of the collision against the fund by June 30, 2007. The amount of the fund was determined by the tonnage-formula method used by Chinese courts, as well as by the majority of maritime nations (but not by the United States).

MSC Shipping's damages complaint was served on Westminster International and Boskalis International, the owner and charterer of the dredge, and MSC Shipping obtained an order arresting the dredge, the W.D. Fairway. Those two Boskalis companies challenged the Chinese court's jurisdiction over them, and thereafter decided to proceed no further in the Tianjin Admiralty Court. As counsel for Boskalis advised the district court in this case:

All of the Boskalis entities have made the decision that they do not desire to participate in China because they've all—those that have been served have filed objections to the jurisdiction of the Chinese court, which has not been— those objections have not been heard in China at this time.

At oral argument, however, counsel for Boskalis advised us that the Chinese court had rejected their jurisdictional challenge. The record does not reveal whether Boskalis has taken any further steps in the damages action filed against it by MSC Shipping in China.

Boskalis also made the decision not to file a claim against the limitation fund in the Tianjin Admiralty Court, even though it knew of the Chinese court's admonition that claims had to be filed by June 30, 2007. As counsel for Boskalis acknowledged to the district court:

The Court: Okay. So the Boskalis entities made a reasoned decision after being notified that there was a limitation of liability proceeding instituted in the courts of China not to participate and let the statute of limitations run?

Counsel for Boskalis: That's correct, Your Honor.

Instead of proceeding in the Tianjin Admiralty Court, Boskalis sought to litigate its claims for damages against MSC Shipping in the United States. It acknowledges that it made this election because U.S. law would, according to its assessment, result in a larger limitation fund than the fund created under Chinese law. On May 4, 2007, it commenced an action against MSC Shipping for $326 million in damages in the Southern District of Texas. Because MSC Shipping was not found in that district, Boskalis proceeded under Admiralty Rule B and attached an unrelated vessel chartered by MSC Shipping, requiring MSC Shipping to file security for the release of that vessel. Rule B is designed to secure the appearance of the defendant and, through the attachment of defendant's assets, secure satisfaction of any judgment entered, up to the value of the assets. See Swift & Co. Packers v. Compania Colombiana del Caribe, S.A., 339 U.S. 684, 693, 70 S.Ct. 861, 94 L.Ed. 1206 (1950). Because the amount filed by MSC Shipping to obtain release of its vessel was insufficient to pay Boskalis' $326-million damage claim, Boskalis filed seven additional Rule B claims in district courts in Texas, Louisiana, South Carolina, and Virginia, obtaining a total of 16...