Winthrop Products, Inc. v. Hanjin Container Line, Ltd.

• Decision Date: 30 June 1992
• Citation: 155 Misc.2d 108,587 N.Y.S.2d 475
• Parties: WINTHROP PRODUCTS, INC., et al., Petitioner(s)/Plaintiff(s), v. HANJIN CONTAINER LINE, LTD., Respondent(s)/Defendant(s).
• Court: New York City Court

Page 475

587 N.Y.S.2d 475

155 Misc.2d 108

WINTHROP PRODUCTS, INC., et al., Petitioner(s)/Plaintiff(s), v. HANJIN CONTAINER LINE, LTD., Respondent(s)/Defendant(s).

Civil Court of the City of New York,

New York County, Special Term,

Part I.

June 30, 1992.

Graham, Miller, Neandross, Mullin & Noonan, P.C., Michael J. Slevin, for petitioners/plaintiffs.

Cichanowicz, Callan & Keane, Lawrence v. Cichanowicz, for respondents/defendants.

LOUIS B. YORK, Judge.

Defendant brings this motion for summary judgment to enforce a forum-selection clause, or in the alternative for dismissal on the grounds of forum non-conveniens. For the reasons discussed below, defendant's motion is denied.

Plaintiff, Winthrop Products, Inc. hired defendant, Hanjin Container Line, Ltd. to transport ocean cargo from New York to Hong Kong. The bill of lading supplied by defendant included on its reverse side as one of 32 provisions, a forum-selection clause stating that "any action [under the bill of lading] shall be brought before the Seoul Civil District Court in the Republic of Korea."

In February of 1987, defendant's ship, the Hanjin Kobe, loaded plaintiff's cargo in New York and transported it to Keelung, Taiwan. In Taiwan, defendant transferred the cargo to a smaller "feeder" ship, the K.H. Enterprise, for delivery to Hong Kong. On August 7, 1987, defendant notified plaintiff that en route from Taiwan to Hong Kong, the K.H. Enterprise had collided with another vessel and had sunk with plaintiff's cargo on board. Plaintiff waited four years for its claim to be paid and then sued in this court to recover $17,120.00 for the lost cargo.

The governing law in this case is the U.S. Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C.App. sections 1300-15. "Every bill of lading ... which is evidence of a contract for the carriage of goods by sea to or from ports of the United States, in foreign trade, shall have effect subject to the provisions of this chapter." 46 U.S.C.App. section 1300.

Defendant acknowledges that enforcing the forum-selection clause is contrary to the majority rule in the federal courts, yet attempts to analogize the recent case of Carnival Cruise Lines, Inc. v. Shute, 499 U.S. ----, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991). Carnival involved neither COGSA nor a forum-selection clause designating a foreign locale for litigation. In that case, the Supreme Court determined that the forum-selection clause did not violate a statute similar to COGSA and upheld the designation of Florida as the required forum for a suit brought against the foreign cruise line by residents of the state of Washington.

COGSA, like the federal statute in Carnival, voids contract clauses which reduce a carrier's liability. "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 and obligations provided in this section, or lessening such liability otherwise than as provided in this Act, shall be null and void...." 46 U.S.C.App. section 1303(8). A forum-selection clause which imposes on plaintiff the substantial burden of transporting its suit to a remote forum and proceeding without the benefit of an American jurisdiction undoubtedly affects the liability of the carrier involved.

The applicable precedent in this case is Underwriters at Lloyd's v. M/V Steir, 773 F.Supp. 523 (D.Puerto Rico 1991). Steir followed a line of similar cases beginning with Indussa Corporation v. S.S. Ranborg, 377 F.2d 200 (2d Cir.1967) (en banc) which held that bill of lading forum clauses requiring litigation in foreign jurisdictions are invalid under COGSA, because they tend to reduce the liability of the carrier. Steir, 773 F.Supp. at 525. Union Ins. Soc. v. S.S. Elikon, 642 F.2d 721 (4th Cir.1981) (Congress intended COGSA to avoid the difficulty of forum-selection clauses in bills of lading which represented clauses of an adhesion contract). The bill of lading forum clause in this case was not a negotiated term of a contract between parties of equal bargaining power. See Steir, 773 F.Supp. at...