Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer

PETITIONER:Vimar Seguros y Reaseguros, S. A.
RESPONDENT:M/V Sky Reefer et al.
LOCATION:Ohio Elections Commission

DOCKET NO.: 94-623
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the First Circuit

CITATION: 515 US 528 (1995)
ARGUED: Mar 20, 1995
DECIDED: Jun 19, 1995

Stanley McDermott, III – on behalf of the Petitioner
Thomas H. Walsh, Jr. – for respondents
Thomas C. Walsh – on behalf of the Respondents

Facts of the case


Media for Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer

Audio Transcription for Oral Argument – March 20, 1995 in Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer

Audio Transcription for Opinion Announcement – June 19, 1995 in Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer

William H. Rehnquist:

The opinion of the Court in number 94-623, Vimar Seguros Y Reaseguros v. M/V Sky Reefer will be announced by Justice Kennedy.

Anthony M. Kennedy:

This case begin in Massachusetts District Court when owner damaged cargo and the owner’s marine insurers sued the ship and its owners the allegation was about over a $1 million where the oranges and lemons have been damaged, when they were loaded in an improper way.

The shipment was from Morocco where the fruits was loaded or misloaded to Massachusetts.

The contract of carriage is astandard form standard form of ocean bill of lading the dispute is over one of the clauses in the bill of lading.

It provides damage claims will be subject to arbitration, there is no dispute over that it goes on to provide that the arbitration will be in Tokyo and will proceed under Japanese Law, there is a dispute over that.

The District Court and the Court of Appeals ordered the arbitration to proceed as provided in the bill of lading and the First Circuit affirmed.

The cargo owner and the marine insurers object to these rulings.

They are the petitioners here and we now affirm.

The petitioner argues that the arbitration clause can not be enforced under the Federal Arbitration Act because it is contrary to another Federal Law the so called Carriage of Goods by Sea Act and the acronym for that is COGSA.

COGSA has a provision that renders null and void any term in the bill of lading which lessens the liability that COGSAotherwise provides in the petitioner’s view the additional cost and inconvenience of going to Japan and arbitrating under Japanese Law lessens the liability in the sense this prohibited back by COGSA and we hold that a Foreign Arbitration Clause does not per se lessen liability under COGSA.

COGSA sets out certain duties and obligations that are carried and may not alter to its advantage in the bill of lading, but it does not identify the particular procedures or the form for enforcing these obligations.

That’s the fact that a form maybe more costly and less convenient, for a shipper does not lessen liability as those terms are used in COGSA, our reading is consistent with principles of international committee their implicit in the Hague rules and it is the Hague International Convention on which COGSA in fact is modeled.

It also accords with the way other nations that have ratified the Hague rules have interpreted their international obligations.

The petitioner also argues that the arbitration clause lessens liability when combined with Japanese choice of Law Clauses because the Japanese version of the Hague rule as the petitioner interprets it release the respondent for certain negligent conduct that would be remedy done at COGSA.

We need not to address that argument at this interlocutory stage because the arbitrators will decide the choice-of-law question in the first instance.

For these reasons we affirm the decision of the First Circuit and remand for further proceedings.

Justice Stevens has filed a dissenting opinion and Justice Breyer took no part in the consideration or decision.