Post-war yearning for deparochialisation and the siren of free trade: The Bremen v. Zapata Off-Shore Co.

Abstract

This first case expresses a postwar yearning for deparochialisation. At stake was the legal effect of a forum-selection clause in an international maritime contract. Decided by the United States Supreme Court in 1972, it marks the beginning of a process of liberalisation of contractual choice of forum, that would extend progressively from adjudication to arbitration. One might say that the siren of free trade lures international jurisdiction into the nets of party autonomy. The dispute arises from a towage contract between an American corporation (Zapata) and a German corporation (Unterweser), in which the main obligation was to move an oil rig from Louisiana to the Adriatic Sea. The contract contained the following forum-selection clause: 'Any dispute arising must be treated before the London Court of Justice.' Unterweser's deep-sea tug Bremen departed Louisiana on 5 January 1968, however, during transportation a severe storm arose while the Bremen was in international waters. The rig was damaged and was towed to Tampa, Florida, the nearest port of refuge. Despite the contractual provisions, on 12 January, Zapata commenced a suit in admiralty in the United States District Court at Tampa, seeking damages against Unterweser in personam and the Bremen in rem, alleging negligent towage and breach of contract. Unterweser invoked the forum clause and moved to dismiss for lack of jurisdiction or on forum non conveniens grounds. Alternatively, the German corporation requested to stay the action pending submission of the dispute to the London Court of Justice. Unterweser commenced an action in the High Court of Justice in London, as the contract provided, and Zapata showed before that court to contest jurisdiction. The English court ruled that it had jurisdiction under the contractual forum provision. In its turn, the United States District Court at Tampa relied on the prior decision of the Court of Appeals in Carbon Black Export, Inc. v. The Monrosa, 254 F.2d 297 ('agreements in advance of controversy whose object is to oust the jurisdiction of the courts are contrary to public policy, and will not be enforced') and denied Unterweser's motion to dismiss or stay Zapata's initial action. The Court of Appeals affirmed that the forum-selection clause was unenforceable. Unterweser sought review in Supreme Court on certiorari and it was granted. The U.S. Supreme Court held that the forum-selection clause is binding on the parties unless the party seeking to avoid it could meet the high burden of showing it to be unreasonable, unfair, or unjust.