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The Bremen v. Zapata Off-Shore Co.

Supreme Court of the United States

March 21, 1972, Argued ; June 12, 1972, Decided

No. 71-322

Opinion

 [*2]  [***516]  [**1909]    MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.

We granted certiorari to review a judgment of the United States Court of Appeals for the Fifth Circuit declining to enforce a forum-selection clause governing disputes arising under an international towage contract between petitioners and respondent. The circuits have differed in their approach to such clauses. 1 For the reasons stated hereafter,  [****3]  we vacate the judgment of the Court of Appeals.

In November 1967, respondent Zapata, a Houston-based American corporation, contracted with petitioner Unterweser, a German corporation, to tow Zapata's ocean-going, self-elevating drilling rig Chaparral from Louisiana to a point off Ravenna, Italy, in the Adriatic Sea, where Zapata had agreed to drill certain wells.

Zapata had solicited bids for the towage, and several companies including Unterweser had responded. Unterweser was the low bidder and Zapata requested it to submit a contract, which it did. The contract submitted by Unterweser contained the following [****4]  provision, which is at issue in this case:

"Any dispute arising must be treated before the London Court of Justice."

 [*3]  In addition the contract contained two clauses purporting to exculpate Unterweser from liability for damages to the towed barge. 2

 [**1910]  After reviewing the contract and making several changes, but without any alteration in the forum-selection [****5]  or exculpatory clauses, a Zapata vice president executed the contract and forwarded it to Unterweser in Germany, where Unterweser accepted the changes, and the contract became effective.

On January 5, 1968, Unterweser's deep sea tug Bremen departed Venice, Louisiana, with the Chaparral in tow bound for Italy. On January 9, while the flotilla was in international waters in the middle of the Gulf of Mexico, a severe storm arose. The sharp roll of the Chaparral in Gulf  [***517]  waters caused its elevator legs, which had been raised for the voyage, to break off and fall into the sea, seriously damaging the Chaparral. In this emergency situation Zapata instructed the Bremen to tow its damaged rig to Tampa, Florida, the nearest port of refuge.

On January 12, Zapata, ignoring its contract promise to litigate "any dispute arising" in the English courts, commenced a suit in admiralty in the United States  [*4]  District Court at Tampa, seeking $ 3,500,000 damages against Unterweser in personam and the Bremen in rem, alleging negligent towage and breach of contract. 3 Unterweser responded by invoking the forum clause of the towage contract, and moved [****6]  to dismiss for lack of jurisdiction or on forum non conveniens grounds, or in the alternative to stay the action pending submission of the dispute to the "London Court of Justice." Shortly thereafter, in February, before the District Court had ruled on its motion to stay or dismiss the United States action, Unterweser commenced an action against Zapata seeking damages for breach of the towage contract in the High Court of Justice in London, as the contract provided. Zapata appeared in that court to contest jurisdiction, but its challenge was rejected, the English courts holding that the contractual forum provision conferred jurisdiction. 4

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407 U.S. 1 *; 92 S. Ct. 1907 **; 32 L. Ed. 2d 513 ***; 1972 U.S. LEXIS 114 ****

THE BREMEN ET AL. v. ZAPATA OFF-SHORE CO.

Prior History:  [****1]  CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT.

Disposition:  428 F.2d 888 and 446 F.2d 907, vacated and remanded.

CORE TERMS

district court, courts, tow, parties, Appeals, towage, contractual, clauses, bargaining, Contracting, litigate, forum-selection, inconvenient, convenience, admiralty, Sea, proceedings, witnesses, disputes, public policy, casualty, damages, waters, motion to dismiss, negotiated, Drilling, freely, exculpatory clause, vessel, rig

Admiralty & Maritime Law, Practice & Procedure, Forum Selection, Business & Corporate Compliance, Contracts Law, Contract Conditions & Provisions, Forum Selection Clauses, Waivers, Notice, International Trade Law, Dispute Resolution, International Commercial Arbitration, Arbitration