Bremen v. Zapata Off-Shore Co.

407 U.S. 1 (1972)

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Nature of the Case

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Facts

P, a Houston-based American corporation, contracted with Unterweser (D), a German corporation, to tow P's ocean-going, self-elevating drilling rig Chaparral from Louisiana to a point off Ravenna, Italy. Zapata had solicited bids for the towage. Unterweser (D) was the low bidder and Zapata requested it to submit a contract. The contract submitted contained the following provision, which is at issue in this case: 'Any dispute arising must be treated before the London Court of Justice.' The contract contained two clauses purporting to exculpate Unterweser (D) from liability for damages to the towed barge. P made several changes without any alteration in the forum-selection or exculpatory clauses. P executed the contract and forwarded it to Unterweser (D) in Germany, where Unterweser accepted the changes, and the contract became effective. Unterweser's (D) deep-sea tug Bremen (D) departed Venice, Louisiana, with the Chaparral in tow bound for Italy. On January 9, while in international waters in the middle of the Gulf of Mexico, a severe storm arose. The elevator legs broke off and fell into the sea, seriously damaging the Chaparral. P instructed the Bremen (D) to tow its damaged rig to Tampa, Florida, the nearest port of refuge. P commenced a suit in admiralty in the United States District Court at Tampa, seeking $ 3,500,000 damages against Unterweser (D) in personam and the Bremen (D) in rem, alleging negligent towage and breach of contract. Unterweser (D) invoked the forum clause and moved to dismiss for lack of jurisdiction. Unterweser (D) also commenced an action against P seeking damages for breach of the towage contract in the High Court of Justice in London. P appeared in that court to contest jurisdiction, but its challenge was rejected. Faced with time constraints, Unterweser (D) filed an action to limit its liability in the District Court in Tampa. Finally, the District Court denied Unterweser's (D) January motion to dismiss or stay P's initial action. It held a forum-selection clause unenforceable, reiterating the traditional view of many American courts that '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.' The court of appeals affirmed. The Supreme Court granted certiorari.