United States Court declines to overturn "Great Circle" decision on "subject details" issue

There is an important difference between United States law and English law on the question whether a charterparty which has been fixed "subject details" is a binding contract. The position in English law is that there is generally no binding contract - see The Junior K [1988] 2 Lloyd’s Rep 583. By contrast, the US Court of Appeals for the Second Circuit in Great Circle Lines v Matheson 681 F2d 121 (1988) held that a fixture sub details was binding. In 1995 a dispute arose as to whether a fixture "subject details" of the vessel Bin He was a binding contract, and the matter was litigated in the US courts. In 1998 a Federal judge, following the Great Circle case, ruled that a binding charter had been formed. The owners appealed to the Second Circuit, urging the court to overrule the Great Circle case and to follow the Junior K instead. In 2001 a three-judge panel of the Second Circuit affirmed the lower court, holding that "unpopular" as the Great Circle precedent might be, it could be overruled only by a full ("en banc") bench of the Second Circuit, consisting of more than a dozen judges. The owners petitioned for an en banc hearing. The Court ordered additional briefing from the parties, and solicited and received briefs from amicus curiae. The decisions of courts in England, Canada, Italy, Australia and the Scandinavian countries, as well as awards of French and American arbitrators, and criticism from American, English, Scandinavian and Chinese scholars were all cited in favour of bringing US law in harmony with English law.