We use cookies to improve your website experience. To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy. By continuing to use the website, you consent to our use of cookies. Close

THE POSITION IN THE UNITED STATES ON FOREIGN FORUM SELECTION AND ARBITRATION CLAUSES

Lloyd's Maritime and Commercial Law Quarterly

THE POSITION IN THE UNITED STATES ON FOREIGN FORUM SELECTION AND ARBITRATION CLAUSES

Robert Force *

To offset several extremely broad grants of jurisdiction to US federal courts, with jurisdiction in Admiralty cases being a prime example, US courts have devised rules and approaches to limit the scope of federal jurisdiction. As one example, US courts have adopted a very pro-enforcement approach to foreign forum selection and arbitration clauses. A review of the case law reveals that only in the most extreme situations will US courts refuse to enforce these clauses. This article also demonstrates, at least in cargo loss or damage cases, that sending the cargo claimant off to another country effectively ends the case or results in a discounted settlement. Despite the fact that in arbitration cases the district court in which suit has been filed merely stays the action pending arbitration, as a practical matter there is nothing that the court can do after the arbitrators have issued their award.

I. INTRODUCTION

Maritime jurisdiction in the United States of America is very open ended. Consequently, any maritime tort or contract case in which a US court can obtain jurisdiction over the defendant or the defendant’s property, theoretically, may be brought in that court. Various rules have been devised to prevent the exercise of extravagant jurisdiction and overtaxing the US judiciary.
Of course a federal court may, if the court in which a case has been filed is an improper venue, “transfer” a case to another federal court in which venue is proper and may likewise do so for the convenience of the parties.1 These situations rarely involve dismissal. If a defendant has been properly served with process even in an improper venue within the limitation period, transfer presents no problem of prescription. A federal court may not transfer a case to a state court, and a state court may not transfer a case to a federal court. Similarly, neither a federal nor a state court may transfer a case to a foreign court or arbitral tribunal. When a court is confronted with a valid foreign forum selection clause or where a court is asked to yield its jurisdiction to a more convenient forum, the court has no option but to dismiss the case. There is no international mechanism to which
LLOYD’S MARITIME AND COMMERCIAL LAW QUARTERLY

250

The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, please enter your details below to log in.

Enter your email address to log in as a user on your corporate account.
Remember me on this computer

Not yet an i-law subscriber?

Devices

Request a trial Find out more

Informa UK Limited is a company registered in England and Wales with company number 1072954 whose registered office is 5 Howick Place, London, SW1P 1WG. VAT GB365462636. Informa UK Limited is part of Informa PLC.

Lloyd's List Group is a trading division of Informa UK Limited, a company registered in England and Wales with company number 1072954 whose registered office is 5 Howick Place, London, SW1P 1WG. VAT GB365462636. Informa UK Limited is part of Informa PLC. Lloyd's is the registered trademark of the Society incorporated by the Lloyd's Act 1871 by the name of Lloyd's.