U.S. Supreme Court The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) The Bremen v. Zapata Off-Shore
Co. No. 71-322 Argued March 21, 1972 Decided June 12, 1972 407 U.S.
1 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH
CIRCUIT Syllabus Petitioner Unterweser made an agreement to tow respondent's
drilling rig from Louisiana to Italy. The contract contained a
forum-selection clause providing for the litigation of any dispute
in the High Court of Justice in London. When the rig under tow was
damaged in a storm, respondent instructed Unterweser to tow the rig
to Tampa, the nearest port of refuge. There, respondent brought
suit in admiralty against petitioners. Unterweser invoked the forum
clause in moving for dismissal for want of jurisdiction and brought
suit in the English court, which ruled that it had jurisdiction
under the contractual forum provision. The District Court, relying
on Carbon Black Export, Inc. v. The Monrosa, 254 F.2d 297,
held the forum-selection clause unenforceable, and refused to
decline jurisdiction on the basis of forum non conveniens. The Court of Appeals affirmed. Held: The forum-selection clause, which was a vital
part of the towing contract, is binding on the parties unless
respondent can meet the heavy burden of showing that its
enforcement would be unreasonable, unfair, or unjust. Pp. 407 U. S. 8 -20

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

															BURGER, C. J., delivered the opinion of the Court, in which
BRENNAN, STEWART, WHITE, MARSHALL, BLACKMUN, POWELL, and REHNQUIST,
JJ., joined. WHITE, J., filed a concurring statement, post, p. 407 U. S. 20 .
DOUGLAS, J., filed a dissenting opinion, post, p. 407 U. S. 20 . Page 407 U. S. 2 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. [ Footnote 1 ] For the reasons stated hereafter,
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 provision,
which is at issue in this case:

															"Any dispute arising must be treated before the London Court of
Justice. " Page 407 U. S. 3 In addition, the contract contained two clauses purporting to
exculpate Unterweser from liability for damages to the towed barge.
[ Footnote 2 ]

															After reviewing the contract and making several changes, but
without any alteration in the forum selection 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 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 Page 407 U. S. 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. [ Footnote 3 ] Unterweser responded by invoking
the forum clause of the towage contract, and moved 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. [ Footnote 4 ] Page 407 U. S. 5 In the meantime, Unterweser was faced with a dilemma in the
pending action in the United States court at Tampa. The six-month
period for filing action to limit its liability to Zapata and other
potential claimants was about to expire, [ Footnote 5 ] but the United States District Court in
Tampa had not yet ruled on Unterweser's motion to dismiss or stay
Zapata's action. On July 2, 1968, confronted with difficult
alternatives, Unterweser filed an action to limit its liability in
the District Court in Tampa. That court entered the customary
injunction against proceedings outside the limitation court, and
Zapata refiled its initial claim in the limitation action.
[ Footnote 6 ] Page 407 U. S. 6 It was only at this juncture, on July 29, after the six-month
period for filing the limitation action had run, that the District
Court denied Unterweser's January motion to dismiss or stay
Zapata's initial action. In denying the motion, that court relied
on the prior decision of the Court of Appeals in Carbon Black
Export, Inc. v. The Monrosa, 254 F.2d 297 (CA5 1958), cert. dismissed, 359 U. S. 180 (1959). In that case, the Court of Appeals had 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."

															254 F.2d at 300-301. [ Footnote
7 ] Apparently concluding that it was bound by the Carbon
Black case, the District Court gave the forum selection clause
little, if any, weight. Instead, the court treated the motion to
dismiss under normal forum non conveniens doctrine
applicable in the absence of such a clause, citing Gulf Oil
Corp. v. Gilbert, 330 U. S. 501 (1947). Under that doctrine "unless the balance is strongly in
favor of the defendant, the plaintiff's choice of forum should
rarely be disturbed." Id. at 330 U. S. 508 .
The District Court concluded: "The balance of conveniences here is
not strongly in favor of [Unterweser] and [Zapata's] choice of
forum should not be disturbed."

															Thereafter, on January 21, 1969, the District Court denied
another motion by Unterweser to stay the limitation action pending
determination of the controversy in the High Court of Justice in
London, and granted Zapata's motion to restrain Unterweser from
litigating Page 407 U. S. 7 further in the London court. The District Judge ruled that,
having taken jurisdiction in the limitation proceeding, he had
jurisdiction to determine all matters relating to the controversy.
He ruled that Unterweser should be required to "do equity" by
refraining from also litigating the controversy in the London
court, not only for the reasons he had previously stated for
denying Unterweser's first motion to stay Zapata's action, but also
because Unterweser had invoked the United States court's
jurisdiction to obtain the benefit of the Limitation Act.

															On appeal, a divided panel of the Court of Appeals affirmed,
and, on rehearing en banc, the panel opinion was adopted, with six
of the 14 en banc judges dissenting. As had the District Court, the
majority rested on the Carbon Black decision, concluding
that, " at the very least,'" that case stood for the proposition
that a forum selection clause "`will not be enforced unless the
selected state would provide a more convenient forum than the state
in which suit is brought.'" From that premise, the Court of Appeals
proceeded to conclude that, apart from the forum selection clause,
the District Court did not abuse its discretion in refusing to
decline jurisdiction on the basis of forum non conveniens. It noted that (1) the flotilla never "escaped the Fifth Circuit's mare nostrum, and the casualty occurred in close proximity
to the district court"; (2) a considerable number of potential
witnesses, including Zapata crewmen, resided in the Gulf Coast
area; (3) preparation for the voyage and inspection and repair work
had been performed in the Gulf area; (4) the testimony of the Bremen crew was available by way of deposition; (5)
England had no interest in or contact with the controversy other
than the forum selection clause. The Court of Appeals majority
further noted that Zapata was a United States citizen and "[t]he
discretion Page 407 U. S. 8 of the district court to remand the case to a foreign forum was
consequently limited" -- especially since it appeared likely that
the English courts would enforce the exculpatory clauses. [ Footnote 8 ] In the Court of Appeals'
view, enforcement of such clauses would be contrary to public
policy in American courts under Bisso v. Inland Waterways
Corp., 349 U. S. 85 (1955), and Dixilyn Drilling Corp. v. Crescent Towing &
Salvage Co., 372 U. S. 697 (1963). Therefore,

															"[t]he district court was entitled to consider that remanding
Zapata to a foreign forum, with no practical contact with the
controversy, could raise a bar to recovery by a United States
citizen which its own convenient courts would not countenance.
[ Footnote 9 ]"

															We hold, with the six dissenting members of the Court of
Appeals, that far too little weight and effect were given to the
forum clause in resolving this controversy. For at least two
decades, we have witnessed an expansion of overseas commercial
activities by business enterprises based in the United States. The
barrier of distance that, once tended to confine a business concern
to a modest territory no longer does so. Here we see an
American Page 407 U. S. 9 company with special expertise contracting with a foreign
company to tow a complex machine thousands of miles across seas and
oceans. The expansion of American business and industry will hardly
be encouraged if, notwithstanding solemn contracts, we insist on a
parochial concept that all disputes must be resolved under our laws
and in our courts. Absent a contract forum, the considerations
relied on by the Court of Appeals would be persuasive reasons for
holding an American forum convenient in the traditional sense, but
in an era of expanding world trade and commerce, the absolute
aspects of the doctrine of the Carbon Black case have
little place, and would be a heavy hand indeed on the future
development of international commercial dealings by Americans. We
cannot have trade and commerce in world markets and international
waters exclusively on our terms, governed by our laws, and resolved
in our courts.

															Forum selection clauses have historically not been favored by
American courts. Many courts, federal and state, have declined to
enforce such clauses on the ground that they were "contrary to
public policy," or that their effect was to "oust the jurisdiction"
of the court. [ Footnote 10 ]
Although Page 407 U. S. 10 this view apparently still has considerable acceptance, other
courts are tending to adopt a more hospitable attitude toward forum
selection clauses. This view, advanced in the well reasoned
dissenting opinion in the instant case, is that such clauses are prima facie valid, and should be enforced unless
enforcement is shown by the resisting party to be "unreasonable"
under the circumstances. [ Footnote 11 ] We believe this is the correct doctrine to
be followed by federal district courts sitting in admiralty. It is
merely the other side of the proposition recognized by this Court
in National Equipment Rental, Ltd. v. Szukhent, 375 U. S. 311 (1964), holding that in federal courts a party may validly consent
to be sued in a jurisdiction Page 407 U. S. 11 where he cannot be found for service of process through
contractual designation of an "agent" for receipt of process in
that jurisdiction. In so holding, the Court stated:

															"[I]t is settled . . . that parties to a contract may agree in
advance to submit to the jurisdiction of a given court, to permit
notice to be served by the opposing party, or even to waive notice
altogether." Id. at 375 U. S.
315 -316. This approach is substantially that followed in
other common law countries, including England. [ Footnote 12 ] It is the view advanced by
noted scholars, and that adopted by the Restatement of the Conflict
of Laws. [ Footnote 13 ] It
accords with ancient concepts of freedom of contract, and reflects
an appreciation of the expanding horizons of American contractors
who seek business in all parts of the world. Not surprisingly,
foreign businessmen prefer, as do we, to Page 407 U. S. 12 have disputes resolved in their own courts, but, if that choice
is not available, then in a neutral forum with expertise in the
subject matter. Plainly, the courts of England meet the standards
of neutrality and long experience in admiralty litigation. The
choice of that forum was made in an arm's length negotiation by
experienced and sophisticated businessmen, and, absent some
compelling and countervailing reason, it should be honored by the
parties and enforced by the courts.

															The argument that such clauses are improper because they tend to
"oust" a court of jurisdiction is hardly more than a vestigial
legal fiction. It appears to rest at core on historical judicial
resistance to any attempt to reduce the power and business of a
particular court, and has little place in an era when all courts
are overloaded and when businesses, once essentially local, now
operate in world markets. It reflects something of a provincial
attitude regarding the fairness of other tribunals. No one
seriously contends in this case that the forum selection clause
"ousted" the District Court of jurisdiction over Zapata's action.
The threshold question is whether that court should have exercised
its jurisdiction to do more than give effect to the legitimate
expectations of the parties, manifested in their freely negotiated
agreement, by specifically enforcing the forum clause.

															There are compelling reasons why a freely negotiated private
international agreement, unaffected by fraud, undue influence, or
overweening bargaining power, [ Footnote 14 ] such Page 407 U. S. 13 as that involved here, should be given full effect. In this
case, for example, we are concerned with a far from routine
transaction between companies of two different nations
contemplating the tow of an extremely costly piece of equipment
from Louisiana across the Gulf of Mexico and the Atlantic Ocean,
through the Mediterranean Sea to its final destination in the
Adriatic Sea. In the course of its voyage, it was to traverse the
waters of many jurisdictions. The Chaparral could have
been damaged at any point along the route, and there were countless
possible ports of refuge. That the accident occurred in the Gulf of
Mexico and the barge was towed to Tampa in an emergency were mere
fortuities. It cannot be doubted for a moment that the parties
sought to provide for a neutral forum for the resolution of any
disputes arising during the tow. Manifestly, much uncertainty and
possibly great inconvenience to both parties could arise if a suit
could be maintained in any jurisdiction in which an accident might
occur or if jurisdiction were left to any place where the Bremen or
Unterweser might happen to be found. [ Footnote 15 ] The elimination of all such uncertainties by
agreeing in advance on a forum acceptable to both parties is an
indispensable element in international trade, Page 407 U. S. 14 commerce, and contracting. There is strong evidence that the
forum clause was a vital part of the agreement, [ Footnote 16 ] and it would be unrealistic to
think that the parties did not conduct their negotiations,
including fixing the monetary terms, with the consequences of the
forum clause figuring prominently in their calculations. Under
these circumstances, as Justice Karminski reasoned in sustaining
jurisdiction over Zapata in the High Court of Justice, "[t]he force
of an agreement for litigation in this country, freely entered into
between two competent parties, seems to me to be very
powerful." Page 407 U. S. 15 Thus, in the light of present-day commercial realities and
expanding international trade, we conclude that the forum clause
should control absent a strong showing that it should be set aside.
Although their opinions are not altogether explicit, it seems
reasonably clear that the District Court and the Court of Appeals
placed the burden on Unterweser to show that London would be a more
convenient forum than Tampa, although the contract expressly
resolved that issue. The correct approach would have been to
enforce the forum clause specifically unless Zapata could clearly
show that enforcement would be unreasonable and unjust, or that the
clause was invalid for such reasons as fraud or overreaching.
Accordingly, the case must be remanded for reconsideration.

															We note, however, that there is nothing in the record presently
before us that would support a refusal to enforce the forum clause.
The Court of Appeals suggested that enforcement would be contrary
to the public policy of the forum under Bisso v. Inland
Waterways Corp., 349 U. S. 85 (1955), because of the prospect that the English courts would
enforce the clauses of the towage contract purporting to exculpate
Unterweser from liability for damages to the Chaparral. A
contractual choice of forum clause should be held unenforceable if
enforcement would contravene a strong public policy of the forum in
which suit is brought, whether declared by statute or by judicial
decision. See, e.g., Boyd v. Grand Trunk W. R. Co., 338 U. S. 263 (1949). It is clear, however, that whatever the proper scope of the
policy expressed in Bisso, [ Footnote 17 ] it does not reach this case. Bisso rested on considerations with respect to the towage business
strictly in Page 407 U. S. 16 American waters, and those considerations are not controlling in
an international commercial agreement. Speaking for the dissenting
judges in the Court of Appeals, Judge Wisdom pointed out:

															"[W]e should be careful not to over-emphasize the strength of
the [ Bisso ] policy. . . . [T]wo concerns underlie the
rejection of exculpatory agreements: that they may be produced by
overweening bargaining power; and that they do not sufficiently
discourage negligence. . . . Here, the conduct in question is that
of a foreign party occurring in international waters outside our
jurisdiction. The evidence disputes any notion of overreaching in
the contractual agreement. And, for all we know, the uncertainties
and dangers in the new field of transoceanic towage of oil rigs
were so great that the tower was unwilling to take financial
responsibility for the risks, and the parties thus allocated
responsibility for the voyage to the tow. It is equally possible
that the contract price took this factor into account. I conclude
that we should not invalidate the forum selection clause here
unless we are firmly convinced that we would thereby significantly
encourage negligent conduct within the boundaries of the United
States."

															428 F.2d at 907-908. (Footnotes omitted.)

															Courts have also suggested that a forum clause, even though it
is freely bargained for and contravenes no important public policy
of the forum, may nevertheless be "unreasonable" and unenforceable
if the chosen forum is seriously inconvenient for the trial of the
action. Of course, where it can be said with reasonable assurance
that, at the time they entered the contract, the parties to a
freely negotiated private international commercial agreement
contemplated the claimed inconvenience, it is difficult to see why
any such claim of inconvenience should be heard to render the forum
clause unenforceable. Page 407 U. S. 17 We are not here dealing with an agreement between two Americans
to resolve their essentially local disputes in a remote alien
forum. In such a case, the serious inconvenience of the contractual
forum to one or both of the parties might carry greater weight in
determining the reasonableness of the forum clause. The remoteness
of the forum might suggest that the agreement was an adhesive one,
or that the parties did not have the particular controversy in mind
when they made their agreement; yet even there, the party claiming
should bear a heavy burden of proof. [ Footnote 18 ] Similarly, selection of a remote forum to
apply differing foreign law to an essentially American controversy
might contravene an important public policy of the forum. For
example, so long as Bisso governs American courts with
respect to the towage business in American waters, it would quite
arguably be improper to permit an American tower to avoid that
policy by providing a foreign forum for resolution of his disputes
with an American towee.

															This case, however, involves a freely negotiated international
commercial transaction between a German and an American corporation
for towage of a vessel from the Gulf of Mexico to the Adriatic Sea.
As noted, selection of a London forum was clearly a reasonable
effort to bring vital certainty to this international transaction,
and to provide a neutral forum experienced and capable in the
resolution of admiralty litigation. Whatever "inconvenience" Zapata
would suffer by being forced to litigate in the contractual forum
as it agreed to do was clearly Page 407 U. S. 18 foreseeable at the time of contracting. In such circumstances,
it should be incumbent on the party seeking to escape his contract
to show that trial in the contractual forum will be so gravely
difficult and inconvenient that he will, for all practical
purposes, be deprived of his day in court. Absent that, there is no
basis for concluding that it would be unfair, unjust, or
unreasonable to hold that party to his bargain.

															In the course of its ruling on Unterweser's second motion to
stay the proceedings in Tampa, the District Court did make a
conclusory finding that the balance of convenience was "strongly"
in favor of litigation in Tampa. However, as previously noted, in
making that finding, the court erroneously placed the burden of
proof on Unterweser to show that the balance of convenience was
strongly in its favor. [ Footnote
19 ] Moreover, the finding falls far short of a conclusion that
Zapata would be effectively deprived of its day in court should it
be Page 407 U. S. 19 forced to litigate in London. Indeed, it cannot even be assumed
that it would be placed to the expense of transporting its
witnesses to London. It is not unusual for important issues in
international admiralty cases to be dealt with by deposition. Both
the District Court and the Court of Appeals majority appeared
satisfied that Unterweser could receive a fair hearing in Tampa by
using deposition testimony of its witnesses from distant places,
and there is no reason to conclude that Zapata could not use
deposition testimony to equal advantage if forced to litigate in
London, as it bound itself to do. Nevertheless, to allow Zapata
opportunity to carry its heavy burden of showing not only that the
balance of convenience is strongly in favor of trial in Tampa (that
is, that it will be far more inconvenient for Zapata to litigate in
London than it will be for Unterweser to litigate in Tampa), but
also that a London trial will be so manifestly and gravely
inconvenient to Zapata that it will be effectively deprived of a
meaningful day in court, we remand for further proceedings.

															Zapata's remaining contentions do not require extended
treatment. It is clear that Unterweser's action in filing its
limitation complaint in the District Court in Tampa was, so far as
Zapata was concerned, solely a defensive measure made necessary as
a response to Zapata's breach of the forum clause of the contract.
When the six-month statutory period for filing an action to limit
its liability had almost run without the District Court's having
ruled on Unterweser's initial motion to dismiss or stay Zapata's
action pursuant to the forum clause, Unterweser had no other
prudent alternative but to protect itself by filing for limitation
of its liability. [ Footnote
20 ] Its action in so doing was a direct consequence Page 407 U. S. 20 of Zapata's failure to abide by the forum clause of the towage
contract. There is no basis on which to conclude that this purely
necessary defensive action by Unterweser should preclude it from
relying on the forum clause it bargained for.

															For the first time in this litigation, Zapata has suggested to
this Court that the forum clause should not be construed to provide
for an exclusive forum or to include in rem actions.
However, the language of the clause is clearly mandatory and
all-encompassing; the language of the clause in the Cabon
Black case was far different. [ Footnote 21 ]

															The judgment of the Court of Appeals is vacated, and the case is
remanded for further proceedings consistent with this opinion. Vacated and remanded. [ Footnote 1 ] Compare, e.g., Central Contraction Co. v. Maryland Casualty
Co., 367 F.2d 341 (CA3 1966), and Wm. H. Muller & Co.
v. Swedish American Line Ltd., 224 F.2d 806 (CA2) cert.
denied, 350 U.S. 903 (1955), with Carbon Black Export,
Inc. v. The Monrosa, 254 F.2d 297 (CA5 1958), cert.
dismissed, 359 U. S. 180 (1959).

															[ Footnote 2 ]

															The General Towage Conditions of the contract included the
following:

															"1. . . . [Unterweser and its] masters and crews are not
responsible for defaults and/or errors in the navigation of the
tow."

															"2. . . ."

															"b) Damages suffered by the towed object are in any case for
account of its Owners."

															In addition, the contract provided that any insurance of the
Chaparral was to be "for account of" Zapata. Unterweser's initial
telegraphic bid had also offered to "arrange insurance covering
towage risk for rig if desired." As Zapata had chosen to be
self-insured on all its rigs, the loss in this case was not
compensated by insurance.

															[ Footnote 3 ]

															The Bremen was arrested by a United States marshal
acting pursuant to Zapata's complaint immediately upon her arrival
in Tampa. The tug was subsequently released when Unterweser
furnished security in the amount of $3,500;000.

															[ Footnote 4 ]

															Zapata appeared specially and moved to set aside service of
process outside the country. Justice Karminski of the High Court of
Justice denied the motion on the ground the contractual choice of
forum provision conferred jurisdiction, and would be enforced
absent a factual showing it would not be "fair and right" to do so.
He did not believe Zapata had made such a showing, and held that it
should be required to "stick to [its] bargain." App. 206, 211, 213.
The Court of Appeal dismissed an appeal on the ground that Justice
Karminski had properly applied the English rule. Lord Justice
Willmer stated that rule as follows:

															"The law on the subject, I think, is not open to doubt. . . . It
is always open to parties to stipulate . . . that a particular
Court shall have jurisdiction over any dispute arising out of their
contract. Here, the parties chose to stipulate that disputes were
to be referred to the 'London Court,' which I take as meaning the
High Court in this country. Prima facie, it is the policy
of the Court to hold parties to the bargain into which they have
entered. . . . But that is not an inflexible rule, as was shown,
for instance, by the case of The Fehmarn, [1957] 1 Lloyd's
Rep. 511; (C.A.) [1957] 2 Lloyd's Rep. 551. . . ."

															"I approach the matter, therefore, in this way, that the Court
has a discretion, but it is a discretion which, in the ordinary way
and in the absence of strong reason to the contrary, will be
exercised in favour of holding parties to their bargain. The
question is whether sufficient circumstances have been shown to
exist in this case to make it desirable, on the grounds of balance
of convenience, that proceedings should not take place in this
country. . . ."

															[1968] 2 Lloyd's Rep. 158, 162-163.

															[ Footnote 5 ]

															46 U.S.C. §§ 183, 185. See generally G. Gilmore &
C. Black, Admiralty § 115 (1957).

															[ Footnote 6 ]

															In its limitation complaint, Unterweser stated it "reserve[d]
all rights" under its previous motion to dismiss or stay Zapata's
action, and reasserted that the High Court of Justice was the
proper forum for determining the entire controversy, including its
own right to limited liability, in accord with the contractual
forum clause. Unterweser later counterclaimed, setting forth the
same contractual cause of action as in its English action and a
further cause of action for salvage arising out of the Bremen's services following the casualty. In its
counterclaim, Unterweser again asserted that the High Court of
Justice in London was the proper forum for determining all aspects
of the controversy, including its counterclaim.

															[ Footnote 7 ]

															The Carbon Black court went on to say that it was, in
any event, unnecessary for it to reject the more liberal position
taken in Wm. H. Muller & Co. v. Swedish American Line
Ltd., 224 F.2d 806 (CA2), cert. denied, 350 U.S. 903
(1955), because the case before it had a greater nexus with the
United States than that in Muller. [ Footnote 8 ]

															The record contains an undisputed affidavit of a British
solicitor stating an opinion that the exculpatory clauses of the
contract would be held " prima facie valid and enforceable"
against Zapata in any action maintained in England in which Zapata
alleged that defaults or errors in Unterweser's tow caused the
casualty and damage to the Chaparral. In addition, it is not disputed that, while the limitation fund
in the District Court in Tampa amounts to $1,390,000, the
limitation fund in England would be only slightly in excess of
$80,000 under English law.

															[ Footnote 9 ]

															The Court of Appeals also indicated in passing that, even if it
took the view that choice of forum clauses were enforceable unless
"unreasonable," it was "doubtful" that enforcement would be proper
here, because the exculpatory clauses would deny Zapata relief to
which it was "entitled," and because England was "seriously
inconvenient" for trial of the action.

															[ Footnote 10 ]

															Many decisions reflecting this view are collected in Annot. 56
A.L.R.2d 300, 306-320 (1957), and Later Case Service (1967).

															For leading early cases, see, e.g., Nute v. Hamilton Mutual
Ins. Co., 72 Mass. (6 Gray) 174 (1856); Nashua River Paper
Co. v. Hammermill Paper Co., 223 Mass. 8, 111 N.E. 678 (1916); Benson v. Eastern Bldg. & Loan Assn., 174 N.Y. 83, 66
N.E. 627 (1903).

															The early admiralty cases were in accord. See, e.g., Wood
& Selick, Inc. v. Compagnie Generale Transatlantique, 43
F.2d 941 (CA2 1930); The Ciano, 58 F. Supp.
65 (ED Pa.1944); Kuhnhold v. Compagnie Generale
Transatlantique, 251 F. 387 (SDNY 1918); Prince
Steam-Shipping Co. v. Lehman, 39 F. 704 (SDNY 1889).

															In Insurance Co. v.
Morse , 20 Wall. 445 (1874), this Court broadly
stated that "agreements in advance to oust the courts of the
jurisdiction conferred by law are illegal and void." Id. at 87 U. S. 451 .
But the holding of that case was only that the State of Wisconsin
could not by statute force a foreign corporation to "agree" to
surrender its federal statutory right to remove a state court
action to the federal courts as a condition of doing business in
Wisconsin. Thus, the case is properly understood as one in which a
state statutory requirement was viewed as imposing an
unconstitutional condition on the exercise of the federal right of
removal. See, e.g., Wisconsin v. Philadelphia & Reading
Coal Co., 241 U. S. 329 (1916).

															As Judge Hand noted in Krenger v. Pennsylvania R. Co., 174 F.2d 556 (CA2 1949), even at that date, there was, in fact, no
"absolute taboo" against such clauses. See, e.g., Mittenthal v.
Mascagni, 183 Mass.19, 66 N.E. 425 (1903); Daley v.
People's Bldg., Loan & Sav. Assn., 178 Mass. 13, 59 N.E.
452 (1901) (Holmes, J.). See also Cerro de Pasco Copper Corp.
v. Knut Knutsen, O.A.S., 187 F.2d 990 (CA2 1951).

															[ Footnote 11 ] E.g., Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341 (CA3 1966); Anastasiadis U.S.S. Little John, 346 F.2d 281 (CA5 1965) (by implication); Wm. H. Muller &
Co. v. Swedish American Line Ltd., 24 F.2d 806 (CA2), cert. denied;. 350 U.S. 903 (1955); Cerro de Pasco
Copper Corp. v. Knut Knutsen, O.A.S., 187 F.2d 990 (CA2 1951); Central Contracting Co. v. C. E. Youngdahl & Co., 418
Pa. 122, 209 A.2d 810 (1965).

															The Muller case was overruled in Indussa Corp.
U.S.S. Ranborg, 377 F.2d 200 (CA2 1967), insofar as it held
that the forum clause was not inconsistent with the "lessening of
liability" provision of the Carriage of Goods by Sea Act, 46 U.S.C.
§ 1303(8), which was applicable to the transactions in Muller,
Indussa, and Carbon Black. That Act is not applicable
in this case.

															[ Footnote 12 ]

															In addition to the decision of the Court of Appeal in the
instant case, Unterweser Reederei G.m.b.H. v. Zapata Off-Shore
Co. [The Chaparral], [1968] 2 Lloyd's Rep. 158 (C.A.), see
e.g., Mackender v. Feldia A.G., [1967] 2 Q.B. 590 (C.A.); The Fehmarn, [1958] 1 W.L.R. 159 (C.A.); Law v.
Garrett, [1878] 8 Ch.D. 26 (C.A.); The Eleftheria, [1970] P. 94. As indicated by tho clear statements in The
Eleftheria and of Lord Justice Willmer in this case, supra, n 4, the
decision of the trial court calls for an exercise of discretion. See generally A. Dicey & J. Morris, The Conflict of
Laws 979-980, 1087-1088 (8th ed.1967); Cowen & Mendes da Costa,
The Contractual Forum: Situation in England and the British
Commonwealth, 13 Am.J.Comp.Law 179 (1964); Reese, The Contractual
Forum: Situation in the United States, id. at 187, 190 n.
13; Graupner, Contractual Stipulations Conferring Exclusive
Jurisdiction Upon Foreign Courts in the Law of England and
Scotland, 59 L.Q.Rev. 227 (1943).

															[ Footnote 13 ]

															Restatement (Second) of the Conflict of Laws § 80 (1971); Reese,
The Contractual Forum: Situation in the United States, 13
Am.J.Comp.Law 187 (1964); A. Ehrenzweig, Conflict of Laws § 41
(1962). See also Model Choice of Forum Act (National
Conference of Commissioners on Uniform State Laws 1968).

															[ Footnote 14 ]

															The record here refutes any notion of overweening bargaining
power. Judge Wisdom, dissenting in the Court of Appeals, noted:

															"Zapata has neither presented evidence of nor alleged fraud or
undue bargaining power in the agreement. Unterweser was only one of
several companies bidding on the project. No evidence contradicts
its Managing Director's affidavit that it specified English courts
'in an effort to meet Zapata Off-Shore Company half way.' Zapata's
Vice President has declared by affidavit that no specific
negotiations concerning the forum clause took place. But this was
not simply a form contract with boilerplate language that Zapata
had no power to alter. The towing of an oil rig across the Atlantic
was a new business. Zapata did make alterations to the contract
submitted by Unterweser. The forum clause could hardly be ignored.
It is the final sentence of the agreement, immediately preceding
the date and the parties' signatures. . . ."

															428 F.2d 888, 907.

															[ Footnote 15 ]

															At the very least, the clause was an effort to eliminate all
uncertainty as to the nature, location, and outlook of the forum in
which these companies of differing nationalities might find
themselves. Moreover, while the contract here did not specifically
provide that the substantive law of England should be applied, it
is the general rule in English courts that the parties are assumed,
absent contrary indication, to have designated the forum with the
view that it should apply its own law. See, e.g., Tzortzis v.
Monark Line A/B, [1968] 1 W.L.R. 406 (C.A.); see
generally 1 T. Carver, Carriage by Sea 496-497 (12th ed.1971);
G. Cheshire, Private International Law 193 (7th ed.1965); A. Dicey
& J. Morris, The Conflict of Laws 705, 1046 (8th ed.1967);
Collins, Arbitration Clauses and Forum Selecting Clauses in the
Conflict of Laws: Some Recent Developments in England, 2 J.Mar.L.
& Comm. 363, 365-370 and n. 7 (1971). It is therefore
reasonable to conclude that the forum clause was also an effort to
obtain certainty as to the applicable substantive law.

															The record contains an affidavit of a Managing Director of
Unterweser stating that Unterweser considered the choice of forum
provision to be of "overriding importance" to the transaction. He
stated that Unterweser towage contracts ordinarily provide for
exclusive German jurisdiction and application of German law, but
that, "[i]n this instance, in an effort to meet [Zapata] half-way,
[Unterweser] proposed the London Court of Justice. Had this
provision not been accepted by [Zapata], [Unterweser] would not
have entered into the towage contract. . . ."

															He also stated that the parties intended, by designating the
London forum, that English law would be applied. A responsive
affidavit by Hoyt Taylor, a vice-president of Zapata, denied that
there were any discussions between Zapata and Unterweser concerning
the forum clause or the question of the applicable law.

															[ Footnote 16 ] See nn. 14-15 supra. Zapata has denied specifically discussing the forum
clause with Unterweser, but, as Judge Wisdom pointed out, Zapata
made numerous changes in the contract without altering the forum
clause, which could hardly have escaped its attention. Zapata is
clearly not unsophisticated in such matters. The contract of its
wholly owned subsidiary with an Italian corporation covering the
contemplated drilling operations in the Adriatic Sea provided that
all disputes were to be settled by arbitration in London under
English law, and contained broad exculpatory clauses. App.
306-311.

															[ Footnote 17 ] Dixilyn Drilling Corp. v. Crescent Towing & Salvage
Co., 372 U. S. 697 (1963) (per curiam), merely followed Bisso and declined to
subject its rule governing towage contracts in American waters to
"indeterminate exceptions" based on delicate analysis of the facts
of each case. See 372 U.S. at 372 U. S. 698 (Harlan, J., concurring).

															[ Footnote 18 ] See, e.g., Model Choice of Forum Act § 3(3), supra, n 13,
comment:

															"On rare occasions, the state of the forum may be a
substantially more convenient place for the trial of a particular
controversy than the chosen state. If so, the present clause would
permit the action to proceed. This result will presumably be in
accord with the desires of the parties. It can be assumed that they
did not have the particular controversy in mind when they made the
choice of forum agreement, since they would not consciously have
agreed to have the action brought in an inconvenient place."

															[ Footnote 19 ]

															Applying the proper burden of proof, Justice Karminski, in the
High Court of Justice at London, made the following findings, which
appear to have substantial support in the record:

															"[Zapata] pointed out that in this case the balance of
convenience so far as witnesses were concerned pointed in the
direction of having the case heard and tried in the United States
District Court at Tampa in Florida because the probability is that
most, but not necessarily all, of the witnesses will be American.
The answer, as it seems to me, is that a substantial minority, at
least, of witnesses are likely to be German. The tug was a German
vessel, and was, as far as I know, manned by a German crew. . . .
Where they all are now or are likely to be when this matter is
litigated I do not know, because the experience of the Admiralty
Court here strongly points out that maritime witnesses, in the
course of their duties, move about freely. The homes of the German
crew presumably are in Germany. There is probably a balance of
numbers in favour of the Americans, but not, as I am inclined to
think, a very heavy balance."

															App. 212. It should also be noted that, if the exculpatory
clause is enforced in the English courts, many of Zapata's
witnesses on the questions of negligence and damage may be
completely unnecessary.

															[ Footnote 20 ]

															Zapata has suggested that Unterweser was not in any way required
to file its "affirmative" limitation complaint, because it could
just as easily have pleaded limitation of liability by way of
defense in Zapata's initial action, either before or after the
six-month period. That course of action was not without risk,
however, that Unterweser's attempt to limit its liability by answer
would be held invalid. See G. Gilmore & C. Black,
Admiralty § 115 (1957). We do not believe this hazardous option in
any way deprived Unterweser's limitation complaint of its
essentially defensive character so far as Zapata was concerned.

															[ Footnote 21 ] See 359 U.S. at 359 U. S.
182 .

															MR. JUSTICE WHITE, concurring.

															I concur in the opinion and judgment of the Court except insofar
as the opinion comments on the issues which are remanded to the
District Court. In my view, these issues are best left for
consideration by the District Court in the first instance.

															MR. JUSTICE DOUGLAS, dissenting.

															Petitioner Unterweser contracted with respondent to tow
respondent's drilling barge from Louisiana to Italy. The towage
contract contained a "forum selection clause" Page 407 U. S. 21 providing that any dispute must be litigated before the High
Court of Justice in London, England. While the barge was being
towed in the Gulf of Mexico, a casualty was suffered. The tow made
for Tampa Bay, he nearest port, where respondent brought suit for
damages in the District Court.

															Petitioners sued respondent in the High Court of Justice in
London, which denied respondent's motion to dismiss.

															Petitioners, having previously moved the District Court to
dismiss, filed a complaint in that court seeking exoneration or
limitation of liability as provided in 46 U.S.C. § 185. Respondent
filed its claim in the limitation proceedings, asserting the same
cause of action as in its original action. Petitioners then filed
objections to respondent's claim and counterclaimed against
respondent, alleging the same claims embodied in its English
action, plus an additional salvage claim.

															Respondent moved for an injunction against petitioners'
litigating further in the English case, and the District Court
granted the injunction pending determination of the limitation
action. Petitioners moved to stay their own limitation proceeding
pending a resolution of the suit in the English court. That motion
was denied. 296 F.
Supp. 733 .

															That was the posture of the case as it reached the Court of
Appeals, petitioners appealing from the last two orders. The Court
of Appeals affirmed. 428 F.2d 888, 446 F.2d 907.

															Chief Justice Taft, in Hartford Accident Co. v. Southern
Pacific, 273 U. S. 207 , 273 U. S. 214 ,
in discussing the Limitation of Liability Act, said that

															"the great object of the statute was to encourage shipbuilding,
and to induce the investment of money in this branch of industry,
by limiting the venture of those who build the ship to the loss of
the ship itself or her freight then pending, in cases of damage or
wrong, happening without the privity or Page 407 U. S. 22 knowledge of the ship owner, and by the fault or neglect of the
master or other persons on board; that the origin of this
proceeding for limitation of liability is to be found in the
general maritime law, differing from the English maritime law; and
that such a proceeding is entirely within the constitutional grant
of power to Congress to establish courts of admiralty and maritime
jurisdiction."

															Chief Justice Taft went on to describe how the owner of a vessel
who, in case the vessel is found at fault, may limit his liability
to the value of the vessel and may bring all claimants "into
concourse in the proceeding, by monition," and they may be enjoined
from suing the owner and the vessel on such claims in any other
court. Id. at 273 U. S.
215 .

															Chief Justice Taft concluded:

															"[T]his Court has, by its rules and decisions, given the statute
a very broad and equitable construction for the purpose of carrying
out its purpose and for facilitating a settlement of the whole
controversy over such losses as are comprehended within it, and
that all the ease with which rights can be adjusted in equity is
intended to be given to the proceeding. It is the administration of
equity in an admiralty court. . . . The proceeding partakes in a
way of the features of a bill to enjoin a multiplicity of suits, a
bill in the nature of an interpleader, and a creditor's bill. It
looks to a complete and just disposition of a many-cornered
controversy, and is applicable to proceedings in rem against the ship, as well as to proceedings in personam against the owner, the limitation extending to the owner's property
as well as to his person." Id. at 273 U. S.
215 -216.

															The Limitation Court is a court of equity, and, traditionally,
an equity court may enjoin litigation in another court where
equitable considerations indicate that the other litigation might
prejudice the proceedings in the Limitation Court. Petitioners'
petition for limitation Page 407 U. S. 23 subjects them to the full equitable powers of the Limitation
Court.

															Respondent is a citizen of this country. Moreover, if it were
remitted to the English court, its substantive rights would be
adversely affected. Exculpatory provisions in the towage control
provide (1) that petitioners, the masters and the crews "are not
responsible for defaults and/or errors in the navigation of the
tow" and (2) that "[d]amages suffered by the towed object are in
any case for account of its Owners."

															Under our decision in Dixilyn Drilling Corp v. Crescent
Towing & Salvage Co., 372 U. S. 697 , 372 U. S. 698 ,
"a contract which exempts the tower from liability for its own
negligence" is not enforceable, though there is evidence in the
present record that it is enforceable in England. That policy was
first announced in Bisso v. Inland Waterways Corp., 349 U. S. 85 , and
followed in Boston Metals Co. v. The Winding Gulf, 349 U. S. 122 ; Dixilyn, supra; Gray v. Johanesson, 287 F.2d 852 (CA5); California Co. v. Jumonville, 327 F.2d 988 (CA5); American S.S. Co. v. Great Lakes Towing Co., 333 F.2d 426
(CA7); D. R. Kincaid, Ltd. v. Trans-Pacific Towing, Inc., 367 F.2d 857 (CA9); A. L. Mechling Barge Lines, Inc. v. Derby
Co., 399 F.2d 304 (CA5). Cf. United States v.
Seckinger, 397 U. S. 203 .
Although the casualty occurred on the high seas, the Bisso doctrine is nonetheless applicable. The Scotland, 105 U. S. 24 ; The Belgenland, 114 U. S. 355 ; The Gylfe v. The Trujillo, 209 F.2d 386 (CA2).

															Moreover, the casualty occurred close to the District Court, a
number of potential witnesses, including respondent's crewmen,
reside in that area, and the inspection and repair work were done
there. The testimony of the tower's crewmen, residing in Germany,
is already available by way of depositions taken in the
proceedings. Page 407 U. S. 24 All in all, the District Court judge exercised his discretion
wisely in enjoining petitioners from pursuing the litigation in
England. * I would affirm the judgment below.

															* It is said that, because these parties specifically agreed to
litigate their disputes before the London Court of Justice, the
District Court, absent "unreasonable" circumstances, should have
honored that choice by declining to exercise its jurisdiction. The
forum selection clause, however, is part and parcel of the
exculpatory provision in the towing agreement which, as mentioned
in the text, is not enforceable in American courts. For only by
avoiding litigation in the United States could petitioners hope to
evade the Bisso doctrine.

															Judges in this country have traditionally been hostile to
attempts to circumvent the public policy against exculpatory
agreements. For example, clauses specifying that the law of a
foreign place (which favors such releases) should control have
regularly been ignored. Thus, in The Kensington, 183 U. S. 263 , 183 U. S. 276 ,
the Court held void an exemption from liability despite the fact
that the contract provided that it should be construed under
Belgian law, which was more tolerant. And see E. Gerli &
Co. v. Cunard S.S. Co., 48 F.2d 115, 117 (CA2); Oceanic
Steam Nav. Co. v. Corcoran, 9 F.2d 724, 731 (CA2); In re
Lea Fabrics, Inc., 226 F.
Supp. 232 , 237 (NJ); F. A. Straus & Co. v. Canadian P.
R. Co., 254 N.Y. 407, 173 N.E. 564; Siegelman v. Cunard
White Star, 221 F.2d 189, 199 (CA2) (Frank, J., dissenting).
6A A. Corbin on Contracts § 1446 (1962).

															The instant stratagem of specifying a foreign forum is
essentially the same as invoking a foreign law of construction,
except that the present circumvention also requires the American
party to travel across an ocean to seek relief. Unless we are
prepared to overrule Bisso, we should not countenance
devices designed solely for the purpose of evading its
prohibition.

															It is argued, however, that one of the rationales of the Bisso doctrine, "to protect those in need of goods or
services from being overreached by others who have power to drive
hard bargains" (349 U.S. at 349 U. S. 91 ),
does not apply here, because these parties may have been of equal
bargaining stature. Yet we have often adopted prophylactic rules
rather than attempt to sort the core cases from the marginal ones.
In any event, the other objective of the Bisso doctrine,
to "discourage negligence by making wrongdoers pay damages"
( ibid. ) applies here and in every case, regardless of the
relative bargaining strengths of the parties.

Summary: The Supreme Court ruled that a forum-selection clause in an international towage contract was binding unless it could be proven to be unreasonable, unfair, or unjust. The Court vacated the judgment of the Court of Appeals, which had declined to enforce the clause, and remanded the case for further consideration.