M/S BREMEN AND UNTERWESER REEDEREI, GMBH

v. ZAPATA OFF-SHORE COMPANY

407 U.S. 1 (1972)
FACTS:
The Bremen (BREMEN), a German towing corporation, contracted to
transport a self-elevating drilling rig from Louisiana to Ravenna, Italy - in the
Adriatic Sea, for Zapata Off-Shore Co. (ZAPATA), a Houston-based American
Corporation. Their towing agreement included a forum-selection clause (FSC)
providing for the litigation of any dispute in the High Court Justice in London
(English tribunal). When suddenly, a storm forced Bremen to make land in the
nearest port of refuge which is in Tampa, Florida and since the rig under tow was
damaged, Zapata sued there, ignoring the forum clause. The Bremen responded by
invoking the forum clause and moved to dismiss for lack of jurisdiction or on forum
non conveniens grounds. In the meantime, Bremen 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, but the United States District Court in Tampa (DISTRICT COURT) had
not yet ruled on Bremens motion to dismiss or stay Zapata's action after the sixmonth period for filing the limitation action had run, that the District Court denied
Bremens motion to dismiss or stay Zapata's initial action.
The US District Court in Tampa, relying on the Carbon Black Export,
disregarded the FSC saying that it is unenforceable and instead conducted a forum
non conveniens analysis.
The Court of Appeals affirmed the District Courts use of a forum non
conveniens analysis and also held that the said forum-selection clause is
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.' It even ruled
that unless the selected state or forum named in the FSC would provide a more
convenient forum than the state in which suit is brought, the FSC will not be
enforced.
ISSUE:
WON the forum-selection clause in the towing contract of The Bremen and Zapata
is enforceable and binding among the parties.
RULING:
YES. The forum-selection clause, which was a vital part of the towing
contract, is enforceable and binding on the parties unless the party seeking to
avoid it can meet the heavy burden of showing that its enforcement would be
unreasonable, unfair, or unjust.
The Supreme Court reversed the decision of the Court of Appeals. It stated
that absent an FSC, a forum non conveniens analysis would be appropriate, but
that in times of expanding world trade and commerce, judicial hostility towards

FSCs is outdated. Continued judicial hostility towards FSCs, the Court explained,
would have the opposite effect on the much desired expansion of American
business and industry.
Thus, the Supreme Court asserted a new attitude towards choice clauses, by
reasoning that Americans simply could not continue to force their laws into the
forefront of international commerce and trade agreements by giving their courts
control over every conflict in international trade and commerce in which a U.S.
party is involved. In addition to ending the hostility towards FSCs, the Court
developed a new analytical framework in the area of international contracts,
abandoning the traditional forum non conveniens analysis used in domestic
contract cases.
Supreme Court asserted a new attitude towards choice clauses, by
reasoning that Americans simply could not continue to force their laws into the
forefront of international commerce and trade agreements by giving their courts
control over every conflict in international trade and commerce in which a U.S.
party is involved. In addition to ending the hostility towards FSCs, the Court
developed a new analytical framework in the area of international contracts,
abandoning the traditional forum non conveniens analysis used in domestic
contract cases.
Despite the Supreme Courts support for FSCs, the Court in The Bremen
held that several circumstances would allow a court to disregard an FSC. These
exceptions or defenses can be roughly characterized as: (1) unreasonableness, (2)
fraud, (3) undue influence or overweening bargaining power,(4) the traditional
exceptions for voiding any contract, and (5) public policy
An FSC is not binding if a party can prove that enforcement would be
unreasonable or unjust. Mere inconvenience or additional expense is not the test
of unreasonableness since it may be assumed that the parties received benefits
under the contract in exchange for these potential problems. Therefore, unless
serious unexpected inconvenience is present, there is no basis for concluding that
it would be unfair, unjust, or unreasonable to hold a party to his bargain.