MS Bremen v Zapata Off-Shore Company

M/S Bremen v Zapata Off-Shore Company FACTS: Zapata (Houston corp), engaged in drilling business, entered into a contract with Unterwesser (German corp), for the latter to ship its drilling rig (called Chaparral) from Louisiana to Italy. Contract provided for a forum selection clause (any dispute treated in London court) and an exculpatory clause (limited Unterwesser's liability for damages to the rig). A severe storm caused damage to the rig. Zapata had the rig towed to Florida. Zapata filed for damages ($3.5M) in US court. Unterwesser filed MTD due to forum selection clause. Pending the MTD, Unterwesser filed a case in London (Zapata appeared only to contest jd; denied since clause is binding). Due to the 6 month period for an action limiting its liability, Unterwesser filed an action in US court to assert the exculpatory clause. US court denied Unterwesser's MTD due to traditional view (agreements in advance to oust jd is contrary to public policy) and applied forum non conveniens (burden of proof on Unterwesser since US forum strongly favors parties). ISSUE: W/N US court correctly disregarded forum selection clause. HELD: NO. First, court emphasized freedom of contract and reality of expansion of overseas commercial activities (absent the clause, CA decision would have been persuasive). Second, forum selection clause has not been historically favored by US courts but at present, courts tend to adopt a more hospitable attitude (prima facie valid unless unreasonable, fraud, or overreaching). The rule is that parties may agree in advance, to permit notice to be served by the opposing party, and even to waive notice altogether. Third, the clause is a result of negotiation between experienced businessmen (London courts meet standards of neutrality and experience in admiralty litigation). Thus, whatever inconvenience was clearly foreseeable at the time of contracting.