On 24 June 2011, in international waters of the Bay of Campeche, M/V Hos Beaufort, a US-flagged offshore supply vessel, allided with the stationary SSV Iolair, a Marshall Islands-flagged semi-submersible, catamaran-shaped offshore construction support floatel platform. At the time of the allision, both vessels were performing work for Mexico’s state-owned oil company, Pemex, on the Mexican outer continental shelf. The Beaufort's first mate set the controls of the vessel to auto-pilot, despatched the deckhand/lookout to clean behind the wheelhouse, and then fell asleep. The lookout woke up the first mate when the Beaufort was only 50 feet from the Iolair and the allision was inevitable.

On 19 October 2011, the Beaufort’s owners filed a petition for limitation of liability in Mexico, invoking the provisions of the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976), to which Mexico is a signatory. A second petition for limitation of liability pursuant to the LLMC 1976 was filed on 9 April 2012 to add additional claimants.

On 15 December 2011, the Iolair’s owners filed a complaint for damages against the Beaufort and her owners in the US District Court in the Southern District of Texas. The Beaufort never appeared within the district, so the Court lacked in rem jurisdiction over the vessel. The District Court dismissed the suit for forum non conveniens in favour of the previously filed Mexican limitation action. The Iolair interests appealed.

On 13 February 2014, the Iolair interests filed a federal complaint against the Beaufort, in rem, in the Eastern District of Louisiana, where the vessel was then in port. Although the Mexican Court had issued an injunction prohibiting the Iolair interests from arresting the Beaufort, the US Court issued a warrant for the Beaufort's arrest. The Court held that, because the US is not a signatory to the LLMC 1976, no deference to the Mexican Court was due. The Beaufort's owners supplied a letter of undertaking (LOU) securing the vessel's release, underwritten by their insurer, Steamship Mutual Underwriting Association Ltd.

On 21 May 2014, the US Court of Appeals for the Fifth Circuit remanded the first US action to the District Court in Texas for further consideration. The second US action in Louisiana was stayed pending the Texas District Court’s decision on remand. On remand, the Texas District Court again dismissed for forum non conveniens, and the Iolair interests again appealed. On 20 August 2015, that appeal was dismissed for failure to prosecute.

The subrogated insurers of the Iolair interests, Norwegian Hull Club (NHC), then intervened in the Louisiana action to be substituted as proper parties in interest and also moved for Court approval of the assignment of the LOU from the Iolair interests to NHC. However, the Beaufort owners - as well as the Iolair interests - moved to dismiss the Louisiana action. NHC opposed the dismissal occurring prior to Court approval of the assignment of the LOU to NHC, because absent approval of the assignment, dismissal of the in rem claim would destroy in rem jurisdiction vis-à-vis NHC's claims as subrogor. Additionally, NHC sought to make the assignment of the LOU conditional upon the Iolair interests providing access to certain witnesses/evidence.

Held: The Court granted NHC's motion to confirm the assignment of the LOU, but refused to impose conditions, although the Court did note in its ruling that the Iolair interests had agreed on the record that they would comply with the substance of the proposed conditions.

The owners of the Beaufort sought dismissal of the in rem action in Louisiana on the ground that the forum non conveniens dismissal of the in personam claims in the Texas action was res judicata with respect to the in rem proceedings against the Beaufort in the Louisiana action, based on the privity between the Beaufort in rem in the Louisiana action and the owning/operating entities against whom the Texas in personam claims were asserted.

The court agreed with the Beaufort owners and dismissed the in rem proceedings in Louisiana, on the ground that the forum non conveniens dismissal of the in personam claims in Texas was res judicata - under the concept of issue preclusion - as to the conclusion that venue for all claims arising out of the allision was more convenient in Mexico.