A Mexican-flagged supply vessel, the Isla Azteca, allided with a Mexican-flagged mobile operating drilling unit, the Totonaca, in the Bay of Campeche, in the Mexican EEZ. The shipowner filed limitation proceedings in a Mexican court under the LLMC 1976. The MODU owner filed suit against the shipowner in the US, alleging negligence and unseaworthiness. The District Court in Galveston, Texas, found for the MODU owner. The shipowner appealed. On appeal, the shipowner argued that the case should be dismissed for lack of subject matter jurisdiction, forum non conveniens, and international comity. It also argued that the District Court erred when it concluded that the LLMC 1976 is procedural and consequently may not be used to limit the shipowner's liability in this case.

Held: The District Court is affirmed and the case is remanded to allow trial to proceed on damages.

The United States is not a State party to the LLMC 1976, which requires States parties to defer to certain limitation proceedings abroad, and the District Court's refusal to dismiss on 'international comity' grounds was not an abuse of discretion. The District Court was correct in holding that the LLMC 1976, as incorporated into Mexican law, is procedural, not substantive law, and therefore not applicable in a US court applying Mexican substantive law and US procedural law.

The Court concluded that the cap on liability created by the LLMC 1976 did not attach to the right of recovery created by art 1913 of the Mexican Civil Code. The Convention does not create a right of recovery, but only limits the recovery available under art 1913 and other sources of liability (art 2). Additionally, the cap on liability established by the LLMC 1976 is not 'substantive' because it is not so integral as to follow liability under art 1913 in all maritime cases, as an absolute cap on recovery would. The Convention provides only that '[l]imitation of liability may be invoked' by a shipowner, not that it must be applied by a court as an absolute limit to liability. As a result, the limits established by the Convention are not substantive - liability under art 1913 in a maritime case could exceed the cap established by the 1976 Convention. Cp Black Diamond SS Corp v Robert Stewart Sons Ltd (The Norwalk Victory) 336 US 386, 395, 69 S Ct 622, 93 L Ed. 754 (1949) (suggesting that 'if it is the law of Belgium that the wrong creates no greater liability than that recognized by the Convention of 1924', then the Convention's limit on liability would be substantive).

The US is a signatory, but not a State party to, the United Nations Convention on the Law of the Sea (UNCLOS). However, US courts acknowledge the EEZ provisions of UNCLOS as reflecting customary international law.