On 8 March 2007, a large container ship collided with a dredge in Chinese territorial waters near the port of Tianjin, causing serious damage to both vessels. The container ship was owned by Compania Naviera Joanna SA and was chartered to MSC Mediterranean Shipping Company SA (collectively, MSC). The dredge was owned by Westminster International BV and was chartered to Boskalis International BV. Both corporations received services from their common grandparent, Koninklijke Boskalis Westminster NV (collectively, Boskalis).

After Chinese authorities investigated the collision and legal proceedings began with the arrest of both vessels in the Tianjin Maritime Court of the People’s Republic of China (Tianjin Maritime Court) to resolve liability and damages, Boskalis commenced eight different actions in four separate district courts in the United States under Admiralty Rule B to litigate liability and damages under US law. MSC commenced this limitation of liability action under Admiralty Rule F as a defensive strategy to enjoin the eight actions filed against it and then to have this limitation action dismissed in favor of the Chinese proceedings under the doctrine of forum non conveniens. The District Court held in favor of MSC and dismissed the limitation action. Boskalis appealed and argued that the Tianjin Maritime Court is not an available and adequate alternative forum on the grounds that the limitation fund available in the US would be more favorable to Boskalis than that in a Chinese forum due to the difference in the method of calculating limitation funds.

Held: Appeal dismissed.

The amount of the Chinese limitation fund is determined by the internationally accepted tonnage formula method by which the offending ship is valued by assigning a specific value per ton of the vessel’s pre-voyage tonnage, irrespective of the damage sustained by the vessel in the collision. Under the international norm for establishing limitation of liability funds, such as the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976) and the 1996 Protocol to Amend the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1996), the value of the fund does not depend on the value of the ship surviving the wreck. In addition, the Chinese forum provides a remedy that is completely analogous to the remedy provided by a US forum. Moreover, there is no indication that a Chinese maritime court would treat Boskalis unfairly. Therefore, the District Court’s dismissal of the action under the doctrine of forum non conveniens was affirmed.