Rationis Enterprises Inc. of Panama v. Hyundai Mipo Dockyard Co., Ltd.
United States Court of Appeals for the Second Circuit
426 F.3d 580 (2005)
- Written by Curtis Parvin, JD
Facts
The Nihon was a cargo ship built in Sweden by Brostrom Shipping Co., Ltd. (Brostrom), a Swedish firm, in 1972. In 1984, Brostrom contracted with Hyundai Mipo Dockyard Co., Ltd. (Hyundai) (defendant) to elongate the ship by 15 feet by welding in a new midsection based on specifications established by Lloyd’s Register, an international risk-management concern for ships. In 1985, an inspection revealed fatigue cracks in some of the welds. Hyundai offered to repair the welds, but Lloyd’s determined that the ship would be observed and examined for a period. The ship was ultimately put back in service by various owners, the final owner and operator being Rationis Enterprises Inc. of Panama and Mediterranean Shipping Co., S.A. of Geneva (MSC), which renamed the ship the MSC Carla. In 1997, the ship encountered a heavy storm, and a large wave caused the ship to break in two, with the front end dropping off at the Hyundai weld seam. A dispute emerged regarding whether the weld or an improperly maintained hull failed, precipitating the breakage. Rationis and MSC brought a limitation of liability action in the United States District Court for the Southern District of New York. The lost-cargo claimants filed cross-complaints against Hyundai, alleging defective work in extending the ship’s length. In defense, Hyundai pleaded that the law of Korea, Sweden, or Panama applied. Four years into the litigation, Hyundai filed a motion for summary judgment, claiming that Korean law applied and that Hyundai could not be held liable under Korean law. The district court denied the motion, asserting that Hyundai had failed to plead the applicable law adequately and waived the assertion that Korean law applied. After the trial, the court found Hyundai liable in strict liability and negligence. Hyundai appealed the decision to the United States Court of Appeals for the Second Circuit on various grounds, but the court focused exclusively on the application of foreign-law issues.
Rule of Law
Issue
Holding and Reasoning (Parker, J.)
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