By Maria Hook (University of Otago)
In American Eagle Fishing Llc v Ship “Koorale” [2020] NZHC 1935, the High Court recently considered an important question of choice of law in maritime torts: what is the law governing maritime collisions on the high seas where both vessels are flying the same flag? The answer, according to Whata J, is the lex fori. However, his Honour also acknowledged that there was force in the submission that the law of the flag should govern. This post offers some brief comments on the Court’s reasoning.
Two tuna fishing boats flying the flag of the United States had collided on the high seas. One of the boats, the Koorale, was subsequently served with proceedings in New Zealand while it was undergoing repairs in Nelson. The plaintiffs, the owners of the American Eagle, sought compensation for damage suffered in the collision. The defendant, the owner of the Koorale, applied for a stay of proceedings on the basis that New Zealand was not the appropriate forum to determine the claim. It argued that the dispute should be determined in the US courts, where it had filed proceedings against the plaintiffs. The question of the applicable law arose in the context of that application. Under New Zealand law, liability of the boat owners would be capped at about US$2m. Under US law, compensation would be based on the market value of the vessel and its freight. The defendant estimated its damage and loss to exceed US$10m.
Whata J concluded that New Zealand law was applicable, but that the applicable law was in any case a neutral point in the forum conveniens analysis (at [41]-[68]). His Honour accepted the claimants’ submission that the law of the forum has traditionally been applied in collision cases (at [44], [55]-[57]). He seemed to reject the defendant’s submissions that, where the ships involved have the same home jurisdiction, it should be the law of the flag that is applicable (at [41], [55]-[57]. He also rejected the argument that the claim was subject to the choice of law rules contained in the Private International Law (Choice of Law in Tort) Act 2017, because the Act “presupposes the tort occurred in ‘a country’” (at [42], [63]-[68]).
This reasoning confirms the orthodox common law position that the law of the forum applies to collisions on the high seas. More specifically, it is the “maritime law as administered in the courts of England” that has traditionally been said to be applicable (Chartered Mercantile Bank of India v Netherlands India SN Co (1883) 10 QBD 521 at 545, per Brett LJ) – although in practice this seems to mean “nothing more than English law” (Lloyd v Guibert (1865) LR 1 QB 115 at 123 per Willes J).
Where the ships involved in the collision fly different flags, this position makes sense, because there is no immediately obvious alternative. It would seem unfair to prioritise the law of one ship over the law of the other and there is no other objective connecting factor available. But where the ships fly the same flag, the law of the flag is a viable alternative, and there is no need to rely on the lex fori. His Honour acknowledged the potential merit of this proposition (at [59]). In fact, courts in other jurisdictions have applied the law of the flag in such circumstances (see, eg, The Eagle Point 142 F 453 (1906), referred to by the defendant’s counsel at [41]). There is also academic support for this solution: see, eg, M George “Choice of Law in Maritime Torts” (2007) 3 Journal of Private International Law 137 at 159; S Gahlen Civil Liability for Accidents at Sea (Springer, 2015) at 356; C F Finlayson “Shipboard torts and the conflict of laws” (1986) 16 VUWLR 119 at 138 (“There is no reason why the Eagle Point principle should not be applied in England provided English law is properly pleaded and proved”).
It would be open to the New Zealand court to take this approach. The Private International Law (Choice of Law in Tort) Act 2017 does not apply, because it expressly preserves any choice of law rules for torts that were not previously governed by the double actionability rule (s 11(1), see Hook & Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at 6.73). Moreover, as noted by the Court, the Act presumes the relevant acts to have been committed within a country. This means that the question remains a question for the common law. In the leading English case, Chartered Mercantile Bank of India v Netherlands India SN Co, the Court applied the lex fori in a case involving a collision between two Dutch ships. However, the claim was brought by the (English) shipper of the cargo (which had been damaged in the collision), so the decision is distinguishable. In any case the Court’s rigid reliance on “general maritime law” (at 544) may not sit well with the principles and policies underpinning the modern conflict of laws. Drawing on the principles of the Private International Law (Choice of Law in Tort) Act 2017 for guidance, the law of the flag would seem an appropriate solution, on the basis that it would be more closely connected to the tort than New Zealand law (cf the submission for the defendant at [52]).
In light of these considerations, one might have expected the Court to have more sympathy for the defendant’s argument. The Judge placed particular weight on the need to give effect to international maritime sources that have been incorporated into New Zealand law (at [55]). Clearly, the application of the law of the flag should not undermine the operation of uniform rules of maritime law. However, another way of dealing with this concern would have been to clarify that such rules have overriding mandatory force (so would invariably be applicable, even if the law of the flag is not New Zealand law).
