The Turkish-flagged vessel of Company #1 allided with the Greek-flagged vessel of Company #2 in the Port of Lagos, Nigeria. Company #1 is a Turkish company, and Company #2 is a Greek company. Following the allision, the Greek-flagged vessel required temporary repairs in Nigeria and then extensive repairs in Turkey. Because the repairs caused loss of use damages, Company #2 sued Company #1 in the Eastern District of Louisiana after Company #2 arrested Company #1′s vessel during an unrelated call to a U.S. port. An interlocutory appeal was granted by the Fifth Circuit to consider which country’s law–U.S. or Nigeria–applied to the controversy. Importantly, Nigerian law does not recognise loss of use claims.
The Supreme Court previously articulated eight factors a court should consider when determining whether U.S. or foreign law applies: (1) the place of the wrongful act; (2) the law of the flag; (3) the allegiance of domicile of the injured party; (4) the allegiance of the defendant shipowner; (5) the place of the contract; (6) the inaccessibility of the foreign forum; (7) the law of the forum; and (8) the shipowner’s base of operations. Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306 (1970); Lauritzen v. Larsen, 345 U.S. 571 (1953). Here, the Fifth Circuit agreed with the lower court’s decision that Nigerian law should apply. “Applying the law of the place of the wrongful act promotes stability in maritime law and comity between nations, key concerns in the international choice-of-law context.” The loss of use damages all arose from the Nigeria allision, and as the situs of the wrongful act, Nigerian law governs.