The opinion of the court was delivered by: CANNELLA
Wah Yuen Shipping, Inc.'s ["Wah Yuen"] motion to increase the security fund is granted. Fed. R. Civ. P., Supp. R. F(7) for Admiralty & Maritime Claims ["Rule F(7)"].
On July 6, 1983, Compania Gijonesa De Navegacion, S.A. ["Gijonesa"] commenced this action claiming exoneration from liability from a vessel collision and seeking the application of liability limitations pursuant to the Limitation of the Liability of Owners of Sea-Going Ships (1957) ["Brussels Convention"] and 46 U.S.C. § 183. This action arises out of a collision in Spain on January 11, 1983 of its Spanish vessel, the M/V Cimadevilla ["Cimadevilla"] with the M/V Crusader, a Panamanian vessel owned by the claimant Wah Yuen. As a result of the collision, Wah Yuen presented its damages claim of $607,644.10 to Gijonesa and thereafter, Gijonesa instituted this action and asserted that its interest in the Cimadevilla was $98,110.77.
It then deposited that amount as security with the court for the benefit of claimants, permitting them to challenge the amount.
As a claimant Wah Yuen objected to the amount of security and challenges the law employed by Gijonesa in calculating the limited fund. Wah Yuen asserts that the security should be increased to total $1,784,800, representing Gujonesa's $1,715,000 interest in the Cimadevilla at the end of the voyage plus $34,800, the value of the freight.
In addition, Wah Yuen timely filed a claim in this Court for $607,644.10.
Wah Yuen argues that the Brussels Convention is a matter of procedural rather than substantive law and that a Spanish court would not apply the official rate of exchange of gold for conversion of pesatas into poincare francs. Wah Yuen's expert on Spanish law opines that a Spanish court would apply Article 837 of Spain's Commercial Code which provides that the limitation fund equals the value of the vessel plus the value of pending freight.
This is also the valuation specified in Rule F(7) and 46 U.S.C. § 183(a). With respect to the instant dispute, Wah Yuen argues that the Ccourt, as the forum court should apply the federal liability limitation.
Gijonesa alleges that generally 46 U.S.C. § 183 and the Federal Rules of Civil Procedure limit liability unless the foreign substantive law which limits the right provides a different and lower limitation, as Spanish law does in the instant action. Thus, Gijonesa argues that the Brussels Convention is substantive and applies to the limitation of liability issue because it attaches to a right and limits it. Gijonesa argues that Spanish law mandates the limitation value used herein because of its domestic enactment of the Brussels Convention.
With respect to the valuation of the poincare franc, Gijonesa argues that Spanish courts would use the official rate for the value of gold in converting poincare francs, based on the opinion of its expert. The official rate of gold was the only rate at the time of the formulation of the Brussels Convention.
Generally, "in the absence of some overriding domestic policy translated into law, the right to recover for a tort depends upon and is measured by the law of the place where the tort occurred." Black Diamond S.S. Corporation v. Robert Stewart & Sons (Norway Victory), 336 U.S. 386, 396, 93 L. Ed. 754, 69 S. Ct. 622 (1949) ["Black Diamond"] (citations omitted). because the collision occurred in the territorial waters of Spain, the rights and liabilities of the parties are governed by Spanish substantive law.
With respect to procedural rules, it is well-settled that the law of the forum controls.See Bournias v. Atlantic Maritime Co., 220 F.2d 152, 154 (2d Cir. 1955). Gijonesa, when it deposited the $98,110.77 with the court, claimed that Spanish law provides that this is the monetary limit pursuant to the Brussels Convention. Gijonesa contends that the Brussels Convention is a substantive rather than procedural part of the laws of Spain. Wah Yuen contends that while the substantive rights involved are governed by Spanish law, it claims that the calculation of the liability limitation is a matter of procedure governed by the forum's laws.
Wah Yuen further argues, in the alternative, that if Spanish substantive laws were to apply, its Commercial Code would control rather than the Brussels Convention. The Spanish Commercial Code provides that the limitation of liability is the value of the vessel plus pending freight. This valuation is identical to that of the laws of the United States. Calculating liability is further complicated ...