IN RE UNTERWESER REEDEREI, GMBH

GEWIN, Circuit Judge:

Unterweser Reederei, GMBH (Unterweser), seeks review of an order of the district court denying a stay of the limitation action Unterweser had filed in that court and enjoining Unterweser from proceeding further with litigation concerning the same subject matter in an English court. The limitation action was brought after Zapata Off-Shore Company (Zapata) filed a complaint in admiralty against Unterweser and its tug Bremen.

Unterweser, a German corporation, contracted with Zapata, a Delaware corporation, with its principal place of business in Houston, Texas, to tow Zapata's drilling barge Chaparral1 from Venice, Louisiana to Ravenna, Italy. The tow-age contract contained a forum selection clause providing that any dispute must be litigated before the High Court of Justice in London, England. On 5 January 1968, the Unterweser tug Bremen2 departed Venice, Louisiana with the Chaparral in tow. During the morning of 9 January 1968, the Chaparral sufferred a casualty while proceeding in the Gulf of Mexico. Pursuant to instructions from Zapata, Bremen made for Tampa Bay, the nearest port. Promptly upon arrival, Bremen was arrested by a United States Marshal and her master served with a copy of Zapata's complaint seeking $3,500,000 in damages from Bremen and Unterweser.3

Unterweser filed a motion praying in the alternative that the district court (1) dismiss for want of jurisdiction, (2) decline jurisdiction on the basis of forum non conveniens, or (3) stay further prosecution of the action.4 Unterweser subsequently instituted an action against Zapata in the High Court of Justice in London, claiming moneys due under the towage contract and damages for breach of contract. Zapata was served with the summons of that court; it appeared and moved that the English court dismiss its process. The High Court of Justice denied Zapata's motion holding that it had jurisdiction of the action. This determination was affirmed by the English Court of Appeal which held the forum selection provision of the contract to be reasonable and found no circumstances which would require it to deny enforcement of the agreement.

Before the English Court of Appeal had rendered the above decision, Unterweser filed a complaint in the district court seeking exoneration or limitation of liability arising from the casualty.5 Consequently the district court entered the usual injunction restraining claimants from proceeding outside the limitation court regarding the events of 9 January 1968. Zapata filed its claim in the limitation proceedings asserting the same cause of action as in its original action. Unterweser filed objection to Zapata's claim and counterclaimed against Zapata alleging the same claims embodied in its English action plus an additional salvage claim.

Zapata moved for an injunction restraining Unterweser from litigating further in the High Court of Justice. Unterweser moved to stay its own limitation proceeding pending a determination of Unterweser's suit in the English court. The district court denied the requested stay and enjoined Unterweser from proceeding in any other court regarding the same matter prior to a determination of the limitation action.6 Unterweser appeals from these orders, and we affirm.

I

We shall first comment on the power of the district court to restrain Unterweser from proceeding with its action in England. A court of equity has the traditional power to enjoin parties, properly before it, from litigating in another court. This power has been exercised where the foreign litigation would: (1) frustrate a policy of the forum issuing the injunction; (2) be vexatious or oppressive; (3) threaten the issuing court's in rem or quasi in rem jurisdiction; or (4) where the proceedings prejudice other equitable considerations.7 We must now determine whether this traditional power of the Chancellor appertains to a district court sitting in a limitation proceeding.

Prior to the decision below there has been scant judicial discussion of the power of an admiralty court to enjoin a party bringing a limitation action from contemporaneous litigation in foreign courts. Our research has added little of significance to the authority cited by the district court. The principal decision on the question was rendered by the Second Circuit in The Salvore.8 In that case, the owners of cargo damaged while on board the Salvore brought a libel in the district court. The Salvore's owner sued the cargo claimants in an Italian court for abuse of process, and subsequently brought a limitation proceeding in the district court. On a motion by the cargo claimants, the district court held that it was without power to stay the limitation proceeding or to compel the shipowner to discontinue its Italian suit. In reversing, the Second Circuit relied on the Supreme Court's description of a limitation proceeding as "the administration of equity in an admiralty court; look[ing] to a complete and just resolution of a many cornered controversy."9 It stated:

In A. C. Dodge, Inc. v. J. M. Carras, Inc.,11 the Second Circuit relied on its Salvore decision in affirming an order of the district court dissolving an injunction entered against claimants in the shipowner's limitation proceeding, and providing that it would be reinstituted only if the shipowner obtained a stay of an action which it was simultaneously pursuing in another federal court. Unterweser seeks to distinguish these cases on the ground that neither involved an injunction of the sort issued in the present case. In Salvore and Dodge, the courts sought to coerce the shipowner by conditioning the continuance of the injunction, that restrained claimants from litigating outside the limitation court, on voluntary forebearance of the shipowner's foreign action. We find no implication in these cases which would influence us to hold that district courts are impotent to accomplish directly what these courts sought to effect circuitously. To the contrary, the court in Salvore expressly stated:

Unterweser emphasizes the third case of the trilogy cited in the district court's opinion, Petition of A/S J. Ludwig Mowinckels Rederi.13 There the district court refused to enjoin litigation in an English court by a shipowner participating in a limitation proceeding before the district court. Though there is indication in the opinion that the Mowinckels court felt itself limited to the type of order fashioned in Salvore and approved in Dodge, we agree with the position of the district court below that Mowinckels was based on a determination that any restraint of the shipowner was improper under the attendant circumstances.

Since the district court entered its orders below, Mowinckels has been affirmed by the Second Circuit.14 The opinion on appeal supports the interpretation given Mowinckels by the district court in the instant case. Citing Salvore and Dodge with approval, the Second Circuit stated:

The opinion makes it clear that the district court's action was based on the equitable considerations of that case, and implies no general limitation on a district court's equitable powers in a limitation action.

Unterweser also draws our attention to the proposition, quoted by the district court in Mowinckels from British Transport Commission v. United States,17 that:

This practical observation is not pertinent to the present situation. Unterweser is not merely a potential claimant outside the jurisdiction of the district court; it is a party which has invoked, albeit reluctantly, that very jurisdiction. Though a domestic court has no power to restrain the courts of a foreign nation, it has admitted power to deal with litigants properly before it. An exercise of the latter power is not the assumption of the former.19 With both Unterweser and substantial amounts of its assets before the district court, it need not resort to comity to enforce its order.

Unterweser also seeks to distinguish the foregoing authorities since none of these cases involved a forum selection clause. We are of the opinion that this clause is only relevant in determining whether the district court properly refused to stay the limitation proceeding, and, on the facts of this case, does not affect the power of the district court to grant injunctive relief. The implications of the forum clause will be considered in the next section of this opinion. For the moment we conclude that Unterweser's petition for limitation subjects it to the full equitable powers of the district court.20 In a proper case, these include the power to enjoin a petitioning shipowner from litigating in a foreign forum. As this court observed in Guillot v. Cenac Towing Co.,21 "In the Admiralty the Chancellor now goes to sea and has adequate equitable reserves."

II

Unterweser contends that the district court erred in refusing to stay the limitation action pending a determination of its English suit. It urges that the stay was required by the forum selection clause of the towage contract, which provides: "Any dispute arising must be treated before the London Court of Justice."

At this point it is helpful to pare two questions that are not involved in this appeal. The district court had jurisdiction of the limitation action. We do not understand Unterweser to seriously contend that this jurisdiction was defeated by the presence of the forum clause.22 Neither are we asked to determine whether Zapata has breached the towage contract by filing the libel in the district court. The question we must decide is whether the district court was obliged to decline to exercise admitted jurisdiction under the facts of the present case.

In Carbon Black Export, Inc. v. The SS Monrosa,23 this court reversed an order of the district court declining jurisdiction of a libel filed by a cargo shipper. The district court, relying on Wm. H. Muller & Co. v. Swedish American Line, Ltd.,24 had upheld a forum selection clause contained in the bills of lading designating Genoa, Italy as the exclusive situs for legal proceedings,25 finding that the libellant had not shown the clause to be unreasonable. This court held that the forum clause did not apply to in rem proceedings. In holding that the district court erroneously declined in personam jurisdiction over the shipowner, this court stated:

This court professed no comment on the Second Circuit's decision in Muller distinguishing it on its facts. The Supreme Court granted certiorari to resolve an indicated conflict between Carbon Black and Muller.27 In SS Monrosa v. Carbon Black Export, Inc.,28 the Court dismissed the writ as improvidently granted though it approved this court's interpretation of the forum clause as having no application to in rem actions. Any remaining antagonism between the two opinions was relieved when Muller was overruled by the Second Circuit sitting en banc in Indussa Corp. v. SS Ranborg.29

In Insurance Co. of North America v. N. V. Stoomvaart-Maatschappij,30 the district court was requested to decline jurisdiction on the basis of a forum clause which was more broadly drawn than the clause in Carbon Black and analogous to the provision in the instant contract.31 In denying the request the court stated:

As one commentator has reluctantly observed, the Carbon Black decision, "At the very least * * * stands for the proposition that a choice of forum clause will not be enforced unless the selected state would provide a more convenient forum than the state in which suit is brought."33 We conclude that the forum selection clause, in and of itself, did not compel the district court to stay proceedings in the limitation action so that the parties might litigate in England pursuant to its provisions.

It was within the sound discretion of the district court to decline jurisdiction on the basis of forum non conveniens.34 But apart from the forum selection clause itself the circumstances supported a retention and determination by the district court.35 Though the towage contract envisioned a long voyage with potentional exposure to the jurisdiction of numerous states, the flotilla never escaped the Fifth Circuit's mare nostrum, and the casualty occurred in close proximity to the district court. A considerable number of potential witnesses, including Zapata's crewmen who were aboard the Chaparral, reside in the gulf cost area of the United States. Preparations for the voyage were made in this area, and, after the casualty, inspection of the damage and repair work was conducted there. The testimony of Bremen's crewmen, residing in Germany, is available by way of depositions already taken in the proceedings. The only other nation having significant contacts with, or interest in, the controversy is Germany.36 England's only relationship is the designation of her courts in the forum clause.

Zapata, the only claimant in the limitation action, is a United States citizen. The discretion of the district court to remand the case to a foreign forum was consequently limited.37 This is especially true since, as the court noted, there are indications that Zapata's substantive rights will be materially affected if the dispute is litigated in an English court. The towage contract contained the following exculpatory provisions:

These provisions are apparently contrary to public policy and unenforceable in American courts.38 However, according to the affidavit of F. D. Bateson, Zapata's English maritime law expert, these clauses would be held prima facie valid and enforceable by an English court.39 The district court was entitled to consider that remanding Zapata to a foreign forum, with no practical contact with the controversy, could raise a bar to recovery by a United States citizen which its own convenient courts would not countenance.

Moreover, it is doubtful that Unterweser would benefit even if we ignored Carbon Black and somehow resurrected the Muller rule. The minority of jurisdictions which recognize forum selection provisions, as prima facie valid, deny enforcement where the clause is shown to be unreasonable.40 One commentator, advocating this position, elaborated on the question of reasonableness:

On the facts of the present case the district court did not choose to disturb the original choice of forum.42 We do not feel it abused its discretion in this regard.

III

Having declined to stay the limitation action, we feel it was proper for the district court to restrain Unterweser from proceeding in any other court. The Supreme Court, regarding limitation proceedings, has stated:

Unlike the situation faced by the district court in Petition of A/S J. Ludwig Mowinckels,44 the instant case involves only two contestants, both of whom are properly before a court of competent jurisdiction. It was within the court's discretion to determine, as it did, that allowing simultaneous prosecution of the same action in a foreign forum thousands of miles away would result in "inequitable hardship" and "tend to frustrate and delay the speedy and efficient determination of the cause."45 On the facts of the present case, we find no abuse of that discretion.

In accordance with the foregoing, the order of the district court is affirmed.

WISDOM, Circuit Judge (dissenting).

"Problems arising in a court call for a perceptive awareness not only of what courts are for but of what a legislature is for and sometimes also of what an administrative agency is for and of what matters can best be left to private decision." H. Hart & A. Sacks, The Legal Process iii (tent. ed. 1958) (emphasis supplied).

In this case we deal with an agreement made between two responsible corporations involved in an international transaction. This transaction was no run-of-the-mine project. The subject of the contract was the towing of a six million dollar self-elevating oil drilling barge from the Mississippi to the Adriatic. Unterweser, the tower, is a corporation organized and domiciled in Germany. Zapata, owner of the rig, is a Delaware corporation domiciled in Texas. Zapata solicited bids from several towing companies before engaging Unterweser. Zapata then requested Unterweser to furnish a written contract for its perusal. Unterweser, which generally inserts a provision for German jurisdiction and application of German law, specified an English forum and English law as a reasonable compromise with an American firm in a transaction requiring an oil rig to traverse the Gulf of Mexico, the Atlantic, the Mediterranean, and the Adriatic. After reviewing the suggested contract, Zapata made several changes in the document before executing it. Presumably Zapata could have rejected the contract outright and accepted one of the other bids. Yet the Court holds that these corporations of diverse nationalities, performing a contract in the vicinity of many jurisdictions, could not effectively agree on which forum they would use to regulate their relationship and settle their disputes (probably the best method of ensuring a correct application of the governing law. Reese, The Contractual Forum: Situation in the United States, 13 Am. J.Comp.L. 187, 189 (1964)). Inevitably such a holding poses a serious disability to certainty in the ever-growing international trade. Where contract relations permit advance planning in transnational contracts, "there are evident advantages in such certainty, in avoiding later jurisdictional disputes. Transnational commercial activities would thereby be facilitated". H. Steiner & D. Vagts, Transnational Legal Problems 727 (1968).1

If Carbon Black Export, Inc. v. The SS Monrosa, 5 Cir. 1958, 254 F.2d 297, cert. dismissed, 1959, 359 U.S. 180, 79 S.Ct. 710, 3 L.Ed.2d 723, requires the result the Court reaches here, then I believe that case is outmoded. The Carbon Black Court2 believed "the universally accepted rule" to be that forum agreements are unenforceable. I cannot tell whether the majority here reads Carbon Black at its broadest, that forum agreements are necessarily "contrary to public policy and will not be enforced", 254 F.2d at 301, or at its narrowest, "that a choice of forum clause will not be enforced unless the selected state would provide a more convenient forum than the state in which suit is brought". Reese at 192 (emphasis supplied).3 Believing as I do that Carbon Black's rule is erroneous both historically and analytically, however, I must reject both the broad and the narrow formulations as unsatisfactory.4

I think the rule should be "outright recognition of the parties' autonomy * * * if tempered by the court's continuing power to refuse effect to `unreasonable' prorogation [choice of forum] agreements, and subject to specific legislation limiting access to the courts of the forum". A. Ehrenzweig, Conflict of Laws § 41, at 153 (1962). Or, as the Restatement puts it, "[t]he parties' agreement as to the place of the action cannot oust a state of judicial jurisdiction, but such an agreement will be given effect unless it is unfair or unreasonable". Restatement (Second) of Conflict of Laws § 80 (Proposed Off. Draft, 1967).5

I

The courts' distaste for forum clauses has usually been linked to a supposed longstanding judicial antipathy to arbitration agreements. Ehrenzweig § 41, at 148. Most judges and commentators have attributed this attitude to "the contests of the different Courts in ancient times for extent of jurisdiction, all of them being opposed to anything that would altogether deprive every one of them of jurisdiction". Scott v. Avery, 5 H.L.Cas. 811, 853, 40 Rev.R. 392, 413 (1856) (Lord Campbell). But more recently scholars have demonstrated that the supposed antagonism to arbitration agreements was not so entrenched and that its apparent cause, the desire for fees, was erroneously ascribed. 6A A. Corbin, Contracts § 1433, at 391-95 (1962); Ehrenzweig § 42, at 153 & n. 26; Sayre, Development of Commercial Arbitration Law, 37 Yale L.J. 595 (1928).6 Instead, until the Statute of Fines and Penalties, 8 & 9 Wm. III (1687), made the remedy impractical, courts consistently enforced arbitration agreements through the vehicle of penal bonds. With this remedy gone, pressure mounted to make arbitration agreements irrevocable. The courts resisted not on account of the fees involved, but because "arbitration proceedings were not regulated and the parties' only effective protection against an unfair or insufficient hearing by the arbitrators was in revoking the submission before the award was given". Sayre at 605.7 Not until the nineteenth century was the revocability of arbitration agreements simply premised on the courts' opposition to "ouster" from their jurisdiction. Ehrenzweig § 42, at 155.8 And then legislative action both in England and in the United States encouraged the courts to take a more benevolent view of such agreements.9

The strength of this misconception, however, seems to have contributed to American courts' generally negative attitude toward forum clauses. Home Insurance Company of New York v. Morse, 1874, 20 Wall. (87 U.S.) 445, 22 L.Ed. 365, 368, concluded that the authorities showed "agreements in advance to oust the courts of jurisdiction conferred by law [to be] illegal and void". The Court quoted at length from Scott v. Avery and from Mr. Justice Story's Commentaries on Equity Jurisprudence (§ 670) that

In truth, however, courts had not uniformly disfavored forum clauses. Decisions enforcing the parties' designation of a forum date back to 1796. Gienar v. Meyer, 126 Eng.Rep. 728 (C.P. 1796) (Dutch seaman suing Dutch seamaster for wages in English court; held, ship's articles specifying the code of Rotterdam and the courts of Holland were enforceable). They continue through the nineteenth century despite the fear of "ouster". Indeed, the example of arbitration influenced the English courts to deal kindly with forum clauses. Law v. Garrett, 8 Ch.D. 26 (C.A.1878), for example, spoke in terms of arbitration in a case involving the stipulation of a Russian court in St. Petersburg. Lord Justice Baggallay observed that the court entirely agreed with Willesford v. Watson, L.R. 8 Ch. 473 (1870), that where "parties choose to determine for themselves that they will have a forum of their own selection instead of resorting to the ordinary Courts, a prima facie duty is cast upon the Courts to act upon such arrangement". 8 Ch.D. 26, 37. The agreement did not "oust" the court of jurisdiction, but did give it discretion to stay the proceedings. The English courts have continued to follow the principle of Law v. Garrett.11 Today their rule appears to be enforcement of a forum clause unless the particular case militates against it. The Vestris, 43 Lloyd's List L.R. 86 (Adm.Div.1932). "[A] forum selection agreement will, prima facie, be respected; the burden of proof lies upon the party resisting the application for a stay, and he must convince the court that a stay should be granted." Cowen & Mendes da Costa, The Contractual Forum: Situation in England & the British Commonwealth, 13 Am.J.Comp. L. 179, 186 (1964).

American courts, however, have generally retained their hostility to forum agreements. If the law is to be applied simply by tallying up the number of precedents that have not been overruled, then the majority opinion here is undoubtedly correct.12 But important incursions have been made. In 1949, Judge Learned Hand observed:

Krenger v. Pennsylvania Railroad, 2 Cir. 1949, 174 F.2d 556, 561 (concurring opinion). In 1951, the Second Circuit enforced a forum clause specifying Norwegian courts. Cerro De Pasco Copper Corporation v. Knut Knutsen, 2 Cir. 1951, 187 F.2d 990.13 And in 1955 it went one step farther in destroying the hostility, holding in Wm. H. Muller & Company v. Swedish American Lines Ltd., 2 Cir. 1955, 224 F.2d 806, cert. denied, 1955, 350 U.S. 903, 76 S.Ct. 182, 100 L.Ed. 793, that courts should enforce a forum clause in an international contract unless it was unreasonable or prohibited by statute.14 I must disagree with the majority's conclusion that Indussa Corporation v. S.S. Ranborg, 2 Cir. 1967, 377 F.2d 200,15 overrules this part of Muller. Indussa's decision not to enforce a forum clause derived from its view that the Carriage of Goods by Sea Act, 46 U.S.C. §§ 1300-1315, where applicable, prohibited such clauses. COGSA did apply to Muller (as it did to Carbon Black) and for that reason Muller was overruled. "[T]he Muller court leaned too heavily on general principles of contract law and gave insufficient effect to the enactments of Congress governing bills of lading. * * *" 377 F.2d at 202. Where COGSA does not apply as in this case, I believe Muller's "general principles of contract law" still lead to Muller's result.16

In 1965, the Pennsylvania Supreme Court enforced a forum clause between two American parties specifying New York courts. The Pennsylvania court started with the proposition that private bargaining could not change statutory rules of jurisdiction or venue.

Central Contracting Company v. C. E. Youngdahl & Company, 1965, 418 Pa. 122, 209 A.2d 810, 816.

The Third Circuit, confronted with the same forum clause the next year, concluded that

Central Contracting Company v. Maryland Casualty Company, 3 Cir. 1966, 367 F.2d 341, 344-345.17

This very cursory review indicates that an unqualified judicial opposition to forum and arbitration clauses has at best only weak historical antecedents. Neither arbitration nor forum clauses were the subject of such opprobrium as has popularly been supposed. Concern there was, but not a universal rule that such clauses were void. And despite American courts' general disregard of forum clauses, significant dissenting views have been registered.18

II.

A search for policies to buttress the wholesale invalidation of forum clauses is likewise unsuccessful. Chief Justice Shaw of Massachusetts tried to formulate the arguments in 1856, recognizing then that history afforded "no authority upon which to determine the case". Nute v. Hamilton Mutual Insurance Company, 72 Mass. (6 Gray) 174, 185 (1856). He reasoned first that

Id. at 184. This symmetry and convenience argument bears doubtful relevance to the intrastate venue problems involved in Nute.19 On the international scene, it is simply inapplicable. Reese at 188. No general law fixes venue among the nations and states, only individual jurisdiction rules and happenstance. Convenience and expedience can more successfully be served by duly considered forum agreements fairly bargained for and enforceable.

Id. at 184. To the extent this argument is a real concern, it appears less pertinent to an international context than to intrastate venue problems where parties might more easily exert influence on local adjudicators. If it is a problem, however, wholesale prohibition of forum clauses is an excessive response. An inquiry that takes this factor into account where it arises would adequately meet that concern. The best comment about Shaw's policy arguments is his own: "these considerations are not of much weight" and "no great reliance" deserves to be placed upon them. Id. at 184.

The greatest inconvenience to the Massachusetts Chief Justice's mind was

Id. Of course consistent enforcement of a forum stipulation need not produce confusion. Shaw's real objection was rooted in his belief that the parties to a contract could not make terms with regard to their remedy; that was a matter only the courts could decide. Id. at 180-181. Although the distinction between substantive rights and remedies may well exist, the breadth of the principle as Shaw saw it has been subjected to serious challenge, Ehrenzweig § 41, at 149,20 and in the case of arbitration statutes, overruled.

In re New York, Lackawanna & Western Railroad Company, 1885, 98 N.Y. 447, 453. It may be that some questions of remedy are less amenable to private settlement than are questions of primary rights and obligations. But the specific question still unanswered is whether forum clauses are thus an inappropriate subject for private ordering.

This Court was no more successful in marshalling arguments to support its conclusion in Carbon Black. We simply relied on authority as characterized by Corpus Juris Secundum and American Jurisprudence to opine that forum agreements are "contrary to public policy". That of course "is the conclusion to be proved rather than proof for the conclusion". Ehrenzweig, § 41, at 149. Our apparent concern that such agreements attempted to "oust" us of jurisdiction was ill-considered. The majority here correctly points out that jurisdiction is not an issue. The question is whether a court possessing jurisdiction should for good and sufficient reasons decline to exercise it. But since the bogey of jurisdictional ouster infuses so much of the opposition to forum clauses and since it infuses the Carbon Black rule to which the Court pays obeisance today, it is necessary to lay it to rest. There are various ways to do so. For example, "[i]f the agreement is enforced, it cannot truly be said that jurisdiction has been conferred or ousted by the parties. Jurisdiction is exercised or withheld only by force of the law that gives effect to the parties' agreement". Perillo, Selection Forum Agreements in Western Europe, 13 Am. J.Comp.L. 162 (1964); accord, In re New York, Lackawanna & Western Railroad Company, 1885, 98 N.Y. 449, 453. If that formulation does not persuade the fearful we can follow the example of the Netherlands. There "the courts recognize that the parties have no power to modify the rules of jurisdiction. Nevertheless, the courts refuse to participate in a breach of contract. Consequently, they refuse to take cognizance of a case in violation of the parties' agreement". Perillo at 165; accord, Racecourse Betting Control Board v. Secretary for Air, [1944] 1 Ch. 114, 126 (C.A.1943).

In summarizing the English view, Lord Denning couches it in these terms:

The Fehmarn, [1958] 1 Weekly L.R. 159, 161-62 (C.A.1957). Finally a federal judge has concluded:

Geiger v. Keilani, E.D.Mich.1967, 270 F.Supp. 761, 765 (Freeman, C. J.)21

I cannot believe that jurisdictional ouster is a real issue. We are willing to dismiss a suit of which we have jurisdiction if it is between aliens.22 And federal courts have not been chary of "losing jurisdiction" in other areas. In habeas corpus cases from state courts, federal courts decline to exercise jurisdiction until a prisoner has exhausted state remedies. The exhaustion doctrine, now codified, 28 U.S.C. § 2254 (b), was characterized not as a jurisdictional bar, but as an argument of comity — to decline, in favor of state courts, jurisdiction that we possessed. Fay v. Noia, 1963, 372 U.S. 391, 418, 83 S.Ct. 822, 9 L.Ed.2d 837, 856-857. The absention doctrine is similar. "Abstention allows a federal court whose jurisdiction has been properly invoked to postpone decision, pending trial in a state court, when the result might turn on issues of state law." Note, Federal — Question Abstention: Justice Frankfurter's Doctrine in an Activist Era, 80 Harv.L.Rev. 604 (1967) (emphasis supplied).23 The doctrine of forum non conveniens has also allowed a court with jurisdiction of a suit to refuse to hear the controversy where a more convenient forum is available. Gulf Oil Corporation v. Gilbert, 1947, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055. If in all these cases we can recognize that other policies militate against the formal notion that once we have jurisdiction we must exercise it, surely we can undertake the task which Carbon Black neglected, of weighing the arguments against forum clauses. It is time to lose our fixation with the ancient notion of physical power — that because a tort occurs with in this Court's "mare nostrum" we would be derelict not to decide the case.24

III.

What does emerge from the history, the cases, and the commentary is a legitimate concern for the bargaining conditions in which the forum agreement was made and the quality of the remedy available to the parties if the agreement is enforced. These two concerns encompass several relevant factors that have been isolated. (1) Did the parties freely and intelligently enter their agreement? In contracts of adhesion, where one party possessed overweening bargaining power or where there was no opportunity to negotiate the terms, and of course where fraud has occurred, courts are unwilling to deny a plaintiff his forum on the basis of the contractual stipulation.25 (2) Would the stipulated forum in rendering its decision transgress an important public policy of the present forum? In cases of bankruptcy, divorce, successions, real rights, and regulation of public authorities, for example, courts cannot remit the dispute to a foreign forum lest a foreign court render a decree conflicting with our ordering of these affairs.26 And in cases where objectionable activity within our jurisdiction would be encouraged by the foreign court's decree, we would reach a similar result. Cf. The Kensington, 1902, 183 U.S. 263, 22 S.Ct. 102, 46 L.Ed. 190. (3) Will the designated forum adjudicate the parties' dispute? A court may postpone declining jurisdiction until it is sure the foreign court will hear the dispute and provide a remedy. See, e. g., Swift & Company Packers v. Compania Colombiana, 1950, 339 U.S. 684, 697-698, 70 S.Ct. 861, 94 L.Ed. 1206, 1215. (4) Is the designated forum seriously inconvenient for the trial of the action? Since we recognize in the doctrine of forum non conveniens that a jurisdictionally selected forum should sometimes give way to another in the face of strong arguments of convenience, it would be anomalous to ignore those considerations where the parties have selected a forum without the benefit of hindsight.

This list is not exhaustive but is exemplary of relevant considerations. But since these concerns can be isolated and since forum clauses can provide such a clear benefit of certainty in international trade, we should be satisfied to apply these concerns to individual cases rather than reject all forum agreements. The burden of proof should be on the party objecting to the designated forum to support his objections. Maryland Casualty, 367 F.2d at 345; Youngdahl, 209 A.2d at 816. The fourth factor in particular must not become just another label for the doctrine of forum non conveniens. It is essential to remember that the parties expressed in their agreement the judgment that on balance a particular forum was most convenient for trial of their disputes.27 The burden should rest upon the party objecting to that forum to show a significant balance of greater inconvenience in litigating in the designated forum.

The majority has intimated that the forum clause at issue here would fail to qualify even under this more charitable approach, and holds that the factors in this case justify the district court's discretionary refusal to disturb the plaintiff's choice of forum. If the test I advocate is the correct one, however, there was no proper exercise of discretion by the district court. That court's memorandum order demonstrates that it invalidated the forum clause under Carbon Black and then, ignoring the forum clause, declined to dismiss on a forum non conveniens theory.28 The district court's conclusion, apart from the authority of Carbon Black, was that "[t]he balance of conveniences here is not strongly in favor of Defendant and Plaintiff's choice of Forum should not be disturbed". A proper approach to a forum clause should reverse that burden. It is a truism that we do not observe an exercise of discretion that was misled by an erroneous view of the law. And to dispel any notion that this forum clause was unreasonable as a matter of law, I canvass the factors I have suggested.

(1) Zapata has neither presented evidence of nor alleged fraud or undue bargaining power in the agreement. Unterweser was only one of several companies bidding on the project. No evidence contradicts its Managing Director's affidavit that it specified English courts "in an effort to meet Zapata Off-Shore Company half way". Zapata's Vice President has declared by affidavit that no specific negotiations concerning the forum clause took place. But this was not simply a form contract with boilerplate language that Zapata had no power to alter. The towing of an oil rig across the Atlantic was a new business. Zapata did make alterations to the contract submitted by Unterweser. The forum clause could hardly be ignored. It is the final sentence of the agreement, immediately preceding the date and the parties' signatures. Perhaps more evidence could be accumulated, but under this evidence Zapata has not met the burden of showing that it was pressured into the forum stipulation.

(2) I conclude that the English courts would provide an adequate remedy and would contravene no important American public policy. In dealing with forum non conveniens, the majority intimates that the district court's discretion to decline jurisdiction was limited because Zapata is an American citizen and the English courts would violate our public policy. The towage contract provided:

On the premise that the English courts would apply English law rather than American in this situation and upon the affidavit of Zapata's English law expert that English courts will enforce the contract, the majority concludes that our policy against enforcing exculpatory clauses might be violated if the controversy proceeded to England.

Of course if Zapata had chosen to abide by the contractual stipulation of forum the case would have proceeded in England and we would have had no opportunity to enforce this public policy. But beyond that, we should be careful not to over-emphasize the strength of the policy. According to Bisso v. Inland Waterways Corporation, 1955, 349 U.S. 85, 91, 75 S.Ct. 629, 99 L.Ed. 911, 918,29 two concerns underlie the rejection of exculpatory agreements: that they may be produced by overweening bargaining power; and that they do not sufficiently discourage negligence. Bisso applied these concerns to towage contracts in admiralty jurisdiction. Yet when we sit in diversity we will enforce an exculpatory clause in favor of a railroad. Seaboard Coast Line Railroad Company v. Tennessee Corporation, 5 Cir. 1970, 421 F.2d 970. Neither there nor in the case of insurance contracts do the dangers strike us as so serious that federal courts cannot enforce the state law. The question here is whether the fact that a towage contract is involved and the fact that we are sitting in admiralty require us to outlaw a forum that might enforce exculpatory clauses. I believe the policy is not so strong. Bisso depends less on the questions of public policy involved than on the long line of authority which it believed established a federal rule barring enforcement of such contracts.30 Although the question has been settled by the Supreme Court for federal courts, we would unduly extend its scope in refusing to enforce a forum clause simply because a foreign forum may enforce an exculpatory clause. Here the conduct in question is that of a foreign party occurring in international waters outside our jurisdiction. The evidence disputes any notion of overreaching in the contractual agreement. And for all we know, the uncertainties and dangers in the new field of transoceanic towage of oil rigs were so great that the tower was unwilling to take financial responsibility for the risks, and the parties thus allocated responsibility for the voyage to the tow.31 It is equally possible that the contract price took this factor into account. I conclude that we should not invalidate the forum selection clause here unless we are firmly convinced that we would thereby significantly encourage negligent conduct within the boundaries of the United States.32 At the very least, before excluding the forum clause, we should remand to the district court for compilation of a record dealing with the economic relationships in this industry and the consequences of enforcing forum clauses in this international context.

Zapata's American citizenship may very well be an argument in some cases for refusing to decline jurisdiction on the basis of forum non conveniens.33 Swift & Company Packers v. Compania Colombiana, 1950, 339 U.S. 684, 70 S.Ct. 861, 94 L.Ed. 1206, decided on forum non conveniens principles (no forum clause was mentioned) that it would not deny an American citizen his American forum primarily because there was no assurance that the defendant would appear with adequate security in the foreign court. Here, of course, Unterweser and Zapata have already joined argument in the English courts, the English courts have ruled that they have jurisdiction, and Unterweser has offered to post the same security that is available to Zapata here. The Supreme Court in Swift, moreover, expressly declined to decide the "abstract question whether United States admiralty courts may decline jurisdiction over libels brought by United States citizens". 339 U.S. at 697, 70 S.Ct. at 869, 94 L.Ed. at 1215. In this case we deal with a situation where Zapata voluntarily and specifically surrendered in the contract its right to proceed in American courts. See Cerro De Pasco Copper Corp. v. Knut Knutsen, 2 Cir. 1951, 187 F.2d 990, 991 (Swift "inapposite" in context of a forum clause). A proper solicitation for the interests of American citizens may militate in favor of enforcing these clauses. Otherwise, Americans who wish to contract with foreign nationals and who are willing to accept a forum clause will have difficulty in convincing the foreign party that he can rely on the agreement.34

(3) The availability of the English forum is certain. Soon after Zapata brought its action in the district court, Unterweser moved that court to decline jurisdiction and initiated proceedings for breach of contract and moneys due in the High Court of Justice, London, England, as the forum provision directs. Zapata appeared in the London court and moved to dismiss the summons on three grounds: that the English court was not a convenient forum; that proceedings between the parties were underway in the United States; and that the writ had been improperly served. The High Court of Justice ruled that it had jurisdiction, that the summons had been properly served, and that the action should proceed. Zapata appealed. The English Court of Appeal affirmed, holding that the forum provision was reasonable and that Zapata had made no showing which would compel the Court to refuse to enforce the agreement.35 Thus, the English courts have ruled that they will hear the controversy. Furthermore, when Unterweser advised the district court that it had initiated the action in England, it offered to keep available all the security given in the initial action — $3,500,000 — to satisfy any relief Zapata might obtain in London.

(4) The majority concludes that factors of convenience do not justify dismissing the action. But the majority treats the question under the doctrine of forum non conveniens the standard for which is that the plaintiff's choice of forum "should rarely be disturbed" unless "the balance is strongly in favor" of the defendant. Gulf Oil Corporation v. Gilbert, 1947, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055. I submit that when a forum clause is involved our standard should be not to disturb the contractual choice of forum unless "the forum chosen by the parties would be a seriously inconvenient one for the trial of the particular action". Restatement (Second) of Conflict of Laws § 80, Comment, supra note 5. From this perspective I conclude that factors of convenience do not justify refusing the motion to decline jurisdiction.

The majority considers the following factors relevant: the casualty occurred close to the Fifth Circuit and the district court; a "considerable number" of witnesses live on the Gulf Coast; preparations for the voyage, inspection of the damage and repair work were performed here; depositions of the Bremen's crewmen are available; and there are no contacts with the English forum. Thus, they agree with the district court, which concluded that a "great majority, if not all, of the witnesses are or were in the United States, including an alleged forty potential witnesses residing permanently here." But this observation appears to ignore the fact that most of Unterweser's witnesses reside in Germany — the twenty-three crew members of the Bremen, Von Aswegen, Managing Director of Unterweser, personnel from the builders of the Bremen and the independent contractors who outfitted the vessel, individuals with companies for whom Bremen has previously towed. It is true that depositions of the German crew members are available because Zapata obtained them immediately after filing its libel. But if, as is likely, Zapata's witnesses are its crewmen (on the Chaparral) and Unterweser's witnesses are its crewmen (on the Bremen), the inference from that observation is that Zapata should have live witnesses at trial while Unterweser relies on depositions. Presumably depositions of the American witnesses could be taken for an English trial, or both sides could face the same difficulty of transporting their witnesses. Although the voyage began here and the casualty occurred nearby, the tug was built in Germany and had its home port in Bremen. As the High Court of Justice observed, "There is probably a balance of numbers in favor of the Americans, but not, as I am inclined to think, a very heavy balance". The fact that no contacts exist with the English forum is not determinative. That forum was chosen as a logical compromise should a dispute arise.36 The English court has the advantage of dividing the inconveniences between the disputants. An English-speaking court with common law traditions is probably more amenable to American plaintiffs than the German courts with which there are "contacts". Finally, the English court may very well have been chosen for the law it would apply. That factor may have enabled Zapata to obtain the low bid from Unterweser. I conclude, therefore, that Zapata has not justified disturbing the contractual choice of forum.

* * *

For all these reasons, I believe we should overrule Carbon Black and remand this case to give the district court an opportunity to find the relevant facts and exercise its discretion in light of the "modern and correct rule".37 If the district court should properly have declined to exercise its jurisdiction, then of course it should not have enjoined the London action. Given the majority's conclusion that the district court properly retained jurisdiction, however, I do not disagree with its analysis that the injunction was then proper.