Server: Netscape-Enterprise/2.01 Date: Wed, 31 Dec 1997 20:56:00 GMT Content-type: text/html Legal Transportation News Vol. 2

Legal Transportation News Vol. 2

Newsletter logo
Compliments of the Law Offices of Brusanowski & Veigel Vol. 2 issue 1
Copyright © 1996, Charles h. Veigel, All Rights Reserved Late Winter 1996
IN THIS QUARTER'S ISSUE:

So You Think You Can Litigate Your Cargo Claim?
Case Update: Vimar Seguros Y Reaseguros, sa v. M/V Sky Reefer 515 U.S. ___, 1995 (6/19/95)

The Supreme Court may have inadvertently cut off a cargo claimant's ability to enforce a small or moderately sized cargo claim in the Sky Reefer case (see citation above June 19, 1995).

The case required the Supreme Court to interpret the Carriage of Goods by Sea Act (COGSA) and how it related to a bill of lading containing a clause requiring arbitration in a foreign country. The case concerned a shipload of Moroccan oranges and lemons. The buyer, a New York company, contracted to buy the shipload from a Moroccan fruit supplier. The goods were transported on a vessel called the M/V Sky Reefer. A bill of lading was issued with a Japanese choice of law and forum arbitration clause. When the vessel arrived in Massachusetts, the buyer discovered that thousands of boxes of oranges shifted during transport resulting in over $1 million dollars in damages. The Court held (broadly) that carrier dictated choice of forum clauses and foreign arbitration clauses were enforceable. On first glance, this may not appear significant. However, the implications to small and medium sized cargo claimants will be devastating.

The outcome of this decision will cause ocean carriers to re-draft their bills of ladings and insert forum arbitration clauses that will be favorable to them and unfavorable to a shipper or consignee.

Who would have thought that if a container placed on board in Seattle and delivered to Australia would be litigated or arbitrated in Japan. The implications to a shipper or consignee are obvious. If your goods arrive damaged and you have a claim against the carrier, you cannot sue in the United States. The carrier will point to the forum clause in the bill of lading and require the claimant to travel to a foreign forum to litigate or arbitrate the dispute.

The inconveniences and costs to the small and medium sized cargo claimant are numerous. Foreign legal counsel will need to be hired that may be as costly or costlier than American counsel. In addition the foreign forum may have evidentiary rules that differ from the U.S. or other international acts that are not favorable to the cargo claimant. Moreover the foreign forum may be biased in favor of the carrier. It is also unclear what effect the case will have on stevedores, terminal operators, truckers and other agents of the carrier who enjoyed liability provisions in carrier's bills of lading through Himalayan clauses. Small and medium sized cargo claimants must contend with these and many other worries.

Ocean carriers will likely rush to amend their bills of lading. It is this firm's understanding that several large ocean carriers have already altered the terms of their bills of lading to take advantage of the ruling.

The impact of this holding may not be fully realized. In the interim, the Maritime Law Association is lobbying Congress to amend the Carriage of Goods by Sea Act to eliminate the holding of Sky Reefer. They propose to insert a provision that would void a forum clause if the shipment was loaded or discharged in a U.S. port. Not until the spring of 1996 will we hear of any outcomes. I will keep you posted....

Charles H. Veigel

If you do not want to receive a copy of the Legal Transportation News, please email us requesting that we remove your name from our mailing list. We hope our Newsletter is both informative and helpful to your industries.

U.S. Airline v. the U.K.

Transportation Secretary Frederico Pena said that talks between the U.S. and the United Kingdom continue to be stalled.

Major U.S. airlines have lobbied Pena recently to improve their access to British flying hubs such as Heathrow airport.

Transportation Fuels Tax

The Clinton Administration faces lobbying from airlines to continue their exemption from a transportation fuels tax that was part of the 1993 tax act. The exemption was introduced to help financially strained airlines. Since some airlines appear to be doing much better financially, it is unclear whether the exemption will continue.

(Dow Jones Business Center)

New Regulations Proposed by the Federal Aviation Administration -

Sweeping new regulations have been proposed by the F.A.A. covering scheduled aircraft with fewer than 30 seats. The proposals are based on recommendations submitted by the National Transportation Safety Board last year. The regulations are intended to improve safety for commuter airlines that carry about 60 million passengers per year.

The new rules require the stipulated airplanes to: upgrade light training and maintenance practices, appoint a company safety officer, improve ground operations, add safety equipment such as fire protection devices and medical kits, and increase the use of flight simulators for pilot training. Also pilots will be required to retire at the age of sixty. The National Transportation Safety Board cited pilot fatigue as a cause in crashes and recommended shortening hours for pilots in line with bigger airplanes.

It is believed that the proposed regulations would add about $4.00 per ticket to commuter fares. It has been estimated that an airline with 10-19 seats would need to make $500,000 worth of changes per airplane, running many of the smaller airlines out of business. However, many of the "regional carriers" prefer the changes to gain greater respectability from the public and reducing a distinction between propeller planes and jets.

The proposed rules are scheduled to be printed in the Federal Register the end of December. If anyone wants a copy of those rules, please do not hesitate to call us.

Anna Brusanowski

Expanding into China - Intellectual Property Rights and Foreign Investment Update

I recently attended a Chinese business law briefing by the U.S.-China Joint Commission on Commerce and Trade. The presentation was sponsored by the U.S. Dept. of Commerce and Washington State China Relations Council.

Have you considered expanding your operations into China? Many U.S. companies have approached the Chinese market with uncertainty. If you are considering a direct investment, it is useful to begin with an outline of the major vehicles China recognizes in foreign direct investment: These include equity joint ventures, cooperative joint ventures and wholly-owned enterprises.

One of the major complaints of foreign companies doing business in China concern Chinese attitudes towards negotiation, consultation and the enforcement of contracts. Be prepared for lengthy negotiation. Also, it is not advisable to agree to broad generalities in contracts. Negotiate the details even if your Chinese counterpart claims that "this is the way things are done in China." Omitting important details will only exacerbate misunderstandings that may arise due to language, customs and perhaps inexperience.

Practically all investment-related contracts in China must go through an approval process. The review of the foreign investment contract by an examination and approval authority can often cause further delay and even open the door to further negotiation. Foreign companies have even complained that contracts at one time approved are later rejected by a new official or authority.

Nevertheless, China currently ranks 11th in the world in terms of foreign trade volume. Chinese foreign trade law was passed on July 1, 1994 and provides the basic system for Chinese foreign trade, import and export of commodities, technology and services.

Applying for patent, copyright or trademarks in China can be complicated. With respect to trademarks, (I assume most of you would be interested in trademarks), first registration rather than first use is the rule. The registration fee is relatively low and costs about $50.00 USD.

Although enforcement has been an issue lately, China contends that it has gained significant experience in the previous 10 years in learning about enforcement and providing remedies in the intellectual property arena. In particular they cite the number of cases that have been litigated in China: 10,000 trademark cases, 4,000 patent, 2,000 copyright. If you are interesting in filing a trademark or investing in China, please give us a call or send an email to us.

Charles H. Veigel

NAFTA & Mexican Trucks

Beginning December 18th, commercial trucks from Mexico may be allowed to operate throughout U.S. highways along border states. Under provisions of the North American Free Trade Agreement, Mexican trucks could operate only upon a narrow strip of territory along the U.S. border with Mexico. The Texas Attorney General is particularly concerned; in a recent inspection of Mexican trucks, 530 out of 744 were ordered off the road due to safety violations. Moreover, more than half the trucks exceed the U.S. weight limit of 80,000 pounds and one in four is carrying explosives, corrosives and toxic wastes. Currently, talks between Mexico and the U.S. are scheduled to resolve the dispute. (Reuter)

Company News

Charles Veigel became a member of the United States Court of International Trade in New York. He also joined the Association of Transportation practitioners.

Lawyer Profile:

Anna M. Brusanowski, Attorney at Law

Anna was born in Wroclaw, Poland. She emigrated to the United States and attended Reed College. After graduating from Reed, Anna worked for a law firm in New York City. She attended Seattle University School of Law. Anna speaks Polish and Russian. Her practice emphasizes international transportation, employment law, torts, workman's compensation and Eastern European law. She is licensed to practice in the State of Washington and also the Federal District Court for the Western District of Washington.

FIRM'S SERVICES:

BRUSANOWSKI & VEIGEL is a client-centered law firm that provides individualized service to small and medium sized companies. We strive to provide our clients the utmost in competency, communication and common sense to help them avoid legal trouble in both daily management and expansion plans.

Services:

BRUSANOWSKI & VEIGEL
ATTORNEYS AND COUNSELORS AT LAW
GRAND CENTRAL ON THE PARK
FOURTH FLOOR, SUITE 253
216 FIRST AVENUE SOUTH
SEATTLE, WASHINGTON 98104
(206) 583-2330; FAX: (206) 682-4461;
EMAIL: BVLawFirm@aol.com

home

disclaimer