CAN CRUISE LINES RELY ON THE ATHENS CONVENTION AS
A SHIELD IN U.S. LITIGATION?
(Published June 1995)
Passenger tickets for cruises that originate in a foreign port and do not call in the United States normally incorporate provisions of the Athens Convention Relating to the Carriage of Passengers and Their Luggage by Sea ("Convention") to limit the cruise line's liability. The Convention is an international treaty which, among other things, limits the amount an injured party may recover from the line for negligence. Presently, the Convention limits such damages to 46,666 "Special Drawings Rights" ("SDRs") or approximately US $70,000.00 under current exchange rates.
Often cruise lines are faced with lawsuits in the United States for incidents that arise on cruises calling solely in foreign ports. In these instances, the Convention becomes an important tool by which a cruise line may limit its exposure. Under its own terms, the Convention has the force of law between and in signatory nations, and applies, for example, on any ship registered in a signatory country. However, when suit is brought in the US, the Convention does not necessarily apply as binding law because the US has neither signed nor ratified the Convention. Nevertheless, the Convention may still be enforced as a matter of contract under US maritime law, or by application of maritime choice of law principles.
Relatively few cases have addressed the Convention. Fortunately, those few cases to consider the issue have all upheld the cruise lines' argument that the Convention does limit liability for injuries or death. See, e.g, Mills v. Renaissance Cruises, 1993 A.M.C. 131 (N.D. Cal. 1993); Kirman v. Compagnie Francais de Croisieres, 1994 A.M.C. 2848 (S.Ct. Cal. 1993). An unpublished decision, Becantinos v. Canard. 1991 W.L. 64187 (S.D.N.Y. 1 99 1 ), enforced the limitation in favor of the cruise line as to a passenger claiming damage to property. In a more recent, yet to be published decision, KRT&M attorneys successfully invoked the Athens Convention to limit a cruise line's liability to a passenger who sought personal injury damages arising during a Mediterranean cruise. The court rejected plaintiff's argument that the ticket contract provision was unenforceable because the contract invoked the Convention generally but failed to specify the limitation amount. Berman v. Royal Cruise Line, Case No. SC 026712 (S.Ct. Cal. 1995).
In Mills, the ticket contract explicitly claimedthe benefit of the Convention. Moreover, unlike many cruise line ticket contracts, the Mills ticket contract specified that the limit for recovery was 46,666 Special Drawing Rights. The Mills court upheld the limitation and ruled the limitation did not violate 46 U.S.C. § 1 83(c) (a federal statute which prohibits a cruise line from limiting its liability for its own negligence). The Mills court reasoned that because the cruise did not touch a US port, nor did the incident occur in US waters, the federal statute did not apply.
In Kirman, however, the Convention was neither incorporated in nor even mentioned in the ticket contract. The cruise line argued the Convention nonetheless applied, and preempted US law, under the traditional maritime choice of law factors set forth in Lauritzen v. Larsen, 345 US 571,1953 A.M.C. 1210(1953). In order to determine whether US or foreign law should be applied to a given case, the Lauritzen analysis examines: (1) the place of the wrongful act; (2) the law of the flag; (3) the injured's domicile; (4)the shipowner's allegiance; (5)the place of the contract; (6) the accessibility of an alternate foreign forum; and (7) the law of the forum. In Kirman, the cruise line operator resided in Switzerland, had no US office and the ticket was sold outside of the US The incident occurred aboard a Bahamas flag vessel and the Bahamas was a signatory to the Convention. The court therefore concluded the law of the vessel's flag mandated application of the Convention as part of Bahamian law.
Berman involved a passenger injured on a cruise between Italy and Portugal, who brought suit in California. The situation in Berman was different than in the Mills or Kirman cases, and presented the most likely scenario encountered by cruise lines currently selling tickets in the US. Using language similar to that which many major cruise lines include in their ticket contracts, the Berman ticket simply referenced the Convention and advised passengers any limitations of liability in the Convention would apply. Unlike the ticket in Mills, however, the specific amount of the Convention's limitation was not stated. Unlike the situation in Kirman, the ticket was sold in the US and the cruise line had a principal place of business in the US, in the state of California, thus making application of foreign law difficult under the Lauritz factors.
Despite these differences, the Berman court enforced the Convention limitation as a matter of contract. The court held that including a reference to the specific monetary limitation in the ticket provision" added little, if any, meaningful information, to the ticket." Indeed, a passenger reading "46,666 SDRs" would have no idea what was meant by that amount and would be in the same position as a passenger reading a ticket which simply referenced the Convention but made no mention of the specific limit. The court also accepted KRT&M's argument that the Convention itself does not require the limitation amount to be stated, noting the Warsaw Convention (applicable to international air carriers), by analogy, similarly does not require the precise amount of the limitation to be stated in airline ticket contracts.
The Benuan case establishes that a cruise line selling tickets in the US for cruises that do not touch a US port can rely on the Convention to place a ceiling on recoverable damages, even where the ticket contract does not specify the specific SDR recovery limit. As long as the applicability of the Convention is reasonably communicated in the ticket contract, the contractual limitation should be enforced with regard to wholly foreign voyages.
