Conflict of Laws and Choice of Law
“Proper law” is the decision as to which territorial law is to govern the contract, defines the obligations of the contractual parties and determines whether the contract is valid and legal. It also determinates the effects and conditions of discharge. Selection of the “proper law” to adjudicate the marine contract is a difficult task in Admiralty Jurisdiction because the issue of whether enforcement of the maritime lien is allowed by international law may turn on interpretaion of the law of the country where the litigation is. So, the question is over the priority of the law where the lien was created (lex loci), as opposed to the law of where the court exercising jurisdiction (lex fori).
The answer is found in the application of a multiplicity of contract analysis process. The court will weight and analyze all related factors between the transaction and the respective legal systems by a case-by-case analysis. The factors may include: (a)the need of the international system; (b)the protection of justified expectation; (c)ease in determination and application of the law to be applied; (d)relevant policies of other interested states; (e)the place of the wrong; (f)the law of flag; (g)the allegiance or domicile of the injured party; (h)the law of forum; (i)the place of the contract; (j)the allegiance of the defendant shipowner and so on. The prefect decision will result from a balance between the relevant factors.
However, the US courts will choose the factors which could be applied to protect the American. If the relevant factors direct to select international law, the case may be dismissed on the grounds of forum non conveniens. If the choice of law is to apply the US law, the court will retain jurisdiction. The reason for this is that Federal Maritime Lien Act is used to protect Americans, not the foreigners.
Read more about this topic: Maritime Lien
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