FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TRANS-TEC ASIA,
Plaintiff-Appellant,
v. No. 06-55355
M/V HARMONY CONTAINER, its
freights engines apparel and D.C. No.
CV-04-01160-SVW
tackle; SPLENDID SHIPPING
SENDIRIAN BERHAD; MASTER OF THE
M/V HARMONY CONTAINER,
Defendants-Appellees.
TRANS-TEC ASIA,
Plaintiff-Appellee,
v.
M/V HARMONY CONTAINER, its
freights engines apparel and No. 06-55397
tackle; SPLENDID SHIPPING
SENDIRIAN BERHAD, D.C. No.
CV-04-01160-SVW
Defendants-Appellants, OPINION
and
MASTER OF THE M/V HARMONY
CONTAINER.
Defendant.
Appeals from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted
October 16, 2007—Pasadena, California
2253
2254 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
Filed March 11, 2008
Before: Alex Kozinski, Chief Judge, A. Wallace Tashima
and M. Margaret McKeown, Circuit Judges.
Opinion by Judge McKeown
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2257
COUNSEL
J. Stephen Simms, Simms Showers LLP, Baltimore, Mary-
land, for the appellant.
Gerald L. Gorman, Bradley M. Rose, Kaye Rose & Partners,
LLP, San Diego, California, for the appellee.
OPINION
McKEOWN, Circuit Judge:
Like many maritime cases, this case involves a foreign-
flagged vessel that sailed in and out of United States ports.
And, like many maritime cases, because of the geographic
scope of the high seas,1 United States law may, in some cases,
be applicable to transactions beyond our country’s territorial
waters and borders. And, like many maritime cases, the suit
here arose against the vessel while it was docked in a United
States port. The question we consider is whether a foreign
supplier, by supplying fuel to a foreign-flagged vessel in a
foreign port under an agreement that United States law
applied to the transaction, may obtain a maritime lien under
the Federal Maritime Lien Act, 46 U.S.C. § 31301 et seq.
1
The “high seas” is generally defined as “the seas or oceans beyond the
jurisdiction of any country.” Black’s Law Dictionary 1376 (8th ed. 2004).
2258 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
(“FMLA”), on the vessel docked in an American port. The
district court granted summary judgment in favor of the vessel
and its owner and against the fuel provider, holding that the
FMLA did not permit a foreign necessaries provider to obtain
a maritime lien under the circumstances. Based on the plain
language of the statute, coupled with an enforceable choice of
law clause, we conclude that a maritime lien arose under the
FMLA, and we reverse.
BACKGROUND
Splendid Shipping Sendirian Berhad (“Splendid”)2 is a
Malaysian corporation that owns the M/V Harmony Con-
tainer (“Harmony”), a Malaysian-flagged vessel. In June
2000, Splendid entered into a charter-party with Kien Hung
Shipping Company (“Kien Hung”) for a ten-year charter of
the Harmony. Kien Hung, a Taiwanese corporation, operated
the Harmony in a loop from ports in North and South Amer-
ica to ports in Japan, China, and Korea. In particular, the Har-
mony made regular stops at Long Beach, California, and Man-
zanillo, Mexico.
In early February 2003, one of Kien Hung’s managers
sought a price quote for fuel bunkers. The manager contacted
an agent at Yee Foo Marine Industrial Co. Ltd. (“Yee Foo”),
who requested a price quote from Trans-Tec Asia (“Trans-
Tec”), a Singaporean entity. An employee for Trans-Tec
faxed a quote to the Yee Foo agent, who forwarded the quote
to Kien Hung. The Kien Hung manager then faxed back an
order to the Yee Foo agent, who forwarded the order to Trans-
Tec. In response, Trans-Tec sent a one-page email confirma-
tion (“Bunker Confirmation”) to Yee Foo for the sale of 1150
metric tons of fuel bunkers to be supplied to the Harmony at
a cost of U.S. $251,850. The Yee Foo agent then forwarded
2
In the parties’ briefs, Splendid’s name is listed as “Splendid Shipping
Sendirian Berhad,” though other documents, such as the district court’s
orders, used “Berhard.”
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2259
the Bunker Confirmation to Kien Hung, which did not
respond.
The Bunker Confirmation named “Kien Hung Shipping Co.
Ltd.” and “The Vsl, Her Master and Owners” as “Buyer,” and
Trans-Tec as “Seller.” It provided that “[t]his confirmation
incorporates Seller’s standard terms and conditions dated 3
January 2000. Pls inform us if you require a copy.” Kien
Hung did not request a copy.
Trans-Tec’s standard terms and conditions are included in
a document entitled “The Trans-Tec Services Group of Com-
panies General Terms and Conditions” (“Terms and Condi-
tions”). The Terms and Conditions state that “the General
Terms shall apply to every sale of marine petroleum products
(‘Products’) entered into between a particular Trans-Tec
Group company as seller (‘Seller’) and any buyer of such
Products (‘Buyer’).”
The Terms and Conditions also contained an incorporation
and merger clause (“The Confirmation and the General Terms
. . . taken together, shall constitute the full agreement . . . .”),
and, particularly pertinent here, a choice of law clause, which
stated:
Seller shall be entitled to assert its lien or attachment
in any country where it finds the vessel. Each Trans-
action shall be governed by the laws of the United
States and the State of Florida, without reference to
any conflict of laws rules. The laws of the United
States shall apply with respect to the existence of a
maritime lien, regardless of the country in which
Seller takes legal action.
Trans-Tec delivered the bunkers to the Harmony in Busan,
South Korea, in late February 2003. In May 2003, Kien Hung
went bankrupt, and Trans-Tec was left unpaid for the bunkers.
Hamburg Sud, a German company, bought Kien Hung’s oper-
2260 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
ations, took over the Harmony’s charter, and continued sailing
the vessel to Long Beach, California. Trans-Tec threatened to
arrest the Harmony once it arrived at Long Beach, but the ves-
sel’s insurers posted security to avoid taking the ship out of
operation.
Trans-Tec filed suit in federal court in Los Angeles, assert-
ing a maritime claim in contract and in tort against the Har-
mony, a maritime claim in contract against Splendid, a claim
for unjust enrichment against Splendid, and maritime attach-
ment and garnishment of the Harmony and its bunkers.3 The
district court chose to resolve the dispute in stages. Realizing
that the choice of law issue was the foundational building
block, the court first invited the parties to brief only this issue
with respect to Trans-Tec’s claims regarding a maritime lien
and unjust enrichment. The court then decided that, under
United States law, the choice of law provision was not incor-
porated as a term of the contract, Splendid was not bound as
a party to the contract, and Malaysian law governed the con-
tract.
In a later order granting partial summary judgment to
Splendid on its unjust enrichment claim, the district court
informed the parties that it would reconsider its prior decision
that United States law determined incorporation of the choice
of law clause. The court ultimately granted summary judg-
ment against Trans-Tec on the grounds that: (1) Malaysian
law, not United States law, governed contract formation; (2)
under Malaysian law, the United States choice of law clause
was incorporated as a term of the contract; and (3) Trans-Tec
could not obtain a maritime lien on the Harmony because
United States law denied maritime liens to foreign necessaries
3
Trans-Tec ultimately dropped its tort claim for conversion against the
Harmony. It also made a quasi in rem claim against Splendid for maritime
attachment and garnishment of the Harmony under Supplemental Rule B
for Certain Admiralty and Maritime Claims. That claim was among those
dismissed and is not part of the appeal.
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2261
providers servicing foreign-flagged ships in foreign ports.
Trans-Tec now appeals this decision, and Splendid cross-
appeals on the basis that the district court should not have
applied the United States choice of law provision to the trans-
action in any respect.
During the back-and-forth flurry of summary judgment
motions, Trans-Tec filed an affidavit in which it expressed a
need to conduct discovery to establish that Splendid was a
party to the contract and that Splendid had participated in the
bunker contract. The district court construed Trans-Tec’s affi-
davit as a motion for additional time to conduct discovery
under Federal Rule of Civil Procedure 56(f), denied the
motion, and later denied Trans-Tec’s motion to reconsider its
ruling.
ANALYSIS
Trans-Tec’s Terms and Conditions included a choice of law
provision that designated United States law as governing the
existence of a maritime lien. That designation is particularly
significant because the United States is one of a handful of
countries that recognizes a maritime lien for the provision of
necessaries.4 46 U.S.C. § 31342; WILLIAM TETLEY, MARITIME
LIENS AND CLAIMS 551 (2d ed. 1998) (“TETLEY”). Splendid’s
first line of defense is that the choice of law clause was not
a part of the contract between Trans-Tec and Kien Hung.
Alternatively, Splendid urges that the maritime lien does not
apply to the provision of necessaries by a foreign provider.
Our resolution of this appeal proceeds in three steps:5 (1) we
4
Fewer than thirty countries, among them the United States and France,
recognize such a lien. See TETLEY at 551 (stating that maritime liens arise
only in the United States, France, and those nations that signed on to the
1926 Brussels Convention, which provides a maritime lien for necessaries
under limited circumstances).
5
We review de novo both the district court’s grant of summary judg-
ment and the legal question whether Trans-Tec’s claims give rise to a mar-
itime lien. Myers v. Am. Triumph F/V, 260 F.3d 1067, 1069 (9th Cir.
2001).
2262 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
determine the governing law with respect to contract forma-
tion; (2) applying the controlling law, we next determine
whether the contract incorporates the choice of law provision;
and (3) finally, if the choice of law provision is incorporated
as a term of the contract, we evaluate whether Trans-Tec
acquired a maritime lien for supplying fuel bunkers to the
Harmony.
I. DETERMINING THE LAW GOVERNING CONTRACT
FORMATION
[1] Before we can determine the validity of the United
States choice of law provision in the contract between Trans-
Tec and Kien Hung, we need to figure out which country’s
law controls the issue of contract formation. Because the
availability of a maritime lien under United States law is the
ultimate question, the temptation is to skip directly to United
States law, as urged by Trans-Tec. That approach, however,
“put[s] the barge before the tug.” See DeNicola v. Cunard
Line, Ltd., 642 F.2d 5, 7 n.2 (1st Cir. 1981). Instead, we con-
sider which country’s law governs the incorporation issue as
if there were no choice of law clause. In other words, we can-
not rely on the choice of law provision until we have decided,
as a matter of law, that such a provision was a valid contrac-
tual term and was legitimately incorporated into the parties’
contract.
[2] Both Supreme Court and Ninth Circuit law direct our
analysis. We are guided by the principle that “[i]n the absence
of a contractual choice-of-law clause, federal courts sitting in
admiralty apply federal maritime choice-of-law principles
derived from the Supreme Court’s decision in Lauritzen v.
Larsen, 345 U.S. 571 (1953), and its progeny.” Chan v. Soc’y
Expeditions, Inc., 123 F.3d 1287, 1296 (9th Cir. 1997) (cita-
tions omitted).
In Lauritzen, the Supreme Court identified seven factors
“which, alone or in combination, are generally conceded to
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2263
influence choice of law to govern a tort claim”:6 (1) the place
of the wrongful act; (2) the law of the flag; (3) the allegiance
of the injured party; (4) the allegiance of the defendant ship-
owner; (5) the place of contract; (6) the inaccessibility of a
foreign forum; and (7) the law of the forum. 345 U.S. at 583-
92. We have added that courts should weigh and evaluate all
relevant points of contact between the transaction and the sov-
ereign legal systems that are affected by it, and not simply run
through a mechanical analysis of the Lauritzen factors. Tento,
694 F.2d at 1194-95. Accordingly, we also consider factors
that § 188 of the Restatement identifies as relevant where a
contract lacks a choice of law provision, such as the place of
negotiation of the contract, the place of performance and the
place of business of the parties. See RESTATEMENT (SECOND) OF
CONFLICT OF LAWS § 188 (1971); Gulf Trading & Transp. Co.
v. The Vessel Hoegh Shield, 658 F.2d 363, 366-67 (5th Cir.
Unit A Oct. 1981) (discussing § 188 factors where there was
no choice of law clause).
[3] In weighing all the points of contact implicated by the
transaction, including the factors set out in Lauritzen and the
Restatement, we agree with the district court’s conclusion that
under maritime conflicts of law principles, Malaysian law
governed the contract formation. Splendid’s nationality and
the Harmony’s flag are “substantial contacts” with Malaysia
that point towards Malaysian law “as the most appropriate for
resolving this litigation.” Tento, 694 F.2d at 1196. No sover-
eign other than Malaysia boasts such substantial contacts.
That the bunkers were supplied in Busan, South Korea, “was
dictated in large part by the fortuity of the ship’s location and
intended route.” Id. at 1195. Deciding which country consti-
6
Although Lauritzen dealt with tort claims under the Jones Act, the “Su-
preme Court has extended the Lauritzen approach to ‘guide courts in the
application of maritime law generally.’ ” Gulf Trading & Transp. Co. v.
The M/V Tento, 694 F.2d 1191, 1193 (9th Cir. 1982) (quoting Romero v.
Int’l Terminal Operating Co., 358 U.S. 354, 382 (1959) (citations omit-
ted)).
2264 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
tuted the “place of contract” or the place where negotiation of
the contract occurred is a thorny inquiry, and does not weigh
in favor of applying any one sovereign’s law, as the bunker
contract was formed through a series of emails and facsimiles
sent by Trans-Tec and Kien Hung through Yee Foo, Trans-
Tec’s Taiwanese intermediary, at a time when the Harmony
was docked in Hong Kong. To be sure, the Singaporean
nationality of Trans-Tec, the “injured party,” is a relevant
point of contact. However, standing alone, it fails to outweigh
the nature and quality of the Malaysian contacts: the Harmo-
ny’s Malaysian flag and Splendid’s Malaysian nationality.
II. APPLYING MALAYSIAN LAW TO CONTRACT FORMATION
Malaysian law, which relies heavily on English law,7
instructs us to examine the parties’ language and conduct in
determining whether the parties intended to incorporate the
Terms and Conditions into their contract, even though no
copy of that document was exchanged in the flurry of emails
and faxes that preceded the refueling. We conclude that the
clear and specific language of the Bunker Confirmation, cou-
pled with Kien Hung’s acceptance of the fuel bunkers without
protest after receiving the Bunker Confirmation, reflect that
the contract incorporated the Terms and Conditions as a mat-
ter of Malaysian law.
[4] The only relevant Malaysian case makes crystal-clear
that Malaysian courts accord dispositive weight to the “words
and actings” of the parties in deciding whether they intended
to incorporate a clause. Bauer Sdn Bhd v. Daewoo Corp.,
(Malaysian Court of Appeal 1999) 4 MLJ 545, 560. In Bauer,
the Malaysian court held that an arbitration clause from a pre-
vious work order was not incorporated into later work orders
in part because there was an absence of “the language that is
7
See TETLEY at 1331 (stating that Malaysian maritime law is primarily
English maritime law).
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2265
necessary to reasonably support the finding of an intention to
incorporate.” Id.
[5] In addition, under Malaysian law, “a term may be incor-
porated not only by words but also by conduct.” Id. at 559.
The court in Bauer found instructive an English case involv-
ing the incorporation of disputed terms. Id. (citing British
Crane Hire v. Ipswich Plant Hire Ltd., [1975] Q.B. 303
(Eng.)). Even though one party had not expressed assent to
the terms, “the common understanding which is to be derived
from the conduct of the parties,” i.e., the acceptance of goods
without protesting the subsequently mailed conditions, indi-
cated that those terms were incorporated into the contract.
British Crane, [1975] Q.B. at 311.
[6] Here, both the contract language and the parties’ con-
duct support the conclusion that Trans-Tec’s Terms and Con-
ditions were incorporated into the bunker contract. The
documents at issue are the Kien Hung order and the Bunker
Confirmation. In response to Kien Hung’s order, the Bunker
Confirmation email unambiguously stated that “[t]his confir-
mation incorporates seller’s standard terms and conditions
dated 3 January 2000.” That language “reasonably support[s]
the finding of an intention to incorporate” the Terms and Con-
ditions. Bauer, 4 MLJ at 560.
[7] Kien Hung’s conduct also demonstrates that the parties
intended to incorporate the Terms and Conditions. See id.
Kien Hung neither objected to, nor requested a copy of, the
Terms and Conditions after receiving the Bunker Confirma-
tion, even though the Bunker Confirmation expressly stated,
“Pls inform us if you require a copy” of the Terms and Condi-
tions. A Kien Hung manager received the Bunker Confirma-
tion one week before Kien Hung accepted delivery of Trans-
Tec’s fuel bunkers in Busan, giving Kien Hung sufficient time
to request the Terms and Conditions, reject any or all of them,
or change course entirely. The district court correctly con-
cluded that under Malaysian law, the parties’ language and
2266 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
conduct demonstrated that the Terms and Conditions, includ-
ing the United States choice of law provision, were incorpo-
rated as a term of the bunker contract.
III. GIVING EFFECT TO THE UNITED STATES CHOICE OF LAW
PROVISION
Having determined that the United States choice of law
provision was a term of the contract, we address Splendid’s
argument that we should not give effect to that provision
because the transaction is “too foreign” to apply United States
law. To take Splendid’s approach would steer us off course
because it ignores both the long-recognized principle of hon-
oring the expectations of the parties to a contract and the
scope of a maritime lien under the FMLA.
A. RECOGNITION OF THE CHOICE OF LAW PROVISION
[8] Absent a strong showing that it should be set aside, the
parties’ choice of law provision, as part of a “freely negoti-
ated private international agreement, unaffected by fraud,
undue influence, or overweening bargaining power . . . should
be given full effect.” M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 12-13 (1972). This presumption in favor of
enforcing contract provisions encourages predictability in the
law, particularly in the international arena. See RESTATEMENT
§ 187(2) cmt. e (stating that predictability is best served “by
letting the parties choose the law to govern the validity of the
contract and the rights created thereby”).
That this transaction involved multiple foreign points of
contact does not dissuade us from recognizing the parties’
agreed-upon law and jurisdiction. In Liverpool & London S.S.
Protection & Indemnity Association v. Queen of Leman MV,
296 F.3d 350 (5th Cir. 2002), the Fifth Circuit upheld a mari-
time lien asserted by an English insurer against a vessel
whose insurance premiums had gone unpaid. Even though the
insurance contract was governed by English law, the court
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2267
honored a provision in the contract that the insurer could “en-
force its right of lien in any jurisdiction in accordance with
local law in such jurisdiction.” Id. at 353. By bringing suit in
the Eastern District of Louisiana, the insurer was entitled to
seek a maritime lien under the FMLA, as United States law
was the “local law.” The Fifth Circuit declared that “there is
nothing absurd about applying the law of the jurisdiction into
which the ship sails, as the ship’s presence in the jurisdiction
represents a substantial contact.” Id. at 354.
[9] Queen of Leman thus counsels that where foreign par-
ties have specified that they want United States law to deter-
mine the existence of a maritime lien in a transaction
involving multiple foreign points of contact, and the ship has
sailed into the United States, it is reasonable to uphold the
choice of American law. That a maritime lien might exist on
the vessel under United States law, but would not exist under
Malaysian law, was a consequence obviously contemplated
by the contracting parties, and because the Harmony sailed
into a United States port, results in no fundamental unfairness.8
We agree with the Fifth Circuit’s holding in Queen of
Leman, but recognize that it is in tension with the Second Cir-
cuit’s view in Rainbow Line, Inc. v. M/V Tequila, 480 F.2d
1024 (2d Cir. 1973). There, the court refused to apply a
United States choice of law clause to decide whether a char-
terer was entitled to a maritime lien because application of
United States law would have adversely affected the rights of
a third-party creditor. Id. at 1026. Rather than apply the char-
ter’s choice of law clause, the Second Circuit conducted a
Lauritzen analysis to determine which country’s law governed
8
Our holding in Tento supports this conclusion. 694 F.2d 1191. There,
in the absence of an express choice of law, we conducted a Lauritzen anal-
ysis and held that United States law properly applied, notwithstanding the
“foreignness” of the transaction: the vessel and its owner were Norwegian,
the fuel supplier was Italian, and the fuel was provided in an Italian port.
Id. at 1196.
2268 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
the existence of a maritime lien. Id. at 1026-27. It is worth
noting that the adversely affected party involved in Rainbow
Line was a third-party lender to a subsequent owner of the
vessel, an entity far removed from the original parties to the
charter. For the reasons previously stated, we prefer the Fifth
Circuit’s rule in Queen of Leman.
A Canadian court that recently faced a similar choice of
law provision and an array of foreign players applied the par-
ties’ choice of United States law and recognized the existence
of a maritime lien under the FMLA. Kirgan Holding S.A. v.
Ship Panamax Leader, [2002] F.C. 1235 (Can.), reprinted in
2002 A.M.C. 2917. Although Canadian law has no preceden-
tial value here, the decision is instructive, particularly in light
of the relatively uncharted waters presented by this appeal.
The court upheld the parties’ chosen law, even though, as
Splendid would put it, all the points of contact involved were
“foreign”: the supplier was Panamanian, the vessel was regis-
tered under the flags of Malta and Cyprus, the vessel owner
was Maltese, the charterer was Caribbean, and the provision
of fuel bunkers occurred in Malta. The only contact that the
transaction had with Canada, whose law does not provide for
a maritime lien for the supply of necessaries, was that the ves-
sel was arrested in a Quebec port. The Canadian court con-
cluded that the provision should be respected. Id. We agree
with that conclusion and now turn our focus to the FMLA.
B. APPLICATION OF THE FMLA
According to United States maritime lien law, “a person
providing necessaries to a vessel on the order of the owner or
a person authorized by the owner . . . has a maritime lien on
the vessel” and “may bring a civil action in rem to enforce the
lien.” 46 U.S.C. § 31342. Splendid’s siren song about the pre-
sumption against extraterritorial application of United States
law fails to distract us from reaching the clear-cut conclusion
that the FMLA’s plain language demands: A maritime lien
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2269
arose in favor of Trans-Tec because it provided necessaries9
to the Harmony on the order of the Harmony’s charterer.
Charterers and their agents are presumed to have authority to
bind the vessel by the ordering of necessaries. Id. § 31341;
see also TETLEY at 602-03; THOMAS J. SCHOENBAUM, ADMIRALTY
AND MARITIME LAW § 9-3 (4th ed. 2004) (“SCHOENBAUM”). As
our decision rests in part on the unique nature of the remedy
sought in this case, we offer a brief primer on maritime liens.
1. BACKGROUND ON MARITIME LIENS IN THE UNITED STATES
[10] A maritime lien is “one of the most striking peculiari-
ties of Admiralty law, constituting a charge upon ships of a
nature unknown alike to common law and equity.” Black’s
Law Dictionary 943 (8th ed. 2004) (quoting GRIFFITH PRICE,
THE LAW OF MARITIME LIENS 1 (1940)). It has been defined as:
“(1) a privileged claim, (2) upon maritime property, (3) for
service done to it or injury caused by it, (4) accruing from the
moment when the claim attaches, (5) travelling with the prop-
erty unconditionally, (6) enforced by means of an action in
rem.” Id. (quoting Price at 1). The lien gives the creditor the
right to appropriate the vessel, have it sold, and be repaid the
debt from the proceeds of the sale. Equilease, 793 F.2d at
602.
The maritime lien serves the “dual purpose of keeping
ships moving in commerce while not allowing them to escape
their debts by sailing away.” Id. In other words, a maritime
lien may be considered “a right based upon the legal fiction
that the ship is the wrongdoer—the ship itself caused the loss
and can be called to the bar to make good the loss.” SCHOEN-
BAUM § 9-1 (emphasis added).
9
Fuel bunkers are “necessaries” within the meaning of § 31342, as they
were “useful” to the Harmony and “enable[d] her to perform her particular
function.” See Equilease Corp. v. M/V Sampson, 793 F.2d 598, 603 (5th
Cir. 1986) (en banc); accord Bominflot, Inc. v. The M/V Henrich S, 465
F.3d 144, 147 (4th Cir. 2006); Hoegh Shield, 658 F.2d at 367.
2270 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
The United States, through common law and statute, has
long recognized and enforced maritime liens. Id. As reflected
in the earliest Supreme Court cases on maritime liens, this
remedy was premised on concern for the vessel. Throughout
the nineteenth century, the Court recognized that maritime
liens could arise for the provision of necessaries in “foreign
ports,” or ports that were not the vessel’s home port, in order
to keep the vessel fit for sail. See, e.g., The St. Jago de Cuba,
22 U.S. (9 Wheat.) 409, 416-18 (1824) (stating that the “con-
sideration that controls every other” is that “[t]he vessel must
get on”); The Gen. Smith, 17 U.S. (4 Wheat.) 438, 443 (1819).
Conferring a lien on the vessel to “material-men” ensured the
continued maintenance of vessels by encouraging suppliers to
provide necessaries in foreign ports. See The J.E. Rumbell,
148 U.S. 1, 9 (1893) (observing that maritime liens for neces-
saries furnished “to keep a vessel fit for sea” took precedence
over all other claims except seamen’s wages or salvage).
Before 1910, when the FMLA was first enacted, an odd
distinction existed in the American law of maritime liens: a
maritime lien arose for the provision of necessaries in a port
in a foreign country or foreign state, but no lien arose if nec-
essaries were supplied in the vessel’s home port. The Roa-
noke, 189 U.S. 185, 193-94 (1903); The Gen. Smith, 17 U.S.
at 443. As a consequence of this anomaly, a lien on a vessel
for the provision of supplies in a port of the vessel’s home
state could arise only if there were state legislation to that
effect. The Gen. Smith, 17 U.S. at 443. The significant vari-
ance among the state statutes was of concern to the Supreme
Court. Lucian Y. Ray, Maritime Contract Liens, 47 TUL. L.
REV. 587, 589 (1973). In 1874, Justice Bradley, writing for
the Court, hinted that Congress “might adopt a uniform rule
for the whole country” to govern maritime liens. The Lotta-
wanna, 88 U.S. (21 Wall.) 558, 577 (1874) (Bradley, J.).
Congress responded in 1910 by passing the FMLA. Act of
June 23, 1910, ch. 373, § 1, 36 Stat. 604. The legislative pur-
pose was three-fold: (1) to overrule the home port doctrine;
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2271
(2) to nullify the doctrine that, when a vessel’s owner con-
tracted in person for necessaries or was present in the port
when they were ordered, it was presumed that the supplier did
not intend to rely upon the vessel’s credit, such that a lien did
not arise; and (3) to substitute a single federal maritime statute
for the varying state statutes dealing with necessaries. Pied-
mont & Georges Creek Coal Co. v. Seaboard Fisheries Co.,
254 U.S. 1, 11 (1920); see also Dampskibsselskabet Danne-
brog v. Signal Oil & Gas Co., 310 U.S. 268, 271-72 (1940)
(stating that the FMLA’s purpose was to “simplify and clarify
the rules as to maritime liens as to which there had been much
confusion”). In addition, the FMLA, by favoring suppliers
regardless of where necessaries were provided, was intended
to boost a faltering merchant marine industry. Equilease, 793
F.2d at 602. In effect, the FMLA “was intended to operate in
aid of those who supply necessaries to ships and it corre-
spondingly restricted the rights of the owners of the vessels.”
Dampskibsselskabet, 310 U.S. at 273.
In 1920, Congress codified the FMLA as part of the Ship
Mortgage Act of 1920, 46 U.S.C. §§ 971-75, but the sub-
stance of the lien law was left virtually unchanged until 1971.
TETLEY at 604. Under the original legislation, a vessel owner’s
insertion of a “no lien” clause in the charter-party prohibited
suppliers from obtaining a lien if a provider “knew, or by
exercise of reasonable diligence could have ascertained” that
no lien would be available. Id. (emphasis omitted). Under the
1971 amendments, the “reasonable diligence” standard was
dropped in favor of an “actual knowledge” standard. The leg-
islation thus voids a “no lien” clause, as long as the supplier
did not have knowledge of the clause. H.R. REP. NO. 92-340
(1971), reprinted in 1971 U.S.C.C.A.N. 1363. Therefore,
even though the charter-party between Splendid and Kien
Hung forbade Kien Hung from incurring liens on the Har-
mony, that fact, standing alone, does not prevent Trans-Tec
from obtaining a maritime lien in this case, as nothing in the
record indicates that Trans-Tec knew of the provision.
2272 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
In 1988, Congress repealed all previous maritime lien stat-
utes and recodified the prior law on maritime liens as part of
the Commercial Instruments and Maritime Liens Act. Pub. L.
No. 100-710 (1988), 102 Stat. 4735 (codified at 46 U.S.C.
§ 31301 et seq.). Congressional reports indicated that the new
law was not intended to make any substantive changes to the
FMLA, and the lien provisions are still generally referred to
as “the FMLA.” H.R. REP. NO. 100-918 (1988), reprinted in
1988 U.S.C.C.A.N. 6104, 6107, 6141; TETLEY at 587-88.
2. APPLICATION OF THE FMLA
[11] The language of the FMLA is clear and unambiguous:
[A] person providing necessaries to a vessel on the
order of the owner or a person authorized by the
owner—
(1) has a maritime lien on the vessel;
(2) may bring a civil action in rem to
enforce the lien; and
(3) is not required to allege or prove in
the action that credit was given to the
vessel.
46 U.S.C. § 31342. The statute imposes no restriction on the
nationality or other identity of the supplier or the vessel, and
no geographic restriction on the place of provision of the nec-
essaries. Splendid endeavors to shoehorn the FMLA into a
narrower statute than it is by arguing that the FMLA does not
give a maritime lien to a foreign necessaries provider for the
provision of supplies to a foreign vessel in a foreign port.
However, we are not persuaded by Splendid’s constrained and
unsupported view of United States maritime lien law.
[12] In accord with Supreme Court teachings, see, e.g.,
Leocal v. Ashcroft, 543 U.S. 1, 8 (2004), we begin our analy-
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2273
sis with the language of the statute. “[A] person providing
necessaries” means any person, not only an “American per-
son.” The FMLA, by its plain language, is not restricted in
application to United States citizens, American companies, or
companies doing business in the United States. Though Con-
gress may have had American suppliers in mind, the statute,
on its face, recognizes a maritime lien in favor of any person
providing necessaries.
Although we need not look beyond the plain language of
the statute, we address Splendid’s argument that the House
Report’s mention of “American materialmen” is reason to
deny Trans-Tec a maritime lien. See H. REP. NO. 92-340
(1971), reprinted in 1971 U.S.C.C.A.N. 1363 (stating that
enactment would “be of great assistance to American materi-
almen in collecting amounts owed on necessaries”). Splendid
fails to point out that the Report did not exclude foreign
“materialmen” from its reach, and the Committee’s reasons
for protecting American suppliers extend to foreign suppliers,
as well:
Granting the materialman a lien encourages the
prompt furnishing of necessaries to vessels so that
they can be speedily turned around and put to sea.
This is especially significant today when the empha-
sis on vessel performance is reduced port time and
increased speed.
Id. Given Congress’s expressed hope that the amended Act
would “encourage[ ] the prompt furnishing of necessaries to
vessels so that they can be turned around and put to sea,” id.,
it would undo Congress’s aim to recognize maritime liens
only in favor of American materialmen. In any event, this
passing reference hardly overrides the unambiguous language
of the statute.
The statute also states that a maritime lien arises upon the
provision of necessaries to “a vessel.” Again, the statute’s lan-
2274 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
guage is not limited to American vessels. Though § 31342
mentions only “a vessel,” the “inference to be drawn from the
legislative history is that section 31342 will be interpreted
similarly to former sect. 971,” which stated that the lien
applied to “any vessel, whether foreign or domestic.” TETLEY
at 597. An abundance of case law has recognized a maritime
lien under the FMLA where necessaries have been provided
to a foreign-flagged vessel. See, e.g., Hoegh Shield, 658 F.2d
at 368 (holding that maritime lien arose on Norwegian ves-
sel); Loginter S.A. v. M/V Nobility, 177 F. Supp. 2d 411, 415
(D. Md. 2001) (Maltese vessel); Mobil Sales & Supply Corp.
v. The Vessel Panamax Venus, 1986 A.M.C 420, 423 (C.D.
Cal. 1985) (Liberian vessel).
Finally, the statute does not discriminate between the provi-
sion of necessaries in the vessel’s home port and a foreign
port. As previously noted, Congress expressly jettisoned the
“home port doctrine” with the passage of the FMLA in 1910,
thus allowing maritime liens regardless of whether neces-
saries were provided in the vessel’s home port or in a foreign
port. See TETLEY at 597. Cases in the wake of the FMLA’s
passage have faithfully recognized maritime liens where nec-
essaries have been provided in foreign ports. See, e.g., Ryan
Walsh, Inc. v. M/V Ocean Trader, 930 F. Supp. 210, 219 (D.
Md. 1996) (oil provided to vessel in Indonesia); Mobil Sales,
1986 A.M.C. at 423 (oil provided to vessel in China and
Japan). In sum, putting together the pieces of this statutory
puzzle makes evident that because Trans-Tec provided neces-
saries to the Harmony on the order of its charterer, a maritime
lien arose in favor of Trans-Tec.
Splendid posits that applying the FMLA to a foreign sup-
plier providing necessaries in a foreign locale to a foreign flag
vessel would somehow result in the “extraterritorial” applica-
tion of United States maritime lien law. Splendid’s argument
obscures several important points, including the nature of
admiralty law and the high seas, the parties’ agreement to
apply United States maritime lien law, and the fact that the
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2275
Harmony routinely sailed into a United States port and was
subject to in rem jurisdiction in California when the Harmo-
ny’s insurers posted a bond to avoid its seizure.
Nothing in the statute supports Splendid’s argument that
the FMLA does not apply to situations involving a foreign
vessel, a foreign supplier, and provision in a foreign port.
Other courts facing similar scenarios have given the FMLA
the fair reading that its plain language demands, and have
found no reason to narrow it. See, e.g., Queen of Leman, 296
F.3d at 352-53 (stating that if United States law applied, the
FMLA would create a maritime lien for the insurance pro-
vided); Kirgan Holding, [2002] F.C. 1235 (holding that a
maritime lien arose under the FMLA for the provision of fuel
bunkers to a foreign-flagged vessel in Malta).
Hardly any area of law could be viewed as more extraterri-
torial than admiralty law. It is well settled that the admiralty
jurisdiction of United States courts extends to the high seas:
“The traditional domain of admiralty jurisdiction is, of course,
the sea . . . .” SCHOENBAUM § 3-3. Save for inland navigable
waters, ports, and a few other locations, admiralty jurisdiction
by definition extends beyond United States territorial bounda-
ries. Tethering United States maritime lien law to situations
involving only American-flagged vessels, American suppli-
ers, or American ports would threaten the ability of foreign
vessels to move freely from port to port without the fear of
going without necessaries. See The St. Jago de Cuba, 22 U.S.
at 416 (stating that “the consideration that controls every
other” is that “[t]he vessel must get on”).
Splendid argues that extension of the FMLA to “completely
foreign transactions” seriously interferes with other nations’
regulation of their commercial affairs because United States
law allows for maritime liens for the provision of necessaries,
and most other nations do not. But recognizing a maritime
lien on the Harmony does not interfere with Malaysian law,
which we applied at the outset to incorporate the United
2276 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
States choice of law provision, or the law of any other nation
implicated in this transaction. This case presents no extraterri-
torial “problem” of the ilk that has troubled the Supreme
Court because here the parties chose United States law to con-
trol their transaction, and the vessel sailed to a United States
port. Cf. F. Hoffman-La Roche Ltd. v. Empagran S.A., 542
U.S. 155 (2004) (holding that foreign vitamin distributors
could not bring a claim under the Foreign Trade Antitrust
Improvements Act for solely foreign injury). Our conclusion
does not curb the sovereignty of any other nation, or another
country’s ability to regulate its maritime affairs. In fact, rec-
ognition of freely negotiated contract terms encourages pre-
dictability and certainty in the realm of international maritime
transactions.10
Splendid also has forgotten the crucial fact that this transac-
tion was not “completely foreign.” The subject of this in rem
action is the vessel Harmony. Between October 2002 and
March 2003, the Harmony transported $48.9 million in goods
to and from Long Beach, California. That the Harmony was
docked at Long Beach at the time that Trans-Tec filed suit
was not mere happenstance: Long Beach was a regular stop
on the Harmony’s route. These contacts with the United
States, along with the parties’ express agreement to apply
United States maritime lien law, put to rest any fears that an
American court is unilaterally imposing the FMLA on other
nations.
10
Given that approximately thirty nations recognize a maritime lien for
the provision of necessaries, other countries have options, if desired, to
address this circumstance. For example, a country could simply prohibit
contracting parties from choosing United States or foreign maritime lien
law in their contracts. Alternatively, national law could require charterers
to inform suppliers of existing no-lien clauses in the charter-party. And,
in the private arena, ship owners could take steps to give suppliers notice
of the no-lien provisions, thus effecting actual notice of the provisions and
preventing charterers from burdening the ship with maritime liens. See 46
U.S.C. § 31341 (stating that charterers are only presumed to have author-
ity to bind the vessel).
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2277
Our reliance on the plain language of the statute is all the
more justified when one considers that the tangled web of
American case law11 that bears on this issue is not particularly
helpful in sorting out the answer. Compare Conti Lines S.A.
v. MV Baroness V, 1992 A.M.C. 681, 683 (M.D. Fla. 1991)
(holding that the “plain language of the statute and the history
of the Federal Maritime Lien Act” allow foreign necessaries
providers to obtain maritime liens) with Swedish Telecom
Radio v. M/V Discovery I, 712 F. Supp. 1542, 1548 (S.D. Fla.
1989) (stating that the FMLA “was not intended to provide
maritime liens for goods and services where . . . they are sup-
plied by foreign companies in foreign ports”) (citations omit-
ted).
Both the district court and Splendid rely on an Eleventh
Circuit case, Trinidad Foundry & Fabricating, Ltd. v. M/V
K.A.S. Camilla, 966 F.2d 613 (11th Cir. 1992), as the founda-
tion for their conclusion that the FMLA does not apply to this
transaction.12 The most telling aspect of Trinidad is that the
court acknowledged that the FMLA was not even in play:
Ҥ 31342 is not even applicable to this case because, as we
11
We appreciate the straightforward approach of the Canadian federal
court that evaluated a strikingly similar situation in Kirgan Holding,
[2002] F.C. 1235, reprinted in 2006 A.M.C. 812. After first deciding to
enforce the parties’ United States choice of law clause, the court deter-
mined that under the FMLA, a maritime lien arose in favor of the neces-
saries provider, without discussing any “extraterritorial” implications of
doing so. Id. Despite Splendid’s assertion that the case was overruled by
J.P. Morgan Chase Bank v. Mystras Maritime Corp., [2006] F.C. 409,
Kirgan was merely distinguished on its facts. Though the outcomes of the
two cases are difficult if not impossible to reconcile, we are persuaded by
Kirgan.
12
The district court also cited to BENEDICT ON ADMIRALTY, which states
that there is no maritime lien under the FMLA for a supplier of goods and
services to a foreign flag vessel in a foreign port. 2 BENEDICT ON ADMI-
RALTY § 38, at 3-35 (7th ed. 1997). See also SCHOENBAUM § 9-8. Neither
treatise addresses the circumstances of a contractual choice of FMLA as
controlling law and neither offers any substantive analysis, instead basing
its reasoning on Trinidad.
2278 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
have already held, English law governs.” Id. at 617. In Trini-
dad, a Trinidadian corporation made repairs to a Norwegian
vessel whose owners failed to pay. Id. at 614. Despite the con-
tractual designation of English law, which does not recognize
a maritime lien for repairs, the supplier sought a maritime lien
under the FMLA. The court stated that Ҥ 31342 does not pro-
vide for a maritime lien for goods and services supplied by a
foreign plaintiff to foreign flag vessels in foreign ports.” Id.
at 617 (citing Tramp Oil & Marine, Ltd. v. M/V Mermaid I,
805 F.2d 42, 46 (1st Cir. 1986); Swedish Telecom, 712 F.
Supp. at 1545-46). Having already determined that United
States law was not applicable, the court’s commentary—
without any analysis—on § 31342 could hardly be less per-
suasive. One can argue about what is or is not dictum,13 but
it seems to us that a clearer case than this one cannot be
found. Not only did the court recognize that United States law
did not apply, but it did not even analyze § 31342, the statute
at issue here.
The two cases cited as authority in Trinidad do not bolster
its stray commentary. The plaintiff in Tramp was an English
fuel broker that hired an American supplier to provide oil to
a vessel. 805 F.2d at 44. Tramp paid the supplier, but Tramp
was never paid, so it sought a maritime lien against the vessel.
The First Circuit stated that under the FMLA, a supplier
would be entitled to a maritime lien for providing fuel to the
vessel. Id. However, because it was the intermediary that was
unpaid, and not the fuel supplier, the FMLA did not apply to
give the broker the “suppliers’ rights to the lien”: “We there-
fore think it unnecessary to protect American suppliers, and
unfair to the vessel, to extend the availability of a maritime
13
See, e.g., United States v. Johnson, 256 F.3d 895, 914-16 (9th Cir.
2001) (en banc) (Kozinski, J., concurring); United States v. Crawley, 837
F.2d 291, 293 (7th Cir. 1988) (Posner, J.) (defining dictum as “not a fully
measured judicial pronouncement . . . not likely to be relied on by readers,
and . . . may not have been part of the decision that resolved the case or
controversy on which the court’s jurisdiction depended (if a federal
court)”).
TRANS-TEC ASIA v. M/V HARMONY CONTAINER 2279
lien directly to an intermediate broker unknown to the vessel.”
Id. at 44, 46. The location and nationality of the supplier were
not at issue. Instead, the lack of a relationship between the
vessel and the intermediate broker meant that the broker could
not obtain a maritime lien for merely arranging the provision
of fuel to the vessel. Id. at 46 (noting that extending the sup-
pliers’ lien to intermediate brokers “could radically change
the presuppositions of maritime commerce”). Tramp thus
sheds no light here.
[13] Similarly, the Eleventh Circuit misread Swedish Tele-
com, the other case cited in Trinidad. As in Trinidad, the
court ultimately decided that Swedish law—not United States
law—governed the transaction. Nonetheless, as in Trinidad,
the court offered the totally irrelevant view that “a foreign
supplier of goods is precluded from acquiring a lien under the
federal Act even if it supplies goods or services in an Ameri-
can port.” Swedish Telecom, 712 F. Supp. at 1546. We are left
with the firm conclusion that Trinidad is a house of cards that
quickly tumbles with even the gentlest examination. Here,
where the contract specified that “the laws of the United
States” were to determine the existence of a maritime lien, our
reliance on the plain language of the United States statute,
rather than a case applying English law, comports with pre-
dictable judicial reasoning.
IV. DISCOVERY DISPUTE
[14] The district court did not abuse its discretion by refus-
ing Trans-Tec’s request under Rule 56(f) for more time to
take discovery. Trans-Tec has not shown that it diligently pur-
sued its previous discovery opportunities, nor that further dis-
covery is likely to produce evidence that would preclude
summary judgment. See Qualls v. Blue Cross of Cal., Inc., 22
F.3d 839, 844 (9th Cir. 1994).
CONCLUSION
We agree with the district court’s conclusions that Malay-
sian law governs the issue of contract formation, and that
2280 TRANS-TEC ASIA v. M/V HARMONY CONTAINER
under Malaysian law, the United States choice of law provi-
sion was incorporated as a term of the bunker sale contract.
We reverse the district court’s holding that no maritime lien
arose under the FMLA, and remand for proceedings in accor-
dance with our decision.
REVERSED in part, AFFIRMED in part, and
REMANDED. Each party shall bear its own costs on
appeal.