2 The General Towage Conditions of the contraet included the following:

“ 1 . . . . [Unterweser and its] masters and crews are not responsible for defaults and/or errors in the navigation of the tow.

“2. . . .

“b) Damages suffered by the towed object are in any case for account of its Owners.”

In addition, the contract provided that any insurance of the Chaparral was to be “for account of” Zapata. Unterweser’s initial telegraphic bid had also offered to “arrange insurance covering towage risk for rig if desired.” As Zapata had chosen to be self-insured on all its rigs, the loss in this case was not compensated by insurance.

3 The Bremen was arrested by a United States marshal acting pursuant to Zapata’s complaint immediately upon her arrival in Tampa. The tug was subsequently released when Unterweser furnished security in the amount of $3,500.000.

4 Zapata appeared specially and moved to set aside service of process outside the country. Justice Karminski of the High Court of Justice denied the motion on the ground the contractual choice of forum provision conferred jurisdiction and would be enforced absent a factual showing it would not be “fair and right” to do so. He did not believe Zapata had made such a showing, and held that it should be required to “stick to [its] bargain.” The Court of Appeal dismissed an appeal on the ground that Justice Karminski had properly applied the English rule. Lord Justice Willmer stated that rule as follows:

“The law on the subject. I think, is not open to doubt . . . . It is always open to parties to stipulate . . . that a particular Court shall have jurisdiction over any dispute arising out of their contract. Here the parties chose to stipulate that disputes were to be referred to the ‘London Court,’ which I take as meaning the High Court in this country. Prima facie it is the policy of the Court to hold parties to the bargain into which they have entered. . . . But that is not an inflexible rule, as shown, for instance, by the case of The Fehmarn, [1957] 1 Lloyd’s Rep. 511; (C. A.) [1957] 2 Lloyd’s Rep. 551 . . . . I approach the matter, therefore, in this way, that the Court has a discretion, but it is a discretion which, in the ordinary way and in the absence of strong reason to the contrary, will be exercised in favour of holding parties to their bargain. The question is whether sufficient circumstances have been shown to exist in this case to make it desirable, on the grounds of balance of convenience, that proceedings should not take place in this country . . . .” [1968] 2 Lloyd’s Rep. 158. 11)2-163.

5 46 U. S. C. §§ 183, 185 (1971). See generally Gilmore, G. & Black, C., Admiralty §10-15 (1957)Google Scholar.

6 In its limitation complaint, Unterweser stated it “reservc[d] all rights” under its previous motion to dismiss or stay Zapata’s action, and reasserted that the High Court of Justice was the proper forum for determining the entire controversy, including its own right to limited liability, in accord with the contractual forum clause. Unterweser later counterclaimed, setting forth the-same contractual cause of action as in its English action and a further cause of action for salvage arising out of the Bremen’s services following the casualty. In its counterclaim, Unterweser again asserted that the High Court of Justice in London was the proper forum for determining all aspects of the controversy, including its counterclaim.

7 The Carbon Black court went on to say that it was, in any event, unnecessary for it to reject the more liberal position taken in Wm. 11. Midler & Co. v. Swedish American Line, Ltd., 224 F. 2d 806 (CA2), cert, denied, 350 U. S. 903 (1955), because the case before it had a greater nexus with the United States than that in Midler.

8 The record contains an undisputed affidavit of a British solicitor stating an opinion that the exculpatory clauses of the contract would be held “prima facie valid and enforceable” against Zapata in any action maintained in England in which Zapata alleged that defaults or errors in Unterweser’s tow caused the casualty and damage to Chaparral.

In addition, it is not disputed that while the limitation fund in the District Court in Tampa amounts to $1,390,000, the limitation fund in England would be only slightly in excess of $80,000 under English law.

9 The Court of Appeals also indicated in passing that even if it took the view that choice of forum clauses were enforceable unless ‘‘unreasonable” it was “doubtful” that enforcement would be proper here because the exculpatory clauses would deny Zapata relief to which it was “entitled” and because England was “seriously inconvenient” for trial of the action.

10 Many decisions reflecting this view are collected in Annot., 56 A. L. R. 2d 300, 306-320 (1957), and Later Case Service (1967).

For leading early cases, see, e. g., Nute v. Hamilton Mutual Ins. Co., 72 Mass. (6 Gray) 174 (1856); Nashua River Paper Co. v. Hammermill Peper Co., 223 Mass. 8, 111 N. E. 678 (1916); Benson v. Eastern Bldg. & Loan Assn., 174 N. Y. 83. 66 N. E. 627 (1903). The early admiralty cases were in accord. See, e. g. Wood A Sclick, Inc. v. Compagnie Generale Transatiantique, 43 E. 2d 941(CA2 1930); The Ciano, 58 F. Supp. 65 (ED Pa. 1944); Kuhnhold v. Compagnie Generale Transatiantique, 251 Fed. 387 (SDXY 1918); Prince Steam Shipping Co. v. Lehman, 39 Fed. 704 (SDNY 1889).

In Insurance Company v. Morse, 20 Wall. 445 (1874), this Court broadly stated that “agreements in advance to oust the courts of jurisdiction conferred by law are illegal and void.” But the holding of that case was only that the State of Wisconsin could not by statute force a foreign corporation to “agree” to surrender its federal statutory right to remove a state court action to the federal courts as a condition of doing business in Wisconsin. Thus, the case is properly understood as one in which a state statutory requirement was viewed as imposing an unconstitutional condition on the exercise of the federal right of removal. See. e. g., Wisconsin v. Philadelphia & Reading Coal Co., 241 U. S. 329 (1916).

As Judge Hand noted in Krenger v. Pennsylvania, 174 F. 2d 556 (CA2 1949), even at that date there was in fact no “absolute taboo” against such clauses. See, e. g., Mittenthal v. Mascagni, 183 Mass. 19, 66 N. E. 425 (1903); Daley v. People’s Bldg., Loan & Sav. Assn., 178 Mass. 13, 59 N. E. 452 (1901) (Holmes, J.). See also Cerro de Pasco Copper Corp. v. Knut Knutson, O. A. S., 187 F. 2d 990 (CA2 1951).

11 E. g., Central Contracting Co. v. Maryland Casualty Co., 367 F. 2d 341 (CA3 1966); Anastasiadis v. SS Little John, 346 F. 2d 281 (CA5 1965) (by implication); Wm. H. Midler & Co. v. Swedish American Line Ltd., 224 F. 2d 806 (CA2), cert, denied, 350 U. S.. 903 (1955); Cerro de Pasco Copper Corp. v. Knut Knutsen, O. A. S., 187 F. 2d 990 (CA2 1951); Central Contracting Co. v. C. E. Youngdahl & Co., 418 Pa. 122. 209 A. 2d 810 (1965).

The Muller case was overruled in Indussa Corp. v. SS Ranborg, 377 F. 2d 200 (CA2 1967), insofar as it held that the forum clause was not inconsistent with the “lessening of liability’’ provision of the Carriage of Goods by Sea Act, 46 U. S. C. § 1303 (8), which was applicable to the transactions in Muller, Indussa, and Carbon Black. That Act is not applicable in this case.

12 I n addition to the decision of the Court of Appeal in the instant case. Unterweser Reederei G. M. B. If. v. Zapata Off-Shore Co. (The Chaparral) [1908] 2 Lloyd’s Rep. 158 (CA), see, c a.. Mackender v. Feldia A. G. [1907] 2 Q. B. 590 (CA): The Fehmarn [1958] 1 W. L. R. 159 (CA): Law v. Garrett [1878] 8 Ch. D. 26 (CA); The Eleftheria [1970] P. 94. As indicated by the clear statements in The Eleftheria and of Lord Justice Willmer in this case, supra, n. 4, the decision of the trial court calls for an exercise of discretion. See generally Dicey & Morris, The Conflict of Laws 979-980. 1087-1088 (8th ed. 1907): Cowen & Mendes da Costa. The Contractual Forum: Situation in England and the British Commonwealth. 13 Am. J. Comp. Law 179 (1904); Reese, The Contractual Forum: Situation in the United States, id., at 187, 190 n. 3; Graupner, , Contractual Stipulations Conferring Exclusive Jurisdiction Upon Foreign Courts in the Law of England and Scotland.* 59 L. Q. Rev. 227 (1943)Google Scholar.

13 Restatement, (Second) of the Conflict of Laws § 80 (1971); Reese, , The Contractual Forum: Situation in the United Stales* . 13 Am. J. Comp. Law 187 (1964)Google Scholar; Ehrenzweig. Conflict of Laws §41 (1962). See also Model Choice of Forum Act (Uniform Law Commissioners 1968).

14 The record here refutes any notion of overweening bargaining power. Judge Wisdom in the Court of Appeals noted:

“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 . . . .”

15 At the very least, the clause was an effort to eliminate all uncertainty as to the nature, location, and outlook of the forum in which these companies of differing nationalities might find themselves. Moreover, while the contract here did not specifically provide that the substantive law of England should be applied, it is the general rule in English courts that the parties are assumed, absent contrary indication, to have designated the forum with the view that it should apply its own law. See, e. g., Tzortzis v. Monark Line A/B [1968] 1 W. L. R. 406 (CA); see generally 1 Carver, Carriage by Sea 496-497 (12th ed. 1971); Cheshire, . Private Intrenational Law 193 (7th ed. 1965)Google Scholar; Dicey, & Morris, , The Conflict of Laws 705, 1046 (8th ed. 1967)Google Scholar; Collins, . Arbitration Clauses and Forum Selecting Clauses in the Conflict of Laws: Some Recent Developments in England* , 2 J. Mar. L. & Comm. 363, 365-370 and n. 7 (1971)Google Scholar. It is therefore reasonable to conclude that the forum clause was also an effort to obtain certainty as to the applicable substantive law.

The record contains an affidavit of a Managing Director of Unterweser stating that Unterweser considered the choice of forum provision to be of “overriding importance” to the transaction. He stated that Unterweser towage contracts ordinarily provide for exclusive German jurisdiction and application of German law, but that “in this instance, in an effort to meet [Zapata] halfway, [Unterweser] proposed the London Court of Justice. Had this provision not been accepted by [Zapata], [Unterweser] would not have entered into the towage contract . . . .” He also stated that the parties intended, by designating the London forum, that English law would be applied. A responsive affidavit by Hoyt Taylor, a Vice President of Zapata, denied that there were any discussions: between Zapata and Unterweser concerning the forum clause or the question of the applicable law.

16 See nn. 14-15. supra. Zapata has denied specifically discussing the forum clause with Unterweser, but, as Judge Wisdom pointed out, Zapata, made numerous changes in the contract without altering the forum clause, which could hardly have escaped its attention. Zapata is clearly not unsophisticated in such matters. The contract of its wholly owned subsidiary with an Italian corporation covering the contemplated drilling operations in the Adriatic Sea provided that all disputes were to be settled by arbitration in London under English law, and contained broad exculpatory clauses. App. 306-311.

17 Dixilyn Drilling Corp. v. Crescent Towing & Salvage Co., 372 U. S. 697 (1963) (per curiam), merely followed Bisso and declined to subject its rule governing towage contracts in American waters to “indeterminate exceptions” based on delicate analysis of the facts of each case. See 372 U. S., at 608 (Harlan. J., concurring).

18 See. e. g., Model Choice of Forum Act §3 (3) (Uniform Law Commissioners 1968), comment: “On rare occasions, the state of the forum may be a substantially more convenient place for the trial of a particular controversy than the chosen State. If so, the present clause would permit the action to proceed. This result will presumably be in accord with the desires of the parties. It can be assumed that they did not have the particular controversy in mind when they made the choice-of-forum agreement since they would not consciously have agreed to have the action brought in an inconvenient place.”

19 Applying the proper burden of proof, Justice Karminski in the High Court of Justice at London made the following findings, which appear to have substantial support in the record:

“[Zapata] pointed out that in this case the balance of convenience so far as witnesses were concerned pointed in the direction of having the case heard and tried in the United States District Court at Tampa in Florida because the probability is that most, but not necessarily all, of the witnesses will be American. The answer, as it seems to me, is that a substantial minority at least of witnesses are likely to be German. The tug was a German vessel and was as far as I know, manned by a German crew, . . . Where they all are now or are likely to be when this matter is litigated I do not know, because the experience of the Admiralty Court here strongly points out that maritime witnesses in the course of their duties move about freely. The homes of the German crew presumably are in Germain. There is probably a balance of numbers in favor of the Americans, but not, as I am inclined to think, a very heavy balance.”

It should also be noted that if the exculpatory clause is enforced in the English courts, many of Zapata’s witnesses on the questions of negligence and damage may be completely unnecessary.

20 Zapata has suggested that Unterweser was not in any way required to file its ‘‘affirmative” limitation complaint because it could just as easily have pleaded limitation of liability by way of defense in Zapata’s initial action, either before or after the six-month period. That course of action was not without risk, however, that Unterweser’s attempt to limit its liability by answer would be held invalid. See G. Gilmore and C. Black. Admiralty § 10-15 (1957). We do not believe this hazardous option in any way deprived Unterweser’s limitation complaint of its essentially defensive character so far as Zapata was concerned.

21 See 359 U. S., at 182.

* It is said that because these parties specifically agreed to litigate their disputes before the London Court of Justice, the District Court, absent “unreasonable” circumstances should have honored that choice by declining to exercise its jurisdiction. The forum selection clause, however, is part and parcel of the exculpatory provision in the towing agreement which, as mentioned in the text, is not enforcible in American courts. For only by avoiding litigation in the United States could petitioner hope to evade the Bisso doctrine.