U.S. Supreme Court Held that Choice-of-Law Clauses in Maritime Contracts Are Presumptively Enforceable Under Federal Maritime Law

On February 21, 2024, the Supreme Court of the United States, in a unanimous opinion delivered by Justice Kavanaugh, held that choice-of-law clauses in maritime contracts are presumptively enforceable under federal maritime law, subject to two narrow exceptions: (1) when the chosen law would contravene a controlling federal statute or established federal maritime policy; or (2) when the contracting parties cannot show any reasonable basis for the chosen jurisdiction. The second exception must be applied with “substantial deference to the contracting parties.” Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC, Case No. 22-500, Slip Op. at 10-11 (Feb. 21, 2024). The Court stated that “the uniformity and predictability resulting from choice-of-law provisions are especially important for marine insurance contracts given that marine insurance is ‘an integral of virtually every maritime transaction, and maritime commerce is a vital part of the nation’s economy.’” Id. at 9 (quoting M. Sturley, Restating the Law of Marine Insurance: A Workable Solution to the Wilburn Boat Problem, 29 J. Mar. L. & Com. 41, 45 (1998). This decision is a very favorable and significant result for marine insurers and the principle of maritime uniformity. 

_{Case Law Alerts, 2nd Quarter, April 2024 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2024 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.}