The U.S. Court of Appeals for the 9th Circuit recently issued a
decision holding that a dispute pertaining to liability for damage
caused during the salvage of a vessel could proceed in court,
despite the inclusion of an arbitration provision in the salvage
contract. In light of this decision, it would be prudent to review
the language of arbitration clauses in contracts, particularly
those pertaining to work or services provided in jurisdictions
covered by the 9th Circuit (Alaska, Arizona, California, Hawaii,
Idaho, Montana, Nevada, Oregon, Washington, Guam, Northern Mariana
Islands), to ensure the wording of the arbitration clause reflects
the intent of the parties.
In Cape Flattery Limited v. Titan Maritime, LLC, a
shipowner (Cape Flattery) had contracted with a salvage company
(Titan) to remove a stranded vessel from a reef. The contract
contained a provision calling for disputes "arising out
of" the contract to be resolved by arbitration in England.
