Sunday, May 18, 2014
Exxon Corp. v. Central Gulf Lines, Inc. case brief summary
Exxon Corp. v. Central Gulf Lines, Inc. (1991)
• Unpaid bill for fuels acquired for the vessel Hooper which is owned by CentralGulf chartered by Waterman
• Waterman and Exxon negotiated a marine fuel requirements contract - they would fuel them at ports where Exxon was located and when the vessels were at non-Exxon ports, they would arrange for local suppliers to which Exxon would pay and Waterman would pay Exxon
• Exxon was Waterman’s agent in getting fuel from Arabian Marine in Saudi Arabia
• Arabian Marine billed Exxon, Exxon billed Watrman and Waterman filed Chapter 11 never paying the bill in full
• CentralGulf agreed to assume personal liability for the unpaid bill if a court were to hold Hooper liable in rem for that cost
• Issue: Whether admiralty jurisdiction extends to claims arising from agency contracts
• Minturn v. Maynard - an agent who advanced funds for repairs and supplies necessary for a vessel could not bring a claim in admiralty against the vessel’s owners - should this be overruled?
• Holding: Minturn is overruled there is no per se exception of agency contracts for admiralty jurisdiction
• The true criterion in determining whether a contract falls within admiralty is the nature and subject matter of the K, as whether it was a maritime contract, having reference to maritime service or maritime transactions
• Courts should look to the subject matter of the agency contract and determine whether the services performed under the contract are maritime in nature
• When the nature and subject matter of 2 transactions are the same as they relate to maritime commerce, if admiralty jurisdiction extends to one, it must extend to the other
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