Background
In December 2019, passengers on board the Royal Caribbean International cruise ship Ovation of the Seas were killed and injured when the White Island Volcano erupted while they were taking day trips ashore on the Island.
The cruise had departed Sydney and travelled to New Zealand ports before returning to Sydney. The cruise was subject to Royal Caribbean’s Australian terms and conditions which, among other things, contained an exclusive jurisdiction clause in favour of New South Wales Courts.
Despite this, in December 2020, some American passengers who were allegedly injured on the vessel commenced proceedings in the United States District Court, District of Florida, Miami Division.
Royal Caribbean sought to bring an anti-suit injunction against those Plaintiffs in the Federal Court of Australia. Prior to doing so, they required orders permitting service on the passengers in their home state of Maryland in the USA.
Decision
To make the orders for service, the Court had to consider whether Royal Caribbean had a prima facie case against the US-passengers for an anti-suit injunction.
An anti-suit injunction is a Court order prohibiting overseas legal proceedings which would be more appropriately heard in the “home” Court’s jurisdiction. The Court in this case did not have to decide whether to make such an order, only whether that case would have sufficient prospects of success to justify ordering service of the proceedings on the passengers in the USA.
Ordinarily, an exclusive jurisdiction clause is a very strong indicator in favour of an anti-suit injunction.
However, Royal Caribbean’s contract with the passengers complicated this. The contract was in the corporate name of the operator of the cruise – RCL Cruises Ltd (RCL) – whereas the Florida proceeding was against RCL’s parent company – Royal Caribbean Cruises Ltd (RCCL).
Even though both companies were part of the Royal Caribbean International group, if RCCL was not a party to the contract, the Court indicated that there may be difficulties relying on the exclusive jurisdiction clause.
The Court however found that RCCL could rely on the clause, because the passenger’s claim in Florida was brought on the basis that that RCCL was the contracting party. The terms and conditions said that the contract was with “either [RCL] or [RCCL], depending on which of those entities will be operating the cruise ship on which you sail”.
The Court held that if the passengers were right, then RCCL could rely on the exclusive jurisdiction clause. That was enough to give rise to a prima facie case for Royal Caribbean’s application.
Analysis
International travel operators, in particular the cruise lines, often see Plaintiffs bring opportunistic cases in foreign jurisdictions to improve their prospects of success and / or potential quantum of damages. These claims can complicate addressing victims of disasters as operators are forced to respond in multiple jurisdictions, multiplying legal costs.
This decision, although only the first step towards resolution, shows that Australian Courts are willing to recognise jurisdiction clauses in travel contracts, even when corporate structures may complicate their enforcement.
This article was written by Simon Liddy, Partner and Ryan Hunter, Associate.