## Facts

- Ta Chi Navigation (Panama) Corp. S.A. owned the Panamanian-flag cargo vessel M/V *Eurypylus*.
- The *Eurypylus* loaded cargo in Japan and other Asian ports for delivery to Puerto Rico and ports on the Gulf and East Coasts of the United States.
- After a casualty involving cargo claims, cargo interests asserted claims against the shipowner.
- Ta Chi filed an admiralty complaint in the Southern District of New York seeking exoneration from or limitation of liability under the U.S. Limitation of Liability Act.
- By stipulation and court order, the parties presented a threshold choice-of-law question: whether U.S. limitation law or Panamanian law governs the limitation proceeding, specifically the items comprising the limitation fund.

## Issues

1. Whether the U.S. Limitation of Liability Act or Panamanian law governs the limitation proceeding and determines the items comprising the limitation fund when the shipowner elects to file a limitation action in a U.S. admiralty court.

## Decision

- The court held that the U.S. Limitation of Liability Act governs the limitation proceeding and the items comprising the limitation fund.
- The court rejected applying Panamanian limitation provisions to fix the fund in this U.S.-filed limitation action.
- The ruling resolved only the preliminary choice-of-law question and did not decide exoneration or the merits of underlying cargo liability.

## Legal Principles

- In a limitation proceeding brought in a U.S. admiralty court under the U.S. Limitation Act, the forum may apply U.S. limitation law to determine the limitation fund.
- The law governing limitation (including the fund’s composition) may be treated separately from the law governing underlying substantive liability on cargo claims.
- A shipowner’s decision to invoke a U.S. forum and seek limitation under the U.S. statute supports applying U.S. limitation law in that proceeding.

## Conclusion

The court applied the U.S. Limitation of Liability Act to govern the composition of the limitation fund because the shipowner invoked a U.S. limitation proceeding, and limitation questions were treated as governed by forum limitation law rather than a foreign limitation regime.


Complaint of Ta Chi Navigation (Pan.) Corp. S.A., 416 F. Supp. 371 (S.D.N.Y. 1976)