## Facts

- A container ship built in 1972 was lengthened in 1984 by inserting a prefabricated midsection; the work was performed in Korea by Hyundai Mipo Dockyard to specifications developed with Lloyd’s Register oversight.
- The lengthening contract included a choice-of-law clause selecting English law for the work.
- After the ship returned to service, Lloyd’s detected cracking, conducted further testing, and later approved the vessel for unrestricted service.
- The ship changed ownership multiple times; Rationis later owned it and Mediterranean Shipping Co. operated it as the MSC Carla.
- In 1997, during heavy weather in the North Atlantic, the vessel broke in two near the lengthening weld seam; the forward section sank and substantial cargo was lost.
- Cargo interests blamed defective lengthening work; Hyundai disputed causation and argued the break was due to later corrosion and maintenance issues.

## Issues

1. Whether the district court erred by refusing to apply Korean law on the ground that Hyundai waived reliance on foreign law by raising it late.
2. Which jurisdiction’s law governed Hyundai’s liability for the 1984 shipyard work under federal maritime choice-of-law principles.
3. Whether Korean substantive law, if applicable, barred or limited Hyundai’s liability on the facts found at trial.
4. Whether an anti-suit injunction barring Hyundai’s participation in related Korean proceedings could stand after resolving the choice-of-law and liability questions.

## Decision

- The Second Circuit held that the district court abused its discretion by treating foreign law as an affirmative defense subject to waiver and by failing to determine and apply foreign law once properly put in issue under Federal Rule of Civil Procedure 44.1.
- Applying federal maritime choice-of-law analysis, the court concluded Korean law governed Hyundai’s liability because the allegedly defective work was performed in Korea by a Korean shipyard and Korea had the strongest regulatory interest.
- Under Korean law as established in the record, Hyundai was not liable for the casualty on the trial court’s factual findings.
- The court reversed the judgment against Hyundai and vacated the anti-suit injunction as moot.

## Legal Principles

- Under Federal Rule of Civil Procedure 44.1, foreign law is a question of law for the court; courts have authority and responsibility to determine its content from any relevant source.
- Notice of an intent to raise foreign-law issues under Rule 44.1 need not appear in a pleading; delay does not forfeit reliance on foreign law absent unfair prejudice.
- In maritime tort/product-defect disputes tied to ship construction or modification, the governing law turns on the jurisdiction with the most significant contacts and strongest governmental interest in regulating the relevant conduct.
- When the applicable foreign law provides no cause of action or bars liability on the established facts, judgment must be entered for the defendant, and related equitable relief (including anti-suit injunctions) may become moot.

## Conclusion

The Second Circuit required determination and application of foreign law under Rule 44.1, held Korean law governed claims against the Korean shipyard for the Korean-performed lengthening work, reversed the shipyard’s liability under that law, and vacated the anti-suit injunction as moot.


Rationis Enters. Inc. of Pan. v. Hyundai Mipo Dockyard Co., 426 F.3d 580 (2d Cir. 2005)