In 1985, Hyundai added a section to a Swedish vessel through Lloyds per contract governed by English law. The addition and subsequent repairs were performed by Hyundai in Korea. Subsequently, the vessel was purchased by a Panamanian firm, and eventually “hogged” on a voyage from France to the U.S. The shipowner brought a limitation-of-liability proceeding in the Southern District of New York, and the cargo owners asserted third-party claims against Hyundai. Applying the Lauritzen factors, the court observed that neither the law of the flag nor the shipowner’s base of operations were relevant, as the shipowner was not a party to the action. The court also rejected the relevance of the contract, as claims under COGSA are not necessarily breach of contract claims, but can be mixed claims of tort, contract and bailment law. Particularly where the citizenship of the parties pointed to no clear venue, the court applied the law where the repairs had occurred. “The place of the alleged wrongful act that gave rise to the liability is Korea, where the welding was performed. The cargo interests contend that the place of the wrongful act is the location of the casualty, that is, the Atlantic Ocean. But we have held that the place of the wrongful act is not where the vessel sinks, but where the negligence occurs. The reason for this rule is not difficult to discern because it is the state where the negligence occurs that has the greatest interest in regulating the behavior of the parties.” Therefore, Korea’s 10-year statute of repose on product liability claims barred the plaintiffs’ claims. See Rationis Enters. of Panama v. Hyundai, No. 04-4267, 2005 U.S. App. LEXIS 22323 (2d Cir. Oct. 17, 2005).
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