Claims
Florida appeals court revives Taiwanese yacht insurer dispute over forum clause
By Insurance Wire Staff, . Insurance Wire.
A Florida appeals court has revived a breach-of-contract suit against Taiwanese insurer Fubon Insurance Company, ruling that the forum clause in its marine cargo policies was permissive rather than mandatory, Business Insurance reported Wednesday.
The case, Alexander Marine Co., Ltd. v. Fubon Insurance Company, Ltd., was decided by Florida's Fourth District Court of Appeal in West Palm Beach. The panel ruled unanimously that the clause did not prevent the dispute between the two Taiwanese companies from being litigated in Florida.
The underlying facts are straightforward. Fubon insured Alexander Marine for the shipment of three yachts from Kaohsiung, Taiwan, to Port Everglades, Florida. A fire aboard the transport vessel destroyed two of the yachts; the third was damaged during offloading. When a dispute arose over the amount owed, Alexander Marine sued for breach of contract in Broward County Circuit Court. Fubon moved to dismiss, pointing to a policy clause stating that disputes were "Subject to Taiwanese Law and Jurisdiction." The trial court granted the dismissal.
The appellate panel reversed. According to Business Insurance, the court noted that Florida courts enforce forum clauses only when they contain exclusivity language such as "shall," "must," "exclusive," or "only." The Fubon clause contained none of those words. The ruling states directly: "Identifying a forum is not the same as requiring that forum to the exclusion of all others."
The case now returns to the trial court, which has not yet ruled on Fubon's separate argument that Taiwan is the more convenient forum under a forum non conveniens analysis. That argument remains live, so Alexander Marine's ability to keep the case in Florida is not yet settled.
The practical implication for marine cargo underwriters is significant. Forum selection clauses are standard policy language, but this ruling illustrates that permissive phrasing can be treated as no clause at all when a policyholder chooses to sue in a jurisdiction the insurer did not intend. The distinction between identifying a forum and mandating one exclusively is not always obvious in drafting, and the gap between the two can determine where a coverage dispute is resolved.
For insurers writing marine cargo risks that cross into U.S. ports, the decision is a reminder that a clause reading "subject to" a foreign jurisdiction may not hold if it lacks the explicit exclusivity language Florida courts require. Underwriters and their legal teams writing policies with international forum provisions should confirm whether their current language would survive the same scrutiny. Carriers that assumed a foreign-law-and-jurisdiction clause was self-enforcing in Florida may need to revisit that assumption.
What the reporting does not establish is how broadly other Florida courts or courts in other states would apply the same standard, or whether Fubon will succeed on the forum non conveniens argument when the trial court takes it up. That second question is the one to watch: even if the forum clause fails, a finding that Taiwan is the substantially more convenient forum could still move the case out of Florida.
Source: https://www.businessinsurance.com/florida-court-revives-taiwanese-companies-yacht-coverage-dispute/
Insurance Wire provides news and information, not insurance, legal, or financial advice. Consult a qualified professional about your specific needs.