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REVISED, July 14, 1998
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 97-21048
_______________
AFRAM CARRIERS, INC., et al.,
Plaintiffs,
AFRAM CARRIERS, INC.,
Plaintiff-Appellee,
VERSUS
BRUCE MOEYKENS, et al.,
Defendants,
ADELE NAJAR VDA. DE PANTA,
Individually and as Personal Representative of
the Estate of Augustin Pantin Pazos;
EDGAR PANTA NAJAR,
ROSA DEL CARMEN PANTA NAJAR,
and
ELVIS ANDERSON PANTA NAJAR,
Movants-Appellants.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
_________________________
June 26, 1998
Before KING, SMITH, and STEWART, Circuit Judges.
JERRY E. SMITH, Circuit Judge:

This appeal addresses the propriety of a choice of forum
clause in a settlement agreement related to a Limitation Act
proceeding, 46 U.S.C. § 181 et seq. Finding no reversible error,
we affirm.
I.
The S/S TAMPA BAY, a ship owned and operated by Afram
Carriers, arrived in the Peruvian port of El Callao, and four
employees of the contractual security service, Servipro, hired to
guard the ship boarded. Among the four was the deceased, Augustin
Panta.
Peruvian port authorities ordered Afram to fumigate the ship.
Afram evacuated all crew members except the captain, the chief
engineer, and the four Servipro employees. The ship's captain
assigned the security personnel to quarters on the ship during the
fumigation. While there, Panta, the chief engineer, and several
others still aboard were overcome by fumes from the chemical,
methyl bromide, used for fumigation. Panta later died from
inhalation of this toxic substance.
Afram and Panta's wife and children entered into a settlement
agreement providing that, in exchange for a sum of about
U.S. $2000, the Pantas release all existing claims against Afram in
both the Peruvian and American courts. The agreement further
provides Peruvian choice of law and forum-selection clauses.1
1 Specifically, the settlement agreement states:
(continued...)
2

At about the time that Afram was settling the Panta heirs'
wrongful death claim, it instituted a limitation of liability
proceeding under the Limitation Act, 46 U.S.C. § 181 et seq., in
federal court and included all personal injury and property damage
claimants in its complaint. The district court ordered that
monitions be served against all potential claimants in order to
give them notice that they needed to present, or forever waive,
their rights.
Because of the settlement agreement, Afram did not serve the
Panta claimants with a monition. Eighteen months later, however,
when they found out about the limitation proceeding, the Pantas
moved to intervene and attempted to assert their wrongful death
claim against Afram and the TAMPA BAY.
Afram resisted the intervention on the ground that the
settlement agreement provided that any disputes arising over the
release would be litigated in Peruvian, rather than American,
courts. The district court tentatively agreed to enforce the
forum-selection clause but allowed the parties to submit additional
briefing on the "possible effects that enforcing the forum
selection provision would have on the Panta claimants."
After reviewing the additional briefing, the court denied the
motion to intervene and dismissed the claims without prejudice if
the claimants filed an appropriate action in the Peruvian courts
(...continued)
This Agreement shall be interpreted, governed by, and construed in
accordance with the laws of the Republic of Peru and any issue
arising out of this Agreement will be subject to the exclusive
jurisdiction of the Peruvian courts applying Peruvian law.
3

within thirty days. The Pantas appeal the denial of their motion
to intervene.2
II.
"[T]he enforceability of a forum-selection or arbitration
clause is a question of law which is reviewed de novo." Mitsui &
Co. (USA), Inc. v. MIRA M/V, 111 F.3d 33, 35 (5th Cir. 1997) (per
curiam) (citations omitted). Forum-selection clauses are
presumptively valid: "[A] freely negotiated private international
agreement, unaffected by fraud, undue influence, or overweening
bargaining power . . . should be given full effect." M/S BREMAN v.
Zapata Off-Shore Co., 407 U.S. 1, 12-13 (1972). "The burden of
proving unreasonableness is a heavy one, carried only by a showing
that the clause results from fraud or overreaching, that it
violates a strong public policy, or that enforcement of the clause
deprives the plaintiff of his day in court." Mitsui, 111 F.3d at
35 (emphasis added) (citing THE BREMAN, 407 U.S. at 12-13, 15, 18).
Allegations that the entire contract was procured as the result of
fraud or overreaching are "inapposite to our [forum-selection
clause] enforceability determination, which must . . . precede any
2 The Pantas' motion to intervene sought an "intervention of right" under
FED. R. CIV. P. 24(a) because (1) the claim related to the res at issue in the
Limitation Act proceeding and because the intervenors had an interest in the res;
(2) a denial of intervention would impede their claim to the res; and (3) their
rights would not be adequately represented by the other parties in the proceeding
(who would be competing for their own shares of the res at the intervenors'
expense). See 6 JAMES W. MOORE, ET AL., MOORE'S FEDERAL PRACTICE § 24.03[1] (3d ed.
1998) (outlining the three requirements to satisfy rule 24(a)). D e n i a l s o f
motions to intervene of right are final orders under 28 U.S.C. § 1291.
Accordingly, we have appellate jurisdiction. See Brotherhood of R.R. Trainmen
v. Baltimore & Ohio R.R., 331 U.S. 519, 524-25 (1947).
4

analysis of the merits [of the contract's validity]." Haynsworth
v. The Corporation, 121 F.3d 956, 964 (5th Cir. 1997) (citation
omitted), cert. denied, 118 S. Ct. 1513 (1998).
The intervenors attempt to overcome the presumption of the
forum-selection clause's validity by arguing that (1) Afram
procured the clause through fraud and overreaching (including
mistake); (2) the clause violates a strong public policy of the
United States; (3) Afram should be estopped from asserting its
rights under the clause because it took other, inconsistent
positions in this litigation; (4) enforcement of the clause would
prevent the intervenors from having their day in court; and (5) the
release does not cover the dispute at issue.
A.
The Pantas primarily argue that Afram procured the forum-
selection clause through fraud and overreaching. The facts, at
least as the Pantas tell the story, are certainly dire. The
deceased was the primary breadwinner for his family. He had no
life insurance and, by all accounts, his family was financially and
emotionally devastated by his death.
In the weeks after the death, the family was offered (although
from the record it is unclear who first solicited the offer), and
accepted, a cash settlement from Afram. In exchange for about one
year's salary, U.S. $2000, the family agreed to waive all claims
against Afram in both the Peruvian and U.S. courts. The Pantas
further agreed to litigate all disputes concerning the release
5

under Peruvian law and in Peruvian courts.
The Pantas use the facts to facilitate the natural inference
that the settlement was procured through fraud or duress or was
otherwise unconscionable. From there, we naturally are inclined to
make a second inference: The forum-selection clause, as part of
the illegally obtained contract, must also have been illegally
procured.
This chain of inferences, however, is foreclosed not only by
binding circuit precedent, see, e.g., Haynsworth, 121 F.3d at 964;
Mitsui, 111 F.3d at 35, but also by the policies underlying the
presumption in favor of enforcing such clauses. "The Supreme Court
has . . . instructed American courts to enforce [forum-selection]
clauses in the interests of international comity and out of
deference to the integrity and proficiency of foreign courts."
Mitsui, 111 F.3d at 35 (citing Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 629 (1985)). Were we to
judge the soundness of the forum-selection clause by what we
believe to be the merits of the underlying contract, we would
subvert the aforementioned comity concerns by making a merits
inquiry that the Supreme Court has determined is best left to the
forum selected by the parties.
Only when we can discern that the clause itself was obtained
in contravention of the law will the federal courts disregard it
and proceed to judge the merits. Because, in this case, we can
draw an inference of an illegally obtained forum-selection clause
only if we judge the merits of the contractSSthat is, the movants
6

have offered no evidence3 that the clause itself was obtained as a
result of fraud or overreachingSSwe cannot disregard it on that
ground.4
B.
The Pantas also argue that enforcing the forum-selection
clause would thwart the "equitable resolution" goal of the
Limitation Act. That is, "[t]he purpose of limitation proceedings
is . . ., in an equitable fashion, to provide a marshalling of
assetsSSthe distribution pro rata of an inadequate fund among
claimants, none of whom can be paid in full." Petition of Tex.
Co., 213 F.2d 479, 482 (2d Cir. 1954) (internal quotation and
citation omitted).
A forum-selection clause is potentially unreasonable when it
would undermine a "strong public policy" of the forum. Mitsui,
111 F.3d at 35. Initially, we must determine, therefore, whether
the equitable resolution afforded by the Limitation Act is a
"strong" public policy that justifies overcoming the forum-
3 The Pantas argue that they have offered evidence that the forum-selection
clause was obtained through fraud: (1) Afram told the Pantas that they could not
sue the ship because the shipowner was American; (2) Afram failed to notify the
Pantas of this proceeding; and (3) the Pantas would have filed claims in this
limitation proceeding, but for the misrepresentations and failures to disclose.
This evidence, however, logically goes to the validity of whole settlement
agreement rather than to the forum-selection clause: It explains why the Pantas
would not have wanted to settle their claims at all, not why they would not have
agreed to the presence of a forum-selection clause. Therefore, although "the
plaintiffs claim fraud in the inducement of the [forum-selection] clause[,] . . .
nothing in their more specific allegations supports this claim." Haynsworth,
121 F.3d at 970.
4 For the same reasons, the Pantas' claim of mistake falters: They fail
to offer any evidence that the clause itself, rather than the entire settlement
agreement, was the result of some contract-excusing mistake.
7

selection clause.
The answer is not simple. Admittedly, equitable resolution of
claims from a limited fund is one of the policies behind Limitation
Act proceedings. See Texas Co., 213 F.2d at 482. Another
consideration, however, is promoting settlement and subsidizing
shipbuilders.5 In fact, most courts have held that the main force
driving Congress to enact the Limitation Act was to put American
shipbuilders on a competitive footing with their European
counterparts by limiting their liability to the value of the ship
and her cargo.6 Because of this fundamental consideration, courts
generally have construed ambiguities in the Act in favor of
shipowners. See, e.g., Coryell v. Phipps, 317 U.S. 406, 411
(1943).
In this case, the two policies of the statute would appear at
loggerheads. On the one hand, the goal of subsidizing shipowners
and promoting settlement supports shipowners' ability to use and
disregard the Limitation Act proceedings as best suits their
interests in settling the claims against them promptly. At the
outset, the shipowner was not obliged to invoke the proceeding
against all claimants. Had it decided not to invoke the shield,
5 See, e.g., British Transp. Comm'n v. United States, 354 U.S. 129, 133
(1957) ("The real object of the act . . . was to limit the liability of vessel
owners to their interest in the adventure, and thus to encourage ship-building
and to induce capitalists to invest money in this branch of industry.") (internal
quotations and citations omitted).
6 See, e.g., id.
8

the owner would remain subject to the full extent of liability.7
Now that it has elected to invoke the shield, the shipowner should
not be hampered, before those proceedings get underway, from making
a last-minute settlement with one of the claimants, if such a
settlement would (1) obtain for it better terms than it could get
in the Limitation Act proceeding and (2) not otherwise prejudice
the remaining claimants.
On the other hand, the goal of equitable resolution argues
against enforcing the forum-selection clause. Once the shipowner
invokes the protection of a Limitation Act proceeding, all claims
subject to the shield should be resolved at one time and by one
court. Arguably, if the shipowner is going to get the benefit of
limited liability against the PantasSSeven if it is at some later
date (such as if and when the Peruvian courts find this agreement
unconscionable and thus grant rescission)SSthen all claimants
deserve an equal shot at the limited fund. Otherwise, the
shipowner can do indirectly what it could not do directlySSfavor
some settlement creditors at the expense of others.8
Given these two competing policy concerns, it is hard to say
that equitable resolution is a "strong" public policy that the
enforcement of the forum-selection clause would contravene. The
7 Underlying the Pantas' "fraud in the inducement" and "contrary to public
policy" challenges to the forum-selection clause is their claim of lack of notice
of the Limitation Act proceedings. Their alleged lack of notice, however,
relates more to Afram's ability to invoke the Limitation Act shield against the
Pantas, when and if they are successful in a Peruvian court at overcoming the
settlement.
8 Some creditors may be favored over the Pantas because they will have the
first chance at the Limitation Act fund while the Pantas are litigating their
claim in Peru.
9

more fundamental policy underlying the Limitation Act, that is,
that of providing subsidization to the shipping industry, seems to
diminish the strength of the equitable resolution principle and, as
a result, to prevent it from overcoming the presumption in favor of
the forum-selection clause's enforceability.9
C.
The Pantas also claim that Afram should be judicially and
equitably estopped from asserting any rights it may have under the
forum-selection clause because Afram has taken inconsistent
positions on the forum-selection clause matter throughout the
Limitation Act proceeding. We disagree.
1.
Judicial estoppel applies to protect the integrity of the
courtsSSpreventing a litigant from contradicting its previous,
inconsistent position when a court has adopted and relied on it.
See United States ex rel. Am. Bank v. C.I.T. Constr. Inc., 944 F.2d
9 But cf. THE QUARRINGTON COURT, 102 F.2d 916, 919 (2d Cir. 1939) ("[A]fter
the limitation proceeding has begun steps outside of that proceeding which would
affect the fund should not be allowed [to be carried out through an arbitration
clause] for they would involve a negation of one of the important purposes of
such proceedings and a well established practice."). THE QUARRINGTON COURT was
decided in an era in which forum-selection and arbitration clauses were
disfavored by the courts because they were thought to "oust their jurisdiction."
In those days, nearly any public policy could undo such a clause. See RICHMAN &
REYNOLDS, UNDERSTANDING CONFLICT OF LAWS § 30, at 77-78 (2d ed. 1993).
By 1972, the Supreme Court had rejected the "ouster of jurisdiction" notion
as parochial. See THE BREMAN, 407 U.S. at 9. Now, there is a heavy presumption
in favor of such clauses; these days, the barrier has been raised: A strong
public policy, not just any public policy, is needed to justify overcoming the
presumption in favor of such clauses. See id.; Mitsui, 111 F.3d at 35.
10

253, 258-59 (5th Cir. 1991).10 "The doctrine of judicial estoppel
'applies in cases where a party attempts to contradict his own
sworn statements in the prior litigation.'" Id. at 258 (quoting
Brandon v. Interfirst Corp., 858 F.2d 266, 268 (5th Cir. 1988)).
"To achieve this purpose, many courts inquire whether the party
'successfully maintained' its contrary position" previously. Id.
at 258 (citation omitted).11
The Pantas argue that when it filed its Limitation Act
complaint, Afram misrepresented to the district court that there
were no other "legal proceedings" underway. The Pantas contend
that the subsequent settlement was a "legal proceeding" and that it
was in violation of the representations in the complaint.12
Assuming arguendo that the Pantas are correct that the
subsequent settlement is a "legal proceeding," they still have
failed to make an additional showing needed to obtain judicial
estoppel: They have not demonstrated the court's acceptance and
reliance on Afram's misrepresentation. "[W]e find no evidence in
10 See also McNamara v. City of Chicago, 138 F.2d 1219, 1225 (7th Cir.
1998) ("The doctrine provides that a party who prevails on one ground in a
lawsuit cannot turn around and in another lawsuit repudiate the ground. If
repudiation were permitted, the incentive to commit perjury and engage in other
litigation fraud would be greater.").
11 There appears to be some tension in the doctrine about whether judicial
estoppel can bar a litigant from raising an inconsistent position in the same
court proceeding, or whether the bar can arise only in a subsequent proceeding.
Compare id. (two proceedings assumed) with, e.g., Ergo Science, Inc. v. Martin,
73 F.3d 595, 598 (5th Cir. 1996) (applying the doctrine to a FED. R. CIV. P. 60
motion for relief from judgment). Because, in the instant case, the conduct does
not, in any event, appear to meet the other criteria needed to invoke the bar,
we will assume arguendo that a single court proceeding is sufficient.
12 We assume arguendo that the representations that a plaintiff makes in
its complaint are subject to the doctrine of judicial estoppel.
11

the record that demonstrates [the court's] acceptance of the
position taken [by Afram in its complaint]." American Bank,
944 F.2d at 258.13
2.
The Pantas' equitable estoppel claim also fails; it appears to
be nothing more than a renamed fraudulent inducement claim. The
Pantas base their equitable estoppel argument on Afram's failure to
disclose to them, when entering into the settlement agreement, that
the Limitation Act proceeding was underway. The same conduct also
forms the basis for the Pantas fraudulent inducement attack on the
entire settlement that we discuss above. See supra part II.A. We
rejected that claim because it attacked the entire contract as
fraudulently induced, rather than focusing on the forum-selection
clause by itself. See id.
Estopping Afram from asserting the forum-selection clause,
based on the same conduct underlying the fraudulent inducement
claim, would contravene our holding in Haynsworth that allegations
that the entire contract was fraudulently induced are "inapposite
to [a forum-selection clause] enforceability determination, which
must . . . precede any analysis of the merits." Haynsworth,
121 F.3d at 964. Our conclusion is based on the reality that,
under a contrary holding, a plaintiff claiming that an entire
13 See also id. ("The 'judicial acceptance' requirement minimizes the
danger of a party contradicting a court's determination based on the party's
prior position and, thus, mitigates the corresponding threat to judicial
integrity.") (citation omitted).
12

contract was fraudulently induced could simply restyle, as a claim
of equitable estoppel, his insufficient fraudulent inducement
attack on the contract as a whole.
D.
The Pantas maintain that they will be prevented from having
their day in court if forced to return to a Peruvian forum, because
they cannot obtain contingency-fee counsel in the Peruvian courts
and cannot afford to pay a Peruvian lawyer in advance. Therefore,
they will be barred from litigating their claim in those courts.
The record contains no information about the Pantas' inability
to obtain counsel to represent them in the Peruvian courts.
Accordingly, we will not consider that matter.14
E.
The Pantas aver that the release does not apply to tort suits
that they file outside Peru. The idea apparently is that the
release applies only if the Pantas include as part of their cause
of action a claim that requires construction of the settlement
agreement. If the settlement agreement arises only as an
affirmative defense to a tort claim, however, the release
provisions do not apply.
There is no error here because the argument relies on our
construction of the release to determine whether the release
14 See, e.g., United States v. Gerald, 624 F.2d 1291, 1296 n.1 (5th Cir. 1980)
("It is appellant's responsibility to insure the inclusion in the record of all
matters he intends to rely upon on appeal.").
13

applies only to "cause of action" claims or to all claims in which
it might arise. The forum-selection clause, however, dictates that
any disagreements about the release must be brought in a Peruvian
courts. In short, to address this argument would force us to
overlook the forum-selection clause and to construe the underlying
agreement when we are foreclosed from doing so.
AFFIRMED.
14