The Second Circuit’s Decision in American Cruise Lines v. Viking USA LLC, River 1 LLC
The Second Circuit Court of Appeals decision in American Cruise Lines v. Viking USA LLC, River 1 LLC upheld an agency decision that a Swiss-based company could operate a luxury cruise ship on the Mississippi River. The American Cruise Lines decision could very well reach beyond the cruise industry and impact how future marine transactions are structured.
The Passenger Vessel Services Act (PVSA) is part of the larger body of US coastwise law, which includes the Jones Act. The PVSA applies to the transportation of passengers between US coastwise points. The coastwise laws have stringent US citizenship requirements. Similarly, the Shipping Act of 1916 requires approval from Maritime Administration (MARAD) before any US company may sell lease, charter, deliver or in any other manner transfer, to a person not a citizen of the US a vessel that is documented in the US.
In American Cruise Lines the core issue was vessel control in a proposed arrangement for the charter of a cruise ship between a US company and a Swiss company. The Court addressed the distinction between a vessel time charter, in which the owner of the chartered vessel is in control of the vessel, and a bareboat charter, in which control rests with the charterer. Because the Court found that the agreement at issue was a time charter, the Second Circuit upheld MARAD’s determination that the transaction did not violate U.S. shipping law.
Read our full insight to explore the decision in detail.
