Aggarao v. MOL SHIP MANAGEMENT CO., LTD.
675 F.3d 355
| 4th Cir. | 2012Background
- Aggarao, a Philippine seaman, sued MOL Ship Management, Nissan, World Car Carriers, and related parties for injuries aboard the M/V Asian Spirit near Baltimore.
- Pre-employment documents included a POEA Contract, POEA Terms, and incorporation of the IBF JSU/AMOSUP-IMMAJ CBA, all containing arbitration and choice-of-law provisions favoring Philippine arbitration and Philippine law.
- The district court dismissed for improper venue, holding Aggarao must arbitrate in the Philippines under the arbitration clause, and denied his injunction to obtain maintenance and cure in the United States.
- Aggarao moved to proceed in federal court on Seaman’s Wage Act and Jones Act claims, contending the arbitration clause did not apply to all his claims and that public policy favored U.S. adjudication.
- The Fourth Circuit held the arbitration clause is enforceable under the Convention Act, applying equitable estoppel to compel arbitration against non-signatories, but remanded to address Aggarao’s injunction request and potential stay pending arbitration.
- The court affirmed in part, vacated in part, and remanded for further proceedings on maintenance and cure, the hollow-formality inquiry, and stay/injunction considerations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the POEA arbitration clause is valid under the Convention Act | Arbitration clause superseded by novation or explicitly non-applicable | Arbitration clause remains valid and governs Aggarao’s claims | Arbitration clause enforceable under Convention Act |
| Whether the POEA arbitration clause divests the district court of jurisdiction over wage and other claims | Convention Act cannot bar Seaman’s Wage Act claims in federal court | Convention Act requires arbitration and divests jurisdiction | Convention Act supersedes to require arbitration; wage claims referred |
| Whether equitable estoppel can bind non-signatories to arbitrate | Nonsignatories World Car and Nissan should not be forced to arbitrate | Agency/coordinated conduct ties all defendants to arbitration | Aggarao must arbitrate claims against signatory MOL and nonsignatories |
| Whether public policy supports pursuing Jones Act/Seaman’s Wage Act claims in U.S. court | Public policy invalidates prospective waiver | Public policy defense deferred to award-enforcement stage | Public policy defense deferred; stay/injunction considerations on remand |
| Whether the district court should dismiss or stay pending arbitration and address maintenance and cure injunction | Court should retain jurisdiction and grant injunction | Court should dismiss or stay pending arbitration | Affirm arbitration; vacate dismissal; remand for hollow-formality review and injunction assessment |
Key Cases Cited
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 F.3d 614 (U.S. 1985) (prospective waiver public policy concerns at enforcement stage)
- Sky Refe r, 515 U.S. 528 (U.S. 1995) (two-stage approach for public policy review in arbitration)
- Rogers v. Royal Caribbean Cruise Line, 547 F.3d 1148 (9th Cir. 2008) (Convention Act scope and FAA integration; §1 exemption not incorporated)
- Se. Bankers Ins. Co. v. United States, 245 F.3d 315 (4th Cir. 2001) (arbiter should be interpreted with strong federal policy in favor of arbitration)
- Scher k v. Alberto-Culver Co., 417 U.S. 506 (U.S. 1974) (arbitration clauses as a form of forum-selection in international contracts)
- Sky Reefer, M/V Sky Reefer, 515 U.S. 528 (1995) (enforcement options when arbitration is involved; review at enforcement stage)
- Hooters of Am., Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999) (FAA stay authority extends to Convention Act cases)