Asignacion v. Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG
783 F.3d 1010
| 5th Cir. | 2015Background
- Asignacion, a Filipino seaman, signed a POEA-mandated contract containing Standard Terms requiring Philippine law and permitting arbitration in the Philippines; he worked aboard the M/V RICKMERS DAILAN (Marshall Islands flag), owned by Rickmers (German).
- Asignacion suffered severe burns in New Orleans, received U.S. treatment, was repatriated to the Philippines, and continued care.
- Louisiana court compelled arbitration in the Philippines; a Philippine arbitration panel (under the Department of Labor) applied only Philippine law and awarded Asignacion $1,870 for a Grade 14 disability.
- Asignacion sought to set aside or block enforcement of the award in U.S. court under Article V(2)(b) of the New York Convention (public policy defense), arguing Philippine remedies were inadequate and the arbitrators failed to give a proper choice-of-law determination.
- The district court refused enforcement, finding enforcement would violate U.S. seamen-protective public policy and invoking the prospective-waiver doctrine; Rickmers appealed.
- The Fifth Circuit reviewed de novo legal issues and reversed, ordering enforcement of the arbitral award.
Issues
| Issue | Plaintiff's Argument (Asignacion) | Defendant's Argument (Rickmers) | Held |
|---|---|---|---|
| Whether Convention Article V(2)(b) permits refusing enforcement because Philippine law gives lesser remedies than U.S. maritime law | Enforcement should be refused because Philippine remedies (as applied) effectively denied Asignacion core seaman remedies (maintenance & cure, negligence, unseaworthiness) and were inadequate | The Convention and federal policy favor enforcement; mere difference or reduction in remedies under foreign law does not violate U.S. public policy | Reversed: plaintiff failed to show enforcement would violate the forum’s fundamental notions of justice; award not so inadequate as to trigger Article V(2)(b) |
| Whether arbitrators’ exclusive application of the contract’s choice-of-law clause (Philippine law) is reviewable as a public-policy violation | Arbitrators’ blanket reliance on the clause did not constitute a fair choice-of-law determination and deprived him of U.S. law remedies | Applying the contractual/POEA choice-of-law in Philippine arbitration is not, by itself, a ground to set aside the award under the Convention | Denied: courts cannot overturn awards for alleged legal errors in choice-of-law; applying Philippine law to Filipino seaman in Philippine arbitration is not per se a public-policy breach |
| Whether Lauritzen–Rhoditis choice-of-law factors or U.S. choice-of-law should invalidate the POEA-mandated choice of Philippine law | U.S. choice-of-law should be used to protect seamen’s special remedies when foreign law reduces them | POEA-mandated Philippine law and arbitration are legitimate; Lauritzen favors enforceability of agreed foreign choice-of-law | Court noted Lauritzen generally enforces contracted-for foreign law; exception (avoiding applicable law) did not clearly apply where choice-of-law was imposed by POEA rather than shipowner; no public-policy override found |
| Whether the prospective-waiver doctrine allows refusing enforcement because the contract’s combined forum/law clauses waive seaman remedies | Prospective-waiver should apply to preserve seamen’s substantive maritime rights and permit pursuit of U.S. remedies | Prospective-waiver doctrine is limited to statutory remedies and does not extend to general maritime (nonstatutory) rights | Reversed: district court erred using prospective-waiver; doctrine pertains to statutory rights and cannot be used to reopen general maritime remedies |
Key Cases Cited
- Lauritzen v. Larsen, 345 U.S. 571 (choice-of-law factors for maritime injuries)
- Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614 (prospective-waiver doctrine re: statutory remedies)
- Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528 (arbitral forum and prospective-waiver discussion)
- Romero v. Int’l Terminal Operating Co., 358 U.S. 354 (limits on imposing U.S. standards on foreign seamen and commerce)
- Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (narrow review of arbitral awards under Convention)
- Calix–Chacon v. Global Int’l Marine, Inc., 493 F.3d 507 (reduced foreign remedies and public-policy analysis)
- United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (public-policy defense in arbitration must be explicit and dominant)