666 F.Supp.3d 1270
S.D. Fla.2023Background
- Plaintiff Bulent Cosgun, a Turkish seaman employed as a waiter aboard M/V Seabourn Odyssey, slipped and was seriously injured while working onboard and sued Seabourn in Broward County, Florida alleging Jones Act negligence, unseaworthiness, maintenance & cure, medical care failures, and benefits under the collective-bargaining agreement.
- Cosgun’s Seafarer Employment Contract incorporated a Collective Bargaining Agreement between Seabourn and the Norwegian Seaman’s Union that contains a broad arbitration clause referencing the New York Convention (1958) and states arbitration will occur “in such place as is agreed upon by the Unions, Owners/Company and Seafarer.”
- Seabourn removed the case to federal court under Chapter 2 of the FAA (implementing the New York Convention) and moved to compel arbitration; Cosgun sought remand, arguing the Court lacked Convention jurisdiction because the arbitration clause did not specify arbitration in a Convention signatory’s territory.
- The narrow legal question became whether Convention/FAA jurisdiction requires an arbitration agreement to specify arbitration will occur in the territory of a Convention signatory (a requirement asserted in prior Eleventh Circuit dicta derived from Ledee).
- The Court concluded the Convention and implementing statute do not impose that forum-as-signatory requirement; the cited Eleventh Circuit four-factor test’s second element is dicta tracing to a misreading in Ledee and addresses award enforcement, not initial arbitration enforcement.
- Holding: federal court has jurisdiction; no viable affirmative defenses (seamen’s exemption or public-policy defenses) apply at the arbitration-enforcement stage; the Court granted Seabourn’s motion to compel arbitration, denied remand, stayed and ordered arbitration to proceed in the Southern District of Florida pursuant to 9 U.S.C. § 4.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Convention/FAA jurisdiction requires the arbitration clause to specify arbitration in the territory of a Convention signatory | Cosgun: Agreement is not enforceable under the Convention because it does not specify arbitration in a signatory state; thus federal courts lack Chapter 2 jurisdiction and the case must be remanded | Seabourn: Chapter 2 requires only (1) a written agreement, (2) a commercial legal relationship, and (3) at least one foreign party; no textual requirement that the clause specify arbitration in a signatory territory | Held: No such textual jurisdictional requirement; Eleventh Circuit language to the contrary is dicta derived from Ledee and misapplies award-enforcement provisions to the arbitration-enforcement stage. Chapter 2 jurisdiction exists. |
| Applicability of the FAA "seamen’s exemption" (9 U.S.C. § 1) to Chapter 2 cases | Cosgun: Chapter 1’s seamen exemption voids arbitration clauses in seamen employment contracts | Seabourn: Bautista controls — Chapter 2’s scope is broader and does not incorporate the seamen exemption; Congress omitted the First Declaration from Chapter 2 | Held: Seamen’s exemption does not defeat Chapter 2 jurisdiction; Bautista remains controlling and GE Energy does not abrogate it. |
| Whether plaintiff may invoke broader federal statutes or maritime public-policy defenses (e.g., Jones Act, Limitation of Liability Act) to render the arbitration agreement "null and void" at this stage | Cosgun: Agreement is void under U.S. law/public policy and thus unenforceable under Article II(3) of the Convention | Seabourn: Article II(3) permits only narrow contract defenses (fraud, duress, mistake, waiver); public-policy defenses relate to award confirmation stage, not initial referral | Held: Plaintiff failed to plead an applicable ‘‘null and void’’ defense; public-policy and other statutory defenses may be raised only at the award-enforcement stage. |
| Forum when Agreement leaves arbitration location to future agreement and parties cannot agree | Cosgun: (implied) should not be compelled absent specific Convention-signatory forum | Seabourn: If forum unspecified, domestic law § 4 authorizes the district court to compel arbitration in its district | Held: No conflict between § 4 and Chapter 2/Convention; when an international arbitration clause fails to fix a forum, the court must compel arbitration in its own district (Southern District of Florida here). |
Key Cases Cited
- GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020) (treaty interpretation — Convention is not self-executing on some points and U.S. law fills gaps)
- Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005) (Chapter 2 covers commercial maritime employment agreements; seamen’s exemption of Chapter 1 does not bar Chapter 2 enforcement)
- Outokumpu Stainless USA, LLC v. Converteam SAS, 902 F.3d 1316 (11th Cir. 2018) (articulated a four-factor test; court here treats its second factor as dicta in relevant respects)
- Ledee v. Ceramiche Ragno, 684 F.2d 184 (1st Cir. 1982) (origin of the four-factor formulation requiring arbitration in a signatory territory; criticized here as misreading Convention/FAA)
- Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257 (11th Cir. 2011) (distinguishes arbitration-enforcement stage from award-enforcement stage under the Convention)
- Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279 (11th Cir. 2015) (Article II(3) null-and-void clause is narrow; two-stage enforcement framework)
- Czarina, L.L.C. v. W.F. Poe Syndicate, 358 F.3d 1286 (11th Cir. 2004) (Article II writing requirement; courts must see a written agreement to compel arbitration under the Convention)
- Internaves de Mexico S.A. de C.V. v. Andromeda Steamship Corp., 898 F.3d 1087 (11th Cir. 2018) (Chapter 1 §4 applies to compel arbitration in-district when no forum specified)
- Jain v. de Mere, 51 F.3d 686 (7th Cir. 1995) (when an agreement lacks a forum clause, §4 requires courts to compel arbitration in their own district)