941 F.3d 487
11th Cir.2019Background
- Cvoro, a Serbian seaman, signed a seafarer employment agreement with Carnival (ship flagged in Panama) that required arbitration in specified foreign venues and selected the law of the ship’s flag (Panama).
- While serving on the Carnival Dream she developed carpal tunnel, was treated aboard and ashore, repatriated to Serbia, and received maintenance and cure paid by Carnival; she later had surgery in Serbia and suffered lasting impairment.
- Cvoro arbitrated her claims in Monaco, asserted Jones Act and maintenance-and-cure claims, but the arbitrator applied Panamanian law and dismissed her claims because Panamanian law does not recognize vicarious liability for shore-side malpractice after signing off.
- Cvoro sued in federal court to vacate/refuse recognition of the Monaco arbitral award under Article V(2)(b) of the New York Convention, arguing enforcement would violate U.S. public policy by depriving her of a Jones Act remedy.
- The district court denied vacatur and dismissed her Jones Act and maritime claims; the Monaco court separately confirmed the award. The Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does enforcing the Monaco award violate U.S. public policy (NY Convention art. V(2)(b))? | Enforcement is contrary to public policy because arbitrator applied Panamanian law and deprived Cvoro of a Jones Act remedy. | Strong federal policy favors enforcement of international arbitration; enforcement does not offend U.S. public policy here. | Enforcement affirmed; Article V(2)(b) defense fails. |
| Do the choice-of-law/forum clauses operate as a "prospective waiver" of statutory (Jones Act) rights? | The clauses in tandem prospectively waive Cvoro’s Jones Act remedy. | Mitsubishi’s prospective-waiver language is dicta; Lindo/Lipcon control and preserve presumption favoring arbitration. | Prospective-waiver argument fails. |
| Were Panamanian remedies so inadequate that enforcement would be fundamentally unfair? | Panamanian law offers no vicarious-liability remedy, so remedies were inadequate. | Carnival provided maintenance and cure and Panamanian law afforded alternative remedies that Cvoro did not pursue. | Remedies not so inadequate; enforcement not fundamentally unfair. |
| Does the Monaco court’s confirmation of the award affect enforcement here? | Monaco confirmation should not compel U.S. enforcement if U.S. public policy is offended. | Foreign confirmation supports comity and predictability; weighs toward enforcement. | Monaco confirmation supports enforcement and comity; does not change result. |
Key Cases Cited
- Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285 (11th Cir. 1998) (choice clauses enforceable; foreign remedies invalidate clauses only if so inadequate as to be fundamentally unfair)
- Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257 (11th Cir. 2011) (strong presumption favoring enforcement of arbitration and choice clauses; Jones Act issues do not upset that presumption)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (U.S. statutory claims arbitrable; footnote 19 discusses prospective-waiver concept)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (strong presumption enforcing forum-selection clauses in international contracts)
- Scherk v. Alberto–Culver Co., 417 U.S. 506 (1974) (U.S. statutory claims may be resolved via arbitration under international agreements)
- Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528 (1995) (public-policy defense under New York Convention is narrow)
- Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434 (11th Cir. 1998) (Article V public-policy defense is narrowly construed)
- Inversiones y Procesadora Tropical INPROTSA, S.A. v. Del Monte Int’l GmbH, 921 F.3d 1291 (11th Cir. 2019) (confirmation that public-policy defense applies only to well-defined, dominant policies)