In personal injury case at sea, Eleventh Circuit affirms
a motion to compel arbitration based on the New York Convention, so long as the
agreement concerns subject matter capable of settlement by arbitration
Plaintiff Harold Leonel Pineda Lindo, a citizen and resident
of Nicaragua, began employment with NCL Ltd., a Bermudan corporation with its
principal place of business in Miami, Florida. In December 2008, Lindo claims
that he injured his back while on board one of NCL’s vessels while acting
within the scope of his employment, later requiring surgery for his personal injury.
Lindo’s employment contract with NCL was governed by a collective bargaining
agreement. The contract also states that all personal injury and Jones Act
claims would be resolved by binding arbitration pursuant to the United Nations
Convention on Recognition and Enforcement of Foreign Arbitral Awards. The
contract stated that the place of arbitration would be the place of the
employee’s citizenship, unless arbitration is unavailable under the Convention
in that country, in which case it shall take place in Nassau, Bahamas. The
choice of law would be that of the flag state of the vessel (Bahamas).
Lindo challenged having arbitration, arguing that the claim
would arise under Bahamian negligence law, not the Jones Act. Lindo then filed
a lawsuit in Florida state court. NCL moved to compel arbitration and removal
to federal court. Lindo amended his complaint to allege a single count of Jones
Act negligence. The district court granted NCL’s motion to compel arbitration
and dismissed Lindo’s amended complaint. Lindo appealed.
The United States Court of Appeals for the Eleventh Circuit
affirmed the district court's order to compel arbitration of Lindo’s Jones Act
negligence claim. The Court began by evaluating the New York Convention. This
Convention recognizes written arbitration agreements concerning subject matter
capable of settlement by arbitration. Both Nicaragua and the Bahamas are
signatories to the Convention. Both parties agree that the Convention applies
to Lindo’s contract.
After reviewing the Convention and Supreme Court and circuit
court precedent, the Court concludes that the district court properly enforced
Lindo’s arbitration agreement and rules that the Jones Act claims must be
arbitrated in a foreign forum (Nicaragua) under Bahamian law. The Court notes
that there is a strong presumption in favor of freely negotiated contractual
choice of law and forum selection provisions. The presumption applies greatly
with regard to international commerce.
“Indeed, the Convention provides that
contracting states ‘shall recognize’ written agreements wherein parties agree
to submit any and all disputes to settlement by arbitration. New York
Convention, art. II(1). This Circuit has stated, in agreement with other
circuits, that ‘a court conducts a very limited inquiry’ when ‘deciding a
motion to compel arbitration under the Convention Act.’ Bautista v. Star
Cruises, 396 F.3d 1294 (11th Cir. 2005) (quotation marks omitted).” 652 F.3d
1275.
Next, the Court evaluates whether a null‑and‑void defense
would apply to the arbitration agreement, thereby making it inoperable. “In
Bautista, this Court held that an arbitration agreement is null and void under
Article II(3) of the Convention only where it is obtained through those limited
situations, ‘such as fraud, mistake, duress, and waiver,’ constituting
‘standard breach‑of‑contract defenses’ that ‘can be applied neutrally on an
international scale.’ 396 F.3d at 1302 (quotation marks omitted). Lindo’s
Contract incorporates a union‑negotiated CBA, and there is no claim—much less
any showing—of fraud, mistake, duress, or waiver. To the extent Lindo relies on
Article II, his claim fails.” 652 F.3d 1276.
“Lindo argued that the arbitration provision is
unconscionable, maintaining that he signed the Contract on a “take‑it‑or‑leave‑the‑ship”
basis. However, this was the same argument asserted by the plaintiff seamen in
Bautista. . . . This Court expressly rejected that argument, concluding that an
unconscionability defense was not available under Article II of the
Convention.” 652 F.3d 1276.
Another defense to arbitration enforcement is one based the
public policy of the United States under Article V of the Convention. The Court
states that this defense does not apply because Article V only applies at the
arbitral award‑enforcement stage, not at the arbitration‑enforcement stage at
issue here. “Article V expressly provides, ‘Recognition and enforcement of an
arbitral award may also be refused if the competent authority in the country
where recognition and enforcement is sought finds that ... [t]he recognition or
enforcement of the award would be contrary to the public policy of that
country.’ New York Convention, art. V(2) (emphasis added). Yet, Article V has
no application in the interlocutory procedural posture of this case, where NCL
seeks to enforce arbitration at the outset of the dispute.” 652 F.3d 1280.
Lastly, the Court denies Lindo’s arguments against the
enforcement of the arbitration agreement, stating that “Lindo’s challenge to
his arbitration agreement fails because (1) Bahamian law itself recognizes
negligence actions; and (2) even if, as Lindo claims, U.S. law under the Jones
Act has a more relaxed causation standard for negligence claims than Bahamian
law, these were precisely the same arguments lodged (and rejected [by this
Court]) in [Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285 (11th
Cir.1998)].” 652 F.3d 1283.
In Lipcon, the Court held “that the choice‑of‑law and forum‑selection
clauses were enforceable and ordered the matter to be heard in English courts
under English law, since we will declare unenforceable choice clauses only when
the remedies available in the chosen forum are so inadequate that enforcement
would be fundamentally unfair.” 652 F.3d 1283 (internal citation omitted).
“In Lindo’s case, the arbitration clause, if anything, is
fundamentally fair for several reasons. For starters, the clause is part of a
union‑negotiated collective bargaining agreement. The fact that the Jones Act
claim was expressly referenced in that CBA is clear indication that this type
of claim was expressly considered during the negotiation process. Lindo cannot
obtain the advantages of his union‑negotiated Contract, while rejecting what he
now perceives as its disadvantages. This union‑negotiated agreement is
enforceable and valid even if it waives Lindo’s U.S. statutory claim under the
Jones Act.” 652 F.3d 1284.
“Lastly, Lindo’s position would effectively eviscerate the
mutually binding nature of the Convention. Lindo maintains that his arbitration
agreement is void as against public policy because he cannot assert his U.S.
statutory rights under Bahamian law. By this logic, courts in other nations
could likewise refuse to recognize valid, mutually agreed‑upon arbitration
provisions if they contemplated the application of American law, in derogation
of home‑based statutory remedies. Yet if every country refused to recognize
arbitration agreements that contemplate the application of foreign law, the
multilateral commitment of the Convention would be defeated.” 652 F.3d 1284.
Citation: Lindo v. NCL (Bahamas), 652 F.3d 1257 (11th
Cir. 2011).
*** About Sarah Ellen Cox: Sarah E. Cox is a Personal Injury attorney in Fort Myers, Florida. Ms. Cox received her Juris Doctor from Whittier School of Law in 2005, and was admitted to the Florida Bar in 2008. News about Sarah E. Cox are at: https://attorneygazette.com/sarah-ellen-cox# Attorney Profile at: https://solomonlawguild.com/sarah-ellen-cox Blog at: http://SarahECoxBlog.blogspot.com
