Sladjana Cvoro v. Carnival Corporation ( 2019 )

Case: 18-11815 Date Filed: 10/17/2019 Page: 1 of 34
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-11815
________________________
D.C. Docket No. 1:16-cv-21559-FAM
SLADJANA CVORO, Serbia,
Plaintiff-Appellant,
versus
CARNIVAL CORPORATION,
d.b.a. Carnival Cruise Lines,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(October 17, 2019)
Before ROSENBAUM, GRANT and HULL, Circuit Judges.
HULL, Circuit Judge:
Case: 18-11815 Date Filed: 10/17/2019 Page: 2 of 34
Plaintiff Sladjana Cvoro appeals the district court’s denial of her petition to
“vacate and/or alternatively to deny recognition and enforcement” of the foreign
arbitral award in favor of her employer, defendant Carnival Corporation d.b.a.
Carnival Cruise Lines (“Carnival”), on Cvoro’s claims brought under the Jones
Act, 46 U.S.C. § 30104, and U.S. maritime law for injuries related to the carpal
tunnel syndrome she developed while working on a Carnival cruise ship. The
district court denied Cvoro’s petition because, even though the arbitrator did not
apply U.S. law during arbitration, enforcing the foreign arbitral award did not
violate U.S. public policy. After careful review of the unique factual
circumstances of this case and with the benefit of oral argument, we must affirm.
I. FACTUAL BACKGROUND
A. Seafarer’s Employment Agreement
In August 2012, Cvoro, who is a citizen and resident of Serbia, signed a
seafarer’s employment agreement (the “seafarer’s agreement”) to work for
Carnival. Carnival is a Panamanian corporation that operates cruise ships with its
principal place of business in Miami, Florida. Everett v. Carnival Cruise Lines,
912 F.2d 1355, 1357 (11th Cir. 1990).
In her seafarer’s agreement, as a condition of her employment, Cvoro agreed
to resolve all legal disputes with Carnival by arbitration. Specifically, Cvoro’s
seafarer’s agreement contains mandatory-arbitration and forum-selection clauses,
2
Case: 18-11815 Date Filed: 10/17/2019 Page: 3 of 34
which provide that “[t]he place of arbitration shall be London, England, Monaco,
Panama City, Panama or Manila, Philippines whichever is closer to the Seafarer’s
home country.” Her seafarer’s agreement also contains a choice-of-law clause
designating the governing law for disputes as the laws of the flag of the cruise ship
on which Cvoro was assigned:
Governing Law. This Agreement shall be governed by, and all disputes
arising under or in connection with this Agreement of Seafarer’s service
on the vessel shall be resolved in accordance with, the laws of the flag
of the vessel on which Seafarer is assigned at the time the cause of
action accrues, without regard to principles of conflicts of laws
thereunder. The parties agree to this governing law notwithstanding
any claims for negligence, unseaworthiness, maintenance, cure, failure
to provide prompt, proper and adequate medical care, wages, personal
injury, or property damage which might be available under the laws of
any other jurisdiction.
Cvoro does not dispute that she entered into this seafarer’s agreement or what its
terms say.
B. Cvoro’s Employment on the Carnival Dream
Beginning in August 2012, Carnival employed Cvoro as a seaman to work
as an assistant waitress aboard the cruise ship Carnival Dream, which sails under
the flag of Panama. During her employment, Cvoro developed pain and swelling
in her left wrist. On March 28, 2013, Cvoro reported to the shipboard medical
center, complaining of pain and swelling in her left wrist, and “pins and needles”
in her wrist and hand. The ship’s physician gave Cvoro a splint and prescribed her
prednisone to stop the swelling.
3
Case: 18-11815 Date Filed: 10/17/2019 Page: 4 of 34
The next day, Cvoro returned to the medical center with the same left wrist
pain, which was getting worse. This time, the physician prescribed her ketorolac
and naproxen to treat the pain. Despite this treatment, Cvoro’s condition did not
improve. On March 31, 2013, Cvoro went to the medical center a third time for
her wrist pain, at which point the ship’s physician determined that she could no
longer carry out her duties aboard the ship. Cvoro was taken off duty the next day.
On April 1, 2013, Cvoro was examined by an orthopedic specialist ashore in
Cozumel, Mexico, who diagnosed her as having carpal tunnel syndrome.
Thereafter, Cvoro stopped working on the Carnival Dream, and upon her own
request, defendant Carnival repatriated her home to Serbia.
To comply with its maintenance and cure obligations under maritime law,
Carnival selected shore-side physicians in Serbia to continue treating Cvoro’s
condition. On May 28, 2013, a doctor selected by Carnival performed surgery on
Cvoro for her carpal tunnel syndrome. According to Cvoro, shortly after her
surgery, she began experiencing horrific symptoms due to the negligence of the
Serbian doctors, and she was eventually diagnosed with complex regional pain
syndrome. After further treatment from a variety of specialists in Europe, on June
30, 2014, Cvoro’s physicians declared her to have reached maximum medical
improvement. But to date, Cvoro suffers from gross motor deficits in her left hand
4
Case: 18-11815 Date Filed: 10/17/2019 Page: 5 of 34
and wrist, frozen shoulder, tendonitis of the wrist, and other permanent problems
with her left arm.
C. Arbitration in Monaco
Pursuant to her seafarer’s agreement, Cvoro filed an arbitration proceeding
against Carnival in Monaco—the venue closest to her home country Serbia—in an
attempt to recover for her injuries. She asserted two claims based on U.S. law.
First, Cvoro brought a claim under the Jones Act, 46 U.S.C. § 30104, asserting that
Carnival was vicariously liable for the alleged negligence of the shore-side doctors
it selected to treat her carpal tunnel syndrome. Second, Cvoro asserted a claim
under general maritime law, that is, the doctrine of maintenance and cure, for
Carnival’s alleged failure to provide her with medical treatment and to pay for her
medical bills and room and board. This second claim was later dropped because
Carnival had in fact paid for all of Cvoro’s medical bills and expenses for room
and board.
D. Panamanian Law Governed Arbitration
As a preliminary matter, the arbitrator determined that Panamanian law
governed the arbitration proceeding because, in the choice-of-law clause of the
seafarer’s agreement, the parties agreed that the law of Panama would apply.
Panama is where the Carnival Dream is flagged. The arbitrator concluded further
that Cvoro did not establish that U.S. law should apply, notwithstanding the
5
Case: 18-11815 Date Filed: 10/17/2019 Page: 6 of 34
choice-of-law clause, because there was not a sufficiently close connection
between the dispute and the United States. In reaching this conclusion, the
arbitrator noted that: (1) Cvoro was in Serbia; (2) Carnival is incorporated in
Panama; (3) the Carnival Dream was flagged in Panama at all relevant times;
(4) the parties chose Panamanian law to govern the dispute; (5) the seat of the
arbitration was Monaco; (6) there was no evidence that the Carnival Dream was in
U.S. territorial waters when the alleged cause of action accrued; and (7) Cvoro did
not allege that the United States was the only venue for enforcing an arbitral award
against Carnival in the event that she prevailed. In fact, the only connection
between the dispute and the United States was that Carnival’s principal place of
business is in Miami, which the arbitrator deemed insufficient to disregard the
parties’ valid agreement to apply Panamanian law.
Despite this ruling, Cvoro persisted in arguing that her claim was based
solely on U.S. law—that is, a Jones Act claim that Carnival was vicariously liable
for the negligence of the shore-side physicians in Serbia that it selected to treat her
carpal tunnel syndrome. Cvoro even invited the arbitrator to find in favor of
Carnival because, she contended, she had no cause of action under Panamanian
law. On that score, it is undisputed that Panamanian law does not recognize a
claim based on vicarious liability for shore-side malpractice occurring after a
seaman leaves the vessel.
6
Case: 18-11815 Date Filed: 10/17/2019 Page: 7 of 34
As the parties’ experts at arbitration generally agreed, Panamanian law
recognizes that Cvoro, as a seafarer who was injured aboard a vessel, has a labor
(contractual) cause of action and a tort cause of action for negligence against
Carnival. The labor claim under Panamanian law is akin to a no-fault maintenance
and cure claim under U.S. law. Panamanian law also recognizes a claim related to
disability compensation for any occupational injury or illness irrespective of fault,
but Cvoro did not pursue this remedy. In addition, Panamanian law recognizes a
seafarer’s action for the negligence of her employer or the shipowner, such as a
claim for Carnival’s negligent hiring of the shore-side physicians. But Cvoro did
not pursue a direct negligence claim against Carnival either.
E. Arbitrator’s Final Award
Even though Cvoro conceded that she had not pursued any cause of action
under Panamanian law, in its final award, the arbitrator examined Cvoro’s possible
claims under Panamanian law, based on both labor and tort law. First, as to a
claim for maintenance and cure, the arbitrator found that such a claim failed
because Cvoro did not contest that Carnival satisfied its obligations to provide
assistance, room and board, and medical care. As to a disability claim, the
arbitrator determined that, because Cvoro’s claim was based solely on the medical
negligence of the shore-side physicians in Serbia, which occurred after she signed
off the Carnival Dream, Carnival had no obligation to pay any disability.
7
Case: 18-11815 Date Filed: 10/17/2019 Page: 8 of 34
Moreover, the arbitrator concluded that Cvoro’s tort-based claim failed because
she did not establish that Carnival was directly negligent in any way. Accordingly,
the arbitrator dismissed Cvoro’s claims.
II. PROCEDURAL HISTORY
A. District Court Proceedings
In May 2016, Cvoro filed the instant suit in the district court in the United
States District Court for the Southern District of Florida, seeking to (1) “vacate
and/or alternatively to deny recognition and enforcement” of the arbitral award
under Article V of the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (the “New York Convention” or the “Convention”) 1 (Count I) and
(2) then litigate the merits of her Jones Act claim based on Carnival’s alleged
vicarious liability for the malpractice of the shore-side doctors it selected to treat
her (Count II) and an overlapping claim under general maritime law for damages
caused by the doctors’ malpractice (Count III). 2 After preliminary motions, the
district court bifurcated the proceeding to adjudicate first the threshold and
1
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards is
commonly known as the New York Convention. See New York Convention, June 10, 1958, 21
U.S.T. 2517, 330 U.N.T.S. 38.
2
Because Cvoro’s request to deny recognition and enforcement of the foreign arbitral
award under the New York Convention was only ancillary to her Jones Act and general maritime
law claims, we need not contemplate, and do not decide, whether the district court would have
had subject matter jurisdiction had Cvoro solely moved to vacate the foreign arbitral award.
8
Case: 18-11815 Date Filed: 10/17/2019 Page: 9 of 34
potentially dispositive issue of Cvoro’s request that the district court refuse to
enforce the arbitral award.
In further briefing on the issue, Cvoro argued that the arbitral award was
void as being against U.S. public policy because the arbitrator applied Panamanian
law, not U.S. law, which deprived her of the opportunity to assert a Jones Act
claim against Carnival for vicarious liability. The arbitrator’s final award,
therefore, refused to give her the Jones Act remedy available in the United States,
to which she was entitled as a seafarer. On this basis, Cvoro argued that enforcing
the final arbitral award violated U.S. public policy and thus must be vacated under
Article V(2)(b) of the New York Convention.
In response, Carnival contended, inter alia, that the district court should deny
the petition to vacate the arbitral award because: (1) Cvoro had a meaningful
remedy in arbitration under Panamanian law; and (2) Cvoro’s arguments did not
overcome the clear federal interest in enforcing arbitration awards under the New
York Convention.
In April 2018, the district court issued its order denying Cvoro’s request that
it refuse to enforce the arbitral award and dismissing her claims brought under the
Jones Act and general maritime law. In assessing whether the arbitrator’s
dismissal of Cvoro’s Jones Act claim violated U.S. public policy, the district court
identified three American public policies that were at play. First, the United States
9
Case: 18-11815 Date Filed: 10/17/2019 Page: 10 of 34
has a strong federal policy favoring arbitration, which applies with special force in
the field of international commerce. Second, the United States has an explicit,
well-defined, and dominant public policy extending “special solicitude” to seamen,
who are considered “wards of admiralty.” And third, the Supreme Court has
rejected the notion that all disputes must be resolved under U.S. law, even where
foreign law provides a lesser remedy.
The district court then concluded that the distinctions between Panamanian
law and U.S. law did not overcome the strong federal presumption to enforce
arbitral awards, especially because Cvoro’s theory of vicarious liability is not an
explicitly “well-defined and dominant” U.S. policy “rooted in basic notions of
morality and justice.” Of significance, the district court highlighted that Cvoro
never attempted to pursue any remedies under Panamanian law, so the court could
not say that the remedies during arbitration were so inadequate as to render the
proceeding and its result unfair. The district court therefore determined that Cvoro
did not establish that enforcing the arbitral award would violate U.S. public policy.
This appeal followed.
B. Monaco Court Confirms Arbitral Award
Meanwhile, after Cvoro initiated this lawsuit in the district court, and while
it was still pending there, defendant Carnival instituted a parallel proceeding in the
seat of the arbitration, Monaco, seeking confirmation of the arbitral award. On
10
Case: 18-11815 Date Filed: 10/17/2019 Page: 11 of 34
March 21, 2019, the court of first instance in Monaco issued final judgment in
favor of Carnival confirming the arbitral award because: (1) the seafarer’s
agreement was valid and enforceable under Monegasque law and the New York
Convention; and (2) Cvoro did not provide evidence that the arbitral award was
invalid as contrary to Panamanian law or Monaco’s international public policy.
III. STANDARD OF REVIEW
In reviewing a district court’s decision regarding the enforcement of a
foreign arbitral award, we review its “findings of fact for clear error and its legal
conclusions de novo.” Inversiones y Procesadora Tropical INPROTSA, S.A. v.
Del Monte Int’l GmbH, 921 F.3d 1291, 1304 n.17 (11th Cir. 2019) (quotation
omitted); see also Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141
F.3d 1434, 1443 (11th Cir. 1998) (requiring de novo review of whether admission
of expert testimony at arbitration violated U.S. public policy).
IV. NEW YORK CONVENTION
A. New York Convention, Generally
We begin with the New York Convention, which Cvoro relies upon in
arguing that the district court erred in denying her petition to vacate the arbitral
award. In 1958, the United Nations Economic and Social Council adopted the
New York Convention. Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257, 1262 (11th
Cir. 2011). In 1970, the United States acceded to the Convention, which was
11
Case: 18-11815 Date Filed: 10/17/2019 Page: 12 of 34
implemented that same year by Chapter 2 of the Federal Arbitration Act (“FAA”),
9 U.S.C. § 201 et seq. See 9 U.S.C. § 201 (“The Convention on the Recognition
and Enforcement of Foreign Arbitral Awards of June 10, 1958, shall be enforced in
United States courts in accordance with this chapter.”); Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631, 105 S. Ct. 3346, 3356 (1985).
The Convention requires that contracting states, such as the United States,
recognize written arbitration agreements concerning subject matter capable of
settlement by arbitration:
Each Contracting State shall recognize an agreement in writing under
which the parties undertake to submit to arbitration all or any
differences which have arisen or which may arise between them in
respect of a defined legal relationship, whether contractual or not,
concerning a subject matter capable of settlement by arbitration.
New York Convention, art. II(1).
The U.S. Supreme Court has explained that “the principal purpose” behind
the adoption of the Convention “was to encourage the recognition and enforcement
of commercial arbitration agreements in international contracts and to unify the
standards by which agreements to arbitrate are observed and arbitral awards are
enforced in the signatory countries.” Scherk v. Alberto–Culver Co., 417 U.S. 506,
520 n.15, 94 S. Ct. 2449, 2457 n.15 (1974). By encouraging the recognition and
enforcement of international arbitration agreements and awards, the Convention
“relieve[s] congestion in the courts and . . . provide[s] parties with an alternative
12
Case: 18-11815 Date Filed: 10/17/2019 Page: 13 of 34
method for dispute resolution that [is] speedier and less costly than litigation.”
Indus. Risk Insurers, 141 F.3d at 1440 (quotation omitted) (final alteration in
original). In that vein, the Supreme Court has emphasized that the United States
has a “federal policy in favor of arbitral dispute resolution” which “appl[ies] with
special force in the field of international commerce.” Mitsubishi Motors, 473 U.S.
at 631, 105 S. Ct. at 3356.
To that end and as relevant here, the FAA creates two causes of action in
federal court regarding an international arbitration agreement that falls under the
New York Convention. First, a party may file a motion to compel that arbitration
be held in accordance with an arbitration agreement. 9 U.S.C. § 206; Suazo v.
NCL (Bahamas), Ltd., 822 F.3d 543, 546 (11th Cir. 2016). Second, after
arbitration is completed, a party may file a motion to confirm the arbitral award, at
which time the opposing party may raise a particular set of defenses as to whether
the district court should enforce the arbitral award. 9 U.S.C. § 207; Lindo, 652
F.3d at 1280 (explaining that defenses to the enforcement of an arbitral award may
be raised at the arbitration-award-enforcement stage in actions brought under 9
U.S.C. § 207). This case concerns only the latter cause of action.
At this arbitration-award-enforcement stage, a district court must confirm
the arbitral award unless a party “successfully assert[s] one of the seven defenses
against enforcement of the award enumerated in Article V of the New York
13
Case: 18-11815 Date Filed: 10/17/2019 Page: 14 of 34
Convention.” Indus. Risk Insurers, 141 F.3d at 1441; see also 9 U.S.C. § 207;
New York Convention, art. III. Here, Cvoro invoked only one of the seven
defenses listed in Article V—that enforcement of the arbitral award would be
contrary to the public policy of the United States. The party opposing enforcement
of the award, here Cvoro, has the burden of proving that Article V defense
discussed below. Indus. Risk Insurers, 141 F.3d at 1442; Imperial Ethiopian Gov’t
v. Baruch-Foster Corp., 535 F.2d 334, 335–36 (5th Cir. 1976).
B. Article V(2)(b): Public-Policy Defense
The New York Convention’s public-policy defense, Article V(2)(b), states
that enforcement of an arbitral award “may . . . be refused if the competent
authority in the country where . . . enforcement is sought finds that . . . recognition
or enforcement of the award would be contrary to the public policy of that
country.” New York Convention, art. V(2)(b); see also Vimar Seguros y
Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 540, 115 S. Ct. 2322, 2330
(1995) (“‘A court in the United States need not recognize a judgment of the court
of a foreign state if . . . the judgment itself, is repugnant to the public policy of the
United States.’” (alteration in original) (quoting 1 Restatement (Third) of Foreign
Relations Law of the United States § 482(2)(d) (1986))).
“[T]he public-policy defense under the Convention is very narrow” and is
likewise to be construed narrowly in light of the presumption favoring enforcement
14
Case: 18-11815 Date Filed: 10/17/2019 Page: 15 of 34
of international arbitral awards. Inversiones y Procesadora, 921 F.3d at 1306;
Indus. Risk Insurers, 141 F.3d at 1445. The defense applies to only violations of
an “explicit public policy” that is “well-defined and dominant” and is ascertained
“by reference to the laws and legal precedents and not from general considerations
of supposed public interests.” Indus. Risk Insurers, 141 F.3d at 1445 (internal
quotation marks omitted) (citing Drummond Coal Co. v. United Mine Workers,
Dist. 20, 748 F.2d 1495, 1499 (11th Cir. 1984)).
Moreover, the public-policy defense “applies only when confirmation or
enforcement of a foreign arbitration award would violate the forum state’s most
basic notions of morality and justice.” Inversiones y Procesadora, 921 F.3d at
1306 (internal quotation marks omitted) (quoting Bamberger Rosenheim, Ltd.,
(Israel) v. OA Dev., Inc., (United States), 862 F.3d 1284, 1289 n.4 (11th Cir.
2017). Consequently, “[a]lthough this defense is frequently raised, it ‘has rarely
been successful.’” Ministry of Def. & Support for the Armed Forces of the Islamic
Republic of Iran v. Cubic Def. Sys., Inc., 665 F.3d 1091, 1097 (9th Cir. 2011)
(quoting Andrew M. Campbell, Annotation, Refusal to Enforce Foreign
Arbitration Awards on Public Policy Grounds, 144 A.L.R. Fed. 481 (1998 &
supp.)); see, e.g., Indus. Risk Insurers, 141 F.3d at 1444–45 (rejecting a party’s
public-policy defense against enforcement of an arbitral award because the
violation alleged—the side-switching of an expert witness during arbitration—was
15
Case: 18-11815 Date Filed: 10/17/2019 Page: 16 of 34
not so “well-defined and dominant” to rise to the level of a “public policy of the
sort required to sustain a defense under article V(b)(2) of the New York
Convention”).
V. DISCUSSION
On appeal, Cvoro argues that the arbitral award should not be enforced
because enforcement is contrary to the United States’ explicit public policy with
respect to the protection of seamen, who have long been treated as wards of
admiralty. According to Cvoro, this public policy was articulated by Congress in
the expansive protections afforded to seamen as part of the Jones Act, which
includes providing seamen with a cause of action against their employer based on
the vicarious liability for injuries sustained due to the negligence of their
employer’s agents. See 46 U.S.C. § 30104 (incorporating the provisions of the
Federal Employers’ Liability Act applicable to railway workers, including 45
U.S.C. § 51, which holds an employer vicariously liable for the negligence of its
agents); Hopson v. Texaco, Inc., 383 U.S. 262, 264, 86 S. Ct. 765, 766 (1966).
Relying on a footnote in Mitsubishi Motors, Cvoro maintains that because she was
deprived of this Jones Act remedy during arbitration, the arbitral award violates
U.S. public policy, rendering it unenforceable in the United States under Article
V(2)(b) of the Convention. See Mitsubishi Motors, 473 U.S. at 637 n.19, 105
S. Ct. at 3359 n.19.
16
Case: 18-11815 Date Filed: 10/17/2019 Page: 17 of 34
A. Relevant Caselaw
Our Court has never addressed at this arbitration-award-enforcement stage
whether depriving a seaman of a Jones Act remedy violates U.S. public policy for
purposes of the Article V(2)(b) defense. However, two of our decisions provide
substantial guidance.
First, in Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285 (11th
Cir. 1998), we addressed the “question of whether the anti-waiver provisions of the
United States securities laws preclude enforcement of certain choice-of-law and
forum-selection clauses . . . in international agreements.” Id. at 1287.
Acknowledging that choice clauses “may operate in tandem as a prospective
waiver of the statutory remedies for securities violations,” this Court nevertheless
held that the choice clauses were enforceable and not contrary to public policy. Id.
at 1287, 1298 (internal quotation omitted). In so ruling, we examined whether the
English remedies were inadequate, given that English law contained no direct
analogues to the U.S. Securities Act for securities registration violations. Id. at
1297. We recognized numerous ways in which English securities law allegedly
provided inferior remedies as compared to U.S. law. Id. at 1297–98. Despite the
fact that “the United States securities laws would provide [appellants] with a
greater variety of defendants and a greater chance of success due to lighter scienter
17
Case: 18-11815 Date Filed: 10/17/2019 Page: 18 of 34
and causation requirements,” we refused to invalidate the choice clauses “simply
because the remedies available in the contractually chosen forum are less favorable
than those available in the courts of the United States.” Id. at 1297 (quotation
omitted) (alteration in original). “Instead, we will declare unenforceable choice
clauses only when the remedies available in the chosen forum are so inadequate
that enforcement would be fundamentally unfair.” Id.
More recently, in Lindo, our Court confronted a similar issue as here
regarding waiver of a seaman’s Jones Act remedy in arbitration, albeit at the earlier
arbitration-enforcement stage. In Lindo, the seafarer, Harold Lindo, brought a
Jones Act claim against his employer, the cruise line operator NCL (Bahamas) Ltd.
(“NCL”), in Florida state court, alleging that he had injured his back while lifting
trash bags at work. 652 F.3d at 1260–61. The employment agreement between
NCL and Lindo required that such claims be arbitrated in Nicaragua (the country
where Lindo was a citizen) and that the law of the Bahamas (the law of the vessel)
would apply. Id. at 1261. NCL removed the case to federal court and then moved
to compel arbitration, which the district court granted. Id. at 1261–62. Lindo
appealed, arguing, inter alia, that the application of Bahamian law in the arbitral
forum would eliminate his U.S. statutory claim under the Jones Act. Id. at 1263–
64. Therefore, according to Lindo, compelling arbitration would violate public
policy under the New York Convention. Id.
18
Case: 18-11815 Date Filed: 10/17/2019 Page: 19 of 34
This Court affirmed the district court’s order compelling arbitration. First,
we extensively examined a series of cases where the Supreme Court and this Court
enforced forum-selection and choice-of-law clauses in contracts that required
application of non-American law in suit or arbitration. Lindo, 652 F.3d at 1264–
69. For starters, in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S. Ct.
1907 (1972), the Supreme Court “announced a strong presumption in favor of
enforcing such forum-selection clauses, despite the possibility that a markedly
different result would be obtained if the case proceeded in English courts as
opposed to American Courts.” Lindo, 652 F.3d at 1264. Two years later, in
Scherk v. Alberto–Culver Co., 417 U.S. 506, 94 S. Ct. 2449 (1974), the Supreme
Court “recognized that U.S. statutory claims are amenable to arbitral resolution—
even U.S. statutory claims containing anti-waiver provisions.” Lindo, 652 F.3d at
1264–65. After reviewing these cases and others, we distilled from the Supreme
Court precedents several overarching themes applicable to agreements requiring
the application of non-American law in international arbitrations:
(1) courts should apply a strong presumption in favor of enforcement
of arbitration and choice clauses; (2) U.S. statutory claims are
arbitrable, unless Congress has specifically legislated otherwise;
(3) choice-of-law clauses may be enforced even if the substantive law
applied in arbitration potentially provides reduced remedies (or fewer
defenses) than those available under U.S. law; and (4) even if a contract
expressly says that foreign law governs . . . courts should not invalidate
an arbitration agreement at the arbitration-enforcement stage on the
basis of speculation about what the arbitrator will do, as there will be a
later opportunity to review any arbitral award.
19
Case: 18-11815 Date Filed: 10/17/2019 Page: 20 of 34
Id. at 1265-69 (emphasis added). The Lindo Court then concluded that Lindo
could not raise the public-policy defense under Article V(2)(b) at that time,
because that defense “applies only at the arbitral award-enforcement stage and not
at the arbitration-enforcement stage.” Id. at 1280.
Nevertheless, we assumed arguendo that Lindo could raise the Article
V(2)(b) public-policy defense at the arbitration-enforcement stage, and this Court
said that his challenge to the arbitration agreement—that it was void as against
public policy because he would be prevented from asserting his Jones Act claim
under Bahamian law—would still fail. Id. at 1283–84. This is 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) in Lipcon.” Id. at 1283. Moreover, Lindo did not show that
international arbitration under Bahamian negligence law would provide an
inadequate remedy such that enforcement of the choice-of-law provision would be
“fundamentally unfair.” Id. at 1283–84. Finally, this Court observed that Lindo’s
position would effectively eviscerate the mutually binding nature of the New York
Convention because every country could refuse to recognize valid, mutually
agreed-upon arbitration provisions if they contemplate the application of foreign
law. Id. at 1284–85.
20
Case: 18-11815 Date Filed: 10/17/2019 Page: 21 of 34
B. Competing Public Policies at Issue
Against this legal framework, we will now consider the competing public
policies at issue in this case. First, we agree with Cvoro that the United States has
an “explicit public policy that is well-defined and dominant” with respect to the
solicitude of seamen. Indus. Risk Insurers, 141 F.3d at 1445 (quotations omitted).
American courts have long acted to protect the interests of seafarers, including
“from the harsh consequences of arbitrary and unscrupulous action of their
employers, to which, as a class, they are peculiarly exposed.” Collie v. Fergusson,
281 U.S. 52, 55, 50 S. Ct. 189, 191 (1930); see also Aguilar v. Standard Oil Co. of
N.J., 318 U.S. 724, 727–28, 63 S. Ct. 930, 932–33 (1943) (“[W]ith the combined
object of encouraging marine commerce and assuring the well-being of seamen,
maritime nations uniformly have imposed broad responsibilities for their health
and safety upon the owners of ships. In this country these notions were reflected
early, and have since been expanded, in legislation designed to secure the comfort
and health of seamen aboard ship[.]”). For instance, when a seaman falls ill or
suffers an injury in the service of the ship, maritime law requires her employer or
the shipowner to provide “maintenance and cure of the seaman for illness or injury
during the period of the voyage, and in some cases for a period thereafter.” Cent.
Gulf Steamship Corp. v. Sambula, 405 F.2d 291, 300 (5th Cir. 1968).
21
Case: 18-11815 Date Filed: 10/17/2019 Page: 22 of 34
Second, when assessing whether enforcing an arbitral award violates public
policy, we also must consider that the United States has a “federal policy in favor
of arbitral dispute resolution” which “applies with special force in the field of
international commerce.” Mitsubishi Motors, 473 U.S. at 631, 105 S. Ct. at 3356.
Third, we also recognize that “[t]he Supreme Court has rejected the ‘concept that
all disputes must be resolved under our laws and in our courts,’ even when
remedies under foreign law do not comport with American standards of justice.”
Asignacion v. Rickmers Genoa Schiffahrtsgesellschaft MBH & CIE KG, 783 F.3d
1010, 1017 (5th Cir. 2015) (quoting M/S Bremen, 407 U.S. at 9, 92 S. Ct. at 1912–
13 (1972)). The Supreme Court has admonished: “To determine that ‘American
standards of fairness’ . . . must [apply] . . . demeans the standards of justice
elsewhere in the world, and unnecessarily exalts the primacy of United States law
over the laws of other countries.” Scherk, 417 U.S. at 517 n.11, 94 S. Ct. at 2456
n.11. Indeed, as we intimated in Lindo, United States public policy does not
necessarily disfavor applying foreign law during arbitration, even when the foreign
law provides a seaman with reduced or different remedies than those available
under U.S. law. Lindo, 652 F.3d at 1264–69, 1283–85.
And fourth, we may consider the fact that the Monaco court already has
confirmed the arbitral award in this case, which weighs in favor of enforcement
here. That is because we take into account “concerns of international comity,
22
Case: 18-11815 Date Filed: 10/17/2019 Page: 23 of 34
respect for the capacities of foreign and transnational tribunals, and sensitivity to
the need of the international commercial system for predictability in the resolution
of disputes[,] . . . even assuming that a contrary result would be forthcoming in a
domestic context.” Mitsubishi Motors, 473 U.S. at 629, 105 S. Ct. at 3355.
C. Analysis of Public-Policy Defense
Weighing the policies at issue and considering the specific unique factual
circumstances of this case, we must conclude that Cvoro’s Article V(2)(b) defense
fails. Cvoro’s public-policy defense hinges on the adequacy of remedies under
Panamanian law afforded to her as a seaman. We acknowledge that the arbitrator
in Monaco dismissed Cvoro’s Jones Act claim, awarding her nothing. We also
acknowledge that, if Cvoro were to prevail in a suit under United States law based
on Carnival’s vicarious liability for the negligence of the shore-side physicians
who treated her, she may well recover money damages. But that likelihood, in and
of itself, does not render the arbitral award unenforceable. Nor does it mean that a
U.S. claim must be available. As we have explained, simply because a foreign
arbitral award provides for a smaller recovery than may have been available under
United States maritime law does not necessarily mean the award violates public
policy. See Lindo, 652 F.3d at 1283–87.
Cvoro argues that her case is distinguishable from Lindo and other similar
precedent because she did not receive merely a smaller recovery in arbitration, she
23
Case: 18-11815 Date Filed: 10/17/2019 Page: 24 of 34
was awarded no recovery at all. That is not entirely correct. The arbitral award
does not represent the sum total of Carnival’s obligations to Cvoro, nor is it an
accounting of monetary benefits that Cvoro received from Carnival for her carpal
tunnel syndrome. To be sure, in the arbitration, Cvoro initially brought a separate
claim for maintenance and cure. But Cvoro later agreed that Carnival had, in fact,
complied with its maintenance and cure obligations under Panamanian law,
including paying for her medical bills, room and board, and living expenses while
under medical care. As a result, Cvoro dropped this maintenance and cure claim in
her arbitration, as it was no longer necessary or valid.
In this regard, Cvoro obtained many of the benefits to which she would be
entitled under U.S. law: Carnival treated Cvoro’s carpal tunnel syndrome after it
manifested in March 2013, repatriated Cvoro home to Serbia, arranged for
continued medical care, and paid for ongoing maintenance and cure during her
recovery to the point when her physician declared her to have reached maximum
medical improvement in June 2014. As such, Cvoro’s contention that Panamanian
law did not afford her any remedy for her injuries is unavailing. Although not
listed in the final arbitral award, Carnival paid for Cvoro’s full maintenance and
cure benefits.
Furthermore, Panamanian law itself provides Cvoro, as a seaman, with
additional remedies that she never pursued in arbitration. First, Panamanian law
24
Case: 18-11815 Date Filed: 10/17/2019 Page: 25 of 34
provides a seafarer who was injured aboard a vessel with an action for the
negligence of a shipowner, including for negligently referring a seaman to a
physician. Cvoro did not pursue this claim because she “ha[d] no affirmative proof
that [Carnival] acted negligently other than simply choosing the physician in this
case.”
Second, Panamanian law also provides a seafarer who suffers an incapacity
or disability with a claim related to disability compensation for any occupational
injury or illness irrespective of fault. Cvoro did not pursue this remedy either. We
recognize that the arbitrator found that Cvoro would not be entitled to those
disability benefits because her claim was based solely on the medical negligence of
the shore-side physicians. In particular, the arbitrator reasoned that, under
Panamanian law, Carnival would not be obligated to pay disability in connection
with this “new” injury sustained after she signed off the ship, as such disability
claims must be based on an “occupational hazard” while onboard the Carnival
Dream. But significantly, Cvoro never sought disability benefits at all, including
benefits based on the wrist injuries she developed while working onboard the
Carnival Dream and before the surgery.
And third, to the extent that Cvoro now argues that she did not reach
maximum medical improvement in June 2014 and has unmet medical needs that
Carnival should pay for, Cvoro did not advance this position during arbitration
25
Case: 18-11815 Date Filed: 10/17/2019 Page: 26 of 34
either. To the contrary, she dropped her maintenance and cure claim, conceding
that Carnival had complied with its obligation to pay for her medical bills. Given
these potential avenues for recovery under Panamanian law and Cvoro’s failure to
fully employ them, we cannot say that the remedies available to her were so
inadequate as to render the arbitration proceedings and arbitral award
fundamentally unfair.
The primary relevant distinction between Panamanian and U.S. law is that
Panamanian law does not recognize a claim that Carnival was vicariously liable for
the negligence of the shore-side physicians that it selected to treat Cvoro, whereas
U.S. law does. Cvoro contends that enforcement of the arbitral award violates the
public policy of the United States because the arbitrator deprived her of this Jones
Act remedy.
The problem for Cvoro is that the arbitral award here was not so inadequate
as to violate this nation’s “most basic notions of morality and justice.” See
Inversiones y Procesadora, 921 F.3d at 1306. The record does not show that
Carnival took advantage of Cvoro in its handling of her injuries or otherwise
saddled her with maintenance and cure expenses. Instead, the evidence shows that
Carnival promptly treated Cvoro’s wrist condition, took her off duty when the
treatment did not work, and repatriated her home to Serbia while continuing to
provide her with maintenance and cure benefits until she reached maximum
26
Case: 18-11815 Date Filed: 10/17/2019 Page: 27 of 34
medical improvement for what was ultimately diagnosed to be carpal tunnel
syndrome. Moreover, Cvoro does not claim that Carnival was negligent in hiring
the Serbian doctors who continued to treat her carpal tunnel syndrome and, in fact,
admits that Carnival was not negligent in hiring the specific Serbian doctor who
performed surgery on her wrist.3
At bottom, Cvoro’s argument that we must refuse to enforce the award
because she was deprived of a statutory remedy against Carnival is precisely the
same argument that we rejected in Lipcon. Lipcon, 148 F.3d at 1297 (“We have
little doubt that the United States securities laws would provide [appellants] with a
greater variety of defendants and a greater chance of success due to lighter scienter
and causation requirements . . . . We will not invalidate choice clauses, however,
simply because the remedies available in the contractually chosen forum are less
favorable than those available in the courts of the United States.”) (alterations in
original) (internal quotations and citations omitted). As in Lipcon, here, we may
not refuse to enforce the arbitral award simply because the remedies available
under Panamanian law are less favorable to Cvoro than the remedies available
3
Cvoro concedes that claiming that Carnival was negligent in selecting the Serbian doctor
who performed her surgery would have been frivolous based on documents produced by
Carnival, which establish: (1) the doctor graduated from a major urban medical school in
Yugoslavia in 1976; (2) after completing a three-year internship, the doctor passed his
specialized exams in plastic and reconstructive surgery, which are the European equivalent to
board certification; and (3) the doctor received additional training at a university hospital in
Yugoslavia and Germany before returning to Serbia where he was a practicing surgeon for over
20 years prior to the subject incident.
27
Case: 18-11815 Date Filed: 10/17/2019 Page: 28 of 34
under U.S. law. And, as detailed above, the remedies available to Cvoro under
Panamanian law are not “so inadequate that enforcement would be fundamentally
unfair.” Id.
D. Mitsubishi Motors Does Not Help Cvoro
Contrary to Cvoro’s assertion, the Supreme Court in Mitsubishi Motors did
not establish that a public policy violation has occurred under the Convention
when a party is deprived of a federal statutory claim in arbitration. Cvoro’s
argument is based on dictum from a footnote in Mitsubishi Motors, from which the
“prospective waiver doctrine” originated.
In Mitsubishi Motors, the Supreme Court deemed enforceable an arbitration
clause requiring the parties to arbitrate antitrust claims arising from the Sherman
Act in Japan. 473 U.S. at 616–24, 628–29, 105 S. Ct. at 3348–52, 3354–55. The
Court held that a party is bound by its agreement to arbitrate U.S. statutory claims
unless Congress has precluded arbitration as to that subject matter. Id. at 627–28,
105 S. Ct. at 3354–55. Even though it was clear in that case that U.S. law would
apply to the antitrust claims during arbitration, in a footnote, the Supreme Court
noted a willingness to condemn, on “public policy” grounds, an arbitration
agreement that has “choice-of-forum and choice-of-law clauses [that] operate[] in
tandem as a prospective waiver of a party’s right to pursue statutory remedies for
antitrust violations.” Id. at 637 n.19, 105 S. Ct. at 3359 n.19. But because the
28
Case: 18-11815 Date Filed: 10/17/2019 Page: 29 of 34
arbitral panel had taken under submission the antitrust claims—due to an
agreement by the parties that U.S. law would apply—the Supreme Court
emphasized that, “at this stage in the proceedings,” it had “no occasion to
speculate” on whether the arbitration agreement’s potential deprivation of a
claimant’s right to pursue federal remedies may render that agreement
unenforceable. Id. The Court also declined to consider “the effect of an arbitral
tribunal’s failure to take cognizance of the statutory cause of action on the
claimant’s capacity to reinitiate suit in federal court.” Id.
In subsequent cases, the Supreme Court has asserted the existence of this
“prospective waiver” doctrine, but the Court has never invoked it to justify the
refusal to enforce an arbitration clause in either the domestic or foreign arbitration
context. See, e.g., Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228, 235, 133
S. Ct. 2304, 2310 (2013); Sky Reefer, 515 U.S. at 540, 115 S. Ct. at 2330; see also
Suazo, 822 F.3d at 548.
The Supreme Court in Sky Reefer declined to apply the “prospective
waiver” doctrine, noting that it was premature to do so since arbitration had not yet
taken place, and it was unclear what law the arbitrator would apply or whether the
plaintiff would receive “diminished protection as a result” of the application of that
law. Sky Reefer, 515 U.S. at 540, 115 S. Ct. at 2329–30. Because, at that point,
the respondents sought only to enforce the arbitration agreement, the Court noted
29
Case: 18-11815 Date Filed: 10/17/2019 Page: 30 of 34
there would be an opportunity for later review of the arbitral award in federal
court. Id. In other words, the district court would have the opportunity at the
award-enforcement stage to address public policy concerns. Id. The Sky Reefer
Court suggested, “[w]ere there no subsequent opportunity for review and were we
persuaded that ‘the choice-of-forum and choice-of-law clauses operated in tandem
as a prospective waiver of a party’s right to pursue statutory remedies,’” the Court
could perhaps condemn an arbitration agreement as being void as against public
policy. Id. at 540, 115 S. Ct. at 2330 (quoting Mitsubishi Motors, 473 U.S. at 637
n.19, 105 S. Ct. at 3359 n.19). But because there was an opportunity for review at
the award-enforcement stage, it was premature to make findings on whether
foreign-law remedies would be inadequate. See Lindo, 652 F.3d at 1279.
Of course, here, Cvoro has already engaged in arbitration and the district
court had the opportunity to review the foreign arbitral award. So it is not
premature at this point to consider Cvoro’s prospective-waiver argument.
Importantly though, following its decision in Sky Reefer, the Supreme Court
limited the import of the “prospective waiver” language in Mitsubishi Motors to
dicta, making plain that “Mitsubishi Motors did not hold that federal statutory
claims are subject to arbitration so long as the claimant may effectively vindicate
his rights in the arbitral forum.” Italian Colors Rest., 570 U.S. at 235 n.2, 133 S.
Ct. at 2310 n.2 (emphasis added). Id. Nonetheless, because the Supreme Court
30
Case: 18-11815 Date Filed: 10/17/2019 Page: 31 of 34
has suggested that an arbitral agreement could perhaps contravene public policy if
the combination of choice-of-forum and choice-of-law clauses work together as a
prospective waiver of a party’s rights to pursue statutory remedies, we discuss the
issue here. Ultimately, that analysis leads us back to our decisions in Lipcon and
Lindo.
We first assume, without deciding, that Cvoro’s Jones Act claim is a
statutory remedy, since Mitsubishi Motors and its progeny spoke of only the
potential prospective waiver of a right to pursue statutory remedies. Next, we
consider whether the choice-of-forum and choice-of-law clauses in the seafarer’s
agreement in this case operate together as a prospective waiver of Cvoro’s
statutory remedy, such that the agreement could perhaps be void as against public
policy.
In Lipcon, we considered the dicta set forth in Mitsubishi Motors and
reached the conclusion that the choice-of-forum and choice-of-law clauses did not
contravene public policy, even if the clauses may have worked together as a
prospective waiver of the party’s statutory remedies. Lipcon, 148 F.3d at 1298. In
doing so, we found significant the fact that English law provided adequate
remedies to the appellants. Id. at 1298–99. As a result, we agreed with the district
court’s finding that the choice clauses were enforceable. Id. at 1299.
31
Case: 18-11815 Date Filed: 10/17/2019 Page: 32 of 34
We recognize, though, that Lipcon was not an arbitral-award-enforcement-
stage case like this one and therefore was “not subject to the New York
Convention’s linking of Article V public policy defense to the arbitral award-
enforcement stage.” Lindo, 652 F.3d at 1269. However, this Court in Lindo found
the decision in Lipcon to be “highly relevant to footnote 19 in Mitsubishi.” Id.
And while Lindo, like Lipcon, was also an arbitration-agreement-enforcement-
stage case (as opposed to an arbitral-award-enforcement-stage case), we
alternatively held that even assuming arguendo that Article V’s public-policy
defense could apply at that earlier stage, Lindo’s challenge to the arbitration
agreement—that it was void as against public policy because he would be
prevented from asserting his Jones Act claim under Bahamian law—would still
fail. Id. at 1283–84.
Indeed, this Court concluded that the fact that Lindo asserted a Jones Act
claim did “not affect the strong presumption in favor of enforcement of the choice
clauses in [the seafarer’s agreement].” Id. at 1276 (citing Mitsubishi Motors, 473
U.S. at 626, 105 S. Ct. at 3354 (“There is no reason to depart from” the strong
presumption of enforceability “where a party bound by an arbitration agreement
raises claims founded on statutory rights.”). And we rejected Lindo’s challenge to
the arbitration agreement as being void as against public policy because he would
be prevented from asserting his Jones Act claim under Bahamian law. Id. at 1283–
32
Case: 18-11815 Date Filed: 10/17/2019 Page: 33 of 34
84. There, we relied on our decision in Lipcon and compared the remedies
available under Bahamian law and U.S. law, ultimately finding that Lindo did not
show that international arbitration under Bahamian negligence law would provide
an inadequate remedy such that enforcement of the arbitration agreement would be
“fundamentally unfair.” Id.
Applying that reasoning here, we find under our current precedent, the
question of prospective waiver of a party’s Jones Act claim collapses into our
examination of whether choice clauses in arbitration agreements render remedies
so inadequate that enforcement of those clauses would be fundamentally unfair.
And in making this determination, we compare the remedies available under the
law chosen in the arbitration agreement and U.S. law. For the reasons already
discussed, we find the remedies available to Cvoro under Panamanian law are not
“so inadequate that enforcement would be fundamentally unfair.” See Lipcon, 148
F.3d at 1297. Accordingly, Cvoro’s prospective-waiver argument fails.
Ultimately, at this arbitration-award-enforcement stage, the test for whether
a court should refuse to enforce a foreign arbitral award based on public policy is
not whether the claimant was provided with all of her statutory rights under U.S.
law during arbitration. Italian Colors Rest., 570 U.S. at 235 n.2, 133 S. Ct. at 2310
n.2. Rather, the public-policy defense “applies only when confirmation or
enforcement of a foreign arbitration award would violate the forum state’s most
33
Case: 18-11815 Date Filed: 10/17/2019 Page: 34 of 34
basic notions of morality and justice.” Inversiones y Procesadora, 921 F.3d at
1306. Cvoro has not made that showing here. Under the totality of the specific
facts of this case, enforcing the arbitral award does not violate our “most basic
notions of morality and justice.” Id.
VI. CONCLUSION
For the foregoing reasons, despite Cvoro’s status as a ward of admiralty, she
has not established that the foreign arbitral award in this case offends the United
States’ “most basic notions of morality and justice.” We therefore conclude that
the district court did not err in denying Cvoro’s request that it refuse to enforce the
arbitral award and dismissing her claims brought under the Jones Act and general
maritime law.
AFFIRMED.
34