The “Carnival Dream” Comes True, as Eleventh Circuit Refuses to Vacate Foreign Arbitration Award Lacking Jones Act Remedy

Cvoro v. CarnivalCorp., No.18-11815, 2019 U.S. App. LEXIS 30940, 2019 WL 5257962 (11th Cir. Oct. 17, 2019).

By: Tristan Gruspier

Inthis decision out of the Eleventh Circuit Court of Appeals, the court declinedto vacate an arbitration award that prevented a seaman from arguing a Jones Actremedy during foreign arbitration The argument entailed an arbitrator’s refusalto consider that the Jones Act claim in controversy was against United Statespublic policy under the New York Convention.[1]The court, acknowledging the claim as a matter of first impression, began alengthy review of the facts to help decide future cases.

Theplaintiff, a Serbian citizen, worked for Carnival Cruise Lines on a Panamanianflagged cruise ship named CARNIVAL DREAM.Her seafarer’s agreement included sections that stipulatedmandatory-arbitration, forum-selection, and choice-of-law based upon the flagof the assigned cruise ship.[2]After working seven months on CARNIVALDREAM, the plaintiff, Cvoro, developed carpal tunnel syndrome. To complywith its maintenance and cure obligations, Carnival repatriated the plaintiffand selected doctors to perform the necessary surgery. Shortly thereafter, theplaintiff experienced symptoms caused by the surgeon’s alleged negligence.After physicians declared her to have reached maximum medical improvement, Cvorofiled an arbitration proceeding against Carnival in Monaco and asserted claimsbased on United States law.

TheArbitrator first determined Panamanian law governed the arbitration proceedingfor a multitude of reasons, one of which included the choice-of-law provision.[3]The seaman asserted United States law applied and forewent remedies providedunder Panamanian law.[4]Consequently, the Arbitrator determined the plaintiff failed to establishCarnival was directly negligent and thus dismissed all claims. This dismissalled to the instant suit.

Cvorobrought suit in the Southern District of Florida, asking the court to vacate ordeny recognition and enforcement of the arbitral award under the New YorkConvention.[5]She argued the arbitral ruling was void and against United States public policybecause the arbitrator applied Panamanian law, which deprived her of the opportunityto assert a Jones Act claim.[6]After a public policy review, the district court denied the plaintiff’s requestand concluded that the plaintiff failed to establish arbitral award enforcementwould violate public policy. The seafarer appealed.

EleventhCircuit assessed the district court’s decision de novo in light of the New YorkConvention and applicable case law.[7]The court relied heavily on precedent from two previous rulings, Lindo andLipcon.[8]In Lindo, the court ruled that an award did not violate public policy becausewhen possible recovery was smaller under foreign law. Similarly, in Lipcon, the court refused to invalidatean award because of deprivation of a statutory remedy as a result of acontractually chosen forum.

Inclosing, the Eleventh Circuit laid out its approach for future public policychallenges under the New York Convention. The court inferred that the only waythe public policy defense would apply is when confirmation or enforcement of aforeign arbitration award would violate the forum state’s most basic notions ofmorality and justice.[9]Such a determination is made by comparison of remedies available under the lawchosen in the arbitration agreement against those of the United States.Applying this approach, the Eleventh Circuit upheld the arbitration anddismissed all claims, as it found the plaintiff never established such a deprivationthrough foreign arbitration.  

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[1] The Convention on theRecognition and Enforcement of Foreign Arbitral Awards Art. V(2)(b), Dec. 29,1970, 21 U.S.T. 2517.

[2] Cvoro v. Carnival Corp., No. 18-11815,2019 WL 5257962, at *1 (11th Cir. Oct. 17, 2019).

[3] Id. at *2.

[4] See id.at *3 (claimed based on 46 U.S.C.A § 30104).

[5] Id.

[6] See id. at *6 (citing MitsubishiMotors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, at 637 n. 19(1985)).

[7] Id. at *4.

[8] See id. at *5-13, (citing Lindov. NCL (Bahamas), Ltd., 652 F.3d 1257 (11th. Cir. 2011) and Lipcon v. Underwriters at Lloyd’s, London,148 F.3d 1285 (11th. Cir. 1998)).

[9] Id. at *13 (citing Inversions y Procesadora (Costa Rica) v. Del Monte Int. GMBH (Swiss),921 F.3d 1291 (11th Cir. 2019)).