United States / 14 October 2003 / United States, U.S. District Court, Southern District of Florida / Bautista v. Star Cruises and Norwegian Cruise Line, Ltd. / 03-21642-CIV
| Country | United States |
| Court | United States, U.S. District Court, Southern District of Florida |
| Date | 14 October 2003 |
| Parties | Bautista v. Star Cruises and Norwegian Cruise Line, Ltd. |
| Case number | 03-21642-CIV |
| Applicable NYC Provisions | I | II | I(3) | II(3) |
| Languages | English |
| Summary | The Plaintiffs, citizens of the Philippines, each entered into a Philippine Overseas Employment Administration (“POEA”) contract with Norwegian Cruise Line Ltd. (“NCL”). The POEA contained an arbitration clause. A steam boiler explosion on board NCL’s vessel killed six and severely injured four Filipino seamen. The Plaintiffs initiated a civil action in state court. The Defendants, NCL and Star Cruises removed these cases to federal district court under Section 205 of the Federal Arbitration Act (“FAA”), which grants federal district courts removal jurisdiction over cases that relate to an arbitration agreement governed by the NYC. The Defendants filed a motion to stay litigation and compel arbitration. The Plaintiffs filed a motion to remand the case to state court, arguing, inter alia, that: (i) the seamen contracts were exempted from the coverage of the NYC; and (ii) the arbitration agreements were null and void because the POEA had ceased to be authorized to perform regulatory functions on behalf of Filipino workers at the time the contracts were entered into. The United States District Court for the Southern District of Florida granted the Defendants’ motion to compel arbitration and denied the Plaintiffs’ motion for remand. In so ruling, the Court held that all the jurisdictional prerequisites for the arbitration agreements to be enforced had been met: (i) there was an arbitration agreement in writing; (ii) the agreement provided for arbitration in the territory of a signatory to the NYC; (iii) the agreement arose out of a commercial legal relationship; and (iv) one of the parties to the agreement was not an American citizen. The District Court then noted that seamen employment contracts fell under Section 202 of the FAA. It stated that pursuant to Article I(3) NYC and Section 201 of the FAA, which follows the text of Article I(3) NYC, the United States agreed to apply the NYC “to differences arising out of legal relationship, whether contractual or not, that are considered as commercial under the national law of the United States.” The District Court concluded that a seamen employment contract was “commercial” under United States law and that application of the exemption in the domestic arbitration law (Section 1 of the FAA) to the international context was unsupported by the plain language of the FAA. The Court also held that the term “null and void” in Article II(3) NYC must be read narrowly and that the Plaintiffs had failed to meet the burden of proof required for invalidation of an arbitration agreement. |
| see also : |
Attachment (1)
 Original Pending Adobe Acrobat PDF |
