Case Law

Date Decided: October 1^st, 2009

Originally Filed in: New Jersey (Federal)

Decided by: U.S. Court of Appeals, Third Circuit (Federal)

Court: United States Court of Appeals for the Third Circuit

Judge: Judge Nygaard

Citation: 2009 WL 3449016 (3rd Cir. 2009)

Background:
Razo, a citizen of the Phillippines ws employed on the cruise ship M/V Empress of the Seas. Royal Caribbean ("Caribbean") was the operator and bareboat charterer of the M/V Nordic Empress.

Razo claimed that he was injured during a lifeboat drill and brought various claims against numerous parties in NJ state court, including Jones Act and unseaworthiness against Royal Caribbean and Nordic.

Razo was employed by the terms of a collective bargaining agreement that incorporated a Philippine Overseas and Employment Administration ("POEA"). Under the agreement Royal and Nordic successfully compelled arbitration of Razo's claim.

Razo appealed the District Court's order of arbitration arguing that the claims were not removable under the Savings to Suitors Clause and the anti-removal statute applicable to Jones Act and the Federal Employers' Liability Act.

Issues:
Did this Court find in favor of Razo holding that his claims were not removable pursuant to the Savings to Suitors Clause and anti-removal statute?

Held:
Razo argued that the district court erred in ruling that an arbitration agreement existed between himself and Royal Caribbean at the time of the injury. However, this Court found that the district court did not err in determining an arbitration clause controlled despite the existence of a conflicting clause which stated disputes were to be adjudicated in the "proper courts of Manila..".

Razo also contended that the agreement is unenforceable under the New York Convention Act. However, this Court found that the Act compelled arbitration because there was an agreement to arbitrate, the Philippines is a signatory to the Convention and Razo is not a US citizen.

Finally, the Court found that the district court was correct in ruling that Razo's reliance on the Jones Act and FELA was misplaced. Accordingly the district court correctly found that the forum for arbitration was in the Philippines because the Convention Act provides separate basis for jurisdiction, including claims under seaman employment contracts.

Comments:
The NY Convention Act requires that the parties must go resolve their disputes through arbitration if the following requirements are met:

1. There is an agreement in writing to arbitrate the dispute

2. The agreement provides for arbitration in the territory of a Convention signatory

3. The agreement arises out of a commercial legal relationship and

4. A party to the agreement is not an American citizen.

Steve Gordon