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Corvo v. Carnival Corp

United States District Court, S.D. Florida, Miami Division

April 4, 2018




         Plaintiff, Sladjana Cvoro, a seafarer, requests the Court vacate an arbitral award as void against public policy because the arbitrator applied Panamanian law. In so doing, the arbitrator precluded Cvoro from asserting a Jones Act claim against her employer Carnival Corporation for vicarious liability. Under the Jones Act, Cvoro claims Carnival is vicariously liable for the negligence of the shore-side physicians it hired to treat her carpal tunnel syndrome. Panamanian law does not recognize that cause of action, and instead requires she show that Carnival itself was negligent in hiring the shore-side physicians. Panamanian law also provides other avenues of relief, such as disability benefits. The arbitral award indicates that Cvoro did not pursue those potential avenues and therefore, the arbitrator did not award her a remedy. Having reviewed the distinctions between Panamanian and U.S. law, this Court does not find it necessary to vacate the arbitral award as void as against public policy.

         THIS CAUSE came before the Court upon Plaintiffs Memorandum in Support of Petition to Vacate and/or Set Aside Arbitration Award (D.E. 67) filed on June 6, 2017.

         THE COURT has considered the petition, the response, the pertinent portions of the record, and being otherwise fully advised in the premises, it is

         ADJUDGED that the petition to vacate the arbitral award is DENIED. It is also

         ADJUDGED that all other pending motions are DENIED as moot as this case is closed.

         I. Background

         Plaintiff, Sladjana Cvoro, is a seafarer from Serbia, who was employed by the Defendant Carnival Corporation on the Carnival Dream. Cvoro sustained injuries when she was treated for carpal tunnel syndrome by a shore-side physician. She developed carpal tunnel while working on the Carnival Dream. To comply with its maintenance and cure obligations under maritime law, Carnival selected the shore-side physicians in Serbia to treat Cvoro's condition. Plaintiff is seeking to assert a Jones Act claim against Carnival for vicarious liability for the physicians' negligence, i.e. that Carnival is liable for the negligence of the shore-side doctor in Serbia.

         At the outset, Cvoro did not file her Jones Act claim in U.S. courts because the parties' seafarer employment agreement contains mandatory arbitration and forum-selection clauses, which provide "[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." The parties' agreement also contains a choice-of-law clause designating the governing law as the law of the ship's flag, in this case Panama.

         Plaintiff filed an arbitration case in Monaco to recover for her injuries against Carnival, which included a U.S. Jones Act claim for vicarious liability. The arbitrator employed the agreement's choice-of-law provision to apply the law of Panama, where the Carnival Dream is registered. The arbitrator dismissed Plaintiffs Jones Act claim finding U.S. law did not apply to the proceeding. It is undisputed that Panamanian law does not recognize a cause of action for vicarious liability. Plaintiff seeks to vacate the arbitral award claiming that the decision not to apply United States law deprived her of her Jones Act remedy in violation of public policy.

         Notably, the parties' respective experts at the arbitration generally agreed on Panamanian law. Panamanian law recognizes a labor (contractual) cause of action and a tort cause of action for negligence against an employer. The labor claim under Panama law is the equivalent of a no-fault maintenance and cure claim under U.S. law. Plaintiff did not oppose the Defendant's position that it satisfied the obligations to provide assistance and medical care (maintenance and cure). Panamanian law also recognizes an available claim for disability compensation related to the underlying condition Plaintiff developed on board, but Plaintiff did not pursue it. Plaintiff also could have pursued a tort claim against Carnival for negligent hiring of the physicians. It is undisputed that Cvoro did not pursue these available avenues under Panamanian law. Cvoro claims it would have been futile to do so because she could obtain no record evidence from Carnival.

         II. Legal Standard and Analysis

         Agreements to arbitrate are governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, popularly known as the New York Convention. The United States has acceded to the Convention, codified at 9 U.S.C. §§ 201-28. "Because arbitration is an alternative to litigation, judicial review of arbitration decisions is 'among the narrowest known to the law.'" Bamberger Rosenheim Ltd. v. OA Development, Inc., 862 F.3d 1284, 1286 (11th Cir. 2017) (quoting AIG Baker Sterling Heights, LLC. v. Am. Multicinema, Inc., 508 F.3d 995, 1001 (11th Cir. 2007)). Foreign arbitral awards are vulnerable to attack only on the grounds expressed in the articles of the Convention, particularly Article V. Article V states that an arbitral award "may ... be refused ... [if] [t]he recognition or enforcement of the arbitral award would be contrary to the public policy" of the country where recognition and enforcement is sought. 21 U.S.T. 2517, Art. V(2)(b). The party defending against the enforcement of an arbitral award bears the burden of proof. Lindo v. NCL (Bahamas) Ltd., 652 F.3d 1257, 1263 (11th Cir. 2011).

         '"[T]he Convention's public policy defense should be construed narrowly' and applies where enforcement [of] the award 'would violate the forum state's most basic notions of morality and justice.'" Costa v. Celebrity Cruises, Inc.,768 F.Supp.2d 1237, 1241 (S.D. Fla. 2011)(quoting Parsons & Whittemore Overseas Co., Inc. v. Societe Generale de L'Industrie du Papier, 508 F.2d 969, 974 (2d Cir. 1974)). '"Erroneous legal reasoning or misapplication of the law is generally not a violation of public policy within the meaning of the . . ...

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