Azavedo v. Royal Caribbean Cruises, Ltd., No. 13-22422-Civ (S.D. Fla. Feb. 28, 2014) [click for opinion]
Plaintiff Micko Azavedo, an Indian citizen, sued Defendant Royal Caribbean Cruises, Ltd. ("Royal Caribbean") claiming that he was injured while working as a seaman aboard one of Royal Caribbean's cruise ships. After removing the action from state court to federal district court, Royal Caribbean moved to compel arbitration under the employment contract entered into by Plaintiff and Royal Caribbean. The contract contained an arbitration clause providing for mandatory binding arbitration pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "Convention"), and also contained a choice-of-law clause providing for the application of Norwegian law.
In opposing Royal Caribbean's motion, Plaintiff did not dispute that the arbitration agreement met all of the jurisdictional prerequisites for compelling arbitration under the Convention and the United States Federal Arbitration Act. Plaintiff instead relied on the "null and void" clause of Article II of the Convention, which states that "[t]he court . . . shall . . . refer the parties to arbitration unless it finds that the said agreement is null and void, inoperative or incapable or being performed." Specifically, Plaintiff argued that the arbitration agreement was unenforceable because the application of Norwegian law, as required by the choice-of-law clause, would deprive Plaintiff of his United States statutory remedies. As a result, Plaintiff claimed, the agreement was null and void as a matter of public policy.
The court rejected this argument. The court explained that under well-settled law, the "null and void" clause of Article II of the Convention is limited to standard breach-of-contract defenses—such as fraud, mistake, duress, and waiver—that can be applied neutrally on an international scale. Plaintiff failed to raise any such standard breach-of-contract defenses, however. Plaintiff raised only public policy defenses, which, although they may appropriately be raised at the arbitral award stage, are not legitimate defenses at the arbitration-enforcement stage. Plaintiff's reliance on a 2009 court of appeals decision that apparently reached a contrary result was misguided, according to the court, because that decision had failed to follow binding circuit precedent and was, in any event, abrogated by a more recent court of appeals decision.
The court granted Royal Caribbean's motion to compel arbitration.