In Sladjana Cvoro v. Carnival Corp., [941 F.3d 487 (11th Cir. 2019)], the United States Court of Appeals for the Eleventh Circuit affirmed the judgment of a district court denying a request to reject an award based on the public-policy defense under the New York Convention.
Plaintiff, Sladjana Cvoro, developed injuries while working as a seafarer for Defendant, Carnival Corporation d.b.a. Carnival Cruise Lines (“Carnival“), on a Carnival cruise ship called the Carnival Dream. Cvoro had signed an employment agreement containing mandatory-arbitration, forum-selection, and choice-of-law clauses. The forum-selection clause provided a list of cities for the place of arbitration. As for the governing law, the laws of the flag of the cruise ship on which the seafarer was assigned applied.
Cvoro filed an arbitration proceeding against Carnival in Monaco, and asserted two causes of action. First, Cvoro brought a claim under the Jones Act, 46 U.S.C. § 30104, asserting that Carnival was vicariously liable for the alleged negligence of the shore-side doctors that Carnival selected to treat Cvoro’s carpal tunnel syndrome developed when Cvoro was onboard the Carnival Dream. The second claim was asserted under general maritime law, that is, the doctrine of maintenance and cure, for Carnival’s alleged failure to provide Cvoro with medical treatment and to pay for her medical bills and room and board. This second claim was later dropped because Carnival had in fact paid for all of Cvoro’s medical bills and expenses for room and board.
Decision of the arbitrator:
Applying the seafarer’s agreement, the arbitrator determined that Panamanian law governed the arbitration proceeding and refused to consider Cvoro’s Jones Act claim for vicarious liability. Although Cvoro conceded that she had not pursued any cause of action under Panamanian law, in its final award, the arbitrator examined Cvoro’s possible claims under Panamanian law. First, as to a claim for maintenance and cure, the arbitrator found that such a claim failed because Cvoro did not contest that Carnival satisfied its obligations to provide assistance, room and board, and medical care. As to a disability claim, the arbitrator determined that, because Cvoro’s claim was based solely on the medical negligence of the shore-side physicians in Serbia, which occurred after she signed off the Carnival Dream, Carnival had no obligation to pay any disability. Finally, the arbitrator concluded that a tort-based claim failed because Cvoro did not establish that Carnival was directly negligent in any way.
Proceedings before the District Court and Appeal Court:
Thereafter, Cvoro filed suit in a U.S. district court seeking to vacate and/or alternatively deny recognition and enforcement of the arbitral award under Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention“). The district court denied Cvoro’s request that it refuse to enforce the arbitral award and dismissed her claims brought under the Jones Act and general maritime law, holding that Cvoro did not establish that enforcing the award would violate U.S. public policy.
On appeal, Cvoro contended that applying Panamanian law violated U.S. public policy for purposes of the Article V(2)(b) defense under the New York Convention, because it deprived a seaman of a Jones Act remedy. The court rejected this argument and noted, as it had in previous cases, that enforcement of an arbitral award may not be refused simply because the remedies available under a foreign law are less favorable to a party than the remedies available under U.S. law.
The Eleventh Circuit held that that the test for whether a court should refuse to enforce a foreign arbitral award based on public policy is not whether the claimant was provided with all of her statutory rights under U.S. law during arbitration. Rather, the public-policy defense “applies only when confirmation of enforcement of a foreign arbitration award would violate the forum state’s most basic notions of morality and justice.” In applying this test, the court decided that Cvoro had not made that showing, and that enforcing the arbitral award does not violate the U.S.’s most basic notions of morality and justice.