Royal Caribbean Cruise Line's Arbitration Clause Found Unenforceable for American Crewmember's Personal Injury Claim

September 3, 2013
By Richard Rusak & Keith Brais on September 3, 2013 10:02 PM |

Cruise Arbitration Agreement.jpgMore and more courts are finding cruise line's personal injury arbitration agreements unenforceable when it comes to American crewmembers. The latest case comes from the Middle District of Florida wherein an American ice skater employed by Royal Caribbean Cruises was injured while performing aboard the Voyager of the Seas off the coast of Mexico. The injured seafarer filed a lawsuit against the cruise line asserting claims for Jones Act negligence, Unseaworthienss and Failure to Provide Maintenance and Cure in a Florida state court. As typical with employee claims, Royal Caribbean removed the case to Federal court located in Tampa and filed a motion to compel enforcement of an agreement to arbitration pursuant to the United National Convention on the Recognition and Enforcement of Foreign Arbitral Awards.


Compelling Arbitration Under the U.N. Convention

In order for a cruise line to compel arbitration under the U.N. Convention, it must show (1) there exists a written agreement to arbitrate; (2) the agreement provides for arbitration in the territory of a signatory of the Convention; (3) the agreement arises out of a commercial legal relationship; and (4) a party to the agreement must not be an American citizen, or the commercial relationship must have some reasonable relation with one or more foreign countries.


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Why American Crewmembers Are Exempt from Arbitration Agreements

In this case Royal Caribbean easily proved the first three prerequisites. The dispute and the focus of the Court's legal analysis was on the fourth prerequisite specifically whether the seaman's agreement had some reasonable relation with one or more foreign states. The court, like others before it, found the fourth prerequisite lacking.

In order to find the arbitration provision enforceable under the U.N. Convention where the crewmember is American and the cruise line's principal place of business is located in the United States, the employment contract must have some relationship with one or more foreign countries. Courts look at the facts surrounding the relationship between the crewmember and the cruise line and the language of the contract to make this determination.

Royal Caribbean argued the relationship is foreign as the crewmember was assigned to a cruise ship registered in the Bahamas, the ship called on foreign ports and the employment contract had a foreign choice of law provision. The court rejected the cruise line's argument. It reasoned the mere fact the Voyager of the Seas is registered in the Bahamas and that the ship calls on foreign ports alone cannot satisfy the foreign relationship test. Moreover, a foreign choice of law provision, in and of itself satisfies the fourth prerequisite of the U.N. Convention.

The court instead focused on the fact the cruise ship begins and ends each cruise in Galveston, Texas and spends most its time on the High Seas which has no connection with any country. The Court also noted the crewmember signed employment contract in Galveston, the contract provides the crewmember to be paid in U.S. dollars and she was assigned specific additional duties to be performed in Galveston including assisting passengers in safety drills, guiding passengers regarding disembarkation, and to be on board and on call during "port manning". In contrast, no work was designated to be performed on foreign soil. Looking at all these factors as a whole, the Court concluded the employment agreement is related to foreign services and found the arbitration agreement null and void.


Choosing a Maritime Injury Lawyer

Hiring a lawyer is an important decision and should not be based only upon advertisement. The cruise injury attorneys of Brais, Brais & Rusak have significant experience representing crewmembers hurt on the job. Our Board Certified Maritime Attorneys were also successful in having an American crewmember's arbitration agreement with his employer cruise line deemed unenforceable by a Federal court.