Court: Foreign arbitration award affirmed and further litigation enjoined after over 20 years of litigation

USA court

( In the fall of 1999, an Indian seaman signed an employment contract, which bound him to work for the vessel’s crewing agency. The contract was signed only by the seaman, and mentioned only the crewing agency (not any of the other Vessel Interests).

It contained a clause stating that any dispute arising out of the agreement would be subject to arbitration in either Singapore or India and governed by Indian law.

Later that year, the seaman became injured aboard the vessel. Shortly thereafter, he sued the Vessel Interests in Louisiana state court. The Vessel Interests removed the case to federal court, citing the Convention on the Recognition and Enforcement of Foreign Arbitral Awards as the jurisdictional basis for removal, and requested the court to compel arbitration.

The district court denied the Vessel Interests’ motion, holding that the forum selection clause was unenforceable as against public policy, and remanded the case to state court.

The Louisiana trial court denied the Vessel Interests’ motion to compel arbitration on the same public policy basis, held a trial, and awarded the seaman $579.000.00.

Next, a Louisiana appellate court reversed the judgment on the ground that the arbitration clause was enforceable, and remanded the case to the trial court with instructions to stay the lawsuit and compel arbitration in India. The case was stayed in its entirety, not just against the crewing agency, over the objection of the seaman.

In early 2020, an arbitrator in India awarded $130,000.00 to the seaman against the crewing agency.

The seaman next returned to Louisiana court, seeking to reinstate the previously rendered $579,000.00 award. This action was removed to federal court by the Vessel Interests, which also instituted a new federal lawsuit to confirm the Indian arbitration award and to enjoin the seaman from pursuing any further litigation.

The district court granted summary judgment in favour of the Vessel Interests. The U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s ruling, holding that the earlier remand did not preclude the second removal, and that the Louisiana appellate decision holding that the clause was enforceable against each of the Vessel Interests prevented the federal appellate court from revisiting those issues.

You can download the very interesting court case below:

Source: US court of appeals


[Total: 3]