IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
STOLT ACHIEVEMENT MT, a vessel bearing
official number 1973; STOLT ACHIEVEMENT,
INC.; STOLT-NIELSEN TRANSPORTATION
GROUP, LTD.; STOLT PARCEL TANKERS, INC.,
the operator and/or owner of the M/T Stolt
Appeal from the United States District Court
the Eastern District of Louisiana
June 4, 2002
Before KING, Chief Judge, REAVLEY and WIENER,
REAVLEY, Circuit Judge:
In this appeal we conclude that the district
court properly ordered the case to arbitration and accordingly affirm.
Appellant Ernesto Francisco, a Philippine
national, was injured on a chemical tanker ship located on the Mississippi
River. Francisco was employed aboard the M/T Stolt Achievement (the vessel),
which was allegedly operated by Stolt-Nielsen Transportation Group, Inc.,
(Stolt) a Liberian corporation.
Stolt's "Crewing Manager" submitted an affidavit
attesting that when Stolt hires Philippine seamen, it must comply with
employment contract requirements of the Philippine Overseas Employment
Administration. Francisco signed such a contract. The contract contains
lengthy provisions addressing employee compensation and benefits in the
event of work-related injury, illness, or death. It provides in section
29 of the "Standard Terms and Conditions" that in the event of "claims
and disputes arising from this employment," the parties agree to arbitrate
their disputes in the Philippines.(1) Section
31 of the same document provides that "[a]ny unresolved dispute, claim
or grievance arising out of or in connection with this Contract . . . shall
be governed by the laws of the Republic of the Philippines, international
conventions, treaties and covenants where the Philippines is a signatory."
Francisco sued Stolt in Louisiana state court,
asserting claims under the Jones Act(2)
and under general maritime law for unseaworthiness and for maintenance
and cure. He alleged that suit in state court was authorized by the saving
to suitors clause of 28 U.S.C. § 1333(1).
Stolt removed the case to federal district
court, alleging that Francisco had signed an employment contract agreeing
to arbitrate claims against Stolt in the Philippines, and that this agreement
was subject to the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (the Convention),(3) a convention
to which the United States and the Philippines are both signatories. The
United States implemented the Convention in 1970 through the enactment
of 9 U.S.C. §§ 201-208 (hereinafter the Convention Act). Francisco
filed a motion to remand the case to state court, and Stolt filed a motion
to compel arbitration under 9 U.S.C. § 206. The district court denied
the motion to remand, granted the motion to compel arbitration, and dismissed
the suit. This appeal by Francisco followed.
Generally, the removal jurisdiction of the
federal district courts extends to cases over which they have original
jurisdiction.(4) "Any civil action of which
the district courts have original jurisdiction founded on a claim or right
arising under the Constitution, treaties or laws of the United States shall
be removable without regard to the citizenship or residence of the parties."(5)
Under § 203 of the Convention Act,(6)
"[a]n action or proceeding falling under the Convention shall be deemed
to arise under the laws and treaties of the United States." Notwithstanding
the saving to suitors clause,(7) under §
205 of the Convention Act,(8)
[w]here the subject matter of an action or
proceeding pending in a State court relates to an arbitration agreement
or award falling under the Convention, the defendant or the defendants
may, at any time before the trial thereof, remove such action or proceeding
to the district court of the United States for the district and division
embracing the place where the action or proceeding is pending.
The district court, therefore, had removal
jurisdiction and subject matter jurisdiction if the pending dispute was
one "falling under" the Convention.
The district court concluded that it should
compel arbitration because this case fell under the arbitration provision
of the employment contract, as well as the provisions of the Convention
Act and the Convention. Francisco essentially makes three arguments as
to why the district court erred. He argues first that his case does not
fall under the Convention Act because there is an exception making that
Act inapplicable to seaman employment contracts. He argues second that,
under the Convention itself, his case is not "capable of settlement by
arbitration" and otherwise does not fall under the Convention. He argues
third that his claims are not subject to the arbitration agreement.
A. The Convention Act (9 U.S.C. §§
The Convention Act provides that "[a] court
having jurisdiction under this chapter may direct that arbitration be held
in accordance with the agreement at any place therein provided for, whether
that place is within or without the United States."(9)
In applying the Convention, we have held that it "contemplates a very limited
inquiry by courts when considering a motion to compel arbitration," and
that the court should compel arbitration if (1) there is an agreement in
writing to arbitrate the dispute, (2) the agreement provides for arbitration
in the territory of a Convention signatory, (3) the agreement arises out
of a commercial legal relationship, and (4) a party to the agreement is
not an American citizen.(10) "If these
requirements are met, the Convention requires district courts to order
These elements were met in the pending case.
Francisco, a Philippine national, signed a written employment contract
stating that claims and disputes arising from his employment, including
personal injury claims, were subject to arbitration in the Philippines.
The employment contract states that it shall be governed by the law of
the Philippines and such conventions and treaties to which the Philippines
is a signatory. The Philippines and the United States are both signatories
to the Convention.(12)
Title 9 of the United States Code has two
chapters relevant to this appeal. Chapter 1 contains the Federal Arbitration
Act (Arbitration Act). Chapter 2 is the Convention Act. Francisco argues
that under § 1 of the Arbitration Act,(13)
seaman employment contracts are excluded from the reach of the Convention
Act. He argues that this exclusion applies to the Convention Act because,
under § 208 of the Convention Act,(14)
the Arbitration Act "applies to actions and proceedings brought under [the
Convention Act] to the extent that [the Arbitration Act] is not in conflict
with [the Convention Act] or the Convention as ratified by the United States."
Francisco correctly points out that the Arbitration
Act does not cover seaman employment contracts. Section 2 of the Arbitration
Act (15) generally recognizes the validity
of arbitration provisions "in any maritime transaction or a contract evidencing
a transaction involving commerce." However, § 1 of the Arbitration
expressly excludes "contracts of employment
of seamen" from the reach of the Arbitration Act.
This exclusion of seamen employment contracts
in the Arbitration Act, however, conflicts with the Convention Act and
"with the Convention as ratified by the United States" under § 208
of the Convention Act, and therefore is not applicable to the Convention
Act. Article II(1) of the Convention itself is very broadly worded to provide
that signing nations shall recognize arbitration agreements "in respect
of a defined legal relationship, whether contractual or not, concerning
a subject matter capable of settlement by arbitration." The United States,
in ratifying the Convention, agreed to apply it "only to differences arising
out of legal relationships, whether contractual or not, which are considered
as commercial under the national law of the United States."(17)
Neither the Convention nor the limiting language ratifying the Convention
contemplate any exception for seamen employment contracts or employment
contracts in general. While the ratification language expresses an intent
to limit the reach of the Convention to
there is no indication that employment contracts or seamen employment contracts
are not considered "commercial."
In keeping with the ratification language,
§ 202 of the Convention Act states:
An arbitration agreement or arbitral award
arising out of a legal relationship, whether contractual or not, which
is considered as commercial, including a transaction, contract, or agreement
described in section 2 of this title, falls under the Convention. An agreement
or award arising out of such a relationship which is entirely between citizens
of the United States shall be deemed not to fall under the Convention unless
that relationship involves property located abroad, envisages performance
or enforcement abroad, or has some other reasonable relation with one or
more foreign states. For the purpose of this section a corporation is a
citizen of the United States if it is incorporated or has its principal
place of business in the United States.
Again, nothing in this language suggests an
exception for seaman employment contracts. While the Arbitration Act contains
such an exception, the language from § 202 of the Convention Act states
only that the legal relationships covered by the Convention Act
those transactions covered by § 2 of the Arbitration Act. The Convention
Act does not state that agreements falling under the Convention are exclusively
limited to those which also fall under § 2 of the Arbitration
Act, and makes no mention of the exclusion for seaman employment contracts
found in § 1 of the Arbitration Act.
In short, the language of the Convention,
the ratifying language, and the Convention Act implementing the Convention
do not recognize an exception for seamen employment contracts. On the contrary,
they recognize that the only limitation on the type of legal relationship
falling under the Convention is that it must be considered "commercial,"
and we conclude that an employment contract is "commercial." Even if we
were doubtful of the correctness of our conclusion, doubts as to whether
a contract falls under the Convention Act should be resolved in favor of
arbitration, in light of the Supreme Court's recognition generally of "the
strong federal policy in favor of enforcing arbitration agreements,"(18)
and its recognition that
[t]he goal of the Convention, and the principal
purpose underlying American adoption and implementation of it, was to encourage
the recognition and enforcement of commercial arbitration agreements in
international contracts and to unify the standards by which agreements
to arbitrate are observed and arbitral awards are enforced in the signatory
The Court has also recognized that the federal
policy favoring arbitration "applies with special force in the field of
Francisco argues that as a matter of policy
the Convention Act and the Arbitration Act should be applied uniformly.
We cannot accept this argument. If the language of a statutory provision
"is sufficiently clear in its context and not at odds with the legislative
history, it is unnecessary to examine the additional considerations of
policy . . . that may have influenced the lawmakers in their formulation
of the statute."(21)
We note two other arguments which favor Francisco's
position but do not ultimately alter our conclusion. Francisco argues that
the exclusions of § 1 of the Arbitration Act are referred to in the
statutory heading of § 1 as "exceptions to operation of title."(22)
Title 9 of the United States Code includes the Arbitration Act in
Chapter 1 and the Convention Act in Chapter 2. The use of the term "title"
in the heading to § 1 therefore suggests that its exclusion of seaman
employment contracts applies to both Acts.
While the use of the term "title" in the heading
is helpful to Francisco, it does not change our conclusion that the plain
language of the Convention Act, enacted long after § 1 of the Arbitration
Act,(23) does not admit to an exception
for seaman employment contracts. "While words in the title of a statute
or the heading of a section can shed light on the meaning of an ambiguous
word or phrase in the text of a statute, they cannot create an ambiguity
where none otherwise would exist."(24)
Francisco also points to legislative history
which is helpful to him. In a Senate hearing on February 9, 1970, Richard
Kearney, the chairman of a State Department advisory committee, gave the
[P]aragraph 3 of article I of the Convention
permits a state party to the Convention to file a declaration that the
Convention will apply only to legal relationships that are considered as
commercial under the national law of that state. . . . [T]he United States
will file such a declaration . . . .
Consequently it is necessary to include the
substance of this limiting declaration in the legislation that implements
the Convention. This is what the first sentence of section 202 intends.
It was not, of course, necessary to make any reference to the national
law of the United States in the first sentence of section 202 because the
definition of commerce contained in section 1 of the original Arbitration
Act is the national law definition for the purposes of the declaration.
A specific reference, however, is made in section 202 to section 2 of title
9, which is the basic provision of the original Arbitration Act.(25)
This testimony suggests that the definition
of a transaction involving "commerce" in §§ 1 and 2 of the Arbitration
Act is the same as the definition of a "legal relationship . . . which
is considered as commercial" falling under the Convention Act. However,
the witness does not specifically address whether the exclusion in §
1 of seaman employment contracts is also applicable to the then-proposed
§ 202 of the Convention Act.
Furthermore, the testimony of a witness not
a member of Congress cannot bind this court where the plain language of
the Convention Act does not provide an exception for seaman employment
contracts. "Legislative history is problematic even when the attempt is
to draw inferences from the intent of duly appointed committees of the
Congress."(26) As discussed above, §
202 of the Convention Act states that a contract considered commercial
includes those contracts described in § 2 of the Arbitration
Act, makes no mention of § 1, and does not state that only
those contracts described in § 2 of the Arbitration Act "fall under"
the Convention. "Courts should not rely on inconclusive statutory history
as a basis for refusing to give effect to the plain language of an Act
of Congress . . . ."(27)
B. The Convention Itself
Francisco argues that, aside from the issue
of the scope of the Convention Act, the Convention itself is inapplicable
to his suit. He bases this argument on his claim that on September 11,
2000, the Supreme Court of the Philippines suspended section 20(G) of the
standard terms and conditions of his employment contract. We assume without
deciding that Francisco is correct regarding the suspension of section
20(G) by the Philippine court and the applicability of this change to his
Section 20 of the terms and conditions addresses
compensation and benefits due the seaman for injury or illness. Section
The seafarer . . . acknowledges that payment
for injury, illness, incapacity, disability or death of the seafarer under
this contract shall cover all claims arising from or in relation with or
in the course of the seafarer's employment, including but not limited to
damages arising from the contract, tort, fault, or negligence under the
laws of the Philippines or any other country.
Francisco argues that under the terms of the
Convention the suspension of section 20(G) means that the Convention no
longer governs his claims against Stolt. We cannot agree with this argument.
The suspension of section 20(G) only means that the seaman no longer acknowledges
that the receipt of scheduled payments set out in the contract are the
only benefits he can recover from his employer.
Francisco argues that under Article II(1)
of the Convention, the treaty only applies to "differences . . . in respect
of a defined legal relationship . . . concerning a subject matter capable
of settlement by arbitration." Francisco similarly relies on Article V(2)(a)
of the Convention, which states that recognition and enforcement of an
arbitral award may be refused if "[t]he subject matter of the difference
is not capable of settlement by arbitration under the law of" the country
where enforcement is sought. The suspension of section 20(G) does not,
in our view, render the dispute incapable of settlement by arbitration
under these provisions. Even if section 20(G) is rendered a nullity, the
parties still agree to arbitrate their dispute under section 29 of the
terms and conditions of the contract, discussed above; section 20(G) only
limits the claims available to Francisco. If anything, the suspension would
seem to give the arbitrators greater discretion to grant the relief to
which Francisco thinks he is entitled. We note that in an arbitration before
the Philippine National Labor Relations Commission (NLRC), Section 10 of
the Migrant Workers and Overseas Filipino Act of 1995, included in the
record, does not appear to limit awards to those damages set out in the
employment contract. Instead, it provides that in cases before the NLRC
labor arbitrators "shall have the original and exclusive jurisdiction to
hear and decide . . . the claims arising out of an employer-employee relationship
or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms
Francisco also relies on Articles V(1)(c)
and (e) of the Convention. Article V(1) provides that recognition and enforcement
of an arbitral award may be refused "at the request of the party against
whom it is invoked," if, under subpart (c), "[t]he award deals with a difference
not contemplated by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the scope of the
submission to arbitration . . . ." First, Article V(1) by its terms can
only be invoked by a party resisting an award. No award has been made and
Francisco would have no reason of which we are aware to resist the enforcement
of an arbitration award made to him under the employment contract. Second,
the mere suspension of a contract term stating that the remedies enumerated
in the contract are exclusive would not, in our view, make an arbitration
in the Philippines one dealing with a dispute "not contemplated by and
not falling within the terms of the submission to arbitration" under Article
V(1)(c) and would not render an arbitration decision one "on matters beyond
the scope of the submission to arbitration" under that provision.
Article V(1)(e) provides that recognition
and enforcement of an award may be refused if "[t]he award has not yet
become binding on the parties, or has been set aside or suspended by a
competent authority of the country in which, or under the law of which,
that award was made." Again, this provision only comes into play after
an award has been made, and only at the request of the party resisting
enforcement of the award, and is inapplicable here. Further, the mere fact
that one clause of the employment contract purporting to limit the relief
available to Francisco can no longer be enforced in the Philippines does
not mean that a Philippine authority has "set aside" an award under subpart
(e). If anything, the suspension of section 20(G) of the contract means
that Francisco is eligible for greater relief from the Philippine arbitrators
than before the suspension of that section's limitation on the employee's
C. The Employment Contract
Francisco separately argues that his claims
against Stolt are federal and general maritime tort claims that are not
covered by the arbitration provision of the employment contract. The contract
clearly provides remedies for work-related personal injuries, and states
in paragraph 29 that "claims and disputes arising from this employment"
are subject to arbitration in the Philippines. The arbitration provision
is not by its language limited to contract claims but covers all claims
"arising from this employment." Francisco alleged in his original petition
that his injuries were sustained "in the course and scope of his employment."
In Marinechance Shipping, Ltd. v. Sebastian,(28)
we addressed whether a forum selection clause in a seaman employment contract
applied to tort claims. We held that the clause--providing that "any and
all disputes or controversies arising out of or by virtue of this Contract"
shall be litigated in the Philippines--applied to tort claims brought by
two Philippine seamen injured aboard a vessel while it was located in the
Mississippi River.(29) We do not agree
that the language of the forum selection clause in Marinechance
is meaningfully different from the language of the arbitration clause in
the pending case for purposes of deciding whether tort claims are covered,
and note that "foreign arbitration clauses are but a subset of foreign
forum selection clauses in general."(30)
Francisco also contended at oral argument
that an employee like himself who was not subject to a collective bargaining
agreement (CBA) is not required to submit his claim to arbitration in the
Philippines. Assuming that this argument was timely made, we reject it.
Paragraph 29 of the Terms and Conditions states that parties subject to
shall submit the claim or dispute to arbitration, but that
parties not subject to a CBA may submit the claim or dispute "to
either the original and exclusive jurisdiction of the" NLRC "or
to the original and exclusive jurisdiction of the voluntary arbitrator
or panel or arbitrators." As explained above in our footnote 1, cases submitted
to the NLRC are resolved by arbitration. Accordingly, even though the contract
uses the word "may" when describing the procedures available to an employee
not covered by a CBA, the only two options available to such an employee
both require arbitration. Especially in light of our general rule, recognized
in a Convention Act case, that "whenever the scope of an arbitration clause
is in question, the court should construe the clause in favor of arbitration,"(31)
we read the contract as mandating arbitration of this dispute in the Philippines.
1. Section 29 states: "In
cases of claims and disputes arising from this employment, the parties
covered by a collective bargaining agreement shall submit the claim or
dispute to the original and exclusive jurisdiction of the voluntary arbitrator
or panel of arbitrators. If the parties are not covered by a collective
bargaining agreement, the parties may at their option submit the claim
or dispute to either the original and exclusive jurisdiction of the [Philippine]
National Labor Relations Commission (NLRC), pursuant to Republic Act (RA)
8042 otherwise known as the Migrant Workers and Overseas Filipinos Act
of 1995 or to the original and exclusive jurisdiction of the voluntary
arbitrator or panel of arbitrators." Section 10 of the Migrant Workers
and Overseas Filipinos Act of 1995 provides that disputes submitted to
the NLRC are resolved by arbitration. Hence, our reading of the contract
is that all claims and disputes arising from the employment are subject
to arbitration, regardless of whether there is a collective bargaining
agreement and regardless of whether the parties opt to proceed before the
2. 46 U.S.C. app. §
3. Done June 10,
1958, 21 U.S.T. 2517, T.I.A.S. No. 6997, 330 U.N.T.S. 38,
in 9 U.S.C.A. § 201 note.
4. 28 U.S.C. § 1441(a).
5. 28 U.S.C. § 1441(b).
6. 9 U.S.C. § 203.
7. 28 U.S.C. § 1333
provides that the federal district courts have exclusive jurisdiction of
"[a]ny civil case of admiralty or maritime jurisdiction, saving to suitors
in all cases all other remedies to which they are otherwise entitled."
8. 9 U.S.C. § 205.
9. 9 U.S.C. § 206.
10. Sedco, Inc. v.
Petroleos Mexicanos Mexican Nat'l Oil Co., 767 F.2d 1140, 1144-45 (5th
11. Id. at 1145.
12. 9 U.S.C. § 201
note (see notes following text of Convention indicating signatories).
13. 9 U.S.C. § 1.
14. 9 U.S.C. § 208.
15. 9 U.S.C. § 2.
16. Section 1 of the Arbitration
Act, 9 U.S.C. § 1, states in its entirety:
§ 1. "Maritime transactions" and "commerce"
defined; exceptions to operation of title
"Maritime transactions", as herein defined,
means charter parties, bills of lading of water carriers, agreements relating
to wharfage, supplies furnished vessels or repairs to vessels, collisions,
or any other matters in foreign commerce which, if the subject of controversy,
would be embraced within admiralty jurisdiction; "commerce", as herein
defined, means commerce among the several States or with foreign nations,
or in any Territory of the United States or in the District of Columbia,
or between any such Territory and another, or between any such Territory
and any State or foreign nation, or between the District of Columbia and
any State or Territory or foreign nation, but nothing herein contained
shall apply to contracts of employment of seamen, railroad employees, or
any other class of workers engaged in foreign or interstate commerce.
17. 9 U.S.C.A. §
201 note (see footnote 29 to notes following text of Convention).
This limiting language was authorized by Article I(3) of the Convention,
which provides that a signatory "may declare that it will apply the Convention
only to differences arising out of legal relationships, whether contractual
or not, which are considered as commercial under the national law of the
State making such declaration."
18. Dean Witter Reynolds
Inc. v. Byrd, 470 U.S. 213, 217 (1985).
19. Scherk v. Alberto-Culver
Co., 417 U.S. 506, 520 n.15 (1974).
20. Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985).
21. Aaron v. SEC,
446 U.S. 680, 695 (1980) (internal quotations omitted).
22. See n. 16,
supra (giving full heading and text to 9 U.S.C. § 1).
23. Section 1 of the Arbitration
Act was part of the 1947 reenactment and codification of the Federal Arbitration
Act, which comprised the entirety of Title 9 when reenacted. See
61 Stat. 669, 674 (1947). The Convention Act, Pub. L. No. 91-368, 84 Stat.
692 (1970), was enacted in 1970.
24. Natural Res. Def.
Council v. EPA, 915 F.2d 1314, 1321 (5th Cir. 1990).
25. S. Rep. No. 91-702,
at 6 (1970).
26. Circuit City Stores,
Inc. v. Adams, 532 U.S. 105, 120 (2001).
27. Hubbard v. United
States, 514 U.S. 695, 708 (1995).
28. 143 F.3d 216 (5th
29. Id. at 223.
30. Vimar Seguros y
Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 534 (1995).
31. Sedco, 767
F.2d at 1145.