Combination Of Arbitration And Non-U.S. Choice Of Law Provisions Contrary To Public Policy; Defendant Permitted To Stipulate To U.S. Law To Compel Arbitration

Alcalde v. Carnival Cruise Lines, Case No. 10-24457-Civ-Moore/Torres (S.D. Fla. July 2011), is another in the line of recent cases struggling with the interplay between the public policy favoring arbitration of international disputes and the freedom of contract permitting parties to select non-U.S. law to govern their dispute even where a U.S. statutory claim is barred as a result. The plaintiff here is a citizen and resident of Peru alleging injuries sustained while employed on a Carnival vessel. His contract contained a broad arbitration clause, a Peru choice of law clause, and a severability clause. He brought a Jones Act claim, among others, and the Court determined that the plaintiff could not bring a Jones Act claim under Peruvian law.

The District Court made the following rulings pertinent to international litigation and dispute resolution:

First, the case was properly removed from state to federal court by reason of the New York Convention.

Second, the Court was willing to entertain a challenge to the enforceability of the arbitration provision. The Court addressed Rent-A-Center, West. Inc. v. Jackson, 130 S. Ct. 2772 (2010), which compelled arbitration of an employee's claim against his employer because the contract at issue contained an arbitration delegation provision and, pursuant to that provision, the employee's claim that the entire contract was procedurally and substantively unconscionable had to be resolved by the arbitrator. The instant case, however, which challenged the arbitration provision itself, would be considered by the Court.

Third, the Court followed the Eleventh Circuit's decision in Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009), which held that an arbitration clause that precluded a seafarer's claims under the...