Admiralty – Personal Injury – Arbitration

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Aggarao v. MOL Ship Mgmt. Co. Ltd. (Lawyers Weekly No. 001-076-12, 38 pp.) (King, J.) No. 10-2211, March 16, 2012; USDC at Baltimore, Md. (Blake, J.) 4^th Cir. Full-text opinion.

Holding: A Filipino seaman who suffered devastating injuries while working aboard the Asian Spirit vessel in the Chesapeake Bay near Baltimore must arbitrate his claims against the vessel owner and additional defendants; the 4^th Circuit affirms the arbitration decision but vacates the dismissal of the case and remands for reinstatement and consideration of the injunction request and entry of a stay pending arbitration.

Seaman Potenciano L. Aggarao Jr. alleged claims of unseaworthiness, maintenance and cure, breach of contract, violation of the Seaman’s Wage Act and negligence under general maritime law and the Jones Act. The district court dismissed the complaint for improper venue, concluding that plaintiff is contractually obliged to arbitrate his claims in the Philippines. The court denied as moot Aggarao’s motion for a preliminary injunction, by which he sought to compel defendant MOL Ship Management Co. Ltd and World Car Carriers to provide maintenance and cure in the U.S.

The Asian Spirit was navigating in the Chesapeake Bay en route to the Port of Baltimore to prepare to take on motor vehicles as cargo. Plaintiff was injured when he was crushed between a deck lifting machine and a pillar. On June 16, 2009, plaintiff initiated this civil action in New York federal court; proceedings later were transferred to Maryland federal court. Defendants settled plaintiff’s bills for hospitalization and medical treatments for $944,531. Defendants advised plaintiff they were “ready and willing” to arrange for his repatriation to the Philippines and would provide further appropriate medical care there but would not pay for additional medical care in the U.S. The district court concluded a contract arbitration clause had to be enforced and dismissed plaintiff’s claims against defendants MOL, World Car and Nissan for improper venue.

Plaintiff signed several relevant agreements: a “Philippine Overseas Employment Administration Contract of Employment” (POEA Contract) with Magsaysay Mitsui OSK, which incorporated “Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels” (POEA Terms). The POEA Terms included a mandatory arbitration clause, and a “Seafarers Employment Contract” with Magsaysay Mitsui incorporated a collective bargaining agreement (CBA).

Plaintiff’s claims against MOL, World Car and Nissan allegedly arose from the same “occurrence” or “incident,” the tragic circumstances that resulted in plaintiff’s injuries. The conduct of these three defendants was coordinated by virtue of each defendant’s alleged involvement in that incident – instigating and contributing to one another. Plaintiff’s claims against MOL depend, in some part, upon the nature of tortious acts allegedly committed by Nissan and World Car.

Plaintiff emphasizes in his claims against MOL, World Car and Nissan that his injuries occurred while he was acting in the scope of his employment. Each of plaintiff’s claims falls within the scope of the arbitration clause. We are thus satisfied, as was the district court, that the doctrine of equitable estoppel applies and that plaintiff must arbitrate his claims against the signatory MOL as well as those claims allegedly against the nonsignatories Nissan and World Car.

Although we affirm the district court’s decision that the arbitration clause is enforceable, we reject its procedural disposition of the case – dismissal with prejudice and denial of plaintiff’s request for an injunction. When plaintiff requested an injunction, there were genuine issues of material fact regarding whether defendants had provided adequate maintenance and cure to him and whether he was fit to be repatriated to the Philippines. The district court is entitled to apply the hollow-formality test to the injunction request and determine whether an arbitral award in his favor in the Philippines might be an empty one, if maintenance and cure is not restored in the interim. The district court also may consider whether plaintiff may receive adequate medical care in the Philippines without severely jeopardizing his life and health. Irrespective of the outcome of the injunction request, the court should stay this case pending the arbitration proceedings.

Affirmed in part, vacated in part and remanded.