Arbitration, Construction of Agreement, International, FAA: Arbitration Agreement Not Signed By Parties Was Unenforceable, Based On Placement Of Comma

This Case Is For Grammar Afficionados; Or, What A Difference A Comma Makes.

       Only and exclusive photo of the Vestris as it went down.  Fred Hansen, photographer, active 1928.  Library of Congress.

           Mr. Yang, a seaman, died when the fishing vessel he worked on sank because of inadequate repairs and an incompetent crew.  There were two defendants:  Majestic Blue Fisheries, LLC, Mr. Yang's employer, and Dongwon Industries Co., Ltd., an affiliated company that provided the repairs and a crew for Majestic's vessel.  The district court denied a motion to compel arbitration with Dongwon, and Dongwon appealed.  Yang v. Dongwon Industries, 15-16881 (9th Cir.  11/30/17) (Nguyen, Fisher, Paez).

        The agreement containing an arbitration clause was signed by Mr. Yang and by Dongwon "on behalf of MAJESTIC BLUE FISHERIES, LLC."  Thus, the parties to the agreement were Mr. Yang and Majestic.  

        The key legal issue turned on the interpretation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Convention Act), which implements a Convention Treaty, and -- drum roll -- on the placement of a comma.  

        The Convention Act requires that a party seeking to compel arbitration must prove the existence and validity of "an agreement in writing withing the meaning of the Convention" Treaty.  And the Convention Treaty defines an "agreement in writing" to "include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams."  Dwell upon the placement of the comma.  Ponder what "signed by the parties" modifies.

        Under cannons of construction, when a comma is included, "the modifier is generally understood to apply to the entire series."  Thus, here, "signed by the parties" modifies both "an arbitral clause in a contract" and "an arbitration agreement."  Neither of which was "signed by the parties."  Hence, the arbitration provision could not be enforced by Dongwon.

        Nor could Dongwon rely on the Federal Arbitration Act to enforce the arbitration provision, "because the FAA expressly exempts from its scope any 'contracts of employment of seamen.'"

        And finally, the Court rejected as a "doctrinal sleight of hand" Dongwon's argument that the Convention Act requirements could be circumvented "by importing into our Convention Act analysis precedent permitting a 'litigant who is not a party to an arbitration agreement to invoke arbitration under the FAA if the relevant state contract law allows the litigant to enforce the agreement.'" 

        Affirmed.

            COMMENT:  It is sobering to think that the legal rights of the family of a drowned seaman depended on the placement of a comma.