Case Is Remanded So District Court Can Assess Jurisdictional Issue.
The plaintiff-appellant Mr. Castro took on a job as a deck hand on ship. His employment agreement contained a mandatory arbitration provision and it required arbitration to occur in and be subject to the procedural rules of American Samoa. After severely injuring himself, he had surgery for which the employer paid. He then met with a company representative, met with an arbitrator in a public lobby, and signed papers that included a settlement and release, and he received a check. Because the surgery was unsuccessful, Mr. Castro filed a lawsuit, and the employer successfully enforced a purported arbitral award in district court. Castro appealed. Castro v. Tri Marine Fish Company LLC, et al., No. 17-35703 (9th Cir. 2/27/19) (McKeown, Friedland, Bolton).
The award had been enforced pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). But there was a threshold problem: there had been a settlement, and thus no dispute to arbitrate, calling in to question the jurisdiction of the district court. Furthermore, the arbitral agreement provided for arbitration in American Samoa, according to Samoan procedure, and the lobby where Mr. Castro signed documents was in the Philippines.
The Court's conclusion says it all: "We review foreign arbitral awards deferentially, but we do not blind ourselves to reality when presented with an order purporting to be one. To cloak its free-floating settlement agreement in the New York Convention's favorable enforcement regime, Tri Marine asked an arbitrator to wave his wand and transform the settlement into an arbitral award. That is not sufficient to produce an award subject to the Convention.
Fashion waves her magic wand. Library of Congress. 1896.
The case is revered in part, vacated in part, and remanded.
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