Byron Chemaly v. Eddie Lampert

At a glance

Parties

Byron Chemaly (plaintiff-appellant, cross-appellee) v. Eddie Lampert, Grant Gold, R. Operations, Ltd., Fountainhead Marine Limited, Camper & Nicholsons and others (defendants-appellees, cross-appellants); XL Catlin Syndicate 2003 (defendant)

Case no.

Eleventh Circuit No. 24-10797; on appeal from S.D. Fla. D.C. Docket No. 1:23-cv-24257-BB

Forum and rules

United States Court of Appeals for the Eleventh Circuit; motion to compel arbitration under the New York Convention and 9 U.S.C. §§ 201 et seq.

Treaty

New York Convention (1958), Article II; arbitration clause in a seafarer employment agreement providing for arbitration in the Cayman Islands

Court

Circuit Judges Jordan (author of the opinion), Hull (concurring in part and dissenting in part) and Marcus

Sector

Maritime employment; superyacht crew

Outcome

Order compelling arbitration affirmed in part and reversed in part (22 April 2026). The non-signatories may not compel arbitration of the Jones Act claim. The cross-appeal on the remanded claims was dismissed for lack of jurisdiction.

The dispute

Byron Chemaly, a South African seaman on the Cayman-flagged yacht M/Y Fountainhead, injured his right shoulder on 8 August 2020 while recovering a Sea Bob underwater scooter, after Captain Grant Gold let go of it. He alleged that he was then told to forgo pain medication, was put on night shifts and given heavy work, and was repatriated without his personal effects. He sued the yacht's nominal employer R. Operations, its record owner Fountainhead Marine, Eddie Lampert (alleged beneficial owner and payer of both companies' expenses), the captain, the manager Camper & Nicholsons and the insurer in Florida state court. His claims included Jones Act negligence, unseaworthiness, maintenance and cure, failure to treat, negligence, conversion and breach of an insurance contract. The defendants removed the case under 9 U.S.C. § 205 and invoked the employment agreement's clause providing that "any dispute arising out of the Agreement" be arbitrated in the Cayman Islands. Chemaly argued that the clause conflicted with a Cayman courts jurisdiction clause, that seamen's and Jones Act claims are not arbitrable, and that the non-signatories could not enforce the clause.

Key holdings

1. GE Energy v. Outokumpu did not abrogate the circuit's decisions in Bautista and Lindo. The panel remains bound by their holdings that the FAA's seaman exemption does not apply under the Convention and that Congress did not exempt Jones Act claims from arbitration. pp. 7–10
2. The arbitration clause in the General Terms and Conditions does not conflict with the Employment Agreement's Cayman choice-of-law and exclusive-jurisdiction clause. One clause chooses the forum and law; the other chooses an arbitrator within that forum. There is therefore a written agreement to arbitrate under the Convention. pp. 11–13
3. A Jones Act claim is "capable of settlement by arbitration" under Article II(1). FELA's anti-waiver provision (45 U.S.C. § 55) does not apply to seamen's arbitration agreements. The argument that maritime law makes such clauses unenforceable is foreclosed by Bautista and Lindo. Arbitration between Chemaly and R. Operations is required. pp. 13–16
4. Under the equitable estoppel test (allegations of interdependent and concerted misconduct, giving rise to claims within the clause), the non-signatories Fountainhead Marine and Lampert cannot compel arbitration of the Jones Act claim. Chemaly pleaded each defendant as his Jones Act employer only in the alternative and did not allege concerted action causing the injury. Lampert's payment of R. Operations' expenses was not enough. pp. 21–24
5. The non-signatories can compel arbitration of the maintenance and cure and failure-to-treat claims. Chemaly attributed the post-injury conduct to all "defendants" jointly, arising from the relationship between shipowner, employer and Lampert. These claims arise out of the agreement. pp. 24–27
6. The alter ego theory was forfeited because it was not raised in the district court, and the court declined to find facts on it. The cross-appeal seeking arbitration of the remanded claims was dismissed: under Wu v. Liu the court lacks jurisdiction over the remand order. pp. 27–29
7. Judge Hull dissented from Part IV.B.1. She would have allowed Fountainhead Marine and Lampert to compel arbitration of the Jones Act claim too. In her view, the allegations do not distinguish between the defendants and rest on the same misconduct, including the failure to provide medical care. Hull, J., concurring in part and dissenting in part, pp. 1–3

Procedural history

1. 8 August 2020Chemaly is injured aboard the M/Y Fountainhead off Sag Harbor, New York, while recovering a Sea Bob.
2. Date not statedChemaly sues in Florida state court. The defendants other than Catlin remove the case to the Southern District of Florida under 9 U.S.C. § 205 and move to compel arbitration. Chemaly later settles all claims against Catlin.
3. Date not statedThe district court compels arbitration of the Jones Act, maintenance and cure, and failure-to-treat claims against R. Operations, Fountainhead Marine and Lampert, and remands the remaining claims to state court.
4. 22 April 2026The Eleventh Circuit affirms in part and reverses in part, with Judge Hull concurring in part and dissenting in part. It dismisses the defendants' cross-appeal.

Keywords

• motion to compel arbitration
• New York Convention Article II
• seaman employment contract
• Jones Act
• FAA seaman exemption
• maintenance and cure
• failure to treat
• non-signatory
• equitable estoppel
• interdependent and concerted misconduct
• alter ego
• borrowed servant doctrine
• forfeiture
• remand order
• Cayman Islands
• yacht
• Outokumpu
• Bautista v. Star Cruises

Summary generated with AI from the published documents — refer to the award for the authoritative text.