Ryan Maunes Maglana and Francis Karl Bugayong v. Celebrity Cruises Inc.

At a glance

Parties

Ryan Maunes Maglana and Francis Karl Bugayong (Filipino crewmembers, on their own behalf and as class representatives) v. Celebrity Cruises Inc.

Case no.

No. 1:20-22133–CIV–MARTINEZ

Court

U.S. District Court, Southern District of Florida (Judge Jose E. Martinez)

Treaty

New York Convention, Article II(1); Chapter 2 of the Federal Arbitration Act

Sector

Cruise shipping; seafarer employment

Outcome

Motion to compel arbitration granted; parties directed to arbitrate and the action dismissed (7 October 2020).

The dispute

The plaintiffs were Filipino citizens employed by Celebrity Cruises Inc. They were on board its vessels when Celebrity suspended all cruises on 13 March 2020 because of COVID-19. They alleged that Celebrity kept them and other Filipino crewmembers on board for months without wages or a way home. For themselves and a putative class, they sued for a mandatory injunction requiring repatriation, false imprisonment, national-origin employment discrimination, wages and penalties under 46 U.S.C. §10313, and intentional infliction of emotional distress. Celebrity moved to compel arbitration and dismiss. It relied on arbitration clauses in the Sign-On Employment Agreement (SOEA), which provides for arbitration in the Philippines under the New York Convention, and in the POEA Contract. The plaintiffs argued that the arbitration agreement was null and void or inoperative because of Celebrity's non-performance and unclean hands. They also argued that their claims fell outside the clause or could not be arbitrated under the Convention, the federal constitution and general maritime law.

Key holdings

1. Under the Convention, a court must order arbitration unless the four jurisdictional prerequisites are not met or one of the Convention's affirmative defenses applies. The plaintiffs did not appear to contest the prerequisites. p. 4 and n. 2
2. The arguments about non-payment of wages, unclean hands and estoppel go to how the contract was performed, not to how it was formed. Under Article II, the 'null and void' defense is read narrowly to cover only defenses such as fraud, mistake, duress and waiver. A defense to performance is part of the underlying dispute and is for the arbitrator to decide. pp. 5–6
3. All the claims fall within the broad arbitration clause under the Eleventh Circuit's 'but for' test. This includes the injunction, the tort claims and the discrimination claim. A detention or quarantine in response to a public health emergency arises out of the plaintiffs' employment on a cruise ship. pp. 6–7 and n. 3
4. The plaintiffs did not show that arbitration would be an ineffective forum for the discrimination claim; such claims are routinely arbitrated. In any event, a party cannot use public-policy considerations to resist a motion to compel arbitration under the Convention. Such defenses can be raised only at the award-enforcement stage. pp. 7–8
5. The motion was granted, the parties were directed to arbitrate, and the action was dismissed and closed. p. 8

Procedural history

1. 13 March 2020Celebrity suspends all cruises because of COVID-19. The CDC issues a No Sail Order the next day.
2. 2020The plaintiffs file a five-count complaint, later amended, as a putative class action. Celebrity moves to compel arbitration and dismiss (DE 26).
3. 7 October 2020The District Court grants the motion, directs the parties to arbitrate and dismisses the action.

Tribunal, counsel and experts

Decided by

• Jose E. Martinez Judge, U.S. District Court, Southern District of Florida

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Keywords

• motion to compel arbitration
• New York Convention Article II
• null and void
• seafarer employment
• cruise ship crew
• COVID-19
• repatriation
• false imprisonment
• employment discrimination
• unclean hands
• public policy defense
• POEA Contract
• Federal Arbitration Act Chapter 2
• arbitrability
• Philippines arbitration
• Celebrity Cruises

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