Case Digest: Francisco v. Stolt Achievement MT, 293 F.3d 270 (2002)

Private International Law  

• Petitioner: Ernesto Francisco, Philippines

• Respondent: Stolt-Nielsen Transportation Group, Inc. , Cayman Islands

• Forum:  Louisiana

Recit Version:

• Ernesto Francisco, a Philippine national, was employed aboard the M/T STOLT ACHIEVEMENT and was injured while the ship was on the Mississippi River. He filed a lawsuit in Louisiana state court seeking damages under the Jones Act and maritime law. The defendants removed the case to federal court and sought to compel arbitration based on Francisco’s employment contract, which incorporated the arbitration provisions of the Philippine Overseas Employment Administration (POEA). The employment contract allowed disputes to be resolved through either the National Labor Relations Commission (NLRC) or voluntary arbitration if no collective bargaining agreement (CBA) applied. 

• The court ruled that Francisco was bound to arbitrate his claims, as the contract's arbitration clause covered all employment-related disputes, including tort claims. The court also dismissed Francisco’s argument that non-CBA employees were exempt from arbitration, stating that both options available required arbitration. Thus, the court ordered the dispute to be arbitrated in the Philippines.

Facts:

• Ernesto Francisco, a Philippine national, was employed aboard the M/T STOLT ACHIEVEMENT, a ship registered under the Cayman Islands flag. The ship was owned by Stolt Achievement, Inc. (Cayman Islands corporation) and operated by Stolt-Nielsen Transportation Group, Ltd. (Liberian corporation). 

• Francisco was injured on the Mississippi River in Louisiana while the ship was en route to the Port of New Orleans. 

• Francisco filed a lawsuit in Louisiana state court under the "saving to suitors" clause (28 U.S.C. § 1333), seeking damages under the Jones Act and general maritime law, along with maintenance and cure. 

• The defendants removed the case to federal court and moved to compel arbitration based on the employment contract’s arbitration clause.

• The employment contract incorporated the Standard Terms and Conditions approved by the Philippine Overseas Employment Administration (POEA), with the option of submitting claims either to the National Labor Relations Commission (NLRC) or a panel of voluntary arbitrators if no collective bargaining agreement applied:

In cases of claims and disputes arising from this employment, the parties covered by a collective bargaining agreement shall submit the claim or dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If the parties are not covered by a collective bargaining agreement, the parties may at their option submit the claim or dispute to either the original and exclusive jurisdiction of the National Labor Relations Commission (NLRC), pursuant to Republic Act (RA) 8042 otherwise known as the Migrant Workers and Overseas Filipino Act of 1995 or to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If there is no provision as to the voluntary arbitrators to be appointed by the parties, the same shall be appointed from the accredited voluntary arbitrators of the National Conciliation and Mediation Board of the Department of Labor and Employment.

• Defendants sought to compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, citing U.S. Code provisions and relevant case law, which favor arbitration when conditions such as written agreements and international commercial relationships are met.

Issue: Whether Francisco was compelled to arbitrate his claims against Stolt. 

Held: Yes, per his employment contract, Francisco was compelled to arbitrate his claims with Stolt. 

The contract clearly provides remedies for work-related personal injuries, and states in paragraph 29 that "claims and disputes arising from this employment" are

subject to arbitration in the Philippines. 

The arbitration provision is not by its language limited to contract claims but covers all claims "arising from this employment." Francisco alleged in his original petition that his injuries were sustained "in the course and scope of his employment."

In Marinechance Shipping, Ltd. v. Sebastian, we addressed whether a forum selection clause in a seaman employment contract applied to tort claims. We held that the clause providing that "any and all disputes or controversies arising out of or by virtue of this Contract" shall be litigated in the Philippines, applied to tort claims brought by two Philippine seamen injured aboard a vessel while it was located in the Mississippi River. 

We do not agree that the language of the forum selection clause in Marinechance is meaningfully different from the language of the arbitration clause in the pending case for purposes of deciding whether tort claims are covered, and note that "foreign arbitration clauses are but a subset of foreign forum selection clauses in general."

Francisco also contended at oral argument that an employee like himself who was not subject to a collective bargaining agreement ("CBA") is not required to submit his claim to arbitration in the Philippines. Assuming that this argument was timely made, we reject it. Paragraph 29 of the Terms and Conditions states that parties subject to a CBA shall

submit the claim or dispute to arbitration, but that parties not subject to a CBA may submit the claim or dispute "to either the original and exclusive jurisdiction of the" NLRC "or to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators." As explained above in our footnote 1, cases submitted to the NLRC are resolved by arbitration.

Accordingly, even though the contract uses the word "may" when describing the procedures available to an employee not covered by a CBA, the only two options available to such an employee both require arbitration. Especially in light of our general rule, recognized in a Convention Act case, that "whenever the scope of an arbitration clause is in question, the court should construe the clause in favor of arbitration," we read the contract as mandating arbitration of this dispute in the Philippines.