## Facts

- A Filipino seafarer worked aboard the M/V ASIAN SPIRIT under a POEA employment contract requiring Philippine-law arbitration in the Philippines.
- He suffered serious injuries while the vessel was in U.S. waters near Baltimore, Maryland.
- He filed suit in federal court asserting Jones Act negligence, unseaworthiness, maintenance and cure, wage-related claims, and damages including future lost wages.
- The case was compelled to arbitration in the Philippines; the federal action was stayed pending arbitration.
- The Philippine tribunal applied Philippine law and awarded schedule-based disability benefits (about $89,100) and 240 days of sick pay.
- The seafarer moved in federal court to vacate/refuse enforcement of the award; the vessel interests moved to confirm the award under the New York Convention and the Federal Arbitration Act.

## Issues

1. Whether a Philippine arbitral award applying Philippine law and limiting recovery to POEA benefits should be recognized and enforced under the New York Convention.
2. Whether enforcing the award would violate U.S. public policy because it failed to address and effectively foreclosed core remedies available under U.S. maritime law.
3. Whether a maritime choice-of-law analysis supported application of U.S. maritime law such that an award omitting U.S. maritime claims was unenforceable.

## Decision

- The court granted the seafarer’s motion to vacate/refuse enforcement and denied the vessel interests’ motion to confirm.
- The court held the Convention’s public policy defense applied because the award did not adequately address rights and remedies provided by U.S. maritime law.
- Applying maritime choice-of-law factors, the court concluded U.S. law had the most significant interest in the dispute.
- Because the arbitral decision treated the matter solely as entitlement to Philippine statutory benefits and did not adjudicate the U.S. maritime claims, enforcing the award would deprive the seafarer of an adequate remedy and contravene U.S. public policy protecting seamen.

## Legal Principles

- Foreign arbitral awards are presumptively enforceable under the New York Convention, but recognition may be refused where enforcement would violate the forum’s public policy (a narrow exception).
- A court may refuse enforcement when an award, as applied, effectively prevents vindication of substantive U.S. statutory or maritime rights that U.S. law deems fundamental.
- Maritime choice-of-law analysis considers multiple contacts (including location of the injury and operational contacts) to determine the substantive law with the most significant interest.
- Enforcing an arbitration agreement does not require enforcing every resulting award; enforceability is assessed at the recognition stage under the Convention’s defenses.

## Conclusion

The court refused to recognize and enforce the Philippine arbitration award because, given the dispute’s substantial U.S. maritime contacts, the award’s exclusive reliance on Philippine-law benefits and failure to decide U.S. maritime claims violated U.S. public policy protecting injured seamen and their maritime remedies.


Aggarao v. MOL Ship Mgmt. Co., No. CCB-09-3106, 2014 U.S. Dist. LEXIS 108692 (D. Md. Aug. 7, 2014)