## Facts

- Lito Martinez Asignacion, a Filipino seaman, signed a POEA-approved employment contract to work aboard the M/V RICKMERS DALIAN, owned by Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG.
- The contract incorporated POEA Standard Terms requiring: (1) Philippine arbitration/labor fora for employment disputes; (2) Philippine law as governing law; and (3) a scheduled disability-benefits scheme for permanent disability.
- While the vessel was docked in the Port of New Orleans, a cascade tank overflowed in the engine room, causing Asignacion severe burns to about 35% of his body and ongoing medical problems.
- Asignacion received initial treatment in Louisiana for nearly a month and was then repatriated to the Philippines for continued care.
- Asignacion first pursued claims under U.S. maritime law in Louisiana state court; Rickmers invoked the arbitration clause and the New York Convention, and the state court compelled arbitration in the Philippines and stayed the litigation.
- A Philippine arbitral panel applied Philippine law, rejected application of U.S. maritime law, and awarded about $1,870 in disability benefits under the POEA schedule.
- Asignacion sought to vacate/set aside the award as contrary to U.S. public policy; Rickmers removed to federal court and moved to recognize and enforce the award under the New York Convention and the Federal Arbitration Act.

## Issues

1. Whether enforcement of the Philippine arbitral award should be refused under Article V(2)(b) of the New York Convention because enforcement would be contrary to U.S. public policy.
2. Whether enforcement should be denied under the prospective-waiver doctrine on the theory that the contract’s foreign forum and choice-of-law provisions effectively waived substantive U.S. maritime rights.

## Decision

- The district court denied Rickmers’s motion to recognize and enforce the Philippine arbitral award.
- The court held that enforcing the award would be contrary to U.S. public policy within the meaning of Article V(2)(b) of the New York Convention.
- The court also held that enforcement would improperly operate as a prospective waiver of Asignacion’s ability to vindicate substantive rights associated with U.S. maritime remedies for injured seamen.

## Legal Principles

- Recognition and enforcement of foreign arbitral awards under the New York Convention may be refused if enforcement would be contrary to the enforcing forum’s public policy. (New York Convention art. V(2)(b).)
- The public-policy defense may apply when enforcement would conflict with fundamental domestic policies, even though U.S. law generally favors arbitration and enforcement of foreign awards.
- Under the prospective-waiver doctrine, an arbitration and choice-of-law arrangement may be invalid if it functions as an ex ante waiver of the ability to pursue substantive statutory rights.
- A court assessing public policy may consider the practical effect of enforcement in light of the injury, the forum’s regulatory interests (including where the tort occurred), and whether the remedial result is so inadequate that enforcement would defeat core protective policies.

## Conclusion

The court refused to enforce the Philippine arbitral award under the New York Convention, concluding that enforcing a very small scheduled-benefits award for severe injuries incurred in a U.S. port would violate U.S. public policy and would function as an impermissible prospective waiver of remedies associated with U.S. maritime law.


Asignacion v. Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG, 2014 A.M.C. 713 (E.D. La. 2014)