Background:
Plaintiff, Pan Quan Ru, filed this action under the Jones Act, general maritime law, and the savings to suitor's clause asserting negligence, unseaworthiness, and seeking general and punitive damages.

Quan Ru alleged injuries while working aboard the tugboat CONDOR owned and operated by Seabulk Towing Services (another defendant). When Quan Ru tried to cast off the tug lines on the stern the messenger line belonging to the CONDOR caught Quan Ru's leg resulting in the amputation of his leg.

Quan Ru filed this action in Louisiana state court for the injuries he sustained while working aboard the vessel M/V Ikan Sepat owned and operated by Sepat Shipping and PACC Ship Managers.

Defendants removed the cause to the District Court for the Eastern District of Louisiana pursuant to federal question jurisdiction on the basis that the Convention on the Recognition of Foreign Arbitral Awards governed the dispute as two documents entered into between the parties contained purported agreements to arbitrate.

Quan Ru filed a Motion to Remand contending that no valid arbitration agreement existed in either the collective bargaining agreement or the employment contract at issue.

The Court denied Quan Ru's first Motion to Remand without prejudice finding that the CBA contained an arbitration agreement that did not apply to Quan Ru individually. However, the Court found at that the employment agreement may have been subject to arbitration under the Convention.

Quan Ru denied actually signing the employment agreement but eventually both parties stipulated on the record that the evidence supported the conclusion that Quan Ru's signature was valid.

Quan Ru now urges this  Court to grant his second Motion to Remand on the basis that the artbitration clause is unenforceable.

Issue:
Did this Court find the arbitration clause in the employment agreement unenforceable?

Held:
Quan Ru argued that the clause is unenforceable and therefore he is not subject to arbitration because, under Chinese law the arbitration clause is unenforceable, enforcing the arbitration agreement would deny Quan Ru statutory remedies guaranteed under United States law and the employment agreement, containing the arbitration clause, is at odds with the relevant CBA and is therefore, void under Chapter 2 of the Federal Arbitration Act.

This Court found that the Chinese law assertion, made by Quan Ru, required analysis and interpretation of Chinese law beyond this Court's limited inquiry. Moreover, this Court found that Chapter 2 allowed for an affirmative defense but this Court found that four factors, under Francisco (discussed below) were met.

Finally, this Court found that US law favors arbitration as a matter of public policy and that the agreement should be enforced despite the fact it denies Quan Ru of statutory remedies available under US law.

Comment:
The Court examined four factors laid out in Francisco.

These four factors determine whether an arbitration agreement is enforceable. Under this inquiry the court MUST compel artibtration:

1. There is an agreement in writing to arbitrate the dispute

2. The agreement provides for arbitration in the territory of a Convention signatory

3. The agreement arises out of a commercial legal relationship and

4. A party to the agreement is not an American citizen.

Because these four factors were met, the arbitration clause was enforceable.

Steve Gordon