PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
POTENCIANO L. AGGARAO, JR.,
Plaintiff-Appellant,
v.
MOL SHIP MANAGEMENT COMPANY,
LTD.; NISSAN MOTOR CAR CARRIER
COMPANY, LTD., trading as Nissan
Carrier Fleet; WORLD CAR No. 10-2211
CARRIERS, INCORPORATED,
Defendants-Appellees,
and
JOHN DOE A; JOHN DOE B; JOHN
DOE C,
Defendants.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Catherine C. Blake, District Judge.
(1:09-cv-03106-CCB)
Argued: January 26, 2012
Decided: March 16, 2012
Before KING and DUNCAN, Circuit Judges, and
J. Michelle CHILDS, United States District Judge for the
District of South Carolina, sitting by designation.
2 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
Affirmed in part, vacated in part, and remanded by published
opinion. Judge King wrote the opinion, in which Judge Dun-
can and Judge Childs joined.
COUNSEL
ARGUED: Paul Thomas Hofmann, HOFMANN &
SCHWEITZER, New York, New York, for Appellant. M.
Hamilton Whitman, Jr., OBER, KALER, GRIMES &
SHRIVER, PC, Baltimore, Maryland, for Appellees. ON
BRIEF: David Warren Skeen, Meighan Griffin Burton,
WRIGHT, CONSTABLE & SKEEN, LLP, Baltimore, Mary-
land; Joseph P. Moschetta, Stephen P. Moschetta, THE MOS-
CHETTA LAW FIRM, PC, Washington, D.C., for Appellant.
Carla Napier Murphy, OBER, KALER, GRIMES &
SHRIVER, PC, Baltimore, Maryland, for Appellees.
OPINION
KING, Circuit Judge:
Plaintiff Potenciano L. Aggarao, Jr., a citizen of the Philip-
pines, brought suit against MOL Ship Management Company,
Ltd., Nissan Motor Car Carrier Company, Ltd., trading as
Nissan Carrier Fleet, and World Car Carriers, Incorporated
(collectively, the "defendants"), for damages arising from
severe injuries he sustained aboard the M/V Asian Spirit in
the Chesapeake Bay near Baltimore.1 Aggarao’s Complaint
alleged multiple claims against the defendants, including
unseaworthiness, maintenance and cure, breach of contract,
1
The Complaint also initially named as defendants Mitsui O.S.K. Lines,
Ltd., World Marine Company, Ltd., the University of Maryland Medical
System Corporation, and three unknown persons identified only as John
Does. Aggarao raises no issues on appeal regarding the dismissals of those
defendants.
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 3
violation of the Seaman’s Wage Act, and negligence under
general maritime law and the Jones Act. The district court dis-
missed the Complaint for improper venue, concluding that
Aggarao is contractually obligated to arbitrate his claims in
the Philippines. See Aggarao v. Mitsui O.S.K. Lines, Ltd., 741
F. Supp. 2d 733 (D. Md. 2010) (the "Opinion"). The court
contemporaneously denied as moot Aggarao’s motion for a
preliminary injunction, by which he sought to compel MOL
and World Car to provide maintenance and cure in the United
States. As explained below, we affirm in part, vacate in part,
and remand.
I.
The devastating injuries suffered by Aggarao that give rise
to this civil action occurred while he was employed as an able
seaman aboard the Asian Spirit. Prior to his employment
thereon, Aggarao had signed several agreements that bear on
the resolution of this appeal. The relevant facts are set forth
below.2
A.
On June 2, 2008, Aggarao entered into a "Philippine Over-
seas Employment Administration Contract of Employment"
(the "POEA Contract") with an entity called Magsaysay Mit-
sui O.S.K. See J.A. 184.3 The Philippine Overseas Employ-
ment Administration (the "POEA") — part of the Philippine
Ministry of Labor and Employment — had prepared the
POEA Contract, which provides that "the terms and condi-
tions in accordance with [POEA] Department Order No. 4 and
2
Our recitation of the facts is drawn from the Opinion, the Complaint,
and the parties’ submissions concerning various motions, including multi-
ple declarations and exhibits. Although we view the facts in the light most
favorable to the plaintiff, they are largely undisputed.
3
Citations herein to "J.A.___" refer to the contents of the Joint Appen-
dix filed by the parties in this appeal.
4 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
Memorandum Circular No. 9 . . . shall be strictly and faith-
fully observed." Id. The referenced documents in turn incor-
porate the "Standard Terms and Conditions Governing the
Employment of Filipino Seafarers On-Board Ocean-Going
Vessels" (the "POEA Terms"), which Aggarao also signed.
See id. at 185-90. Together, the POEA Contract and the
POEA Terms are intended to ensure minimum employment
standards for Filipino seafarers employed by foreign corpora-
tions. Section 29 of the POEA Terms includes a mandatory
arbitration clause, providing in part:
In cases of claims and disputes arising from this
employment, the parties covered by a collective bar-
gaining agreement shall submit the claim or dispute
to the original and exclusive jurisdiction of the vol-
untary arbitrator or panel of arbitrators.
Id. at 187 (the "Arbitration Clause"). Section 31 includes a
choice of law clause, specifying:
Any unresolved dispute, claim or grievance arising
out of or in connection with this Contract . . . shall
be governed by the laws of the Republic of the Phil-
ippines, international conventions, treaties and cove-
nants where the Philippines is a signatory.
Id. (the "Choice of Law Clause"). Additionally, Section 20 of
the POEA Terms prescribes, in relevant part, the "liabilities of
an employer when the seafarer suffers work-related injury or
illness during the term of his contract . . . as follows":
If the injury or illness requires medical . . . treatment
in a foreign port, the employer shall be liable for the
full cost of such medical . . . surgical and hospital
treatment as well as board and lodging until the sea-
farer is declared fit to work or to be repatriated
....
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 5
[P]ayment for injury, illness, incapacity, disability or
death of the seafarer under this contract shall cover
all claims arising from or in relation with or in the
course of the seafarer’s employment, including but
not limited to damages arising from the contract,
tort, fault or negligence under the laws of the Philip-
pines or any other country.
Id. at 186 (the "Liability Clause").
For purposes of the POEA Contract, Magsaysay Mitsui, a
Philippine crewing company, was the agent of defendant
MOL — a Japanese company managing the officers and crew
of the Asian Spirit. Defendant World Car, a Liberian com-
pany, owned, operated, and manned the Asian Spirit. Aggarao
was hired as a crewman of the Asian Spirit, which was char-
tered by defendant Nissan, a Japanese entity. Under the terms
of its charter agreement with World Car, Nissan was responsi-
ble for instructing the ship on its destination and cargo.
One day after signing the POEA Contract, on June 3, 2008,
Aggarao entered into a "Seafarers Employment Contract" (the
"Seafarers Contract") with Magsaysay Mistui that incorpo-
rated the terms of a collective bargaining agreement called the
"IBF JSU/AMOSUP-IMMAJ CBA" (the "CBA"). See J.A.
191-221. World Car and Nissan were bound to the CBA
through an "IBF [International Bargaining Forum] Special
Agreement." See id. at 1421-22. On about June 3, 2008, the
POEA approved the Seafarers Contract. With Aggarao on
board as a crewman, the Asian Spirit thereafter departed from
Manila.
B.
On August 13, 2008, the Asian Spirit was navigating in the
Chesapeake Bay en route to the Port of Baltimore where it
was scheduled to load a cargo of motor vehicles. Aggarao was
working to raise floor panels in the ship in preparation for
6 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
receipt of the cargo load. As the crew began raising the floor
panels, Aggarao was crushed between a deck lifting machine
and a pillar. He was promptly airlifted to the nearby Univer-
sity of Maryland Shock Trauma Center (the "UM Trauma
Center"), where he was treated for severe injuries to his spinal
column and cord, his chest cavity, and his abdomen. Dr.
Thomas M. Scalea performed emergency surgery for "litiga-
tion of vessels, bowel resection, and splenectomy." J.A. 533.
During the next few weeks, Aggarao endured a barrage of
additional surgeries and medical procedures, twelve in all.
On October 15, 2008, Aggarao was discharged from the
UM Trauma Center and, on Dr. Scalea’s recommendation,
transferred within the University of Maryland Medical Sys-
tem ("UMMS") to Kernan Orthopaedics and Rehabilitation
for follow-up treatment, including physical and occupational
therapy in the spinal cord unit. Aggarao presented to Kernan
with "T4 ASIA A paraplegia with complete paralysis" and
"absent bowel and bladder control." J.A. 539. Dr. Henry York
was Aggarao’s physician at Kernan. On November 18, 2008,
Dr. York reported that Aggarao had made "excellent progress
towards his goals of independent functional mobility" in
terms of, inter alia, "bed mobility," and "transfers between his
bed and his wheelchair [and] between level surfaces." Id. Dr.
York contemplated that Aggarao would receive "further phys-
ical therapy" and recommended that he acquire an ultra-
lightweight wheelchair, so that he could achieve optimal
mobility when he returns to the Philippines. Id. at 539-42.
According to a declaration of the defendants’ paralegal,
made on June 4, 2010, Dr. York and a physical therapist had
agreed, at a meeting eighteen months earlier, on December 4,
2008, that Aggarao "had reached as full a recovery as Kernan
Hospital could provide him"; "was able to care for himself
[as] he had been taught how to catheterize himself[,] manage
his wheelchair[, and] get in and out of a car"; and "was ready
for the trip to the Philippines." J.A. 1326. By letter of Decem-
ber 8, 2008, the defendants informed Aggarao that, given the
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 7
extent of his rehabilitation, the owners and insurers of the
Asian Spirit authorized travel arrangements for his return to
the Philippines and would not be providing financial assis-
tance to him for further medical care in the United States.
Nevertheless, Aggarao declined to be repatriated to the Philip-
pines for fear that he could not receive adequate medical treat-
ment there. He also believed that his aging parents, who live
in a remote rural area, would be unable to care for a paraple-
gic and he would die.
On February 25, 2009, Aggarao was discharged from Ker-
nan and relocated to a nearby Days Inn hotel. Kernan
arranged to pay, for seven days only, the costs of his room
and board at the hotel, plus a nurse to make regular visits.
Meanwhile, the defendants reiterated that the owners, manag-
ers, and insurers of the Asian Spirit would honor their obliga-
tions under the POEA contract and Philippine law, including
providing Aggarao further medical care, but only upon his
return to the Philippines. In response, Aggarao insisted that,
notwithstanding his course of rehabilitation at Kernan, Dr.
Scalea, his UM Trauma Center surgeon, had recommended
that he remain in the United States for abdominal reconstruc-
tive surgeries. Aggarao forwarded to the defendants Dr.
Scalea’s letter of March 10, 2009, which explained:
I have been caring for Potenciano Aggarao since his
injury date on August 13, 2008 . . . . In my opinion,
the ideal therapy for this patient is staged abdominal
wall reconstruction . . . . This is a highly complicated
situation and I believe it is in Mr. Aggarao’s best
interest to remain in the United States to have the
procedures done at the Shock Trauma Center. This
is a procedure best done in a tertiary care facility.
More importantly, I believe that optimal results will
occur if he is cared for in an institution that knows
him inside and out.
J.A. 562.
8 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
Forced by financial necessity to leave the Days Inn in April
2009, Aggarao eventually moved in with a Filipino-American
friend, who agreed to provide lodging and assist with his
medications and personal hygiene for $100 per day.4 Later
that month, the defendants arranged for Future Care, Inc., a
provider of medical care management services, to monitor
Aggarao’s medical needs. They also offered a one-time pay-
ment of less than $500 for Aggarao’s prescriptions, if he
agreed to be repatriated to the Philippines; otherwise,
Aggarao would be obligated to pay for his own medical care
in the United States. Aggarao rejected the proposal and
instead borrowed money to pay for his medications.
C.
On June 16, 2009, Aggarao initiated this civil action in the
Eastern District of New York. Shortly thereafter, on June 29,
2009, the defendants settled his bills with UMMS for hospi-
talization and medical treatments, in the aggregate sum of
$944,530.99. The defendants then advised Aggarao that they
were "ready and willing" to arrange for his repatriation to the
Philippines and to "provide further appropriate medical care
in that country," but would "have no further responsibility for,
and will not pay for, any further medical care" in the United
States. J.A. 1356.5
In preparation for his abdominal reconstructive surgeries,
Aggarao underwent weekly skin expansion procedures
between August and October 2009. In the meantime, he
applied to UMMS for medical assistance and was examined
by Dr. Ana T. Acevedo. In her October 30, 2009 report, Dr.
4
As of April 2010, Aggarao owed his Filipino-American caretaker
approximately $33,000.
5
On this record, the defendants have adhered to their ultimatum that
they will have no further responsibility for "any further needed care" in the
United States. Indeed, they have not provided any financial assistance to
Aggarao for maintenance and cure for nearly three years, since June 2009.
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 9
Acevedo concluded that Aggarao would "need appropriate
and diligent medical care for the rest of his life," and that he
was "unlikely to have the expert medical care that he needs"
if he returned to his "small village in the Philippines." J.A.
679.
On November 17, 2009, these proceedings were transferred
to the District of Maryland. Shortly thereafter, on January 5,
2010, Dr. Scalea performed the first of two planned abdomi-
nal reconstructive surgeries on Aggarao. Following that sur-
gery, Dr. Scalea observed in his report that Aggarao will
require a second stage abdominal reconstruction and con-
cluded again that it was in the "best interest of Mr. Aggarao
to remain in the United States to have the follow-up care that
he requires and additional operative procedures done here at
the Shock Trauma Center." J.A. 690. Aggarao was discharged
from the UM Trauma Center on January 9, 2010, but was
rushed back to the Center two days later due to complications.
Thereafter, he was referred to a shelter called Healthcare for
the Homeless.
On January 21, 2010, the defendants moved, inter alia, to
dismiss the Complaint for improper venue under Rule
12(b)(3), pursuant to the Arbitration Clause. Aggarao opposed
the motion to dismiss, arguing that the Arbitration Clause was
not enforceable. Aggarao also served multiple discovery
requests on the defendants; however, the parties thereafter
agreed that no discovery would be conducted pending the
court’s disposition of the venue and arbitration issues.
Aggarao was subsequently moved from the homeless shel-
ter to his Filipino-American caretaker’s home. He was then
examined by Elizabeth Davis, a rehabilitation counselor at
Life Care Resources, Inc. Davis’s report of February 1, 2010,
observed, inter alia, that Aggarao was "at extreme risk for fur-
ther serious complications including infection and autonomic
dysreflexia which is an emergency situation," and would need
a "high level of care" to function and to maintain his health.
10 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
J.A. 727-37. Davis also prepared a Life Care Plan, detailing
the treatment and maintenance that Aggarao would require.
On February 18, 2010, Dr. Scalea performed another surgical
procedure, for a bed sore, at the UM Trauma Center. At that
time, Aggarao learned that he would be eligible for Medicaid
benefits for emergency care only. On February 24, 2010, he
was again discharged from the UM Trauma Center, and trans-
ferred for rehabilitation to the UMMS-affiliated University
Specialty Hospital. Aggarao was approved for rehabilitation
on the possibility that it would be paid through the Medicaid
program. On March 11, 2010, UMMS filed a lien against him
for more than $91,000 in unpaid medical bills.6
Aggarao thereafter retained Dr. Richard P. Bonfiglio, a spe-
cialist in rehabilitation, to conduct a medical evaluation and
review his medical records. Dr. Bonfiglio’s April 19, 2010
report explained that Aggarao "needs extensive, ongoing
daily, medical and rehabilitative care [as] delineated in the
Life Care Plan developed by Elizabeth Davis, RN." J.A. 930.
Bonfiglio also concluded that Aggarao "can best receive this
level of care in the United States," and therefore
strongly advocate[d] that [Aggarao] not be deported
for the complexity of his current medical condition
would likely lead to his premature death, if he is
forced from the United States. [Aggarao] would not
receive the level of medical care that he needs in
other countries especially the Philippines.
Id.
Two days later, on April 21, 2010, Aggarao filed a motion
in the district court seeking a preliminary injunction, compel-
ling MOL and World Car to, inter alia, provide maintenance
6
According to Aggarao’s calculations, UMMS’s lien was underinclu-
sive, in that he then had more than $130,000 in unpaid medical bills and
expected to incur thousands more.
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 11
and cure for him in the United States, until he could attain
maximum medical cure (the "injunction request").7 In opposi-
tion to the injunction request, the defendants submitted the
declaration of Dr. Natalio G. Alegre, a general surgeon prac-
ticing at St. Luke’s Medical Center in Manila. Dr. Alegre
explained that St. Luke’s is a "world-class institution," "the
foremost hospital in the Philippines," and "a tertiary care
facility" with "state-of-the-art facilities." J.A. 1362-63. Dr.
Alegre had apparently reviewed Aggarao’s medical records
and concluded that "[n]othing has been done in the United
States for Mr. Aggarao during that period that could not have
been done to equal effect in the Philippines," including his
abdominal wall reconstruction. Id. at 1364. Dr. Alegre also
explained that it was "well within the capability of practioners
and institutions in the Philippines" to provide Aggarao with
the level of care described in the Life Care Plan prepared by
Davis. Id. Dr. Alegre disagreed with Dr. Bonfiglio’s conclu-
sions, deducing that,
[w]ith the appropriate medical accompaniment, Mr.
Aggarao could safely travel from the United States
to the Philippines. His medical, surgical, rehabilita-
tive, and psychiatric needs can all be handled in the
Philippines.
Id. at 1365.
D.
On September 30, 2010, the district court issued its Opin-
ion in this case, ruling that the Arbitration Clause was
enforceable, and that Aggarao was equitably estopped from
7
By the injunction request, Aggarao alleged that the owner of the Asian
Spirit (World Car) and his employer (MOL) have general maritime duties
to provide maintenance and cure. Although his Complaint also alleged a
maintenance and cure claim against Nissan, Aggarao did not seek injunc-
tive relief against that defendant.
12 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
pursuing in federal court his separate claims against World
Car and Nissan, which were nonsignatories to the POEA Con-
tract. Hence, the court concluded that the Arbitration Clause
"must be enforced" and dismissed Aggarao’s claims against
MOL, World Car, and Nissan for improper venue. See
Aggarao, 741 F. Supp. 2d at 743. Without further elaboration,
the court denied as moot the defendants’ motion for summary
judgment and the injunction request.8 Finally, the court
ordered that the case be closed.
On October 21, 2010, Aggarao filed a timely notice of
appeal. We possess jurisdiction pursuant to 28 U.S.C. § 1291.
II.
We review de novo a district court’s determination on
arbitrability of a civil action. See United States v. Bankers Ins.
Co., 245 F.3d 315, 319 (4th Cir. 2001). We also review de
novo a district court’s dismissal of a complaint for improper
venue on the basis of a forum-selection clause. See Sucampo
Pharm., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 550 (4th
Cir. 2006).9 On a motion to dismiss under Rule 12(b)(3), the
court is permitted to consider evidence outside the pleadings.
Id. A plaintiff is obliged, however, to make only a prima facie
8
With respect to the injunction request, the court observed by footnote
that it had "no doubt and indeed regret[ted] the severity of [Aggarao’s]
medical condition [but] that [did] not alter the requirement for arbitration
in this case." Aggarao, 741 F. Supp. 2d at 743 n.10.
9
Although our Sucampo Pharm. decision involved a forum-selection
clause, the Supreme Court has characterized an arbitration clause as "a
specialized kind of forum-selection clause." Scherk v. Alberto-Culver Co.,
417 U.S. 506, 519 (1974). In particular, the Court has deemed foreign
arbitration clauses to be a "subset of foreign forum selection clauses." See
Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 534
(1995). And, as we explained in Sucampo Pharm., "a motion to dismiss
based on a forum-selection clause should be properly treated under Rule
12(b)(3) as a motion to dismiss on the basis of improper venue." Id. at
550.
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 13
showing of proper venue in order to survive a motion to dis-
miss. See Mitrano v. Hawes, 377 F.3d 402, 405 (4th Cir.
2004). In assessing whether there has been a prima facie
venue showing, we view the facts in the light most favorable
to the plaintiff. See Global Seafood Inc. v. Bantry Bay Mus-
sels Ltd., 659 F.3d 221, 224 (2d Cir. 2011).
We review for abuse of discretion a district court’s denial
of a preliminary injunction. See Dewhurst v. Century Alumi-
num Co., 649 F.3d 287, 290 (4th Cir. 2011). When a motion
for a preliminary injunction is denied as moot, there are "no
factual or legal findings for this court to review." Dubuc v.
Mich. Bd. of Law Exam’rs, 342 F.3d 610, 620 (6th Cir. 2003).
Rather, in such cases, we must determine whether the court
abused its discretion by failing to exercise it. See James v.
Jacobson, 6 F.3d 233, 239 (4th Cir. 1993) (explaining that
abuse of discretion manifests "in a failure or refusal . . . actu-
ally to exercise discretion").
III.
A.
In 1958, UNESCO adopted the Convention on the Recog-
nition and Enforcement of Foreign Arbitral Awards (the
"Convention"). The United States acceded to the Convention
in 1970, and Congress implemented it by enacting Chapter 2
of Title 9 of the United States Code ("the Convention Act").10
10
The Ninth Circuit recently explained the relationship of the Federal
Arbitration Act (the "FAA") to the Convention Act:
Federal arbitration law is codified in the three chapters of Title
9 of the United States Code [only two of which are relevant
here]. The [FAA] comprises the first chapter. See 9 U.S.C. §§ 1-
14. [The legislation] implementing the treaty . . . commonly cal-
led the Convention Act, comprises the second chapter. See U.S.C.
§§ 201-208.
Rogers v. Royal Caribbean Cruise Line, 547 F.3d 1148, 1152–53 (9th Cir.
2008); accord Bautista v. Star Cruises, 396 F.3d 1289, 1292 n.2 (11th Cir.
14 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
"The goal of the Convention," the Supreme Court has
explained, "was to encourage the recognition and enforcement
of commercial arbitration agreements in international con-
tracts and to unify the standards by which agreements to arbi-
trate are observed and arbitral awards are enforced in the
signatory countries." Scherk v. Alberto-Culver Co., 417 U.S.
506, 520 n.15 (1974).
In deciding whether to enforce a foreign arbitration clause
implicating the Convention Act, courts have emphasized four
jurisdictional factors:
that (1) there is an agreement in writing within the
meaning of the Convention; (2) the agreement pro-
vides for arbitration in the territory of a signatory of
the Convention; (3) the agreement arises out of a
legal relationship, whether contractual or not, which
is considered commercial; and (4) a party to the
agreement is not an American citizen, or that the
commercial relationship has some reasonable rela-
tion with one or more foreign states.
Balen v. Holland Am. Line Inc., 583 F.3d 647, 654–55 (9th
Cir. 2009) (internal quotation marks omitted). When these
jurisdictional prerequisites have been satisfied, a district court
is obliged to order arbitration "unless it finds that the [arbitra-
tion] agreement is null and void, inoperative or incapable of
being performed." Convention, art. II(3).
In addressing the four jurisdictional factors, Aggarao
acknowledges that two of them are satisfied. First, the Arbi-
tration Clause provides for arbitration in the Philippines,
2005) (referring to Chapter 1 as "FAA" and to Chapter 2 as the "Conven-
tion Act," even though "[c]ourts often refer to the entirety of title 9 as the
Federal Arbitration Act"). To avoid confusion, we adopt the same nomen-
clature as those circuits, referring to Chapter 1 of Title 9 as the "FAA" and
to Chapter 2 as the "Convention Act."
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 15
which is a signatory of the Convention (Factor Two), and,
second, he is not a citizen of the United States (Factor Four).
Nevertheless, Aggarao contends that jurisdictional Factors
One and Three have not been satisfied. More specifically, he
maintains that there was never an agreement to arbitrate (Fac-
tor One) because the Seafarers Contract and the CBA super-
seded — or at least modified — the POEA Contract, and thus
annulled the Arbitration Clause. Moreover, Aggarao posits
that an agreement to arbitrate could not have arisen from a
commercial legal relationship (Factor Three) because a sea-
man’s employment contract is exempt from the FAA defini-
tion of "commerce."
Notwithstanding the jurisdictional prerequisites, Aggarao
asserts that the Arbitration Clause cannot divest the district
court of jurisdiction over his Seaman’s Wage Act claim and,
by extension, his other claims for relief. He also suggests that
enforcement of the Arbitration Clause and the Choice of Law
Clause would contravene the public policy of this country by
forcing him to waive his statutory claims under the Jones Act
and the Seaman’s Wage Act. Even if he is required to arbi-
trate his claims against MOL, however, Aggarao insists that
he should be able to proceed against World Car and Nissan
in the district court, rather than in arbitration in the Philip-
pines, because they are not signatories to the POEA Contract
and owed duties to him that are distinct from those owed by
MOL. We assess Aggarao’s contentions in turn.
1.
First, Aggarao contends that there is no binding arbitration
agreement because the Seafarers Contract and the CBA con-
stituted a novation that served to supersede the POEA Con-
tract. A contractual novation has four elements: "(1) [a]
previous valid obligation; (2) the agreement of all parties to
[a] new contract; (3) the validity of such new contract; and (4)
the extinguishment of the old contract by the substitution of
the new contract." Holder v. Maaco Enterps., 644 F.2d 310,
16 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
312 n.2 (4th Cir. 1981) (applying Maryland law) (internal
quotation marks omitted). Aggarao’s effort to show a nova-
tion with respect to the Arbitration Clause fails on the fourth
element.
The Opinion accurately observed that "there is no indica-
tion, either expressed or implied, that both parties intended
the Seafarers Contract to constitute a novation of the POEA
Contract." Aggarao, 741 F. Supp. 2d at 739. Neither the Sea-
farers Contract nor the CBA contains any language extin-
guishing the POEA Contract. Rather, the CBA anticipates the
existence of "an individual Contract of Employment" between
the employer (MOL) and the seafarer (Aggarao), e.g., the
POEA Contract, yet the CBA specifies that it is to be
"deemed . . . incorporated into and to contain the terms and
conditions of employment." J.A. 193. Moreover, the POEA
Contract itself provides that any alterations agreed to by the
parties and approved by the POEA "shall be deemed an inte-
gral part of the [POEA Terms]." Id. at 184. That provision is
applicable because the POEA approved the Seafarers Contract
incorporating the CBA. And, the Arbitration Clause contem-
plates that the parties may be covered by a collective bargain-
ing agreement outside the POEA Contract, such as the CBA,
but nevertheless requires that arbitration be conducted in such
circumstances. See id. at 187.
Alternatively, Aggarao contends that the Seafarers Contract
and the CBA at least modified the POEA Contract so as to
repeal the Arbitration Clause. As we have explained, how-
ever, "[w]hen a party seeking to avoid arbitration contends
that the clause providing for arbitration has been superseded
by some other agreement, the presumptions favoring arbitra-
bility must be negated expressly or by clear implication."
Zandford v. Prudential–Bache Sec., Inc., 112 F.3d 723, 727
(4th Cir. 1997) (internal quotation marks omitted). Aggarao
maintains that such a "clear implication" is found in Article
28.5 of the CBA, which provides, in pertinent part, that "[a]ny
payment [for permanent disability sustained during the course
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 17
of a seafarer’s employment], shall be without prejudice to any
claim for compensation made in law." J.A. 205. Aggarao
interprets Article 28.5 to authorize actions at law for personal
injury claims, which, he asserts, countermands the Arbitration
Clause.
Put succinctly, we are unwilling to accept Aggarao’s con-
struction as the proper and clear implication of Article 28.5.
In construing an arbitration agreement under "common law
principles of contract interpretation . . . due regard must be
given to the federal policy favoring arbitration, and ambigui-
ties as to the scope of the arbitration clause itself resolved in
favor of arbitration." United States v. Bankers Ins. Co., 245
F.3d 315, 319 (4th Cir. 2001) (internal quotation marks and
alteration omitted). It is elementary that a contract term must
"be construed in connection with the [contract’s] other provi-
sions, so that if possible, or so far as is possible, they may all
harmonize." Chi. Ry. Equip. Co. v. Merch. Bank, 136 U.S.
268, 281 (1890); see Levin v. Alms & Assocs., Inc., 634 F.3d
260, 267 (4th Cir. 2011) (observing that "whether one of two
provisions in a contract controls is irrelevant where . . . the
two provisions can be comfortably read together" (internal
quotation marks omitted)). This rule applies to our holistic
assessment of the POEA Contract, the Seafarer’s Contract,
and the incorporated CBA, in that these agreements concern
the same subject matter (the terms and conditions of
Aggarao’s employment) and were executed by the same par-
ties within one day of each other. See Aliron Int’l, Inc. v.
Cherokee Nation Indus., Inc., 531 F.3d 863, 868 (D.C. Cir.
2008) (according effect to arbitration clause found in one con-
tract for dispute arising under separate contract because con-
tracts were made by same parties and concerned same subject
matter); cf. Cara’s Notions, Inc. v. Hallmark Cards, Inc., 140
F.3d 566, 571 (4th Cir. 1998) (construing broad arbitration
clause in one contract to encompass dispute originating from
another contract that had no arbitration clause).
Read together, the Arbitration Clause and Article 28.5
authorize Aggarao to pursue his legal claims through arbitra-
18 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
tion. Harmonizing those two provisions in that manner satis-
fies "two prime interpretive dictates regarding judicial review
[—] that all contractual provisions be read to make sense, and
that arbitration be favored." See H.C. Lawton, Jr., Inc. v.
Truck Drivers, Chauffeurs & Helpers Local Union No. 384,
755 F.2d 324, 329 (3d Cir. 1985). Even if the Arbitration
Clause and Article 28.5 could not be so harmonized, we agree
with the district court that there is, at best, an ambiguity as to
how Aggarao "may proceed to recover compensation," since
Article 28.5 does not "provide access to a particular court or
other forum." See Aggarao, 741 F. Supp. 2d at 740. Accord-
ingly, "as a matter of federal law, any doubts concerning the
scope of arbitrable issues should be resolved in favor of arbi-
tration, [even where] the problem at hand is the construction
of the contract language itself." Moses H. Cone Mem’l Hosp.
v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). This
"heavy presumption . . . in favor of arbitrability is particularly
applicable [where, as here,] the arbitration clause is broadly
worded." See Levin, 634 F.3d at 266-67. In these circum-
stances, the court correctly ruled that neither the Seafarer’s
Contract nor the CBA superseded or revoked the Arbitration
Clause.
2.
Next, Aggarao contends that the Arbitration Clause is not
subject to the Convention Act, which applies only to disputes
arising from commercial legal relationships involving foreign
countries. See 9 U.S.C. § 202. In this respect, he maintains
that the POEA Contract did not create a commercial legal
relationship because the FAA is the source of the definition
of "commercial," and it exempts from that definition the
employment contracts of a seaman. In particular, Aggarao
directs us to that part of the FAA defining the term "com-
merce," providing that "nothing herein contained shall apply
to contracts of employment of seamen." 9 U.S.C. § 1 (the "§ 1
exemption"). Aggarao asserts that § 1 defines that which is
commercial for all of Title 9, including § 202, which restricts
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 19
the scope of the Convention Act to commercial legal relation-
ships. Alternatively, he argues that § 208 makes the § 1
exemption applicable to § 202. Otherwise, we should resolve
any ambiguity by resorting to legislative history, which,
according to Aggarao, plainly shows that the § 1 exemption
was meant to apply to § 202.
As the Opinion observed, Aggarao’s contentions have been
squarely rejected by at least three of our sister circuits, which
have held that the § 1 exemption does not apply to the Con-
vention Act. See Aggarao, 741 F. Supp. 2d at 741. Section
202 provides, in relevant part, that an agreement falls under
the Convention Act if it "aris[es] out of a legal relationship,
whether contractual or not, which is considered as commer-
cial, including a transaction, contract, or agreement described
in section 2 of [the FAA]." 9 U.S.C. § 202 (emphasis added).
Section 2 recognizes as enforceable an arbitration clause "in
any maritime transaction or a contract evidencing a transac-
tion involving commerce to settle by arbitration." Id. § 2. As
the Supreme Court has observed, "a contract evidencing a
transaction involving commerce" includes an employment
contract. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105,
113 (2001).
The Fifth and Eleventh Circuits have explained that the ref-
erence in § 202 to § 2 does not exclusively limit the definition
of "commercial" to the contracts described in § 2, but is illus-
trative of the types of commercial legal relationships meant to
be covered by § 202. See Bautista, 396 F.3d at 1298; Fran-
cisco v. Stolt Achievement MT, 293 F.3d 270, 274 (5th Cir.
2002). Significantly, § 202 "makes no mention" of the exemp-
tion found in § 1. Id. Moreover, as the Ninth Circuit has
explained, the § 1 exemption "is neither part of the definition
of commerce . . . nor a limitation on which relationships are
‘considered as commercial’ [r]ather, it operates as an exemp-
tion." Rogers, 547 F.3d at 1155. That is, the exemption "does
not state that . . . employment contracts are not ‘considered as
commercial’[;] it states that . . . even though their employment
20 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
contracts are considered commercial, the FAA does not apply
to them." Id. In any case, § 1 does not incorporate its exemp-
tion into § 202.11
Nor is the § 1 exemption incorporated by § 208. As the
Ninth Circuit observed in Rogers, § 208 "incorporates the
provisions of the FAA unless they are ‘in conflict with’ either
the Convention Act or the Convention." Id. at 1155. Incorpo-
rating the § 1 exemption would create just such a conflict
because "[n]either the Convention nor the limiting language
ratifying the Convention contemplate any exception for sea-
men employment contracts or employment contracts in gen-
eral." See Francisco, 293 F.3d at 274. Instead, Congress
limited the applicability of the Convention only to arbitration
agreements arising from commercial legal relationships, and,
as explained above, the § 1 exemption does not define what
is commercial.
Because § 202 is "plain and unambiguous . . . there is no
need for recourse to legislative history." See Van Alstyne v.
Elec. Scriptorium, Ltd., 560 F.3d 199, 207 (4th Cir. 2009).12
11
We are also unpersuaded that the heading of § 1 — "exceptions to
operation of title" — supports Aggarao’s position that the seaman’s
employment contract exemption is meant to apply throughout Title 9,
including in § 202. Although "words in the title of a statute or the heading
of a section can shed light on the meaning of an ambiguous word or phrase
in the text of the statute, they cannot create an ambiguity where none oth-
erwise would exist." Francisco, 293 F.3d at 275 (internal quotation marks
omitted); accord Bautista, 396 F.3d at 1298 n.12.
12
The legislative history that Aggarao points to — an ambassador’s tes-
timony before a Senate committee — is unavailing. The ambassador testi-
fied that
the definition of commerce contained in section 1 of the original
[FAA] is the national law definition for the purposes of the decla-
ration. A specific reference, however, is made in section 202 to
section 2 of title 9, which is the basic provision of the original
[FAA].
S. Comm. on Foreign Relations, Foreign Arbitral Awards, S. Rep. No. 91-
702, at 6 (1970). Even if the ambassador believed the § 1 exemption
"should apply to the Convention Act, his views as a single State Depart-
ment official are a relatively unreliable indicator of statutory intent." Baut-
ista, 396 F.3d at 1298; see Francisco, 293 F.3d at 276 (same).
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 21
Hence, the § 1 exemption does not apply and we agree with
the district court that the Arbitration Clause falls within the
ambit of the Convention Act.
3.
Aggarao next contends that, even if the Convention Act’s
jurisdictional prerequisites are satisfied, the Arbitration
Clause cannot divest the district court of jurisdiction because
the Seaman’s Wage Act entitles him to access a federal court
to resolve his claim thereunder. See 46 U.S.C. § 10313(i)
(providing federal "courts are available to seamen for enforce-
ment" of wage claims).13 And, because "[r]etention by the dis-
trict court of [seamen] wage claims requires the court, absent
‘special circumstances,’ to exercise jurisdiction over all
claims," he asserts that the Arbitration Clause has no effect in
this case. See Morewitz v. Andros Compania Maritima, S.A.,
614 F.2d 379, 381 n.3 (4th Cir. 1980). Aggarao, however,
misconstrues the authority on which he relies.
The Ninth and Eleventh Circuits have determined that
"[t]he Convention Act expressly compels the federal courts to
enforce arbitration agreements," notwithstanding the jurisdic-
tion conferred on such courts to adjudicate Seaman’s Wage
Act claims. See Rogers, 547 F.3d at 1156 (citing Lobo v.
Celebrity Cruises, Inc., 488 F.3d 891, 894-95 (11th Cir.
2007)). Our Morewitz decision did not rule otherwise. There,
we affirmed the district court’s assessment that it lacked juris-
diction over a Seaman’s Wage Act claim because the claim
was not asserted in good faith. Morewitz did not involve a for-
eign arbitration agreement, and thus we had no occasion to
13
Aggarao alleged that the defendants owed him nominal wages for
work performed before the accident. Subsections (e) and (f) of § 10313 of
Title 46 provide for the payment of wages within certain specified times,
depending on whether the seaman makes a demand before or after expira-
tion of the voyage. Subsection (i) renders § 10313 applicable to "a seaman
on a foreign vessel when in a harbor of the United States."
22 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
consider the Convention Act. With that issue now squarely
before us, we agree with our sister circuits that the Conven-
tion Act supplanted in part the Seaman’s Wage Act, requiring
a federal court to refer to arbitration seamen wage claims and
any other claims subject to an enforceable arbitration agree-
ment.
4.
Next, Aggarao persists in his view that arbitration of his
Jones Act and Seaman’s Wage Act claims in the Philippines
will contravene the public policy of the United States.14 He
portends that, pursuant to the Choice of Law Clause, the arbi-
trator would apply the law of the Philippines to the exclusion
of otherwise applicable American law, thereby denying his
right to pursue his federal statutory claims. Aggarao maintains
that such a deprivation of his rights contravenes our public
policy, as established by the "prospective waiver doctrine"
first articulated by the Supreme Court in Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985).
There, the Court deemed enforceable an arbitration clause
requiring the parties to arbitrate, inter alia, statutory antitrust
claims in Japan. Addressing concerns that a choice of law
14
In similar fashion to the Seaman’s Wage Act, the Jones Act provides
a statutory remedy and federal forum to resolve disputes between seamen
and their employers. Whereas the Seaman’s Wage Act governs contractual
disputes concerning compensation for services performed, the Jones Act
addresses actions in tort arising from workplace injuries:
Any seaman who shall suffer personal injury in the course of his
employment may, at his election, maintain an action for damages
at law, with the right of trial by jury, and in such action all stat-
utes of the United States modifying or extending the common-
law right or remedy in cases of personal injury to railway
employees shall apply.
46 U.S.C. § 30104. The Jones Act thereby "incorporates the judicially
developed doctrine of liability of the Federal Employers Liability Act,"
which governs the injury claims of railway workers. See Martin v. Harris,
560 F.3d 210, 216 (4th Cir. 2009) (internal quotation marks omitted).
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 23
provision would "wholly . . . displace American law" (even
though the parties had stipulated that domestic law would
apply to the antitrust claims), the Court "merely note[d]" by
footnote that,
in the event the choice-of-forum and choice-of-law
clauses operated in tandem as a prospective waiver
of a party’s right to pursue statutory remedies for
antitrust violations, we would have little hesitation in
condemning the agreement as against public policy.
Mitsubishi, 473 U.S. at 637 n.19. Ten years later, the Court
qualified the doctrine, recognizing that a prospective waiver
would contravene public policy only when there is "no subse-
quent opportunity for review" in federal court. See Vimar
Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528,
540 (1995).
Purporting to follow the Court’s mandate in Mitsubishi and
Sky Reefer, the Eleventh Circuit opined that an arbitration
agreement could be deemed "null and void as a matter of pub-
lic policy" if it is clear that the arbitrator would not apply the
law of this country, and no assurance of court review would
follow. See Thomas v. Carnival Corp., 573 F.3d 1113, 1123-
24 & n.17 (11th Cir. 2009). Aggarao urges that we apply the
reasoning of Thomas and find the Arbitration Clause null and
void as against public policy. As the Eleventh Circuit has
more recently explained, however, its decision in Thomas is
problematic on several grounds. See Lindo v. NCL (Baha-
mas), Ltd., 652 F.3d 1257, 1277-80 (11th Cir. 2011). Most
critically, Thomas strayed from Supreme Court precedent by
invoking the "null and void" defense in applying the prospec-
tive waiver doctrine. In Mitsubishi and Sky Reefer, the Court
specified instead that a prospective waiver would be unen-
forceable "as against public policy." Sky Reefer, 515 U.S. at
540. The Convention prescribes that the null-and-void defense
be interposed at the first stage of the arbitration-related court
proceedings, the "arbitration-enforcement stage" — i.e., when
24 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
a district court is "considering an action or motion to ‘refer
the parties to arbitration.’" Lindo, 652 F.3d at 1263 (quoting
Convention, art. II(3)). The public policy defense, on the
other hand, may only be asserted at the second stage of the
arbitration-related court proceedings, the "award-enforcement
stage" — i.e., after an arbitration award has been made and
the court is "considering whether to recognize and enforce an
arbitral award." Id. (citing Convention, art. V).
The Supreme Court has recognized this two-stage
approach, adhering to the arbitration-enforcement and award-
enforcement stages in both Mitsubishi and Sky Reefer. Con-
fronted in Mitsubishi with the possibility that the law of Swit-
zerland would govern an agreement subject to arbitration in
Japan, the Court nevertheless declined "to speculate on this
matter at th[at] stage in the proceedings, when Mitsubishi
[sought] to enforce the agreement to arbitrate, not to enforce
an award." 473 U.S. at 637 n.19. Rather, the Court indicated
that a federal court would "have the opportunity at the award-
enforcement stage to ensure that the legitimate interest in the
enforcement of American antitrust laws has been addressed[,
reserving] the right to refuse enforcement of an award where
[it] would be contrary to the public policy of [the United
States]." Id. at 638 (internal quotation marks omitted).15
The Eleventh Circuit’s Thomas decision erroneously con-
flated the two stages of arbitration-related court proceedings,
15
Similarly, in Sky Reefer, the Court determined that an arbitration
clause was enforceable even though it provided for arbitration in Japan
and expressly stated that it was to be governed by the law of Japan. The
Court decided that the choice of law issue was "premature," as it had not
been established "what law the arbitrators will apply . . . or whether [the
plaintiff would] receive diminished protection as a result." 515 U.S. at
540. Moreover, the defendants sought "only to enforce the arbitration
agreement" and the district court "retained jurisdiction over the case and
[would] have the opportunity at the award-enforcement stage to ensure
that the legitimate interest in the enforcement of [American] laws ha[d]
been addressed." Id. (internal quotation marks omitted).
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 25
merging the null-and-void and public policy defenses and rul-
ing that the arbitration agreement was "null and void as a
matter of public policy." 573 F.3d at 1124 n.7 (emphasis
added). That amalgamation was contrary to Eleventh Circuit
precedent, which had previously held that the null and void
defense only applies when the arbitration agreement has been
"obtained through those limited situations, ‘such as fraud,
mistake, duress, and waiver,’ constituting ‘standard breach-
of-contract defenses’ that ‘can be applied neutrally on an
international scale.’" Lindo, 652 F.3d at 1276 (quoting Baut-
ista, 396 F.3d at 1302). The "narrow scope of the ‘null and
void’ clause is in complete accord with the prevailing author-
ity in other circuits." 652 F.3d at 1277 (collecting cases).
Moreover, the problem with applying the public policy
defense at the first stage of the arbitration-related court pro-
ceedings — the arbitration-enforcement stage — is that the
defense "cannot be applied ‘neutrally on an international
scale,’ as each nation operates under different statutory laws
and pursues different policy concerns." See Lindo, 652 F.3d
at 1278. In applying the Convention’s provisions, the district
courts "must not only observe the strong policy favoring arbi-
tration, but must also foster the adoption of standards which
can be uniformly applied on an international scale." I.T.A.D.
Assocs., Inc. v. Podar Bros., 636 F.2d 75, 77 (4th Cir. 1981).
Consequently, Aggarao is not entitled to interpose his public
policy defense, on the basis of the prospective waiver, doc-
trine until the second stage of the arbitration-related court pro-
ceedings — the award-enforcement stage.16
16
It is possible that the Philippine arbitrator(s) will apply United States
law with respect to the Jones Act and Seaman’s Wage Act claims, or that
Aggarao will be able to effectively vindicate the substance of those claims
under Philippine law and obtain an adequate remedy. Indeed, the Liability
Clause suggests that any payment for Aggarao’s injuries under the POEA
Contract cover his "claims [for] damages arising from the contract, tort,
fault or negligence under the laws of the Philippines or any other coun-
try." J.A. 186 (emphasis added). The defendants have indicated, however,
that they intend to argue, even under the Supreme Court’s choice of law
principles, that United States law should not apply. See Lauritzen v. Lar-
sen, 345 U.S. 571 (1953) (enumerating factors to consider in determining
whether shipowner is "employer" for purposes of Jones Act).
26 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
5.
Finally, Aggarao contends that, even if he is obliged to
arbitrate his claims against MOL, the district court erred in
concluding he was equitably estopped from pursuing his
claims against World Car and Nissan because they are not sig-
natories to the POEA Contract. Without a doubt, however, "a
nonsignatory to an arbitration clause may, in certain situa-
tions, compel a signatory to the clause to arbitrate the signato-
ry’s claims against the nonsignatory despite the fact that the
signatory and nonsignatory lack an agreement to arbitrate."
Am. Bankers Ins. Group, Inc. v. Long, 453 F.3d 623, 627 (4th
Cir. 2006). As Judge Williams there recognized, "[o]ne such
situation exists when the signatory is equitably estopped from
arguing that a nonsignatory is not a party to the arbitration
clause." Id. Most relevant here, the doctrine of equitable
estoppel applies "‘when the signatory to the contract contain-
ing the arbitration clause raises allegations of . . . substantially
interdependent and concerted misconduct by both the non-
signatory and one or more of the signatories to the contract.’"
Brantley v. Republic Mortg. Ins. Co., 424 F.3d 392, 396 (4th
Cir. 2005) (quoting MS Dealer Serv. Corp. v. Franklin, 177
F.3d 942, 947 (11th Cir. 1999) (alterations omitted)).
Although Aggarao maintains that MOL, World Car, and
Nissan had separate roles in the injuries he suffered, and that
each owed him distinct legal duties, his Complaint alleges that
each was his "employer," and that it was "within the course
and scope of his employment" that he sustained injuries "be-
cause of the unsafe and unseaworthy condition of [the Asian
Spirit], fault, breach of agreement, violation of law, and negli-
gence of the Defendants." J.A. 20-23, 25 (emphasis added).
Indeed, Aggarao essentially alleges the same claims against
MOL, World Car, and Nissan — unseaworthiness, mainte-
nance and cure, breach of contract, violation of the Seaman’s
Wage Act, and negligence under general maritime law and the
Jones Act — employing the same allegations as the bases for
liability:
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 27
• The defendants were "negligent for failing to pro-
vide [Aggarao] with a safe place to work, a sea-
worthy vessel, appurtenances and personnel, and
in furnishing defective equipment," J.A. 40, 42,
49, 51, 58, 60;
• "The injuries and impairments sustained by
[Aggarao] were caused and contributed to, in
whole or in part, by the negligence of [the defen-
dants] through [their] officers, supervisors,
agents, servants and/or employees, masters and
officers of the M/V ASIAN SPIRIT, acting
within the scope of their respective employment,"
id. at 41, 42, 50, 51, 59, 60;
• "The injuries and impairments sustained by
[Aggarao] were proximately caused and/or sub-
stantially contributed to by the unseaworthiness
of the M/V ASIAN SPIRIT," id. at 44, 53, 62;
• "To date, [the defendants have] failed to provide
maintenance, cure and unearned wages as
required," id. at 45, 54, 63; and
• The defendants have breached their "employment
agreements with [Aggarao by failing to pay him
his full wages due]," id. at 48, 57, 66.
Aggarao protests that the foregoing allegations are insuffi-
cient for equitable estoppel purposes, because his Complaint
does not also allege "pre-arranged, collusive behavior demon-
strating that the claims are intimately founded in and inter-
twined with the [arbitration] agreement at issue." See
Donaldson Co., Inc. v. Burroughs Diesel, Inc., 581 F.3d 726,
735 (8th Cir. 2009) (internal quotation marks omitted).
Although we have not specifically required allegations of col-
lusion, we agree that, at a minimum, there must be allegations
of "coordinated behavior between a signatory and a nonsigna-
28 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
tory" defendant, id. at 734, and that the claims against both
the signatory and nonsignatory defendants must be "based on
the same facts," be "inherently inseparable," and "fall within
the scope of the arbitration clause," see MS Dealer, 177 F.3d
at 947-48 (internal quotation marks omitted).
Aggarao’s claims against MOL, World Car, and Nissan
allegedly arose from the same "occurrence" or "incident," i.e.,
the tragic circumstances on the Asian Spirit in August 2008
resulting in his injuries. See J.A. at 27-28. The conduct of
MOL, World Car, and Nissan was coordinated by virtue of
each defendant’s alleged involvement in that incident — insti-
gating and contributing to one another. In the first place,
MOL, apparently carrying out the orders of Nissan, directed
the seamen of the Asian Spirit to make preparations to load
its cargo while the ship was yet in the Chesapeake Bay,
instead of in the Port of Baltimore where those tasks could be
more safely accomplished. These unsafe conditions were said
to be exacerbated by design defects in the Asian Spirit and its
deck lifting machine, rendering World Car’s ship unseawor-
thy. MOL, in turn, allegedly provided improper supervision to
an inexperienced crew negligently operating the deck lifting
machine — a crew that World Car had the responsibility to
man. In short, Aggarao’s claims against MOL depend, "in
some part, upon the nature of tortious acts allegedly commit-
ted" by Nissan and World Car, and vice versa. See Brown v.
Pac. Life Ins. Co., 462 F.3d 384, 398-99 (5th Cir. 2006)
(affirming decision compelling plaintiff to arbitrate claims
against nonsignatory parent company because claims were
factually tied to claims against signatory subsidiaries).
Moreover, Aggarao emphasizes in his claims against MOL,
World Car, and Nissan that his injuries occurred while he was
acting in the scope of his employment. The POEA Contract
sets forth terms and conditions of employment, including
obligations to provide a seaworthy vessel, maintenance and
cure, and wages. Hence, each of Aggarao’s claims against
Nissan, World Car, and MOL implicates, in some manner, the
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 29
POEA Contract. Consequently, each of his claims falls within
the scope of the Arbitration Clause. We are thus satisfied —
as was the district court — that the doctrine of equitable
estoppel applies, and that Aggarao must arbitrate his claims
against the signatory MOL as well as those claims alleged
against the nonsignatories Nissan and World Car.17
B.
Although we affirm the district court’s determination that
the Arbitration Clause is enforceable, we reject its procedural
disposition of the case — i.e., dismissal of the Complaint with
prejudice and denial of the injunction request as moot. Con-
trary to the court’s apparent supposition, it was not divested
of jurisdiction once it concluded that Aggarao’s claims were
subject to arbitration in the Philippines. The Supreme Court
in Sky Reefer explicitly recognized that a district court could,
in foreign arbitration cases, properly retain jurisdiction after
referring the parties to arbitration pursuant to the Convention
Act. Id. at 540-41; id. at 542 (O’Connor, J., concurring)
(explaining that "[f]oreign arbitration clauses of the kind pre-
sented here do not divest domestic courts of jurisdiction,
unlike true foreign forum selection clauses"). Indeed, the
Court emphasized that the plaintiff would be ensured a subse-
quent opportunity at a second arbitration-related court pro-
ceeding, the award-enforcement stage, to raise its public
policy defense because the district court had retained jurisdic-
tion. Id.
17
Aggarao raises a concern that Nissan, a Japanese corporation, and
World Car, a Liberian corporation, may not be subject to the jurisdiction
of the arbitrator(s) in the Philippines. At oral argument, however, the
defendants’ eminently able lawyer, on behalf of MOL, Nissan, and World
Car, agreed that his clients will submit to arbitration in the Philippines,
and will not interpose any defenses they may possess concerning the time-
liness of the arbitration. We are satisfied that Nissan and World Car will
abide by those representations. See Irwin v. Dep’t of Veterans Affairs, 498
U.S. 89, 92 (1990).
30 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
Moreover, we have recognized that, "[w]hen a valid agree-
ment to arbitrate exists between the parties and covers the
matter in dispute, the FAA commands the federal courts to
stay any ongoing judicial proceedings and to compel arbitra-
tion." Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 937 (4th
Cir. 1999) (citations omitted). Although our Hooters decision
addressed a district court’s authority to stay proceedings
pending arbitration under § 3 of the FAA — which applies
specifically to arbitration agreements between citizens of the
United States — that provision is equally applicable to actions
subject to the Convention Act. As explained above, § 208 of
the Convention Act incorporates those provisions of the FAA
that are not in conflict with the Convention or the Convention
Act. Because neither the Convention nor the Convention Act
prohibits the issuance of a stay of proceedings, the authority
conferred in § 3 of the FAA is incorporated into the Conven-
tion Act. Cf. Rhone Mediterranee Compagnia Francese Di
Assicurazioni E Riassicurazoni v. Lauro, 712 F.2d 50, 54-55
(3d Cir. 1983) (concluding that stay of proceedings pending
arbitration "was in compliance with the Convention and the
law of the United States").
Although we have acknowledged that "dismissal is a proper
remedy when all of the issues presented in a lawsuit are arbi-
trable," Choice Hotels Int’l, Inc. v. BSR Tropicana Resort,
Inc., 252 F.3d 707, 709–10 (4th Cir. 2001), that is not the situ-
ation presented here.18 Aggarao’s public policy defense invok-
18
There may be some tension between our decision in Hooters — indi-
cating that a stay is required when the arbitration agreement "covers the
matter in dispute" — and Choice Hotels — sanctioning dismissal "when
all of the issues presented . . . are arbitrable." Our sister circuits are
divided on whether a district court has discretion to dismiss rather than
stay an action subject to arbitration. Compare Cont’l Cas. Co. v. Am. Nat’l
Ins. Co., 417 F.3d 727, 732 n.7 (7th Cir. 2005) ("[T]he proper course of
action when a party seeks to invoke an arbitration clause is to stay the pro-
ceedings pending arbitration rather than to dismiss outright."), with Alford
v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992) ("The
weight of authority clearly supports dismissal of the case when all of the
issues raised in the district court must be submitted to arbitration."). We
need not resolve this disagreement because, even under Choice Hotels,
dismissal is not appropriate where, as here, the issues are not all subject
to arbitration.
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 31
ing the prospective waiver doctrine is not subject to
arbitration, and he is unable to pursue that defense until after
an arbitration award has been made. Hence, the district court
was not constrained to dismiss this case. See Sky Reefer, 515
U.S. at 540 (observing with approval that district court pos-
sessed jurisdiction pending arbitration and would have oppor-
tunity at award-enforcement stage to consider plaintiff’s
public policy defense); Nanosolutions, LLC v. Prajza, 793 F.
Supp. 2d 46, 53-54 (D.D.C. 2011) (staying action pursuant to
FAA pending arbitration proceedings in Convention Act
case).
As a corollary to the foregoing, the district court was not
obliged to deny the injunction request as moot when it
deemed Aggarao’s claims to be arbitrable. We have recog-
nized that the "hollow-formality" test may be applicable in
such circumstances, explaining that,
where a dispute is subject to mandatory arbitration
under the [FAA], a district court has the discretion
to grant a preliminary injunction to preserve the sta-
tus quo pending the arbitration of the parties’ dispute
if the enjoined conduct would render that process a
"hollow formality." The arbitration process would be
a hollow formality where "the arbitral award when
rendered could not return the parties substantially to
the status quo ante."
Merril Lynch, Pierce, Fenner & Smith v. Bradley, 756 F.2d
1048, 1053-54 (4th Cir. 1985) (quoting Lever Bros. Co. v.
Int’l Chem. Workers Union, Local 217, 554 F.2d 115, 123
(4th Cir. 1976)). Although our Bradley decision, as well as its
Lever Bros. predecessor, addressed disputes subject to the
FAA only, a court’s authority to entertain an injunction
request that passes the hollow-formality test applies to Con-
vention Act cases as well. Again, § 208 of the Convention Act
incorporates the FAA provided it does not conflict with the
Convention or the Convention Act. As the Fifth Circuit has
32 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
recognized, "nothing in the Convention or [the Convention
Act] limits the inherent authority of a federal court to grant
injunctive relief with respect to a party over whom it has
jurisdiction." Karaha Bodas Co., L.L.C. v. Perusahaan Per-
tambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 365
(5th Cir. 2003); see also Borden, Inc. v. Meiji Milk Prods.
Co., Ltd., 919 F.2d 822, 826 (2d Cir. 1990) (recognizing that
"entertaining an application for a preliminary injunction in aid
of arbitration is consistent with the court’s powers pursuant to
§ 206 [of the Convention Act]").19 Accordingly, the district
court erred in failing to exercise its discretion when it denied
the injunction request as moot. See James v. Jacobson, 6 F.3d
233, 239 (4th Cir. 1993); Toyo Tire Holdings of Ams. Inc. v.
Cont’l Tire N. Am., Inc., 609 F.3d 975, 979-82 (9th Cir. 2010)
(concluding that court "abused its discretion" in "finding as a
matter of law that it lacked the power to grant injunctive
relief"). The court had the authority — and will again on
remand — to apply the hollow-formality test and assess
whether Aggarao’s injunction request should be entertained.
19
Our 1981 decision in Podar Bros., supra at Part III.A.4., does not
foreclose application of the hollow-formality test in this case. Indeed, the
defendants make no such contention. We determined in Podar Bros. that
a district court lacked authority to issue a prejudgment attachment because
it was "contrary to the parties’ agreement to arbitrate and the Convention."
636 F.2d at 77. We deemed the attachment contrary to the Convention in
reliance on the Third Circuit’s decision that article II(3) of the Convention
completely ousts a district court of jurisdiction, other than the power to
"refer the parties to arbitration." See McCreary Tire & Rubber Co. v.
CEAT S.p.A., 501 F.2d 1032, 1038 (3d Cir. 1974); but see Rhone, 712 F.2d
at 55 (subsequent Third Circuit decision recognizing court’s authority to
stay action pending arbitration under Convention). The decision in McCr-
eary, however, predates Sky Reefer where the Supreme Court endorsed a
district court’s retention of jurisdiction over a dispute subject to arbitration
under the Convention Act. Because the Supreme Court has rejected the
McCreary premise, Podar Bros. has been effectively overruled by the
Court on the jurisdictional point and is not controlling precedent with
respect to Aggarao’s injunction request.
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 33
1.
a.
When Aggarao made his injunction request there were gen-
uine issues of material fact regarding whether the defendants
had provided adequate maintenance and cure to him and,
relatedly, whether he was fit to be repatriated to the Philip-
pines. Aggarao insisted that MOL and World Car had
breached their obligations under general maritime law to pro-
vide him maintenance and cure "until he reache[d] maximum
medical recovery." See Vaughan v. Atkinson, 369 U.S. 527,
531 (1962).20 In response, the defendants did not deny that
MOL had an obligation to provide maintenance and cure for
Aggarao in the United States, but contended that their obliga-
tion ended on December 4, 2008, when, according to the par-
alegal’s hearsay declaration, Dr. York said that Aggarao was
fit to be repatriated to the Philippines.21 The defendants
asserted that, under the Liability Clause, MOL was to provide
Aggarao "surgical and hospital treatment as well as board and
lodging until [he was] declared fit to work or to be repatri-
ated." J.A. 186 (emphasis added).22 The defendants pointed
20
Maintenance has been defined as "the right to sustenance and
unearned wages for the period from the onset of the injury to the end of
the voyage; cure is the right to medical care until the seaman reaches the
point of maximum cure." Martin, 560 F.3d at 221.
21
The defendants argued that World Car, the Asian Spirit’s owner, never
had an obligation to provide maintenance and cure because, when the
employer and shipowner are separate entities, only the employer (MOL)
bears that obligation.
22
Under general maritime law, a seaman’s fitness for repatriation is not
determinative of his right to maintenance and cure; rather, the obligation
to provide maintenance and cure persists until he "attains ‘maximum
cure,’ defined as the point at which he is either cured or his condition is
diagnosed as permanent and incurable." Del. River & Bay Auth. v. Kopacz,
584 F.3d 622, 632 (3d Cir. 2009); Carleno v. Marine Transp. Lines, Inc.,
317 F.2d 662, 665-66 (4th Cir. 1963) (holding maintenance and cure "is
fulfilled when subsistence and medical care are furnished to the point
where remedial medicine and surgery can do no more"). Even in cases of
permanent disability, maintenance and cure is required where palliative
care would improve the seaman’s condition. See In re RJF Int’l Corp. for
Exon. from or Limitation of Liab., 354 F.3d 104, 107 (1st Cir. 2004).
34 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
out that, although they had completely cut off assistance to
Aggarao for nearly a year, he had nonetheless found board
and lodging and was still receiving medical care from
UMMS. Accordingly, the defendants maintained that the
injunction request sought not to preserve the status quo, but
to demand relief on the merits of Aggarao’s maintenance and
cure claims.23
The status quo to be preserved by a preliminary injunction,
however, is not the circumstances existing at the moment the
lawsuit or injunction request was actually filed, but the "last
uncontested status between the parties which preceded the
controversy." See Stemple v. Bd. of Ed. of Prince George’s
Cnty., 623 F.2d 893, 898 (4th Cir. 1980). "To be sure, it is
sometimes necessary to require a party who has recently dis-
turbed the status quo to reverse its actions," but as the Tenth
Circuit has explained, "[s]uch an injunction restores, rather
than disturbs, the status quo ante." O Centro Espirita Benefi-
ciente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 1013
(10th Cir. 2004); see United Steelworkers of Am., AFL-CIO
v. Textron, Inc., 836 F.2d 6, 10, (1st Cir. 1987) (determining
23
We are not hesitant to observe the audacity of the defendants’ asser-
tions. As a result of their termination of maintenance and cure, Aggarao
has essentially become a ward of the State of Maryland, dependent on its
taxpayers and charities for his survival. If Aggarao is correct that MOL
and World Car have breached their obligations to provide maintenance
and cure, they ignore his request at their peril. We reiterate that "[t]he obli-
gation to pay maintenance and cure arises under maritime law whenever
the seaman is injured, regardless of any negligence or fault on the part of
the owner or employer." Martin, 560 F.3d at 221. Moreover, any "am-
biguities or doubts" as to a seaman’s right to receive maintenance and cure
"are to be resolved in favor of the seaman." Vaughan, 369 U.S. at 532.
Otherwise, "[t]he shipowner’s willful, arbitrary failure to pay maintenance
and cure gives rise to damages that include a reasonable attorney’s fee."
Williams v. Kingston Shipping Co., Inc., 925 F.2d 721, 723 (4th Cir.
1991). Indeed, "[i]f the failure to give maintenance and cure has caused
or aggravated an illness, the seaman[’s] recovery in such circumstances
include[s] not only necessary expenses, but also compensation for the
hurt." Id. (internal quotation marks omitted).
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 35
that injunction requiring insurance premium payments was
not "mandatory" but "prohibitory" because during "last
uncontested status" defendant had paid premiums) (Breyer,
J.). Hence, the district court is entitled to apply the hollow-
formality test to Aggarao’s injunction request and determine
whether an arbitral award in his favor in the Philippines might
be an empty one, if maintenance and cure is not restored in
the interim.
b.
The district court is also empowered to assess the second
aspect of the injunction request, that Aggarao remain in the
United States pending arbitration because he is not fit to be
repatriated to the Philippines, or because he will not receive
adequate medical care in that country. Obviously, Aggarao
cannot be returned to the status quo ante if his repatriation to
the Philippines for the arbitration proceedings might result in
his demise, or if the lack of adequate medical care there
would prejudice his already debilitated condition. Therefore,
in evaluating whether the injunction request passes the
hollow-formality test, the court should decide whether
Aggarao is fit to be repatriated and, if so, whether he can
receive adequate medical care in the Philippines without
severely jeopardizing his life and health.24
24
Although Aggarao’s situation is unique, this Court confronted similar
circumstances more than fifty years ago in Ieronimakis v. Spence, 257
F.2d 874 (4th Cir. 1958). In Spence, a Greek seaman who had contracted
tuberculosis aboard a Liberian vessel which had come to port in Norfolk,
Virginia, sued the shipowner for maintenance and cure. An immigration
officer sought to have the seaman returned to Greece, pursuant to 8 U.S.C.
§ 1283, requiring the removal of alien crewman afflicted with certain dis-
eases once the immigration officer determined "that it [would] not be pos-
sible within a reasonable time to effect a cure." There, as here, the
shipowner agreed to bear the expense of repatriation and provide proper
medical care to the seaman in his native country "until he reached his
maximum state of cure." See Spence, 257 F.2d at 876. We observed that
the court "acted properly in requiring such a pledge" from the shipowner.
36 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
The parties have presented conflicting medical opinions on
both these questions. On remand — in the absence of an
agreement by the parties — the district court should weigh
these conflicting opinions and, if warranted, receive supple-
mental evidence. Cf. Breese v. AWI, Inc., 823 F.2d 100, 104
(5th Cir. 1987) (observing that whether seaman "has reached
maximum cure . . . is a medical question, not a legal one").25
If the court determines that Aggarao is either not fit to be
repatriated to the Philippines or that he cannot receive ade-
quate medical care there, it should exercise its discretion and
rule on that aspect of the injunction request.26
2.
Irrespective of the outcome of the injunction request, the
court should stay this case pending the arbitration proceedings
to ensure that Aggarao will have an opportunity at the award-
enforcement stage for judicial review of his public policy
Id. at 877. We affirmed the court’s decision to defer to the immigration
officer, however, because we "[could not] say that [the seaman’s] repatria-
tion was ordered without due regard for his safety. The Immigration Offi-
cer acted only after being advised that the seaman was ‘fit for travel.’" Id.
at 878. We nevertheless acknowledged the seaman’s objection as to "the
competency of the Greek hospitals" and agreed that the immigration offi-
cer "should consider as one of the circumstances the facilities for treat-
ment there and here, along with the nature of the disease, and the probable
length of time necessary to effect a cure." Id. at 877.
25
Aggarao informs us that he "has been hospitalized for the past 16
months with a chronic staph infection, which has infected the bones of his
spine with osteomyelitis, which the physicians have been unable to cure."
Reply Br. of Appellant 21. He has moved for leave to supplement the
record on appeal with medical records detailing his medical history since
this appeal was initiated. Because the district court will assess his injunc-
tion request in the first instance, we are satisfied to deny Aggarao’s
motion to supplement the record.
26
If the court authorizes Aggarao to remain in the United States during
the arbitration proceedings, the parties may make arrangements for him to
remotely participate therein.
AGGARAO v. MOL SHIP MANAGEMENT COMPANY 37
defense based on the prospective waiver doctrine. We recog-
nize that the Ninth and Eleventh Circuits have surmised that
a plaintiff’s access to a federal court in this country should be
virtually guaranteed following foreign arbitration proceed-
ings. See Lindo, 652 F.3d at 1279-80; Balen, 583 F.3d at 654.27
Although Aggarao could conceivably initiate a new court pro-
ceeding following arbitration, staying this action removes any
doubt that, if necessary, he will have a full opportunity for
judicial review of his public policy defense. See Sky Reefer,
515 U.S. at 540-41 (observing that there would be subsequent
opportunity for review because district court had "retained
jurisdiction"); id. at 542 (O’Connor, J., concurring in the
judgment) (agreeing that prospective waiver question was
"premature" because district court had "retained jurisdiction").
This approach is also consistent with the Convention, which
contemplates a court retaining jurisdiction to ensure that an
arbitration award comports with the public policy of the
forum country. See Mitsubishi, 473 U.S. at 638 (observing
Convention "reserves to each signatory country the right to
refuse enforcement of an award where the recognition or
enforcement of the award would be contrary to the public pol-
icy of that country" (internal quotation marks omitted)).
IV.
Pursuant to the foregoing, we affirm the district court’s
judgment that the Arbitration Clause is enforceable and that
Aggarao must arbitrate his claims against the defendants in
the Philippines. We nevertheless vacate the dismissal of this
27
The Eleventh Circuit suggests that, even when "a zero-dollar arbitral
award is entered," a plaintiff should be able to interpose the public policy
defense when the defendant moves to enforce the award in federal court,
or after the plaintiff initiates a "separate action under federal law" in any
district court. Lindo, 652 F.3d at 1279 n.23 & 1280 (citing 9 U.S.C.
§§ 203, 206, 207). The Ninth Circuit similarly supposes that a dissatisfied
litigant would "be free to return to the [same] district court [that enforced
arbitration, and then] move to set aside the arbitration award." Balen, 583
F.3d at 654.
38 AGGARAO v. MOL SHIP MANAGEMENT COMPANY
case and remand for reinstatement thereof, for assessment of
the injunction request, for entry of a stay pending arbitration,
and for such other and further proceedings as may be appro-
priate.
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED