Data

Date:: 25-03-2010
Country:: USA
Number:: 09-23846
Court:: United States District Court, S.D. Florida
Parties:: Nikola Krstic v. Princess Cruise Lines, Ltd.

Keywords

DISPUTE BETWEEN A SERBIAN EMPLOYEE AND A BERMUDAN EMPLOYER

NEW YORK CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS - INTERPRETATION OF ARTICLE II(3) - REFERENCE TO UNIDROIT PRINCIPLES

ALLEGED INVALIDITY OF ARBITRATION CLAUSE BY REASON OF UNEQUAL BARGAINING POWER BETWEEN THE PARTIES - CLAIMANT'S REFERENCE TO ART. 3.10 UNIDROIT PRINCIPLES [ART. 3.2.7 OF THE 2010 EDITION] CONSIDERED AS EMBODYING A “PRECISE, UNIVERSAL DEFINITION OF THE UNEQUAL BARGAINING POWER DEFENSE” - CLAIM DISMISSED BECAUSE UNDER THE NEW YORK CONVENTION PARTIES' BARGAINING POWER DISPARITY DOES NOT CONSTITUTE DEFENSE TO VALIDITY OF ARBITRATION CLAUSE

Abstract

Plaintiff, a Serbian worker, brought an action against Defendant, a Bermudan cruise ship employer, alleging to have suffered injuries while working. Defendant opposed the action, contending that, pursuant to the employment contract, any dispute between the parties should have been settled through arbitration in Bermuda. Plaintiff asserted that the arbitration clause was void by reason, inter alia, of the unequal bargaining power of the parties.

In support of his claim, Plaintiff referred to the UNIDROIT Principles, which he stated provides for “a list of various internationally recognized defenses to any contract”, and in particular to Art. 3.10 (“Gross Disparity”) allowing avoidance or adaption of a contract or of its individual terms if, at the time the contract was concluded, a party enjoyed an unjustifiably excessive advantage from the contract or that term. After pointing out that Art. 3.10 UNIDROIT Principles contains “a precise, universal definition of the unequal bargaining power defense that may be applied effectively across the range of countries that are parties to the [New York] Convention”, and, referring to a number of arbitral awards applying the UNIDROIT Principles, Plaintiff urged the Court to adopt such a definition.

In response, Defendant contended that the defense of unequal bargaining power is not universally recognized, as demonstrated by the controversial history of Art. 3.10 UNIDROIT Principles. Moreover, Defendant pointed out that even if the court did adopt the definition contained in Art. 3.10, the threshold requirements in that provision for avoidance of contract or its individual terms were not satisfied in the case at hand. Indeed, the same arbitration agreement as the one in the contract had been upheld on several occasions and had never been found – as required by Art. 3.10 – to "shock the conscience of a reasonable person."

Irrespective of whether the UNIDROIT Principles were applicable, the Court dismissed the claim, holding that "even assuming the existence of a bargaining advantage, Plaintiff has failed to establish that the disparity complained of constitutes a defense under the [New York] Convention, regardless of whether it implicates the UNIDROIT Principles referenced by Plaintiff".

Fulltext

[...]

OPINION BY:
ALAN S. GOLD

OPINION

[...]

I. Introduction

This Cause is before the Court upon Defendant's Motion to Compel Arbitration, filed February 4. 2010. On February 22, 2010, Plaintiff filed a response in opposition, and on March 4, 2010, Defendant filed a reply [...]. Having carefully considered the relevant submissions, the record, and the applicable case law, I grant the motion in part, deny the motion in part, and stay this matter pending arbitration for the reasons that follow.

II. Background

This case arises from injuries sustained by the Plaintiff, a Serbian seaman by the name of Nikola Krstic ("Plaintiff"), while employed aboard Defendant Princess Cruise Lines Ltd.'s ("Defendant" or "Princess") Bermuda-flagged vessel, the "Island Princess". On December 29, 2009, Plaintiff filed a two-count complaint alleging Jones Act negligence [...] and failure to provide prompt and adequate treatment.

On February 4, 2010, Defendant moved to compel arbitration pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 9 U.S.C. § 201, et seq. ("the Convention Act") [...]. The basis for Defendant's motion to compel is an agreement executed by Plaintiff on May 6, 2008 entitled "Acceptance of Employment Terms and Conditions" ("the Acceptance Agreement") providing that "any and all disputes shall be referred to and resolved by arbitration as provided for in the Principal Terms and Conditions of Employment," which Plaintiff acknowledged that he had received, reviewed, and accepted at the time he executed the Acceptance Agreement. In this re-gard, Article 14 of the Principal Terms and Conditions of Employment ('the Principal Terms") contains two pertinent paragraphs. The first is the arbitration clause itself, which provides, in portinent part, that "any and all disputes . . . relat-ing to or in any way arising out of or connected with" services performed by Plaintiff for Defendant "shall be referred to and resolved exclusively by binding arbitration pursuant to [the Convention] in Bermuda . . . ." [...]. The second is a choice-of-law clause, which provides, in pertinent part, that "any such dispute arising under or in connection with these terms or [Plaintiff's] service shall be governed exclusively in all respects by the laws of Bermuda without regard to principles of conflicts of laws." Id. The Principal Terms also contain a severability provision in Article 15, which states that [t]he conditions of these Terms are severable. If any of these terms is determined to be void or otherwise un-enforceable by any court or tribunal of competent jurisdiction, then the remainder of the Terms shall stand in full force in effect." Id.

Defendant now moves this Court to compel arbitration pursuant to the Convention and the aforementioned provi-sions of the Principal Terms, while "stipulating" to the application of U.S. law to Plaintiff's statutory claims in the Ber-muda arbitration. Plaintiff opposes Defendant's motion, arguing that the arbitration clause is void or unen-forceable for a number of reasons. First, he asserts that the arbitration clause is void because the Principal Terms impermissibly restrict Plaintiff's U.S. statutory and common law rights and remedies in violation of public policy. Second, Plaintiff asserts that his Jones Act claim is non-arbitrable, arguing that the case of Bautista v. Star Cruises -- which affirmed an order compelling arbitration of plaintiff's Jones Act claims under the Convention -- was wrongly decided. See generally 396 F.3d 1289 (11th Cir. 2005). Third, Plaintiff argues that the arbitration provi-sion is "defective due to the parties' unequal bargaining power." Fourth, Plaintiff argues that the arbitration provision is unenforceable because "it requires Plaintiff to appear for both physical and testimonial examinations and to provide document production, but . . . appears to require nothing in the way of compulsory discovery from Princess." Id. Fifth, Plaintiff argues that a Bermuda arbitration would be prohibitively expensive; and finally, Plaintiff argues that the arbitration provision is unclear and ambiguous and should thus be considered permissive, not mandatory. Id. I will ad-dress each argument in turn.

III. Standard of Review

Courts deciding motions to compel arbitration under the Convention and its implementing legislation are bound to conduct a "very limited inquiry." Bautista, 396 F.3d at 1294-95. According to the Eleventh Circuit, "[a] district court must order arbitration unless (1) the [Convention's] four jurisdictional prerequisites are not met, . . . or . . . one of the Convention's affirmative defenses applies." Id. (citations omitted). The four jurisdictional prerequisites are that: "(1) there is an agreement in writing within the meaning of the Convention; (2) the agreement provides 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 com-mercial relationship has some reasonable relation with one or more foreign states." Id., n. 7 (citation omitted). These jurisdictional prerequisites are not at issue in the instant case.
As to the Convention's affirmative defenses, "[t]he Convention requires that courts enforce an agreement to arbi-trate unless the agreement is 'null and void, inoperative or incapable of being performed.'" Id. at 1301 (quoting the Con-vention, art. ll(3)). The "null and void" clause must be read narrowly because "the signatory nations have declared a general policy of enforceability of agreements to arbitrate." Bautista v. Star Cruises, 286 F. Supp. 2d 1352, 1366 (S.D. Fla, 2003). The Eleventh Circuit has also held that the "public policy" provision found at Article V(2)(b) of the Conven-tion -- which provides, in pertinent part, that "[r]ecognition and enforcement of an arbitral award may also be re-fused if . . . [t]he recognition or enforcement of the award would be contrary to the public policy of that country" -- is also an "affirmative defense[] to a suit that seeks a court to compel arbitration." Thomas v. Carnival Corp.., 573 F.3d 1113 (11th Cir. 2009). [...] However, as has been repeatedly emphasized by a majority of federal appellate courts, the Convention's public policy defense is "construed narrowly to be applied only where enforcement would violate the fo-rum state's most basic notions of morality and justice." Fotochrome, Inc. v. Copal Co., 517 F.2d 512, 516 (2d Cir. 1975); Steel Corp. of Philippines v. International Steel Services, Inc., 354 Fed. Appx. 689, 2009 U.S. App. LEXIS 25404, 2009 WL 3863328, (3d Cir. Nov. 19, 2009); Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 306 (5th Cir. 2004); M & C Corp. v. Erwin Behr GmbH & Co., KG, 87 F.3d 844, 851 n. 2 (6th Cir. 1996); Slaney v. Int'l Amateur Athletic Federation, 244 F.3d 580, 593 (7th Cir. 2001); TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 939, 376 U.S. App. D.C. 242 (D.C. Cir. 2007); accord Gatlin v. U.S. Anti-Doping Agency, Inc., 2008 WL 2567657, (N.D. Fla. Jun. 24, 2008); Laminoirs-Tretileries-Cableries de Lens, S. A. v. Southwire Co., 484 F. Supp. 1063, 1068 (N.D. Ga. 1980).

IV. Analysis

A. Arbitrability of Jones Act Claims and Bargaining Power Disparity
As a threshold matter, I reject Plaintiff's arguments that the arbitration provision at issue should be declared unen-forceable because (1) Jones Act claims are categorically not arbitrable; and (2) the "bargaining position of the Plaintiff and Defendant are nowhere near commensurate." While Plaintiff is certainly entitled to voice his displeasure with the Eleventh Circuit's decision in Bautista, this Court is bound by Bautista and will not disregard its directives. See Anderson v. Dunbar Armored, Inc., 678 F. Supp. 2d 1280, 2009 U.S. Dist. LEXIS 73041, 2009 WL 2568062, (N.D. Ga. Aug. 18, 2009) (noting that published decisions of the Eleventh Circuit and pre-September 30, 1981 cases of the former Fifth Circuit are binding precedent). Beautista expressly concluded that the district court "properly granted [the cruise line's] motion to compel arbitration" of the seafarer's claims "for negligence and unseaworthiness under the Jones Act . . . and for failure to provide maintenance [and] cure" pursuant to the Convention. Bautista, 396 F.3d at 1292, 1303. Thus, such claims are dearly arbitrable. See Hodgson v. Royal Caribbean Cruises, Ltd., Case No. 09-CV-20798, 2009 U.S. Dist. LEXIS 126749 (Altonaga, J.) (concluding that "[t]he repeal of the [Jones Act's] venue provision is no reason to conclude that Congress has intended to exempt the Jones Act where the Convention applies.").
Bautista also concluded that the same unequal bargaining power complained of here -- i.e., where a multinational cruise line presents a foreign seafarer with an employment contract on a "take it or leave it" basis -- does not "fit within the limited scope of defenses" to the enforceability of an arbitration agreement provided for by the Convention. Bautista, 396 F.3d at 1302 (concluding that "[w]hile it is plausible that economic hardship might make a prospective [] seaman susceptible to a hard bargain during the hiring process, Plaintiffs have not explained how this makes for a de-fense under the Convention."). Thus, even assuming the existence of a bargaining advantage, Plaintiff has failed to establish that the disparity complained of constitutes a defense under the Convention, [...] regardless of whether it impli-cates the UNIDROIT Principles referenced by Plaintiff. [...] See Bautista, 396 F.3d at 1302; Koda v. Camival Cruise Lines, Inc., Case No.: 06-cv-21088, 2007 U.S. Dist. LEXIS 97109 (S.D. Fla. 2007) (Hoeveler, J.) (noting that UNIDROIT Principles regarding bargaining power are not controlling in cases where enforcement of an arbitration agreement is sought pursuant to the Convention); see also Polychronakis v. Celebrity Cruise Lines, Inc., 2008 U.S. Dist. LEXIS 102760, 2008 WL 5191104, (S.D. Fla. Dec. 10, 2008) (King, J.) (concluding that traditional principles of unconscionability and unequal bargaining power were not valid defenses pursuant to the Convention, even where Plaintiff was required to execute the pertinent agreements when he "was well into the voyage, at sea, and in the midst of per-forming his duties. . . after any opportunity for negotiation or disembarkation had passed.").

[...]

C. Thomas Analysis

Plaintiff further argues that the Bermuda choice-of-law provision contained in the Principal Terms renders the agreement to arbitrate unenforceable because the two clauses operate In tandem to impermissibly limit Plaintiff's U.S. statutory and common law remedies, relying on Thomas v. Carnival Corp.., 573 F.3d 1113 (11th Cir. 2009). There is no dispute that the Principal Terms, as written, would require Plaintiff to arbitrate his claims in Bermuda applying Ber-muda substantive law. However, the parties disagree as to whether the arbitration clause is void as a matter of public policy given Defendant's purported "stipulation" to the applicability of U.S. statutory law in the arbitral forum. Defen-dant argues that because of its choice-of-law "stipulation," Thomas does not control. Plaintiff responds that De-fendant's "stipulation" is of no consequence because "stipulations" require the consent of counsel for both parties, and even if it were, it could not salvage an otherwise void arbitration agreement. Id.
Having considered the relevant submissions and the applicable law, I agree with Plaintiff that Defendant's choice-of-law clause is void as a matter of public policy pursuant to Thomas. However, given the stand-alone nature of the choice-of-law clause and the Principal Terms' severability provision, the arbitration clause remains enforceable. [...] Al-though the Eleventh Circuit's narrow holding in Thomas applied only to claims asserted pursuant to the Seaman's Wage Act, [...] a holistic reading of Thomas indicates that the Eleventh Circuit's reasoning applies with equal force to claims brought pursuant to the Jones Act. Specifically, I note that the Eleventh Circuit did not focus on the unique nature of the Seaman's Wage Act in reaching its conclusion that foreign choice-of-law and arbitration clauses can -- if enforced in tandem -- constitute a prospective waiver of statutory rights in violation of public policy. Instead, the Eleventh Circuit focused on the fact that the clauses would "have 'operated in tandem' to completely bar Thomas from relying on any U.S. statutorily-created causes of action." Id. at 1113 (emphasis added); see also id. at 1124 (noting that enforc-ing the foreign choice-of-law and arbitration clauses in tandem "is exactly the sort [of result] that the Supreme Court has described as a prospective waiver of parties rights to pursue statutory remedies without the assurance of a 'subsequent opportunity for review.'") (cites and quotes omitted). Accordingly, I conclude that Thomas directives regarding the pro-spective waiver of statutory remedies are applicable to Plaintiff's Jones Act claim and that, as a result, the Principal Terms' choice of law and arbitration clauses purporting to eliminate Plaintiff's Jones Act rights and remedies cannot be enforced in tandem. [...]

[...]

V. Conclusion

Based on the foregoing, I conclude that the choice-of-law provision at issue should be severed from the Prin-cipal Terms pursuant to the severability provision contained in the Principal Terms. However, the arbitration provision remains enforceable pursuant to the Convention and its implementing legislation. Accordingly, it is hereby

ORDERED AND ADJUDGED that:

1. Defendant's Motion to Compel Arbitration is granted.
2. The Bermuda choice-of-law provision contained in the Principal Terms -- i.e., Paragraph 1 of Article 14 -- is he-reby STRICKEN and shall heretofore be treated by the parties as null and void.
3. Plaintiff's claims shall be submitted to binding arbitration in Bermuda in accordance with the Principal Terms and the provisions of this Order.

[...]

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EXCERPT FROM CLAIMANT'S RESPONSE OF 22 FEBRUARY 2010 IN OPPOSITION OF DEFENDANT'S MOTION TO COMPEL ARBITRATION

[..]

REASON NO. 4: THE CLAUSE IS DEFECTIVE DUE TO THE PARTIES' UNEQUAL BARGAINING POWER.

The bargaining position of the Plaintiff and Defendant are nowhere near commensurate. Princess, part of Carnival Corp. and Carnival Plc, the largest cruise line operation in the world, held all the chips; Plaintiff, the quintessential sea-man as described by Blanco v. Phoenix Compania de Navegacion, S.A., 304 F.2d 13 (4th Cir. 1962)(citing Harden v. Gordon, 11 Fed.Cas. 480, 485 (No. 6047) (C.C.Me.1823), had none. This disparity is a defense to arbitration under U.S. policy. The Supreme Court in Mitsubishi, supra at 627 (emphasis added), explicitly cautioned:

"[T]he first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute. The court is to make this determination by applying the "federal sub-stantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.
. . .
Of course, courts should remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming [*40] economic power that would provide grounds for revocation of any contract." 9 U.S.C. 2.

Mitsubishi thus instructed courts to consider defenses to arbitration under "federal substantive law of arbitrability," and insinuated that unequal bargaining is sufficient in its own right to deny arbitration. Despite this fact, Bautista looked at international law instead, then expressed doubt "that there exists a precise, universal definition of the unequal bar-gaining power defense that may be applied effectively across the range of countries that are parties to the Convention, and absent any indication to the contrary, [the Bautista Court] decline[d] to formulate one." Bautista at 396 F.3d 1302. Yet, even presuming international recognition of unequal bargaining power based on the principles of comity, and not U.S. policy alone, is required to nullify Princess' arbitration clause, the Bautista Court's skepticism is misplaced: Inter-national recognition of the defense of unequal bargaining power assuredly exists; and no court has to go to the trouble of formulating one: The UNIDROIT Principles, a collection of black letter commercial laws, list various interna-tionally recognized defenses to any contract, included unequal bargaining power. See Art. 3.10, Gross Disparity. Com-mittees comprised of leading experts in the field of contract law and international trade law representing all major legal and socio-economic communities of the world drafted the Principles beginning in 1980. As one ICC Tribunal stated in 1998, "[I]t is. . . informative to refer to them [UNIDROIT Principles] because they are said to reflect a world-wide con-sensus in most of the basic matters of contract law." ICC Case No. 9177 (1998) (Zurich). See, e.g., ICC Case No. 217 (2002) (applying the UNIDROIT Principles because it is the instrument widely used in international practice for the interpretation of commercial contracts and quoted by domestic and international literature); ICC Case No. 11 (2002) (applying the UNIDROIT Principles as general principles of law and expressions of lex mercatoria); ICC Case NO. 302 (1999) (Finding UNIDROIT Principles gaining the status of internationally recognized trade usages); ICC Case No. 9479 (1999) (applying "the usage of international trade" by referencing the UNIDROIT Principles "which is considered an 'accurate representation, although incomplete, of the usages of international trade'.")
The UNIDROIT Principles thus provide the very "precise, universal definition of the unequal bargaining power defense that may be applied effectively across the range of countries that are parties to the Convention" which the Bautista Court doubted existed. But see Order Denying Rehearing, in Koda v. Carnival, Case No.: 06-21088-CIV-HOEVELER, in which Judge Hoeveler recognized that "UNIDROIT does indeed provide a definition of unequal power," but nonetheless and, in respect of course, wrongly held that "it is one that the Court is not bound to adopt when faced with the Eleventh Circuit's decision in Bautista to compel arbitration. . . . The Court also took into consideration that the UNIDROIT Principles are not binding unless expressly provided for in contract." The Supreme Court in Mitsubishi, as noted, directed courts to consider defenses to arbitration under "federal substantive law of arbitrability." Even though Bautista wanted more than that, specifically a world-wide defined unequal bargaining defense, the Bautista Court never suggested the defense had to be provided for in the arbitration agreement. In point of fact, the Bautista Court merely sought a definition that may be applied effectively across the range of countries that are par-ties to the Convention. The UNIDROIT Principles clearly provide that. This Court should therefore not hesitate to apply the UNIDROIT Principles' definition here.

EXCERPT FROM DEFENDANT'S REPLY MEMORANDUM OF 4 MARCH 2010

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Third, Plaintiff argues that UNIDROIT Principles relating to contracts provide a universal definition of the unequal bargaining power defense and urge this court to adopt these principles. A search of United States case law reveals that the UNIDROIT contract principles have never been applied by a court in the United States. Moreover, the adoption of the disparity of power defense as part of the UNIDROIT Principles was very controversial, indicating that this de-fense is not as universally recognized as Plaintiff has argued. See Michael Bonell, Policing the International Commercial Contract Against Unfairness Under the UNIDROIT Principles, 3 Tul. J. Int'l & Comp. L. 73, 86-87 (1995)(discussing the opposition to the gross disparity provision and the ultimate compromise to include the provision). Even if a court were to accept the UNIDROIT Principle of gross disparity, the comments to this defense indicate that the disparity must be excessive in order for a contract to be avoided. "As explained in the Comments to Article 3.10 [the gross disparity provision], 'even a considerable disparity in the value and the price or some other element which upsets the equilibrium of performance and counter-performance is not sufficient to permit the avoidance ... of the contract under this article.' Rather, to avoid a contract, the disequilibrium between parties' obligations 'must shock the con-science of a reasonable person.'" See Id. at 88-89 (citing UNIDROIT Principles, art. 3.10 cmt. 1). There is nothing to indicate that the arbitration agreement in this case is the result of excessive disparity between the bargaining powers of the parties. Indeed, this same arbitration agreement has been upheld on numerous occasions and has never been found to "shock the conscious of a reasonable person."

EXCERPT FROM CLAIMANT'S MOTION FOR RECONSIDERATON OF 26 MARCH 2010

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Plaintiff NIKOLA KRSTIC, by and through the undersigned counsel, moves this Court to reconsider its Order compelling arbitration, specifically and only that part of this Court's Order dealing with the matter of unequal bargaining as an affirmative defense to arbitration. [...]

This Court stated as follows with respect to Plaintiff's contention that this Court consider the unequal bargaining of the parties as is a defense to arbitrability:
"While Plaintiff is certainly entitled to voice his displeasure with the Eleventh Circuit's decision in Bautista, this Court is bound by Bautista and will not disregard its directives. Bautista expressly concluded that the district court "properly granted [the cruise line's] motion to compel arbitration" of the sea-farer's claims "for negligence and unseaworthiness under the Jones Act . . . and for failure to provide to provide maintenance [and] cure" pursuant to the Convention. Thus, such claims are clearly arbitrable.
Bautista also concluded the same unequal bargaining power complained of here - i.e., where a multinational cruise line presents a foreign seafarer with an employment contract on a "take it or leave it" basis - does not "fit within the limited scope of defenses to the enforceability of an arbitration agreement provided for by the Convention. Bautista, 396 F.3d at 1302 (concluding that "[w]hile it is plausible that economic hardship might make a prospective seaman susceptible to a hard bargain during the hir-ing process, Plaintiffs have not explained how this makes for a defense under the Convention"). Thus, even assuming the existence of a bargaining advantage, Plaintiff has failed to establish that the disparity complained of constitutes a defense under the Convention, [...] regardless of whether it implicates the UNIDROIT Principles referenced by Plaintiff".

[...]

Yes, Plaintiff is displeased with Bautista; Plaintiff, in fact, believes fervently that Bautista was wrongly decided. But, Plaintiff fully appreciates that the Court is bound by Bautista, and Plaintiff did not and would not ask this Court to disregard Bautista's directives. What Plaintiff instead asked this Court to do with regards to unequal bargaining is rule on what Bautista left open for this Court to decide.
Bautista, as the quote this Court cited above reveals, did not hold that unequal bargaining can never be a de-fense to arbitration under the Convention or that this or any other trial court should forever refrain from considering unequal bargaining as a defense under the Convention. Quite the contrary. The Bautista Court merely held that the plaintiffs in that case had not "explained how [unequal bargaining] makes for a defense under the Convention." Bautista, 396 F.3d at 1302 (emphasis added).
Likewise, the Bautista Court did not hold that no precise, universal definition of the unequal bargaining power defense exists sufficient enough to be applied effectively across the range of countries that are parties to the Convention. The Bautista Court merely expressed doubt "that there exists a precise, universal definition of the unequal bargaining power defense that may be applied effectively across the range of countries that are parties to the Convention, and ab-sent any indication to the contrary, [the Bautista Court] decline[d] to formulate one." Id.
This Honorable Court appears by the language of its Order [D.E. 23] willing to recognize that Bautista did indeed leave it open for this Court to decide whether Plaintiff Krstic can "explain[] how [unequal bargaining] makes for a defense under the Convention" and whether Plaintiff Krstic can likewise show "that there exists a precise, universal definition of the unequal bargaining power defense that may be applied effectively across the range of countries that are parties to the Convention." This Court also appears by the language of its Order willing to recognize that Plaintiff actually showed in this case that the UNIDROIT Principles' definition of unequal bargaining could serve as the "precise, universal definition of the unequal bargaining defense that may be applied effectively across the range of countries that are parties to the Convention." What the Court explicitly states it is unwilling to recognize - as of now, anyway - is that Plaintiff Krstic adequately explained how unequal bargaining makes for a defense under the Convention, particularly since such the defense must, as this Court points out, "rise to the level of 'violating our basic notions of morality and justice.'"
Plaintiff Krstic, however, respectively submits that Plaintiff did indeed explain how unequal bargaining makes for a defense under the Convention, violating our basic notions of morality and justice. Or, Plaintiff tried, at least, to do so. Plaintiff apologizes to this Honorable Court if Plaintiff did a poor job communicating how, and will try again now.
In this regard, Plaintiff cites in support for this proposition to United States Supreme Court precedent as well as to the First Circuit authority to which Bautista looked: Mitsubishi Motors Corp. v. Soler Chrsyler-Plymouth, 473 U.S. 614, 626, 627 (1985); and DiMercurio v. Sphere Drake, Ins., PLC, 202 F.3d 71 (1st Cir. 2000). Plaintiff cited to these authorities in his Response, but perhaps Plaintiff did not make clear enough how compelling these cases are - especially Mitubishi - and just how much they - especially Mitsubishi - support Plaintiff's proposition that unequal bargaining makes for a defense under the Convention, violating our basic notions of morality and justice.
Mitsubishi and DiMercurio were Convention cases, the Court will kindly recall. Mitsubishi, in fact, is one of the fundamental United States Supreme Court cases dealing with the Convention. And the United States Supreme Court explicitly stated in that very fundamental Convention case of Mitsubishi that unequal bargaining is a "disparity [which] is a defense to arbitration" and "courts should remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds for revocation of any contract. 9 U.S.C. 2." Mitsubishi Motors Corp. v. Soler Chrsyler-Plymouth, 473 U.S. 614, 626, 627 (1985) (emphasis added). Implicit in the Mitsubishi Court's holding is that the defense of unequal bargaining is a defense which violates our basic notions of morality and justice. Otherwise, and obviously, the Supreme Court would not have found that unequal bargaining is a "disparity [which] is a defense to arbitration" and the Court would not have instructed trial courts, like this one, to "remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds for revo-cation of any contract." If "overwhelming economic power" is capable of "provid[ing] grounds for revocation of any contract," then that is a defense which clearly goes to our basic notions of morality and justice. The First Circuit Court in DiMercurio v. Sphere Drake, meanwhile, cautioned, as Mitsubishi did, that unequal bargaining could serve as a defense to arbitrability but found that in that case "[t]here [was] no evidence of undue power . . . of the part of the insurer in the negotiation of the policy.") 202 F.3d 71 (1st Cir. 2000).
Plaintiff respectfully submits that he can not provide any better proof how unequal bargaining may serve as a defense to arbitration under the Convention than United States Supreme Court binding precedent which explicitly holds just that. Just as this Court did not and would not disregard Bautista Court's directives, Plaintiff urges this Court to please not disregard the Supreme Court's directive concerning unequal bargaining, and to in turn find that Plaintiff has indeed shown how unequal bargaining may serve as defense to arbitration under the Convention. To the extent neces-sary, if not already apparent from the enormous disparity of bargaining powere between Krsitc and Princess, Plaintiff also urges this Court to allow Plaintiff the opportunity to present the evidence that the arbitration agreement here "resulted from the sort of fraud or overwhelming economic power that would provide grounds for [its] revocation" as envisioned by the Supreme Court in Mitsubishi. 473 U.S. at 627. Krstic, the Court should please recognize, had to deal with its multinational cruise line employer all on his own, whereas the Bautista plaintiffs at least had the Filipino government agency purportedly working on behalf of Filipino seafarers, the POEA, ostensibly negotiating with the multinational cruise line employer in that case.
WHEREFORE, Plaintiff moves this Court to reconsider that part of this Court's Order compelling arbitration relative to the unequal bargaining defense and find that Plaintiff Krstic did here what the Bautista plaintiffs apparently did not there: Explain how unequal bargaining makes for a defense under the Convention; and show that there indeed does exist a precise, universal definition of the unequal bargaining defense that may be applied effectively across the range of countries that are parties to the Convention.

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