Gumenyuk v. Marlow Navigation Co.

SERGIY GUMENYUK, Plaintiff, v. MARLOW NAVIGATION COMPANY, LTD,JANS HS SCHIFFAHRTS GMBH,and HS SCHIFFAHRTS GMBH & CO KG, Defendants.

CIVIL ACTION NO. H-20-00285

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

December 21, 2020

MEMORANDUM AND RECOMMENDATION

Pending in this case that has been referred to the undersigned Magistrate Judge for all further pretrial proceedings is Defendant Marlow Navigation Company, Ltd's Motion to Compel Arbitration (Document No. 18), and Defendant HS Schiffahrts GmbH & Co KG's Motion to Compel Arbitration (Document No. 19). Having considered the motions, the responses and additional briefing, the Seafarer's Employment Agreement signed by Plaintiff, the terms of collective bargaining agreement with the Black Sea Seamans' Trade Union, of which Plaintiff was a member, and the applicable law, the Magistrate Judge RECOMMENDS, for the reasons set forth below, that the two Motions to Compel Arbitration (Document Nos. 18 & 19) be DENIED.

I. Background

This is an admiralty case brought by Plaintiff Sergiy Gumenyuk ("Gumenyuk") under the Jones Act, and under general maritime principles of unseaworthiness and maintenance and cure against Defendants Marlow Navigation Company, Ltd. ("Marlow") and Jans HS Schiffahrts GmbH and HS Schiffahrts GmbH & Co KG (collectively referred to as "Schiffahrts")¹ to recover for injuries Gumenyuk sustained in this District on November 16, 2016. Gumenyuk is Ukranian. Marlow is incorporated and based in Cyprus. Schiffahrts is German company and was the owner of the BBC AMISIA, the vessel on which Gumenyuk served as a chief mate/chief officer, and on which he was injured.

Gumenyuk filed this case in state court under the "savings to suitors" provisions in the Jones Act. Marlow removed the case on the basis that the subject matter of the lawsuit related "to an arbitration agreement falling under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards," 9 U.S.C. § 205. Notice of Removal (Document No. 1) at 2. In an Order entered on May 11, 2020, Gumenyuk's Motion to Remand was denied. (Document No. 14). As was contemplated by the Court's Order denying the Motion to Remand (Document No. 14 at 7), Defendants filed their respective Motions to Compel Arbitration (Document Nos. 18 & 19). It is those two motions that are pending, with Defendant Schiffahrts Motion to Compel Arbitration being predicated, as will be discussed herein, on the viability of Defendant Marlow's Motion to Compel Arbitration.

The following facts are relevant to the pending Motions to Compel Arbitration and are not in dispute:

Gumenyuk is Ukranian and is a member of the Black Sea Seamans Trade Union. Gumenyuk was aboard the AMISIA on November 16, 2016, serving as Chief Officer, at the time of his injuries.

Gumenyuk's position as Chief Officer on the AMISIA is set forth in a "Seafarer'sEmployment Agreement," dated October 27, 2016 (Document No. 19-1). That Seafarers Employment Agreement," stated that it was an "Employment Agreement . . . entered into between the Seafarer and the Employer (hereinafter called the Company)." Gumenyuk was identified as "The Seafarer" and Marcrew Schiffahrts GmbH was identified as "The Company." The Seafarer's Agreement had a term of four months, with a tentative commencement date of October 30, 2016, and a expiration date of February 27, 2017. The Seafarer's Agreement also provided as follows: "Terms and Conditions: As per collective bargaining agreement (BLACK SEA SEAMEN'S TRADE UNION CBA) between The Black Sea Seaman's Trade Union and the employer."

There is no Seafarer's Agreement between Gumenyuk and Marlow, and no Seafarer's Agreement between Gumenyuk and Schiffahrts.

Marlow and Marcrew Schiffahrts GmbH are separate companies. Marlow is a "third party ship and crew management company. . . incorporated in Cyprus in June 1982." Marcrew Schiffahrts GmbH "is a third party crew management company . . . incorporated in May 2000 in Germany." Declaration of Andreas Neophytou, Joint Managing Director of Marlow (Document No. 18-2).

In January 2013, and continuing through the date of Gumenyuk's injuries in November 2016, Marlow was party to a contract with Schiffahrts to "provide crew managing services" to the AMISIA.² Declaration of Andreas Neophytou, Joint Managing Director of Marlow (Document No. 18-2).

Marlow argues in its Motion to Compel Arbitration that Article 29 of the Collective Bargaining Agreement between it and the Black Sea Seaman's Trade Union provides for arbitration of any disputes between it and any Ukranian seafarer to whom the Collective Bargaining Agreement applies. Using what it construes as Gumenyuk's "judicial admission" that Marlow was his employer, Marlow maintains that the terms of its Collective Bargaining Agreement with the Union binds Gumenyuk to the arbitration of his claims in Cyprus. Marlow alternatively claims, in its Reply Brief, that even if it cannot be considered Gumenyuk's employer, the provisions in its Collective Bargaining Agreement with the Union apply to Gumenyuk because he was aboard a vessel that was"manned" by Marlow. Schiffahrts, arguing that any claim against it is intertwined with the claims against Marlow, maintains that it is also entitled to rely on the arbitration provisions in the Collective Bargaining Agreement.³

II. Discussion

"[A]rbitration is simply a matter of contract between the parties; it is a way to resolve those disputes—but only those disputes—that the parties have agreed to submit to arbitration." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995). Under Chapter 2 of the Federal Arbitration Act, cases arising under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("the Convention") are "deemed to arise under the laws and treaties of the United States." Southwest LTC-Management Services, LLC v. Lexington Ins. Co., No. 1:18-CV-00491-MAC, 2019 WL 1715832 *2 (E.D. Tex. Mar. 29, 2019), report and recommendation adopted, 2019 WL 1695498 (E.D. Tex. Apr. 17, 2019). As such, federal district courts may "compel arbitration in accordance with agreements," as well as "enforce awards . . . falling within the Convention." Id. "For an arbitration agreement to be covered by the Convention, four requirements must be met: (1) there must be an agreement in writing to arbitrate the dispute; (2) the agreement must provide for arbitration in the territory of a Convention signatory; (3) the agreement to arbitrate must arise out of a commercial legal relationship; and (4) at least one party to the agreement must not be an American citizen." Stemcor USA Inc. V. CIA Siderurgica do Para Cosipar, 927 F.3d 906, 909-910 (5^th Cir. 2019). In determining, for purposes of the first requirement, whether there is an agreementto arbitrate the dispute, the key inquiry is whether the parties consented to arbitration. See GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 140 S.Ct. 1637, 1649 (2020) (Justice Sotomayor, concurring) ("It is a 'basic precept,' Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 681, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010), that '[a]rbitration under the [FAA] is a matter of consent, not coercion,' Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989); see also, e.g.,Lamps Plus, Inc. v. Varela, 587 U.S. ___, ___, 139 S.Ct. 1407, 1416, 203 L.Ed.2d 636 (2019) ("Consent is essential under the FAA"); Granite Rock Co. v. Teamsters, 561 U.S. 287, 299, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) ("[T]he first principle that underscores all of our arbitration decisions" is that "[a]rbitration is strictly 'a matter of consent'")). It is here that Defendants' Motions to Compel Arbitration fail.

The Collective Bargaining Agreement relied upon by Marlow was between Marlow Navigation Company Limited and The Black Sea Seaman's Trade Union, and it is Marlow and The Black Sea Seaman's Trade Union that are the "Contracting Parties" under the Collective Bargaining Agreement. In all relevant parts, the Collective Bargaining Agreement between Marlow and the Union provided:

Article 1: Application

1.1 This Agreement sets out the standard terms and conditions applicable to all Ukranian seafarers serving on any ship manned by Marlow Navigation Company Ltd.

1.2 This Agreement is deemed to be incorporated into and to contain the terms and conditions of employment of any seafarer to whom this Agreement applies whether or not the company has entered into an individual Employment Agreement with the Seafarer.

1.3 This Agreement requires the Companies to employ the seafarers on the terms and conditions of the CBA, and to enter into individual Employment Agreement[s] with any seafarer to whom this Agreement applies. The company undertakes that it will comply with all the terms and conditions of this Agreement.

* * *

Article 19: Disability

19.1 A seafarer who suffers permanent disability as a result of a work related accident whilst in the employment of the company regardless of fault but excluding permanent disability due to willful acts, including accidents occurring while traveling to or from the ship, and whose ability to work as a seafarer is reduced as a result thereof, shall in addition to sick pay, be entitled to compensation according to the degree of disability but not exceeding the following:

Officers US$ 240.000,00

Ratings US$120.00,00

19.2 The degree of disability suffered by the seafarer shall be determined by a doctor appointed by the Company. If a doctor appointed by or on behalf of the seafarer disagrees with the assessment, a third doctor may be nominated jointly between the company and the seafarer and the decision of this doctor shall be final and binding on both parties.

19.3 Any payment effected under 19.1 above, shall be regarded as final and total settlement of the case.

* * *

Article 29: Disputes and Arbitration

29.1 For any

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