Arbitration

• Author: International Law Group

In 1999, Vinod Kumar Dahiya signed two employment-related documents in New Delhi, India, to receive two years of training and then work for two years for Neptune Shipmanagement Services (Neptune). One of the documents, the "deed," included an arbitration clause, requiring that any dispute would be subject to arbitration in Singapore or India. During his subsequent training on the M/T EAGLE AUSTIN, Dahiya suffered injuries at the vessel's incinerator and was treated in Louisiana.

Dahiya brought a maritime personal injury action in Louisiana state court against his employer Neptune, Talmidge International (the owner of the ship), and other parties (jointly "Defendants"). He alleged violations of the Jones Act [46 U.S.C.A. app. Section 688], general maritime law, and other applicable law. The Defendants removed to federal court because the dispute was subject to an arbitration agreement pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards [9 U.S.C.A. Sections 201-208]. Dahiya argued that the arbitration clause in the deed did not qualify as an arbitration agreement under the Convention and did not support removal pursuant to the Convention. The district court agreed that the forum selection clause was unreasonable, and remanded to state court for lack of subject matter jurisdiction and denied Defendants' motion to compel arbitration. The Defendants sought review of the district court's order.

The U.S. Court of Appeals for the Fifth Circuit finds that the district court's remand deprives this Court of appellate jurisdiction to consider any part of the district court's order. 28 U.S.C. Section 1447(d) [removal jurisdiction] bars a federal appellate court from reviewing the remand ruling no matter how erroneous it may be. Here, the district court apparently concluded that it lacked subject matter jurisdiction and remanded on that basis. That remand is unreviewable.

"That Appellants removed under Section 205 of the Convention does not vest us with jurisdiction despite Section 1447(d). In cases removed under Section 205, 'the procedure for removal of causes otherwise provided by law shall apply.' 9 U.S.C.A. Section 205. This 'procedure for removal' includes the strictures of Section 1447(d). ... Thus, when a case removed under Section 205 is subsequently remanded for lack of subject matter jurisdiction, an appellate court...