international law quarterly
fall 2018 • volume XXXIV, no. 2
Big Changes Ahead, continued
All Things Bahamas—Substantive Law The 2017 CBA provides that the substantive law to be applied will be determined by the Flag State of the vessel. In the contract, Royal Caribbean’s vessels are flagged in the Commonwealth of the Bahamas. Accordingly, the substantive law to be applied during the arbitration, with respect to Royal Caribbean vessels, is the law of the Bahamas. Article 35 (3) provides, in pertinent part, The laws of the Flag State shall govern over any dispute in arbitration without regard to any conflict of law principles, and the parties to the Agreement recognize that the law of the Flag State will apply to all disputes notwithstanding and without regard to any provision of Flag State law that may be construed to preclude the application of Flag State law to non-resident Seafarers.
While past CBAs have provided for the application of Bahamian law, they have also agreed to use the laws of other nations, including Norway. In the past, it was common for the cruise lines and seafarers to orally stipulate to the application of United States maritime law, even though it was in contravention of the CBA. It is unclear whether they will continue to do so, especially in light of the current terms of the clause.
Discovery Depositions: Keep Your Powder Dry The 2017 CBA added a new section related to discovery borne largely out of Fed.R.Civ.P Rule 26 that requires initial disclosure between parties. To the extent the CBA does not specifically address discovery and procedure, the ICDR Employment Rules of the American Arbitration Association will govern. The new CBA is the first time Royal Caribbean and the Norwegian Seafarers’ Union have agreed to limitations on discovery depositions. While other cruise lines and the union have limited depositions in the past, this is the first time Royal Caribbean and the Norwegian Seafarers’ Union have done so. The new provision limits the number and duration of depositions, but makes allowances for additional depositions upon a showing of “good cause” to the arbitrator. Article 35 (9) provides, in apposite part,
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“The parties shall have the right in arbitration to conduct depositions under oath of parties and witnesses, however depositions shall be limited to a maximum of three (3) per party and to a maximum of seven (7) hours in duration each. Additional depositions may be scheduled only with good cause shown and require an Order by the arbitrator.”
No Need to Ask the Seafarer to Submit to an Examination The 2017 CBA broke new ground with respect to an injured seafarer’s examination by the ship owner. The new CBA ensures that the ship owner has a right to examine and verify the claimant’s injuries or damages. The examination is required to occur in the venue of the final hearing. Though the CBA does not mention a country by name, it will likely be the Bahamas since Royal Caribbean’s ships are flagged there and the ship’s flag determines the venue of the arbitration for the final hearing. Notably, no lawyers or representatives from either party may attend the examination. Article 35 (9) provides, in apposite part: The parties are entitled to medical examinations to verify any injuries or damages claimed, or to rebut any defenses. Such medical examinations shall occur in the venue of the final arbitration hearing. To maintain the impartiality of the examination, neither party’s attorney, agent, nor representative shall be present during the Owner’s/Company’s examination.
No Surprises . . . Please Many international arbitration scheduling orders require the parties to the arbitration to exchange documents they intend to introduce at the final hearing. The 2017 CBA removes this issue from the purview of the panel and by its terms requires the parties to exchange the documentation on their own. Article 35 (9) provides, “The parties will exchange documentation to be relied upon at the final arbitration hearing in accordance with the ICDR procedures.” The provision does not specify a precise time when the exchange is to take place. Neither do the applicable ICDR rules. Presumably, the timing will be left to the panel’s discretion.