Originally from the AAA Yearbook on Arbitration and the Law - 30th Edition

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8.01 Applicability of the New York Convention

Johnson v. NCL (Bah.) Ltd., 163 F. Supp. 3d 338 (E.D. La. 2016)

1. A contract need not mention a specific foreign country for it to satisfy the “performance abroad” requirement in determining that it falls under the New York Convention.

2. A null and void defense based on waiver of a statutory right cannot be brought at initial enforcement stage. 

Johnson sued NCL in a state court regarding an employment matter. NCL removed the case to federal court, and then sought arbitration per the employment contract. Johnson sought to have the case remanded to the state court. The court determined that the transaction was subject to the New York Convention, so the parties were compelled to arbitrate their dispute.

The focal dispute is whether the contract matter and performance was, in fact, sufficiently ‘abroad’ to satisfy the four-part test under 9 U.S.C.S. § 202 in determining if an agreement falls under the Convention. As both parties in this case were American citizens, the underlying contract must “envisage performance or enforcement abroad” to satisfy the fourth prong of the four-part test. Johnson argued that because the agreement was signed in Boston between two American parties, and because no foreign country was named in the contract, no itinerary attached to the agreement specifying a foreign country, and the fact that the employee never stepped foot on foreign soil that the performance was not sufficiently ‘abroad’ within the meaning of the four-part test.

The court, however, in choosing between divergent case law, held that an employee need not actually work on the soil of a foreign country to satisfy the “performance abroad” qualification. Here, the court considered that the employee worked more than 80% of her time abroad, traveled to numerous countries, and Johnson could not actually work in her capacity as a casino operator until three miles from the U.S. shores were all variables in favor of the agreement to be considered abroad. In addition, the contract itself contained a great deal of ‘international flavor’ in that it specifically mentioned the need to obtain foreign visas abroad and multiple references to NCL’s obligation to ‘repatriate’ Johnson at the end of her term.  As such, the court held that the contract did, therefore, satisfy the “abroad” requirement, despite not listing a specific foreign country in which performance would take place.