Court Opinion

ID: 5116425
Source: CourtListenerOpinion
Date Created: 2021-10-06 17:00:38.490956+00
Date Added: 2024-06-11T08:21:57.075842
License: Public Domain

USCA11 Case: 20-14450     Date Filed: 10/06/2021    Page: 1 of 12

                                           [DO NOT PUBLISH]
                            In the
         United States Court of Appeals
                 For the Eleventh Circuit

                   ____________________

                         No. 20-14450
                   Non-Argument Calendar
                   ____________________

RAMESH CHERUVOTH,
                                              Plaintiff-Appellant,
versus
SEADREAM YACHT CLUB INC.,
SEADREAM YACHT CLUB LIMITED CORPORATION,

                                          Defendants-Appellees.
                   ____________________

          Appeal from the United States District Court
              for the Southern District of Florida
             D.C. Docket No. 1:19-cv-24416-DPG
                   ____________________
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2                      Opinion of the Court                 20-14450

Before JORDAN, LAGOA, and BRASHER, Circuit Judges.
PER CURIAM:
        This case requires us to consider whether a party who signed
two contracts to charter a yacht and paid deposits under those con-
tracts can later avoid the arbitration clauses contained in the agree-
ments because of his own failure to abide by certain conditions
precedent. Because of the limited scope of review of agreements
falling under the New York Convention, and the well-established
presumption favoring arbitration, we affirm the district court’s or-
der compelling arbitration in accordance with the clear terms of
the parties’ contracts.
      I
              Ramesh Cheruvoth, a citizen of Saudi Arabia, filed
suit in the Southern District of Florida against SeaDream Yacht
Club, Inc., a Florida corporation, and SeaDream Yacht Club Lim-
ited Corporation, a foreign corporation registered and incorpo-
rated in the Bahamas. The complaint asserted various quasi-con-
tract claims, including claims for quantum meruit, breach of im-
plied contract, unjust enrichment, and breach of oral contract. Alt-
hough Mr. Cheruvoth presented only quasi-contract theories, the
parties’ dispute arose out of two yacht charter agreements signed
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20-14450                 Opinion of the Court                            3

by Mr. Cheruvoth on behalf of Abdullah Saleh Kamel in August of
2017 and July of 2018 (the “Agreements”). 1
               The Agreements contain identical arbitration clauses
that state in relevant part:
       Section 14, Governing Law and Venue: This Agreement is
governed by Norwegian law, except for Norwegian choice of law
principles. All disputes arising out of or in connection with this
Agreement shall be referred to arbitration in accordance with the
Norwegian Arbitration Act 14 May 2004 no. 25. The arbitration
court shall be composed of three arbitrators. The chairman shall be
a Norwegian legal professional. The seat of the arbitral proceedings
shall be in Oslo, Norway, and the proceedings shall be conducted
in the English language.
       After signing the Agreements and paying the required de-
posits, Mr. Kamel was unable to embark on either of the planned
charters because he was being detained by the Saudi Arabian gov-
ernment. Rather than proceed to arbitration, Mr. Cheruvoth filed
suit against the SeaDream defendants seeking the return of the de-
posits. The SeaDream defendants filed a motion to compel arbi-
tration and dismiss the case, which the district court granted. This
appeal follows.
       II

1 The parties agree that Mr. Kamel assigned all claims and causes of action
related to this action to Mr. Cheruvoth.
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4                       Opinion of the Court                 20-14450

              We review the district court’s order compelling arbi-
tration de novo. See Solymar Invs., Ltd. v. Banco Santander S.A.,
672 F.3d 981, 985 n.1 (11th Cir. 2012) (citing Lobo v. Celebrity
Cruises, Inc., 488 F.3d 891, 893 n.1 (11th Cir. 2007)).
       III
We have stated that “federal courts interpret arbitration clauses
broadly where possible.” Solymar Invs., Ltd., 672 F.3d at 988–89
(citing AT&T Techs., Inc. v. Commn’cs Workers of Am., 475 U.S.
643, 649–50 (1986)). “The result of such broad interpretation is that
‘any doubts concerning the scope of arbitral issues should be re-
solved in favor of arbitration.’” Id. (quoting First Options of Chi-
cago, Inc. v. Kaplan, 514 U.S. 938, 945 (1995)). See also AT&T
Techs., Inc., 475 U.S. at 650 (“Doubts should be resolved in favor
of coverage.”). The Supreme Court has instructed that “as a matter
of substantive federal arbitration law, an arbitration provision is
severable from the remainder of the contract.” Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006).
The Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, T.I.A.S. No. 6997
(the “Convention”), “is a multilateral treaty that addresses interna-
tional arbitration.” GE Energy Power Conversion France SAS,
Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637, 1644
(2020) (citation omitted). “In 1970, the United States acceded to
the New York Convention, and Congress enacted implementing
legislation in Chapter 2 of the FAA . . . [which] grants federal courts
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20-14450                Opinion of the Court                          5

jurisdiction over actions governed by the Convention.” Id. (citing
84 Stat. 692, 9 U.S.C. §§ 201–08).
Article II of the Convention, which addresses arbitration agree-
ments, states that “[e]ach Contracting State shall recognize an
agreement in writing under which the parties undertake to submit
to arbitration all or any differences which have arisen or which may
arise between them . . . .” T.I.A.S. No. 6997 (Dec. 29, 1970). Article
II defines an “agreement in writing” as “an arbitral clause in a con-
tract or an arbitration agreement, signed by the parties or con-
tained in an exchange of letters or telegrams.” Id. Finally, Article
II(3) states that “[t]he court of a Contracting State, when seized of
an action in a matter in respect of which the parties have made an
agreement within the meaning of this article, shall, at the request
of one of the parties, refer the parties to arbitration, unless it finds
that the said agreement is null and void, inoperative or incapable
of being performed.” GE Energy Power Conversion France SAS,
Corp., 140 S. Ct. at 1644 (citation omitted).
In deciding a motion to compel arbitration under the Convention,
courts conduct “a very limited inquiry.” Bautista v. Star Cruises,
396 F.3d 1289, 1294–95 (11th Cir. 2005) (quoting Francisco v.
STOLT ACHIEVEMENT MT, 293 F.3d 270, 273 (5th Cir. 2002)).
A district court must order arbitration unless (1) the four jurisdic-
tional prerequisites are not met, or (2) one of the Convention’s af-
firmative defenses applies. See Bautista, 396 F.3d at 1294–95 (cita-
tions omitted). The four prerequisites require that “(1) there is an
agreement in writing within the meaning of the Convention; (2)
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6                      Opinion of the Court                20-14450

the agreement provides for arbitration in the territory of a signa-
tory of the Convention; (3) the agreement arises out of a legal rela-
tionship, whether contractual or not, which is considered commer-
cial; and (4) a party to the agreement is not an American citizen, or
that the commercial relationship has some reasonable relation with
one or more foreign states.” Id. at 1295 n.7.
Rather than framing his arguments in the context of the Conven-
tion and its requirements, Mr. Cheruvoth simply maintains that the
Agreements “were never formed” because the parties failed “to ful-
fill certain conditions precedent.” Appellant’s Br. at 2. Thus, ac-
cording to Mr. Cheruvoth, the district court erred by compelling
arbitration without first considering the issue of contract for-
mation. The SeaDream defendants contend that the district court
correctly ruled in their favor because Mr. Cheruvoth has not ar-
gued that any of the four jurisdictional prerequisites were not met
and failed to raise any of the narrow affirmative defenses available
at this stage under the Convention.
As we see it, all of Mr. Cheruvoth’s arguments—although he does
not present them as such—go to the first jurisdictional prerequisite:
whether there is “an agreement in writing” under the Convention.
By focusing solely on the issue of contract formation, Mr. Cheru-
voth misapprehends both Supreme Court and Eleventh Circuit
precedent, which make it clear that formation and arbitrability are
often intertwined. In Solymar, we held that there is “a two-step
process required in considering the arbitrability of any contract
containing an arbitration clause: 1) resolution of any formation
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20-14450                   Opinion of the Court                               7

challenge to the contract containing the arbitration clause, in keep-
ing with Granite Rock; and 2) determination of whether any sub-
sequent challenges are to the entire agreement, or to the arbitra-
tion clause specifically, in keeping with Prima Paint.” Solymar
Invs., Ltd., 672 F.3d at 990. 2
As in Solymar, we first address the contract formation challenges
raised by Mr. Cheruvoth (i.e., we determine whether there is, in
fact, an “agreement in writing” between the parties). Mr. Cheru-
voth argues that a valid contract was never formed between the
parties because (1) Mr. Kamel signed the Agreements after the
dates stated in the contracts, but (2) Mr. Kamel did not send a letter
of credit and an original of the executed Agreements to the offices
of the SeaDream defendants in Florida. This argument fails for two
reasons.
First, Mr. Cheruvoth does not contest the veracity of the signatures
or the existence of the Agreements in general. Under Bautista, his
arguments about conditions precedent do not go to the threshold

2 In Solymar, we laid out this two-step framework to reconcile the Supreme
Court’s decisions in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S.
395, 403–04 (1967) (holding that courts are the proper forum to evaluate a
challenge to the validity of an arbitration clause, but that where the entire
agreement of which an arbitration clause is but a part is challenged, such eval-
uation is properly left to the arbitrator), and Granite Rock Co. v. Int’l Broth-
erhood of Teamsters, 561 U.S. 287, 296 (2010) (explaining that issues concern-
ing contract formation are generally reserved for the courts to decide as a
threshold matter). Rather than finding a conflict between these cases, we de-
termined that they simply required courts to undertake a two-step analysis.
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8                       Opinion of the Court                 20-14450

issue of contract formation. See Bautista, 396 F.3d at 1300 (“Alt-
hough Plaintiffs claim the crewmembers did not have an oppor-
tunity to review the entirety of the Standard Terms before signing,
Plaintiffs do not dispute the veracity of the signatures. . . . Accord-
ingly, this documentation fulfills the jurisdictional prerequisite that
the court be provided with an agreement to arbitrate signed by the
parties.”). See also Buckeye Check Cashing, 546 U.S. at 448–49
(holding that validity challenges to an entire contract go to the ar-
bitrator); Benoay v. Prudential–Bache Sec., Inc., 805 F.2d 1437,
1441 (11th Cir. 1986) (reserving for arbitrator consideration of cer-
tain claims regarding validity of underlying contract as opposed to
validity of arbitration clause); Chastain v. Robinson–Humphrey
Co., Inc., 957 F.2d 851, 854 (11th Cir. 1992) (“Under normal circum-
stances, an arbitration provision within a contract admittedly
signed by the contractual parties is sufficient to require the district
court to send any controversies to arbitration. The calculus
changes when it is undisputed that the party seeking to avoid arbi-
tration has not signed any contract requiring arbitration.”).
Second, even if we were to consider the Agreements’ conditions
precedent under Bautista, we would find that the Agreements were
formed. Under Florida law, “[a] condition may be either a condi-
tion precedent to the formation of a contract or a condition prece-
dent to performance under an existing contract.” U. Hous. by
Dayco Corp. v. Foch, 221 So.3d 701, 704 (Fla. 3d DCA 2017) (quot-
ing Mitchell v. DiMare, 936 So.2d 1178, 1180 (Fla. 5th DCA 2006)).
See Land Co. of Osceola County, LLC v. Genesis Concepts, Inc.,
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20-14450                   Opinion of the Court                                 9

169 So.3d 243, 247 (Fla. 4th DCA 2015); Lowe v. Nissan of Brandon,
Inc., 235 So.3d 1021, 1026 (Fla. 2d DCA 2018). 3
The first condition precedent at issue, from the first Agreement,
reads: “This agreement is not binding until signed by both
SeaDream and contractor and returned with a mutually agreed de-
posit by August 4, 2017.” D.E. 13-1 at 1. Mr. Kamel signed the first
Agreement on August 9, 2017. See D.E. 13-1 at 1. On that basis,
Mr. Cheruvoth contends that “[p]ursuant to the terms of Agree-
ment 1, it never became binding - i.e. was never formed - because
it was not signed by the stated deadline.” Appellant’s Br. at 19. 4

3 In Solymar, we stated that under Florida law conditions precedent are not
relevant to contract formation. See Solymar, 672 F.3d at 996. We would nor-
mally be bound by Solymar’s interpretation of Florida law, but subsequent
rulings by Florida appellate courts have cast doubt on that interpretation. See
EmbroidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am., 845 F.3d 1099, 1105
(11th Cir. 2017) (“[W]hen we have issued a precedential decision interpreting
that state law, our prior precedent rule requires that we follow that decision,
absent a later decision by the state appellate court casting doubt on our inter-
pretation of that law.”); Venn v. St. Paul Fire and Marine Ins. Co., 99 F.3d 1058,
1066 (11th Cir. 1996) (“[I]f subsequent decisions of the United States Supreme
Court or the Florida courts cast doubt on our interpretation of state law, a
panel would be free to reinterpret state law in light of the new precedents.”)
(internal quotation marks omitted). Specifically, the Third, Fourth, and Sec-
ond District Courts of Appeal of Florida have all confirmed that under Florida
law conditions precedent can go to performance or contract formation. See
Foch, 221 So. 3d at 704; Genesis Concepts, 169 So. 3d at 247; Lowe, 235 So. 3d
at 1026.
4In the facts section of his initial brief, Mr. Cheruvoth states that Mr. Kamel
did not return the required deposit by August 4, 2017. But Mr. Cheruvoth does
not rely on the failure to make a timely deposit in his argument section.
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10                        Opinion of the Court                     20-14450

Assuming, without deciding, that this condition precedent relates
to contract formation, we conclude that the tardy signature is not
an impediment to the formation of the first Agreement. Under
Florida law, “a party’s adherence to contractual conditions prece-
dent is evaluated for substantial compliance or substantial perfor-
mance.” Green Tree Servicing, LLC v. Milam, 177 So. 3d 7, 13 (Fla.
2d DCA 2015); Racing Properties, L.P. v. Baldwin, 885 So. 2d 881,
883 (Fla. 3d DCA 2004); Alvarez v. Rendon, 953 So. 2d 702, 708 (Fla.
5th DCA 2007). By signing only 5 days after the first Agreement’s
deadline, Mr. Kamel substantially complied with the condition
precedent.
The second condition precedent on which Mr. Cheruvoth relies, §
20 from the first and second Agreements, provides:
       Section 20, Signing Original Copies: This Agreement shall
have no force or effect unless a fully executed original copy of this
Agreement is received by SeaDream Executive Offices at the ad-
dress shown herein together with the original letter of credit by the

Accordingly, Mr. Cheruvoth likely abandoned that claim. See Sapuppo v. All-
state Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014). (“Abandonment of
a claim or issue can . . . occur when the passing references to it are made in
the ‘statement of the case’ or ‘summary of the argument.’”). Even if Mr.
Cheruvoth did not abandon the argument, Mr. Kamel made the required char-
ter payments. Indeed, that is the foundation of Mr. Cheruvoth’s theory that
SeaDream acquiesced to an alleged quasi-contract. See Appellant’s Rep. at 7.
Hence, there was also substantial compliance as to the deposit.
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20-14450                Opinion of the Court                         11

date set forth. A facsimile or photocopy of this document shall be
deemed as valid as the original.
       See D.E. 13-10 at 7; D.E. 13-1 at 24. Mr. Cheruvoth argues
that the Agreements were not formed because neither the executed
original of the Agreements nor any credit were sent to the
SeaDream defendants. See Appellant’s Br. at 20–22. But the parties
do not dispute that a copy of the executed Agreement was returned
to the SeaDream defendants, and, as § 20 makes clear, a copy is
sufficient. As to the letters of credit, Schedule II of both Agree-
ments establishes that “[n]o Standby Irrevocable Letter of Credit
will be required with this agreement.” D.E. 13-1 at 13; D.E. 13-3 at
27. Schedule II forms part of the Agreements. See D.E. 13-10 at 7;
D.E. 13-1 at 24. Reading the Agreements as a whole, it is clear that
for these particular charters the parties agreed not to require the
delivery of letters of credit. See Goldberg v. Bear Stearns & Co.,
912 F.2d 1418, 1421 (11th Cir. 1990) (“When general propositions
in a contract are qualified by the specific provisions, the rule of con-
struction is that the specific provisions in the agreement control.”).
Therefore, the failure to send executed originals of the Agreements
and letters of credit did not impede the formation of the Agree-
ments.
And because Mr. Cheruvoth challenges only the Agreements as a
whole, instead of the specific arbitration clause contained in them,
our inquiry is complete. See Solymar, 672 F.3d at 998 (affirming
order compelling arbitration where the parties did “not challenge
the formation of the arbitration clause within the [ ] Agreement,
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12                     Opinion of the Court                20-14450

but rather the entirety of the Agreement” because “Prima Paint
was intended to prevent district courts from considering such
broad challenges to general contracts containing arbitration
clauses”). See also Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 70
(2010) (“[A] party’s challenge to another provision of the contract,
or to the contract as a whole, does not prevent a court from enforc-
ing a specific agreement to arbitrate.”). Having determined that
the Convention’s jurisdictional prerequisites are met and, specifi-
cally, that there existed written agreements between the parties,
we find that the district court correctly granted the SeaDream de-
fendants’ motion to compel arbitration.
      IV
              We affirm the district court’s order compelling arbi-
tration and dismissing the case.
Affirmed.