Case of the Day: Stemcor USA v. Cia Siderurgica

The case of the day is Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar (5th Cir. 2019). Daewoo International had a contract with AMT for the purchase of pig iron to be delivered in New Orleans. Thyssenkrupp Mannex GmbH also had a contract with AMT for the purchase of pig iron. AMT failed to perform either contract. Daewoo brought an action against AMT in the Eastern District of Louisiana seeking to compel arbitration and also seeking an attachment of pig iron on a ship then anchored in the port of New Orleans. Daewoo relied both on the rules for maritime attachments and a Louisiana statute providing for prejudgment attachment in aid of an “action for a money judgment.” TKM then sued AMT in Louisiana state court on the substantive claim and obtained an attachment. TKM intervened in the federal case and argued that a maritime attachment was improper and that the Louisiana attachment did not apply because the suit to compel arbitration was not an “action for a money judgment.” The court agreed and dissolved Daewoo’s attachment, making TKM’s attachment the senior lien.

On appeal, the court certified to the Louisiana Supreme Court the question of the proper interpretation of Louisiana’s prejudgment attachment statute. The Supreme Court held that the statute “allows for attachment in aid of arbitration if the origin of the underlying arbitration claim is one pursuing money damages and the arbitral party has satisfied the statutory requirements necessary to obtain a writ of attachment.” On the strength of that holding, the Fifth Circuit reversed the decision dissolving Daewoo’s attachment.

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