The case of the day is CBF Indústria de Gusa S/A v. AMCI Holdings, Inc. (2d Cir. 2017). CBF and several other plaintiffs were Brazilian companies in the business of producing and supplying pig iron. They sold the iron to Primetrade AG, a Swiss company, which then supplied it to Primetrade USA. In 2004, one of Primetrade AG’s ships exploded off the coast of Colombia, and the master and five of his crew died in the accident. In 2005, because of the bad publicity that followed the accident, Primetrade AG transferred it assets, including its contracts with CBF, to Steel Base Trade AG, another Swiss company, which had the same officers and directors as Primetrade and the same offices. In 2007, AMCI International GmbH, a company controlled by Hans Mende and Fritz Kundrun, purchased SBT and its US subsidiary, still named Primetrade USA. In 2008, CBF and SBT entered into contracts for the purchase and sale of 103,500 metric tons of pig iron for more than $76 million. The contracts called for delivery of the pig iron in the United States between April and December 2008. They contained an agreement to arbitrate all disputes under the ICC Rules in Paris. As commodity prices fell in 2008, SBT defaulted on the contracts—it purchased only 33,056 metric tons in all. Its representative told CBF that “it is not our style to walk away from obligations,” and “we are not walking away!!!” CBF later claimed these were false representations made to give Mende and Kundrun time to fraudulently convey SBT’s assets to another company they owned, Prime Carbon, which had begun making large purchases of pig iron and which had the same officers and directors as SBT and the same address as SBT’s parent, AMCI. After SBT transferred its assets to Prime Carbon, it declared bankruptcy in the Cantonal Court of Zug, Switzerland.
Here’s a quick take on the Ninth Circuit’s per curiam decision in Washington v. Trump, the government’s motion for a stay of the temporary restraining order enjoining enforcement of Executive Order 13769, the ban on the entry into the United States of Syrian refugees and all nationals of several majority-Muslim countries. As you probably have read by now, the court denied the motion, which means the TRO stays in place pending the government’s appeal.
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The case of the day is Iraq Middle Market Development Foundation v. Harmoosh (4th Cir. 2017). The Foundation lent $2 million to Al-Harmoosh for General Trade, Travel, and Tourism, an Iraqi company. The loan agreement had an agreement to arbitrate all “disputes, controversies and claims between the parties which may arise out of or in connection with the Agreement.” Mohammad Harmoosh, a managing partner of Al-Harmoosh, gave a promissory note to the Foundation to guarantee payment of the loan. When Harmoosh refused to pay, the Foundation sued for breach of contract in the District of Maryland. Harmoosh successfully moved to dismiss on the grounds that the dispute was arbitrable, but he did not move to compel arbitration.
Continue reading Case of the Day: Iraq Middle Market Development Foundation v. Harmoosh