Tag Archives: FAA

Case of the Day: CBF Indústria de Gusa v. AMCI Holdings

Men casting pig iron, ca. 1900
Casting pig iron, Chicago, ca. 1900

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.

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Case of the Day: Hardy Exploration v. Government of India

The case of the day is Hardy Exploration & Production (India), Inc. v. Government of India (D.D.C. 2016). Hardy was a participant, initially with other private firms and later on its own, then in the end with an Indian state-owned company, GAIL (India) Ltd., in a contract with the government of India for the development and production of hydrocarbons in an area off India’s southeastern coast. After Hardy and GAIL found hydrocarbons in 2006, a dispute arose as to whether the find was natural gas (as the government thought) or oil (as Hardy and GAIL thought). If the find was oil, then Hardy, for reasons unimportant here, would have forfeited its interest under the contract. Hardy demanded arbitration in Kuala Lumpur, as per the parties’ arbitration agreement. The tribunal found that Hardy’s position was correct, ordered a restoration of the status quo ante, and awarded damages of 5 billion rupees (about $74 million). India sought to vacate the award in the Indian courts (not the Malaysian courts), but its petition was dismissed. Hardy filed a petition to enforce the award in India, and then sought confirmation in Washington. India’s defense was that service of process (by FedEx) was defective under the FSIA. Hardy countered that the contract contained a special arrangement for service of process, and that service was therefore proper under 28 U.S.C. § 1608(a)(1).
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