Stemcor USA Inc. v. Cia Siderurgica Do Para Cosipar
Opinion
On second rehearing of this matter, we certified to the Louisiana Supreme Court the question of whether a suit seeking to compel arbitration is an "action for a money judgment" under Louisiana's non-resident attachment statute, La. Code Civ. Proc. art. 3542.
See
Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar
,
I
This is a dispute between two creditors, each of which attached the same pig iron owned by America Metals Trading L.L.P. ("AMT"). Plaintiff-Appellant Daewoo International Corp. ("Daewoo") is a South Korean trading company. In May 2012, Daewoo entered into a series of contracts with AMT for the purchase of pig iron, to be delivered in New Orleans. The sale contracts contained arbitration clauses. Although Daewoo made payments under the contracts, AMT never shipped the pig iron. Thyssenkrupp Mannex GMBH ("TKM") is a German company. Between June 2010 and February 2011, TKM entered into six contracts to purchase pig iron from AMT. AMT never delivered. In response to the breach of contract, TKM and AMT negotiated a settlement, which required AMT to make quarterly payments to TKM. AMT did not pay.
Daewoo sued AMT in the Eastern District of Louisiana, seeking an order compelling arbitration and an attachment of the pig iron on board a ship then-anchored in New Orleans. Daewoo invoked both maritime attachment and the Louisiana non-resident attachment statute, which allows attachments in aid of any "action for a money judgment." La. Code Civ. Proc. art. 3542. Citing both types of attachment, the district court granted Daewoo its attachment. Intervenor-Appellee TKM later attached the same pig iron in Louisiana state court and intervened in Daewoo's federal action arguing that maritime jurisdiction was improper and Louisiana's non-resident attachment statute was inapplicable.
The district court agreed with TKM and vacated Daewoo's attachment.
See
Stemcor USA, Inc. v. Am. Metals Trading, LLP
,
On second rehearing of this matter, we certified to the Louisiana Supreme Court the question of whether a suit seeking to compel arbitration is an "action for a money judgment" under Louisiana's non-resident attachment statute, La. Code Civ. Proc. art. 3542.
See
Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar
,
II
The district court found federal subject matter jurisdiction under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "Convention"). We agree.
For a federal court to have jurisdiction under the Convention, two requirements must be met: (1) there must be an arbitration agreement or award that falls under the Convention, and (2) the dispute must relate to that arbitration agreement. These requirements flow from the text of two sections of the Convention. The explicit jurisdictional provision is Section 203, which gives federal courts jurisdiction over all "action[s] or proceeding[s] falling under the Convention."
The next step, derived from Section 203, is to ask whether the "action or proceeding"-as opposed to the arbitration agreement or award-falls under the Convention. The Convention's removal statute offers guidance on what "falling under" means because "[g]enerally, the removal jurisdiction of the federal district courts extends to cases over which they have original jurisdiction."
Francisco v. Stolt Achievement MT
,
This two-step jurisdictional inquiry is consistent with case law interpreting the Convention.
See, e.g.
,
BP Expl. Libya Ltd. v. ExxonMobil Libya Ltd.
,
Both jurisdictional requirements are met here. First, Daewoo's arbitration agreements with AMT are covered by the Convention. For an arbitration agreement to be covered by the Convention, four requirements
must be met: (1) there must be an agreement in writing to arbitrate the dispute; (2) the agreement must provide for arbitration in the territory of a Convention signatory; (3) the agreement to arbitrate must arise out of a commercial legal relationship; and (4) at least one party to the agreement must not be an American citizen.
See
Freudensprung v. Offshore Tech. Servs., Inc.,
• There is an agreement in writing to arbitrate Daewoo and AMT's dispute.
• That agreement provides for arbitration in New York, and the United States is a signatory to the Convention.
• The agreement arises out of a commercial relationship between Daewoo and AMT.
• Both Daewoo and AMT are not American citizens.
Second, this suit is related to the AMT arbitration agreements because Daewoo seeks an attachment to facilitate the arbitration provided for in the AMT agreements.
See
Borden
,
Indeed,
E.A.S.T.
's reasoning mirrors the reasoning of courts that have found subject matter jurisdiction under the Convention to order state-law provisional remedies. Like the court in
E.A.S.T.
, those courts reason that "nothing in the Convention divests federal courts of jurisdiction to issue provisional remedies ... such as an attachment, when appropriate in international arbitrations."
Bahrain Telecomms. Co. v. Discoverytel, Inc.
,
Applying E.A.S.T. and the cases that follow it, the Convention grants jurisdiction over Daewoo's request for an attachment. Like the plaintiff in E.A.S.T. , Daewoo sought to attach the pig iron in order to facilitate arbitration and increase its chance of recovering on any award. Because Daewoo sought attachment to bring about a covered arbitration-that is, because Daewoo's suit related to a covered arbitration agreement-this court has subject matter jurisdiction. 2
III
The parties dispute whether Louisiana's non-resident attachment statute allows for attachment in aid of arbitration. The district court held that it does not.
As stated previously, we certified to the Louisiana Supreme Court the question of whether a suit seeking to compel arbitration is an "action for a money judgment" under Louisiana's non-resident attachment statute, La. Code Civ. Proc. art. 3542.
See
Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar
,
Louisiana's attachment statute provides that "[a] writ of attachment may be obtained in any action for a money judgment, whether against a resident or a nonresident, regardless of the nature, character, or origin of the claim, whether it is for a certain or uncertain amount, and whether it is liquidated or unliquidated." La. Code Civ. Proc. art. 3542. The underlying action seeking to compel arbitration here is clearly an "action for a money judgment" under Louisiana's non-resident attachment statute. See La. Code Civ. Proc. art. 3542. Daewoo has made it clear from the outset that it would be pursuing a money judgment. The "nature, character, or origin of the claim" just happens to be arbitration. La. Code Civ. Proc. art. 3542. Thus, we conclude that the district court erred in finding that the Louisiana nonresident attachment statute was not available to Daewoo.
IV
For the above reasons, we VACATE and REMAND.
And there are compelling reasons against reading jurisdiction under Section 203 as narrowly limited to the three remedies expressly allowed by the Convention (compelling arbitration and appointing arbitrators in Section 206 and confirming awards in Section 207). Namely,
[n]othing in § 206 or § 207 limits the subject matter jurisdiction of federal courts. These sections merely identify the remedies that federal courts may grant, and do not speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts. ... To grant the remedies provided in those sections, the Court must first determine that it has jurisdiction .... Treating §§ 206 and 207 as jurisdictional provisions confuses the subject matter jurisdiction of federal courts with their remedial authority. Although jurisdiction is a word of many ... meanings, there is a difference between the two. The nature of the relief available after jurisdiction attaches is, of course, different from the question whether there is jurisdiction to adjudicate the controversy .... The breadth or narrowness of the relief which may be granted under federal law ... is a distinct question from whether the court has jurisdiction over the parties and the subject matter. Any error in granting or designing relief does not go to the jurisdiction of the court.
CRT Capital Grp. v. SLS Capital, S.A.
,
We asked the parties to brief whether this court has personal jurisdiction under quasi in rem principles. We are satisfied that we have personal jurisdiction.
See
Republic Nat'l Bank of Miami v. United States
,
Reference
- Full Case Name
- STEMCOR USA INCORPORATED, Plaintiff v. CIA SIDERURGICA DO PARA COSIPAR, Et Al., Defendants Daewoo International Corporation, Plaintiff - Appellant v. Thyssenkrupp Mannex Gmbh, Intervenor Plaintiff - Appellee v. America Metals Trading L.L.P., Et Al., Defendants
- Cited By
- 9 cases
- Status
- Published