895 F.3d 375
5th Cir.2018Background
- Daewoo (South Korean buyer) contracted with AMT for pig iron to be delivered in New Orleans; the contracts contained New York arbitration clauses and AMT failed to deliver.
- Daewoo filed in federal court to compel arbitration and obtained an attachment of the pig iron under both maritime attachment and Louisiana’s non-resident attachment statute.
- Thyssenkrupp Mannex (TKM), another creditor of AMT, later attached the same cargo in Louisiana state court and intervened in the federal action, seeking vacatur of Daewoo’s attachment.
- The district court vacated Daewoo’s Louisiana non-resident attachment, holding a suit to compel arbitration is not an “action for a money judgment.” Daewoo appealed that ruling.
- The Fifth Circuit (majority) affirmed vacatur but on different grounds: it found federal jurisdiction under the Convention existed to grant provisional relief in aid of arbitration, but held Daewoo failed to strictly comply with Louisiana Code of Civil Procedure Article 3502’s pre-petition attachment requirements.
Issues
| Issue | Plaintiff's Argument (Daewoo) | Defendant's Argument (TKM) | Held |
|---|---|---|---|
| Whether federal courts have subject-matter jurisdiction under the New York Convention to grant provisional/state-law remedies in aid of arbitration | Convention jurisdiction exists because the contracts fall under the Convention and the attachment "relates to" the covered arbitration | Argued jurisdiction was improper (challenged maritime basis and state attachment applicability) | Court: Yes—Convention jurisdiction exists to issue provisional remedies in aid of arbitration because the suit relates to a covered arbitration agreement. |
| Whether a suit to compel arbitration qualifies as an "action for a money judgment" under La. Code Civ. Proc. art. 3542 (thus supporting non-resident attachment) | Daewoo argued attachment in aid of arbitration is permissible (and later relied on pre-petition attachment authority) | TKM contended the underlying federal action to compel arbitration is not an action for a money judgment, so Art. 3542 does not apply | Court: A motion to compel arbitration is not directly an action for a money judgment, so Art. 3542 does not underlie the attachment. |
| Whether Louisiana law permits pre-suit attachments in aid of anticipated confirmation proceedings (Article 3502) | Daewoo later argued Art. 3502 allows pre-petition attachment when confirmation is likely | TKM disputed availability/applicability or challenged procedural compliance | Court: Louisiana law (Art. 3502) can permit pre-petition attachments to secure anticipated confirmation suits, but strict literal compliance with Art. 3502 is required. |
| Whether Daewoo complied with Article 3502 procedural requirements when obtaining the attachment | Daewoo did not invoke Art. 3502 in lower court but argued later that requirements were effectively met | TKM did not press Art. 3502 noncompliance below; contested on appeal that the attachment was improper | Held: Daewoo failed to strictly comply with Article 3502 (did not obtain leave or show court findings required), so the attachment is invalid; affirm vacatur. |
Key Cases Cited
- Francisco v. Stolt Achievement M/V, 293 F.3d 270 (5th Cir.) (discusses removal and jurisdictional principles under the Convention)
- Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327 (5th Cir.) (sets test when an arbitration agreement falls under the Convention)
- E.A.S.T., Inc. of Stamford v. M/V Alaia, 876 F.2d 1168 (5th Cir.) (holds pre-arbitration vessel arrest not inconsistent with the Convention; supports provisional remedies in aid of arbitration)
- Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822 (2d Cir.) (upholds provisional remedies in aid of arbitration to secure potential monetary recovery)
- Sedco, Inc. v. Petroleos Mexicanos, 767 F.2d 1140 (5th Cir.) (addresses Convention coverage requirements for arbitration agreements)
- BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd., 689 F.3d 481 (5th Cir.) (analyzes Convention jurisdiction and related relief)