Stemcor USA Inc. v. Cia Siderurgica Do Para Cosipar, 927 F.3d 906

Background

Daewoo (South Korean buyer) contracted with AMT for pig iron to be delivered in New Orleans; contracts contained arbitration clauses but AMT failed to deliver.
Daewoo sued in federal court seeking an order to compel arbitration and a writ of attachment on pig iron aboard a vessel in New Orleans, invoking both maritime attachment and Louisiana’s non-resident attachment statute (La. Code Civ. Proc. art. 3542).
Thyssenkrupp Mannex (TKM) previously had claims against AMT and later attached the same pig iron in Louisiana state court and intervened in federal proceedings, arguing Louisiana’s attachment statute did not permit attachment in aid of arbitration.
The district court dissolved Daewoo’s Louisiana non-resident attachment, concluding a suit to compel arbitration is not an “action for a money judgment” under art. 3542, making Daewoo’s attachment invalid; proceeds were transferred to state court.
On second rehearing the Fifth Circuit certified to the Louisiana Supreme Court whether a suit to compel arbitration is an “action for a money judgment” under art. 3542; the Louisiana Supreme Court answered that attachment is allowed in aid of arbitration when the underlying claim seeks money damages and statutory requirements are met.
The Fifth Circuit held it has subject-matter jurisdiction under the New York Convention to grant provisional remedies in aid of arbitration and concluded the district court erred in denying Daewoo a non-resident attachment writ.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal courts have jurisdiction under the Convention to grant provisional remedies (attachment) in aid of arbitration	Convention grants jurisdiction because there is a covered arbitration agreement and the action relates to that agreement; provisional remedies facilitate enforcement	Provisional remedies are not authorized absent express Convention remedies	Held: Yes. The Convention gives jurisdiction where an action relates to a covered arbitration agreement; courts may order provisional/state-law remedies in aid of arbitration.
Whether a suit to compel arbitration is an “action for a money judgment” under La. Code Civ. Proc. art. 3542	Daewoo: underlying arbitration claim seeks money damages, so art. 3542 applies and attachment is permitted	TKM: an action to compel arbitration is not an action for a money judgment, so non-resident attachment is unavailable	Held: Louisiana Supreme Court answered that art. 3542 allows attachment in aid of arbitration if the arbitration claim seeks money damages and statutory attachment requirements are met.
Whether district court erred in dissolving Daewoo’s attachment writ	Daewoo: court had both subject-matter and quasi in rem personal jurisdiction and statutory grounds for attachment	TKM: attachment improper because underlying action not for money judgment	Held: District court erred; attachment under art. 3542 was available and district court’s judgment vacated and remanded.
Priority of competing attachments and remedy disposition	Daewoo: its attachment should be sustained to secure arbitration recovery	TKM: its state-court attachment takes precedence once federal writ dissolved	Held: Because Daewoo’s writ was improperly dissolved, the Fifth Circuit vacated and remanded for proceedings consistent with the availability of attachment in aid of arbitration.

Key Cases Cited

Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327 (5th Cir.) (standards for Convention coverage)
BP Expl. Libya Ltd. v. ExxonMobil Libya Ltd., 689 F.3d 481 (5th Cir.) (Convention jurisdiction when action relates to covered arbitration)
Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822 (2d Cir.) (provisional remedies in aid of arbitration supported)
E.A.S.T., Inc. of Stamford v. M/V Alaia, 876 F.2d 1168 (5th Cir.) (pre-arbitration vessel arrest not inconsistent with the Convention)
Sedco, Inc. v. Petroleos Mexicanos, 767 F.2d 1140 (5th Cir.) (coverage requirements for Convention jurisdiction)