Stemcor USA, Inc. v. America Metals Trading, LLP

199 F. Supp. 3d 1102, 2016 WL 4140506
CourtDistrict Court, E.D. Louisiana
DecidedAugust 4, 2016
DocketCIVIL ACTION NO: 12-2966, c/w 12-1968
StatusPublished
Cited by4 cases

This text of 199 F. Supp. 3d 1102 (Stemcor USA, Inc. v. America Metals Trading, LLP) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stemcor USA, Inc. v. America Metals Trading, LLP, 199 F. Supp. 3d 1102, 2016 WL 4140506 (E.D. La. 2016).

Opinion

SECTION: R

THIS DOCUMENT RELATES TO ALL CASES

ORDER AND REASONS

SARAH S. VANCE, UNITED STATES DISTRICT JUDGE

Plaintiff in intervention ThyssenKrupp Mannex GMBH (“TKM”) moves the Court to vacate all maritime and state law attachments of the res in these consolidated cases—9,000 metric tons of pig iron aboard the M/V CLIPPER KASASHIO—and transfer the proceeds of a court-ordered sale of the res to the 24th Judicial District Court (“JDC”) for Jefferson Parish.1 According to TKM, the initial attachments purporting to establish federal jurisdiction over the res were void for lack of subject matter jurisdiction, and the first valid attachment orders were issued by the 24th JDC and perfected by service by the Jefferson Parish Sheriff. Therefore, TKM contends, the state court obtained exclusive jurisdiction over the res and all subsequent federal court actions were taken without jurisdiction. For the following reasons, the Court grants the motion.

I. BACKGROUND

In this action, several plaintiffs assert claims against defendants American Metals Trading, LLP (“AMT”), a British entity, and Cia Siderúrgica do Para (“COSI-PAR”), a company existing under the laws of Brazil. According to plaintiffs, COSI-PAR produces pig iron, and AMT sells the product to buyers on COSIPAR’s behalf. Plaintiffs allege that defendants have failed to deliver on a number of their contracts, causing each plaintiff to sustain significant damages. In an effort to obtain security for existing and/or anticipated judgments against defendants, each plaintiff filed a complaint in the United States District Court for the Eastern District of Louisiana. Plaintiffs also moved for and obtained Rule B maritime attachments and/or Louisiana state law attachments of 9,000 metric tons of pig iron aboard the M/V CLIPPER KASASHIO. This pig iron is also subject to attachment and sequestration orders issued by the 24th JDC for Jefferson Parish, and the resulting jurisdictional conflict underlies TKM’s motion [1107]*1107to vacate federal attachments and transfer the res to state court.

A. Parties and Factual Background

1. Stemcor

Plaintiff Stemcor USA, Inc. is a Delaware corporation. In 2012, Stemcor entered into two contracts with defendant AMT for the purchase, sale, and delivery of pig iron from Brazil to New Orleans, Louisiana.2 Both contracts specified the quantity of pig iron to be purchased and the price per metric ton.3 Under both contracts, the sale was to be “DDP, discharged into barges, New Orleans, LA.”4 DDP is the international trade term for “delivery duty paid,” which “means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready of unload at the named placed of destination.”5 Thus, under the agreements, AMT was responsible for arranging for ocean transport of the pig iron and delivery to New Orleans. Both of the Stemcor-AMT contracts required AMT to charter a vessel to make the shipment, specified certain minimum vessel requirements, and permitted Stemcor to reject any proposed vessel that failed to satisfy the contract’s terms.6 Both contracts also specified that Stemcor’s obligation to make final payment for the pig iron was triggered by AMT’s presentation of proof of marine insurance, shipping documents issued by the shipping/freight forwarding company, and other documents.7 Finally, the contracts contained a section entitled “SHIPPING/LOAD CONDITIONS,” which required AMT to, among other things, notify Stemcor when the chartered vessel departed the load port8 and pay “all local taxes, dockage, quay dues, port rates, agency fees and levies assessed on the vessel.”9

The contracts also called for arbitration of disputes between Stemcor and AMT. The applicable provision of both contracts provides: “[a]ny dispute shall be referred to arbitration under the rules of the [London Court of International Arbitration]. A single arbitrator is to be agreed between the parties failing which the arbitrator is to be appointed by the LCIA.”10

Stemcor alleges that it provided AMT with $2,346,000 in prepayments under the first contract, dated April 3, 2012.11 According to Stemcor, AMT made partial shipments of pig iron under the contract, deducting the costs of those shipments from the prepayment amount, but it failed to deliver the total quantity of pig iron provided under the agreement.12 As to the second contract, dated, May 11, 2012, Stemcor alleges that it provided AMT with $2,340,900 in prepayments for the specified [1108]*1108quantity of pig iron.13 AMT again made partial payments and deducted the costs from Stemcor’s prepayment, but it failed to deliver the remainder of the cargo.14 Stemcor asserts breach of contract claims against AMT, as well as cargo damage claims for “off-spec and/or damaged pig iron shipments.”15

2. Daewoo

Plaintiff Daewoo International Corporation is a trading company incorporated under the laws of South Korea. Like Stem-cor, Daewoo entered into a number of purchase and sale contracts with AMT.16 Under these contracts, AMT agreed to sell pig iron to Daewoo.17 The contracts specified a delivery term of “DDP, New Orleans.”18 They also established a payment schedule. AMT would receive a first provisional payment upon providing Daewoo with, among other things, an “Original Forward Certificate Receipt” issued by a freight forwarding company, indicating that AMT had delivered the cargo to the forwarder for shipment to Daewoo. Title to the pig iron passed from AMT to Daewoo upon AMT’s production of the Forward Certificate Receipt, but AMT bore the risk of loss until the point of delivery in New Orleans. Daewoo would make a second provisional payment to AMT within seven days of the shipment date, and it would make its final payment once the pig iron was delivered and unloaded in New Orleans.19

Like the Stemcor-AMT agreements, Daewoo’s contracts with AMT provided for binding arbitration. Specifically, the contracts stated:

any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules in New York, USA, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.20

Daewoo alleges that between June and September 2012, it provided first provisional payments to AMT in the aggregate amount of $14,479,638.97.21 Nonetheless, AMT allegedly failed to deliver any pig iron to Daewoo.22 According to Daewoo, AMT arranged for a freight forwarding company to produce a sham Forward Certificate Receipt to deceive Daewoo into making these payments, even though AMT had no intention of shipping the pig iron cargo.23

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Bluebook (online)
199 F. Supp. 3d 1102, 2016 WL 4140506, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stemcor-usa-inc-v-america-metals-trading-llp-laed-2016.