Stemcor USA Inc v. Cia Siderurgica do Para Cosipar et al

Filing 470

ORDER granting 436 Motion to Vacate Attachments for Lack of Jurisdiction and to Transfer the Pig Iron Sale Proceeds to the Jefferson Parish 24th District Court. The Court ORDERS the proceeds of the pig iron sale transferred from the registry of this Court to the registry for the 24th JDC for Jefferson Parish. In light of this ruling, all plaintiffs' and intervening plaintiffs' claims to entitlement of the proceeds of the pig iron sale are DISMISSED AS MOOT. The only claims that p otentially remain in this suit are Stemcor's and Daewoos' claims for remedies under the Convention and its implementing legislation. Based on the parties' briefs and the proposed pre-trial order, both parties have completed arbitration against defendants, thus rendering their request for an order compelling arbitration moot. Although all arbitrations occurred a significant time ago, neither Stemcor nor Daewoo has moved this Court for confirmation of any arbitral award. Accordingly, the Court will enter judgment DISMISSING Stemcor's and Daewoo's claims under the Convention.. Signed by Judge Sarah S. Vance on 8/4/16. (Reference: ALL CASES) (NEF: Financial)(jjs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
STEMCOR USA, INC.

CIVIL ACTION

VERSUS

NO: 12-2966 , c/w
12-2968

AMERICA METALS TRADING, LLP
and CIA SIDERURGICA DO PARA
(COSIPAR)

SECTION: R

THIS DOCUMENT RELATES TO ALL CASES
ORDER AND REASONS
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.

1

R. Doc. 436.

I.

BACKGROUND
In this action, several plaintiffs assert claims against defendants

American Metals Trading, LLP ("AMT"), a British entity, and Cia Siderurgica
do Para ("COSIPAR"), a company existing under the laws of Brazil. According
to plaintiffs, COSIPAR 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 to vacate federal attachments
and transfer the res to state court.

A.

Parties and Factual Background
2

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

2

R. Doc. 83 at 2 ¶ 9, 3 ¶ 15.

3

R. Doc. 441-1 at 1, 14.

4

Id.

5

R. Doc. 441-1 at 10 ("ICC Guide to Incoterms 2010," published by the
International Chamber of Commerce).
3

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

6

See id. at 5 ("The seller to charter a single deck bulk-carrier with engine/bridge
aft, larktop strengths minimum 15 mt/sqm, hydraulic folding hatch covers, classed LR
100A1 or equivalent . . . , maximum 20 years old. The hatch openings are to be at least
12M long."); id. at 17 (same).
7

Id. at 3-4, 16-17.

8

Id. at 5 ¶ 3, 17 ¶ 3.

9

Id. at 5 ¶ 5, 18 ¶ 5. Stemcor agreed to pay discharge costs and levies on the
cargo. Overtime pay for officers and crew were to be paid by AMT, while overtime costs
ordered by port authorities would be shared equally between the parties.
10

Id. at 7, 25.
4

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 quantity 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 Stemcor, Daewoo entered

11

R. Doc. 83 at 3 ¶ 11.

12

Id.

13

Id. at 4 ¶ 17.

14

Id.

15

Id. at 5 ¶ 24.
5

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
16

R. Doc. 441-1 at 29.

17

Id. at 29 ¶ 1, ¶ 3 (specifying quantity and price terms).

18

Id. at 1 ¶ 4.

19

Id. at 30-31.
6

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 Daewoo asserts claims against AMT for breach of contract.24

3.

TKM

Intervening plaintiff TKM is a corporation existing under the laws of
Germany. Between June 2010 and February 2011, TKM entered into six
contracts with defendant AMT for the purchase and sale of pig iron.25

20

Id. at 32 ¶ 10.

21

EDLA Civil Action No. 12-2968, R. Doc. 8 at 8 ¶ 29.

22

Id. at 8 ¶ 30.

23

Id. at 9 ¶ 33.

24

Id. at 11 ¶ 43.

25

R. Doc. 64-3 at 6 ¶ 16.
7

Although TKM provided AMT with $32,420,809.38 in prepayments, AMT
allegedly breached the contracts by failing to deliver any of the purchased pig
iron.26 Following extensive negotiations, the parties reached a settlement
agreement on February 2, 2012.27 Under the agreement, AMT, COSIPAR, and
another entity, Usina Siderurgica do Para Limitada ("USIPAR"), acknowledged
liability to TKM, agreed to pay the obligation in a number of quarterly
installments, and pledged a quantity of its pig iron to TKM as security.28
TKM alleges that defendants have defaulted on the settlement
agreement through nonpayment.29 TKM further alleges that it enforced the
pledge in its favor by causing two Brazilian courts to attach quantities of pig
iron belonging to COSIPAR in Brazil.30 According to TKM, the 9,000 metric
tons of pig iron aboard the M/V CLIPPER KASASHIO is part of the property
covered by TKM's pledge and subject to attachment orders and liens in

26

Id.

27

Id. at 6 ¶ 17.

28

Id. at 6-7 ¶ 18.

29

Id. at 7 ¶ 19.

30

Id. at 7-10.
8

Brazil.31 TKM contends that it has priority to the res over Stemcor, Daewoo,
and all plaintiffs who have intervened in this action.
4.

ABN AMRO

Intervening plaintiff ABN AMRO is a financial institution organized
under the laws of the Netherlands. It entered into a lending relationship with
AMT, under which it eventually agreed to lend AMT a sum of $30,000,000.32
This loan was secured by COSIPAR's pledge of inventory, which included
45,000 metric tons of pig iron stored in locations throughout Brazil.33 AMT
defaulted under the loan agreement by transferring collateral without ABN
AMRO's consent.34 ABN AMRO accelerated amounts due and demanded that
AMT and COSIPAR pay the principal amount of $30,000,143.28, plus interest,
but defendants have failed to respond.35
According to ABN AMRO, the pig iron cargo aboard the M/V CLIPPER
KASASHIO is part of the pledged property and remains subject to ABN

31

Id. at 9 ¶ 28.

32

R. Doc. 36-1 at 3 ¶ 11.

33

Id. at 4 ¶ 14.

34

Id. at 4 ¶ 18.

35

Id. at 4 ¶ 18.
9

AMRO's security interest.36 ABN AMRO alleges that its own pledges predate
any pledges in favor of TKM, which renders TKM's pledges invalid and grants
ABN AMRO priority to the res.
C.

Procedural History

On December 14, 2012, Stemcor and Daewoo each filed a federal lawsuit
in the Eastern District of Louisiana.37 Pursuant to Rule B and the Federal
Arbitration Act, both plaintiffs sought to attach the pig iron cargo belonging
to defendants aboard the M/V CLIPPER KASASHIO as security for future
arbitration awards. Judge Ginger Berrigan issued an order directing the Clerk
of Court to issue the writ of attachment requested by Stemcor. Judge Eldon
Fallon issued a similar order approving Daewoo's requested writ of
attachment. Both orders were signed on December 14, and these cases were
consolidated in a single action before Judge Berrigan on December 27.38
At the time Stemcor and Daewoo filed suit, the M/V CLIPPER
KASASHIO was entering the Gulf of Mexico en route to discharge its pig iron
cargo in Louisiana. On December 16, the vessel anchored at the Southwest
Pass Fairway Anchorage, where it remained for over a week. On December 21,
36

Id. at 5 ¶ 21.

37

R. Doc. 1; EDLA Civil Action No. 12-2968, R. Doc. 1.

38

R. Doc. 24.
10

Clipper intervened in Daewoo's suit, Civil Action No. 12-2966, seeking a
warrant of arrest and a writ of foreign attachment over the full 21,980 metric
tons of pig iron aboard the M/V CLIPPER KASASHIO to secure its claims for
unpaid freight, deadfreight, and demurrage.39
Before any writs of attachment had been served, Daewoo amended its
complaint to allege a second jurisdictional basis for its claims under 28 U.S.C.
§ 1331. Daewoo alleged that its contracts with AMT are arbitration agreements
falling under the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards and its implementing legislation. Citing AMT's alleged breach
of those agreements, Daewoo sought an order compelling AMT to submit to
arbitration, as well as an attachment of AMT's pig iron cargo pending arbitral
proceedings. Based on these allegations, Judge Fallon issued an order
approving Daewoo's application for a writ of attachment under Louisiana's
non-resident attachment statute on December 21.40
On December 22, the U.S. Marshals Service served Stemcor's Rule B
maritime attachment and Daewoo's Rule B and state law attachments upon

39

R. Docs. 16-19.

40

See EDLA Civil Action No. 12-2968, R. Docs. 9, 11, 12.
11

the cargo aboard the M/V CLIPPER KASASHIO. At the time, the vessel was
anchored at the Kenner Bend Anchorage in Jefferson Parish.41
Clipper's writ of attachment and warrant of arrest were not served on
December 22. Because Clipper initially sought to arrest and attach the full
amount of the cargo aboard the M/V CLIPPER KASASHIO, instead of just the
9,000 metric tons owned by defendants, Duferco SA moved to intervene as the
owner of the other 12,980 metric tons aboard the vessel. In late December,
Duferco filed a number of pleadings opposing Clipper's attempt to arrest and
attach its portion of the cargo.42
While the Clipper-Duferco dispute was pending before Judge Berrigan,
TKM filed suit in the 24th JDC for Jefferson Parish on December 28.43 In its
state suit, TKM sought a writ of attachment and sequestration over the pig iron
cargo aboard the M/V CLIPPER KASASHIO. The state court approved TKM's
request for a writ of attachment. TKM asserts, and no other party disputes,
that the Jefferson Parish Sheriff served seizure papers issued by the 24th JDC

41

R. Docs. 62, 63.

42

R. Docs. 23, 25, 26, 28.

43

R. Doc. 441-1 at 104-110.
12

on the cargo on December 29 at 7:52 a.m.44 At the time, the M/V CLIPPER
KASASHIO was anchored in Jefferson Parish at Kenner Bend.
Judge Berrigan resolved the Clipper-Duferco dispute on December 28.
On that date, Judge Berrigan issued an order granting Clipper's motion to
issue a writ attaching the 9,000 metric tons of pig iron owned by defendants,
as well as a second order granting Clipper's motion for a warrant of arrest over
the full 21,980 metric tons of cargo aboard the M/V CLIPPER KASASHIO.45
The U.S. Marshals Service served the Clipper attachment writ and arrest
warrant on December 29 at 8:00 a.m., eight minutes after the Jefferson Parish
Sheriff served TKM's state court seizure papers on the cargo.46 Later that day,
Clipper released its seizure of Duferco's 12,980 metric tons of pig iron. As
authorized by Judge Berrigan's order, the M/V CLIPPER KASASHIO left
Kenner Bend to discharge Duferco's cargo at a facility located in St. John the
Baptist Parish and returned to an anchorage point in St. Charles Parish.47

44

R. Docs. 62, 63; see also R. Doc. 441-1 at 111-121.

45

R. Docs. 43, 44.

46

R. Doc. 70.

47

R. Doc. 45.
13

ABN AMRO moved to intervene in Stemcor's suit, Civil Action No. 122966, on December 28, asserting supplemental jurisdiction over its claims.48
ABN AMRO alleged that it had a senior lien on the pig iron cargo and
requested a writ of attachment and sequestration under Louisiana law.49
Judge Berrigan granted ABN AMRO's motion to intervene and ordered
issuance of ABN AMRO's state law writ of attachment.50 The U.S. Marshals
Service served ABN AMRO's writ on January 3, 2013.51 On January 7, TKM
moved to intervene in these proceedings and sought issuance of a Louisiana
state law writ of attachment and sequestration.52 Like ABN AMRO, TKM
alleged that the cargo was subject to a security interest in its favor. Judge
Berrigan granted TKM's motions, and the U.S. Marshals Service served TKM's
federal writs of attachment on January 11.53
On January 15, Stemcor amended its pleadings to assert diversity
jurisdiction under 28 U.S.C. § 1332 as an additional basis for federal subject

48

R. Doc. 36.

49

R. Doc. 39.

50

R. Docs. 54, 59.

51

R. Doc. 95.

52

R. Docs. 64, 66.

53

R. Docs. 68, 72, 96.
14

matter jurisdiction.54 Stemcor also sought issuance of a writ of attachment and
sequestration under Louisiana law. Judge Berrigan approved Stemcor's
request for a state law attachment, and the U.S. Marshals Service served the
writ on January 18.55
On January 11, all plaintiffs and intervening plaintiffs who had appeared
in this action filed a joint motion for the interlocutory sale of the defendant's
pig iron cargo to Duferco.56 Judge Berrigan granted the parties' motion, and
the 9,000 metric tons of pig iron were sold on January 29.57 In accordance
with the parties' agreement, the proceeds were deposited in the registry of
court for the Eastern District of Louisiana, where they have remained since the
date of the sale.58 The order expressly memorialized the parties' agreement
that all parties retained the right to challenge the Court's subject matter
jurisdiction over claims asserted by the plaintiffs and intervening plaintiffs.59
It further provided, pursuant to the parties' agreement, that "in the event is

54

R. Doc. 83.

55

R. Docs. 92, 107.

56

R. Docs. 75, 80

57

R. Docs. 85, 104.

58

R. Doc. 108.

59

R. Doc. 104 at 7 ¶ 12.
15

should be ultimately determined that this Court lacks subject matter
jurisdiction . . . and that jurisdiction is proper in another court, the Clerk shall
transfer the Deposited Funds to the registry of the court having proper
jurisdiction subject to the claims preserved herein."60
On April 24, 2013, TKM filed a "Motion to Vacate Maritime Attachments
and to Dismiss Claims for Lack of Jurisdiction," arguing that the Stemcor and
Daewoo claims did not support admiralty jurisdiction and that all remaining
claims should be dismissed because the 24th JDC was the first court to validly
exercise jurisdiction over the pig iron cargo.61 Judge Berrigan denied the
motion without prejudice, reasoning that because defendants had yet to
appear in the action "[p]rudence dictates against addressing the concerns of
[TKM] at this time."62 The Court explained that it would rely on the federal in
rem jurisdiction created by Clipper's December 29 Rule C arrest and exercise
supplemental jurisdiction over the other claims to the res.63
On May 13, 2015, TKM attempted to file a second motion to vacate
federal attachments for lack of jurisdiction. Due to the length of its brief, TKM

60

Id.

61

R. Doc. 141.

62

R. Doc. 195 at 3.

63

Id.
16

sought leave to file a brief exceeding the designated page limit.64 Judge
Berrigan denied TKM's request to file its motion and precluded all parties
from filing dispositive motions until the parties reached certain stipulations.65
Following an October 15, 2015 settlement conference, Clipper settled its
claims against AMT for $421,000. Those funds have since been paid to
Clipper from the proceeds of the court-ordered pig iron sale, and Clipper has
dismissed all claims in rem and quasi rem against the pig iron with prejudice.
On January 5, 2016, this case was reassigned from Judge Berrigan to
Section R of this Court for all further proceedings.

Following the

reassignment, TKM filed the instant "Motion to Vacate Attachments for Lack
of Jurisdiction and to Transfer the Pig Iron Sale Proceeds to the Jefferson
Parish 24th District Court."66 The motion is opposed by Stemcor, Daewoo,
ABN AMRO, and a fourth party, Sindicato dos Trabalhadores das Industrias
Metalurgicas do Municipio de Maraba ("SIMETAL"), whose claims have since
been dismissed from this suit with prejudice.67 As in its earlier motion, TKM
asserts that the initial federal attachments in this action were void for lack of

64

R. Doc. 365.

65

R. Doc. 380.

66

R. Doc. 436.

67

R. Docs. 442, 443, 444, 445.
17

subject matter jurisdiction and that the first court to validly attach the pig iron
cargo was the 24th JDC for Jefferson Parish. Stemcor, Daewoo, ABN AMRO,
and SIMETAL offer a number of arguments in support of federal jurisdiction.
Stemcor also argues that even if the 24th JDC had been the first to validly
attach the pig iron on December 29, 2012, that attachment dissolved when the
pig iron left Jefferson Parish on December 30 and was subsequently sold, with
the proceeds being deposited in the registry of this court.

II.

LEGAL STANDARD
This case involves a number of federal court and state court attachments

of 9,000 metric tons of pig iron aboard the M/V CLIPPER KASASHIO.
Because multiple courts have asserted in rem and quasi in rem jurisdiction
over the pig iron, the case involves the doctrine of "prior exclusive
jurisdiction." That doctrine provides that "when one court exercises in rem
jurisdiction over a res, a second court will not assume in rem jurisdiction over
the same res. Marshall v. Marshall, 547 U.S. 293, 311 (2006). The doctrine
of prior exclusive jurisdiction is not discretionary; it is a mandatory limitation
on a court's jurisdiction.

Penn Gen. Cas. Co. v. Commonwealth of

Pennsylvania ex rel. Schnader, 294 U.S. 189, 195 (1935) ("[I]f the two suits are
in rem or quasi in rem, requiring that the court or its officer have possession
18

or control of the property which is the subject of the suit in order to proceed
with the cause and to grant the relief sought, the jurisdiction of one court must
of necessity yield to that of the other." (emphasis added)); State Eng'r of State
of Nevada v. S. Fork Band of Te-Moak Tribe of W. Shoshone Indians of
Nevada, 339 F.3d 804, 810 (9th Cir. 2003) (describing the doctrine as a
"mandatory jurisdictional limitation"); United States v. One Hundred
Thirty-Four Thousand Nine Hundred Twenty Dollars ($134,920.00) in U.S.
Currency, 25 F.3d 1051 (6th Cir. 1994) ("The first court to exercise in rem
jurisdiction over a particular res does so to the exclusion of other courts.").

III. DISCUSSION
The United States District Court for the Eastern District of Louisiana was
the first court to attempt jurisdiction over the pig iron at issue in this case.
Daewoo and Stemcor each filed suit in this court on December 14, 2012,
seeking to attach defendant AMT's pig iron as security for future arbitration
proceedings. Judge Fallon approved Daewoo's application for a Rule B
maritime attachment and an attachment under Louisiana law, and Judge
Berrigan approved Stemcor's Rule B attachment request. The U.S. Marshal
Services served each of these writs of attachment on December 22, and seven

19

days passed before the Jefferson Parish Sheriff served seizure papers issued
by the 24th JDC for Jefferson Parish on behalf of TKM.
TKM argues, however, that the federal attachments served on December
22 were void for lack of subject matter jurisdiction. According to TKM, the
breach of contract claims asserted by Stemcor and Daewoo do not support the
admiralty jurisdiction necessary for a Rule B attachment, and Daewoo's state
law attachment was issued without federal jurisdiction and in violation of
Louisiana law. Thus, TKM contends that the first valid exercise of jurisdiction
came from the 24th JDC. Invoking the doctrine of prior exclusive jurisdiction,
TKM argues that the Jefferson Parish Sheriff's service of seizure papers
removed the pig iron cargo from the jurisdiction of the Eastern District of
Louisiana. Thus, TKM concludes, all writs of attachment and warrants of
arrest issued in federal court after December 29, 2012 at 7:52 a.m. were taken
without jurisdiction and must be vacated.
To evaluate TKM's motion, the Court considers the legal foundation for
the December 22 attachments obtained by Stemcor and Daewoo, beginning
with both parties' maritime attachments under Rule B.
A.

Maritime Attachment

Daewoo and Stemcor allege that their contracts with AMT are maritime
in nature and give rise to a maritime claim capable of supporting a Rule B
20

maritime attachment. TKM moves to vacate the Rule B attachments on the
grounds that the contracts are non-maritime agreements for the purchase and
sale of a commodity, pig iron. In opposition, Daewoo and Stemcor argue that
under the standards set forth by the United States Supreme Court in Norfolk
S. Ry. Co. v. Kirby, 543 U.S. 14 (2004), the Court has admiralty jurisdiction.
In support, Daewoo and Stemcor contend that the maritime transportation of
pig iron is integral to their contracts. Stemcor also appears to argue that
admiralty jurisdiction exists under the "mixed contracts" doctrine,
notwithstanding the Kirby decision. Because the Court lacks admiralty
jurisdiction under either approach, the Court grants TKM's motion to vacate
the Rule B attachments obtained by Daewoo and Stemcor and served by the
U.S. Marshals Service on December 22, 2012.
A Rule B attachment is a remedy available only under a court's admiralty
jurisdiction. Alphamate Commodity GMBH v. CHS Europe SA, 627 F.3d 183,
186 (5th Cir. 2010) (citing Fed. R. Civ. P. 9(h); Fed. R. Civ. P. Supp. R.
A(1)(A)). As such, a plaintiff may seek attachment under Rule B only if the
claim forming the basis for its suit gives rise to admiralty jurisdiction under 28
U.S.C. § 1333. Id. "If the underlying dispute or claim does not fall within
admiralty jurisdiction, the court lacks the authority to issue a Rule B
attachment." Id.; see also Maritima Petroleo E Engenharia LTDA v. Ocean
21

Rig 1 AS, 78 F. Supp. 2d 162, 166 (S.D.N.Y. 1999) ("The absence of maritime
jurisdiction would prove fatal to plaintiff's attachment.").
A breach of contract claim is an admiralty claim if it involves a maritime
contract. See Gulf Coast Shell & Aggregate LP v. Newlin, 623 F.3d 235, 240
(5th Cir. 2010). "A maritime contract is one 'relating to a ship in its use as
such, or to commerce or navigation on navigable waters, or to transportation
by sea or to maritime employment.'" Id. (quoting J.A.R., Inc. v. M/V Lady
Lucille, 963 F.2d 96, 98 (5th Cir. 1992)). In determining whether a contract
is maritime, courts to look to "the nature and character of the contract" to
determine whether it has "reference to maritime service or maritime
transactions." Kirby, 543 U.S. at 24; Fontenot v. Mesa Petroleum Co., 791
F.2d 1207, 1213–14 (5th Cir.1986) (explaining that a contract is maritime if
there is "a direct and proximate juridic[al] link between the contract and the
operation of the ship, its navigation or its management afloat").
Importantly, "[a]dmiralty jurisdiction does not arise simply because a
contract refers to a ship, or to the transportation of goods by ship." Indagro
S.A. v. Bauche S.A., 652 F. Supp. 2d 482, 489 (S.D.N.Y. 2009); see Richard
Bertram & Co. v. Yacht Wanda, 447 F.2d 966, 967 (5th Cir. 1971) ("The mere
fact that a ship is involved will not bring the cause within the jurisdiction of
the admiralty court."). Instead, as the Fifth Circuit has explained,
22

[i]n order to be considered maritime, there must be a direct and
substantial link between the contract and the operation of the
ship, its navigation, or its management afloat, taking into
account the needs of the shipping industry, for the very basis of
the constitutional grant of admiralty jurisdiction was to ensure a
national uniformity of approach to world shipping.
Alphamate, 627 F.3d at 187 (quoting 1 Benedict on Admiralty § 182 (2010))
(emphasis in original).
The contracts at issue in this case are not maritime because their
primary objective is the sale of pig iron. Neither pig iron nor its sale relates
directly and substantially to the operation of a vessel or its navigation. While
the contracts require AMT to arrange ocean transport of the pig iron, and to
charter a vessel that meets certain specifications, these responsibilities are
incidental to the pig iron sale itself. It is well established that a contract to sell
a commodity is not maritime, "even if [it] requires maritime transport relating
to the shipment of the commodity." EFKO Food Ingredients Ltd. v. Pac.
Inter-Link SDN BHD, 582 F. Supp. 2d 466, 470 (S.D.N.Y. 2008) (rejecting
argument that a contract to sell palm olein was maritime because it required
the defendant "to charter ships to pack up and deliver the palm olein"); see
Lucky-Goldstar, Int'l(Am.) Inc. v. Phibro Energy Int'l, Ltd., 958 F.2d 58, 59
(5th Cir. 1992) ("[A] sale of goods by itself would not be 'maritime' merely
because the seller agrees to ship the goods by sea to the buyer."); Indagro, 652
23

F. Supp. 2d at 491 (concluding that a fertilizer sale contract was non-maritime
despite containing "a number of terms concerning the ocean transport of the
fertilizer"); Aston Agro-Indus. AG v. Star Grain Ltd., No. 06 CV 2805 (GBD),
2006 WL 3755156, at *3 (S.D.N.Y. Dec. 20, 2006) ("That the wheat was
transported on a ship does not make the contracts maritime contracts any
more than it would make them aviation contracts had the wheat been shipped
via airplane."); Shanghai Sinom Imp. & Exp. v. Exfin (India) Mineral Ore Co.,
Pvt., No. 06 CIV. 4711, 2006 WL 4029953 (S.D.N.Y. Oct. 5, 2006) (rejecting
argument that a contract to sell ore was maritime because it "includes
maritime provisions requiring the ore implicitly to be shipped by sea and
specifying certain requirements regarding the conditions for such shipment").
The Supreme Court's decision in Kirby does not change this result.
There, a freight forwarding company issued a through bill of lading, agreeing
to deliver cargo from Australia to an inland destination in Alabama. Kirby,
543 U.S. at 18-19. Although the contract provided that the final leg of the
cargo's journey would be by land, the Supreme Court held that this did not
alter the essentially maritime nature of the parties' agreement. It reasoned
that "[s]o long as the bill of lading requires substantial carriage of goods by
sea, its purpose is to effectuate maritime commerce--and thus it is a maritime
contract." Id. at 27.
24

Although Daewoo and Stemcor attempt an analogy to Kirby, the
contracts at issue in this case are not through bills of lading. AMT's agreement
to sell pig iron to Daewoo and Stemcor did not obligate AMT to serve as an
ocean carrier by transporting the commodity itself; nor did it create
contractual rights or duties pertaining to the operation, management, or
navigation of a vessel at sea. Cf. id. at 18-19 (explaining that "[a] bill of lading
records that a carrier has received goods from the party that wishes to ship
them, states the terms of carriage, and serves as evidence of the contract for
carriage"). Instead, the contracts provided that AMT, as the pig iron seller,
would enter charter parties with a separate entity, which would in turn ship
the pig iron to the buyers.68 Like the bills of lading in Kirby, the charter
parties between AMT and the shippers are maritime contracts. The contracts
for the sale of pig iron are not. See Armour & Co. v. Ft. Morgan S.S. Co., 270
U.S. 253, 259 (1926) (distinguishing between a charter party associated with
a cattle shipment, which was maritime, and contracts "to purchase, assemble,
and sell the cattle" and "to charter vessels and therein transport the cattle,"
which were non-maritime).

68

See R. Doc. 441-1 at 5 (AMT-Stemcor contract, providing: "[t]he seller to
charter a single deck bulk carrier" meeting certain specifications); Id. at 30-31 (AMTDaewoo contract, providing that a second provisional payment for the pig iron would be
made after the pig iron was loaded aboard a chartered vessel).
25

Nor does admiralty jurisdiction arise under the so-called "mixed
contracts" doctrine. In most breach of contract actions, the underlying
contract must be "wholly maritime" to support admiralty jurisdiction.
Lucky-Goldstar, 958 F.2d at 59; see Hartford Fire Ins. Co. v. Orient Overseas
Containers Lines (UK) Ltd., 230 F.3d 549, 555 (2d Cir. 2000) ("The general
rule for exercising admiralty jurisdiction in a contract case is that jurisdiction
arises only when the subject-matter of the contract is 'purely' or 'wholly'
maritime in nature."). Thus, contracts that are "mixed"--that is, they contain
both maritime and non-maritime obligations--generally cannot give rise to
admiralty jurisdiction. See Laredo Offshore Constructors, Inc. v. Hunt Oil
Co., 754 F.2d 1223, 1231-32 (5th Cir. 1985). The Fifth Circuit recognizes two
exceptions to this default rule.

Federal courts may exercise admiralty

jurisdiction over a mixed contract if: (1) the land-based portion of the contract
is incidental to the sea-based portion; or (2) the "contract's maritime
obligations are separable from its non-maritime aspects and can be tried
separately without prejudice to the other." Alphamate, 627 F.3d at 187
(quoting Lucky-Goldstar, 958 F.2d at 59).
In a portion of its brief, Stemcor argues that the mixed contracts doctrine
was "substantially eroded, if not eliminated" by the Supreme Court's decision
in Kirby and faults the Fifth Circuit for applying the doctrine post-Kirby in
26

Alphamate, 627 F.3d at 187.69 Somewhat inconsistently, Stemcor also argues
that the mixed contract doctrine's second exception applies to this case and
establishes admiralty jurisdiction over its breach of contract claims.70 In
support, Stemcor argues that AMT's contractual duty to arrange ocean
transport of the pig iron was a severable maritime obligation, which AMT
breached by failing to deliver pig iron under the terms of the contract.
Stemcor does not plausibly allege that AMT breached a maritime
obligation, let alone a maritime obligation that is severable from the nonmaritime core of the pig iron sale contracts.

Stemcor's first amended

complaint alleges that AMT failed to deliver the total quantity of pig iron
specified in the parties' agreements.71 It further alleges that some of the pig
iron it did send was "off-spec and/or damaged."72 These allegations relate to
quantity and quality terms of the pig iron sale contracts, which create nonmaritime obligations with no connection to the management or navigation of
a vessel at sea. See Exim Grain Trade, B.V. v. J.K. Int'l Pty Ltd., No. 08 CIV.

69

R. Doc. 442 at 7-8.

70

Id. at 8.

71

R. Doc. 83 at 3 ¶ 11 (alleging that defendants made "certain partial shipments
under Contract No. NR10780"); id. at 4 ¶ 17 (alleging that defendants "made one partial
shipment under Contract No. NR 1685").
72

Id. at 83 ¶ 24.
27

6989 (WHP), 2008 WL 5191058, at *2 (S.D.N.Y. Dec. 2, 2008) ("While JKI
failed to transport the total tonnage under the Wheat Contract and failed to
take timely delivery because it could not find a suitable vessel, the amount of
wheat and time of delivery are not maritime obligations."). A contrary ruling
would distort the nature of the parties' contracts and unjustifiably extend the
reach of admiralty jurisdiction. See Alphamate, 627 F.3d at 187 (noting the
impropriety of "expand[ing] maritime jurisdiction to include nearly every
contract involving the sale of good transported by ship").
In sum, the contracts underlying Daewoo's and Stemcor's breach of
contract claims are not maritime contracts, either in whole or severable part.
Accordingly, neither Daewoo nor Stemcor may pursue its claims under the this
Court's admiralty jurisdiction, and there is no jurisdictional basis for the
December 22, 2012 Rule B attachments. See Aston Agro-Indus., 2006 WL
3755156, at *2 ("Absent the requisite admiralty or maritime jurisdiction, a
Rule B maritime attachment is void."). The Court therefore grants TKM's
motion to vacate those attachments for lack of jurisdiction.
B.

Louisiana Law Attachment Pursuant to the Convention

Other than the invalid Rule B attachments, the only other exercise of
federal jurisdiction over the res that predates the 24th JDC for Jefferson
Parish's intervention is Daewoo's December 22 attachment under the
28

Louisiana non-resident attachment statute, Louisiana Code of Civil Procedure
article 3541(5).

Daewoo alleges that the jurisdictional basis for this

attachment is federal question jurisdiction, which exists by way of the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(the "Convention") and its implementing legislation. In support, Daewoo
contends that arbitration provisions in its contracts with AMT render those
contracts arbitration agreements subject to the Convention's terms. It further
alleges that because AMT breached those contracts, Daewoo is entitled to an
order compelling AMT to arbitrate and a state law attachment of AMT's
property to be held as security pending arbitration.
TKM moves to vacate the state law attachment, offering several
arguments to support its position. First, TKM argues that Daewoo may not
bring suit under the Convention because its complaint does not alleged that
it has been "aggrieved" by AMT's refusal to arbitrate, as the Convention
allegedly requires. Second and relatedly, TKM contends that because Daewoo
has not alleged that AMT refuses to arbitrate, its suit to compel arbitration
does not present a justiciable case or controversy under Article III. Third,
TKM argues that because the Convention does not affirmatively authorize
attachment remedies, the Court lacks jurisdiction to entertain Daewoo's
request for such relief. Fourth, TKM contends that Daewoo's attachment
29

under Louisiana's non-resident attachment statute cannot stand because that
statute does not permit attachment in aid of arbitration.
To facilitate its analysis, the Court briefly outlines the framework of the
Convention and its implementing legislation before addressing TKM's specific
jurisdictional arguments.
1.

Framework of the Convention

The Convention is a multilateral treaty requiring signatory nations to
give effect to private arbitration agreements and to recognize arbitration
awards given in other nations.73 The United States has ratified the Convention
and implemented it through Chapter Two of the Federal Arbitration Act
("FAA"), 9 U.S.C. § 201-208. As the Fifth Circuit has observed, "Congress's
purpose and intent, in enacting [Chapter Two], was 'to encourage the
recognition and enforcement of commercial arbitration agreements in
international contracts and to unify the standards by which agreements to
arbitrate are observed and arbitral awards are enforced in the signatory
countries.'" Acosta v. Master Maint. & Const. Inc., 452 F.3d 373, 376 (5th Cir.
2006) (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15 (1974)).
73

Article II(1) of the Convention provides that "[e]ach Contracting State shall
recognize an agreement in writing under which the parties submit to arbitration all or
any differences which have arisen or which may arise between them in respect of a
defined legal relationship, whether contractual or not, concerning a subject matter
capable of settlement by arbitration."
30

Chapter Two promotes an "unambiguous policy" favoring arbitration of
commercial disputes, particularly in the international context. Id.; see also
Sunkyong Eng'g & Const. Co., LTD. v. Born, Inc., 149 F.3d 1174 (5th Cir. 1998)
(noting the "liberal" policy favoring arbitration).
Although Congressional policy favors alternative dispute resolution,
Chapter Two does not completely displace federal courts from the arbitration
process. Chapter Two contains a jurisdictional provision which provides
federal subject matter jurisdiction over any "action or proceeding" that falls
within the Convention's ambit. 9 U.S.C. § 203. Specifically, section 203
provides: "[a]n action or proceeding falling under the Convention shall be
deemed to arise under the laws and treaties of the United States. The district
courts of the United States . . . shall have original jurisdiction over such an
action or proceeding, regardless of the amount in controversy." Id.; see also
9 U.S.C. § 202 (defining arrangements that "fall under the Convention" as
arbitration agreements or arbitral awards arising out of a commercial legal
relationship). Chapter Two also contains two remedy provisions, which
expressly authorize district courts with jurisdiction under the Convention to:
(1) compel the parties to arbitrate pursuant to their agreement, (2) appoint
arbitrators, and (3) confirm arbitration awards. See 9 U.S.C. §§ 206, 207.

31

Courts do not apply Chapter Two in a vacuum. Section 208 provides
that Chapter One of the FAA, which governs domestic arbitration agreements
and awards, "applies to actions and proceedings brought under [Chapter Two]
to the extent that chapter is not in conflict with this chapter or the Convention
as ratified by the United States." 9 U.S.C. § 208; see E.A.S.T., Inc. of
Stamford, Conn. v. M/V Alaia, 876 F.2d 1168, 1173 (5th Cir. 1989) (applying
Chapter One' provision authorizing vessel seizures in admiralty arbitrations
to an action under the Convention).
2.

The Convention Provides Federal Subject Matter
Jurisdiction Over Daewoo's Suit

Contrary to TKM's assertion, the Convention and its implementing
legislation vest the Court with jurisdiction over Daewoo's suit against AMT.
As noted, Chapter Two of the FAA provides federal subject matter jurisdiction
over any "action or proceeding falling under the Convention . . . ." 9 U.S.C. §
203 (emphasis added). The Fifth Circuit has identified four requirements that
must be met for a district court to establish jurisdiction under the Convention:
"(1) there is a written agreement to arbitrate the matter; (2) the agreement
provides for arbitration in a Convention signatory nation; (3) the agreement
arises out of a commercial legal relationship; and (4) a party to the agreement
is not an American citizen." Freudensprung v. Offshore Tech. Servs., Inc., 379
32

F.3d 327, 339 (5th Cir. 2004); see also Sunkyong Eng'g & Const. Co., LTD. v.
Born, Inc., 149 F.3d 1174 (5th Cir. 1998) (holding that if these requirements
are met, the Convention requires the court to compel arbitration).
The pig iron sale contracts between Daewoo and AMT are arbitration
agreements falling under the Convention. Each contract is in writing, and
each pertains to a commercial legal relationship between foreign entities.
Further, each contract contains an arbitration provision, which requires
Daewoo and AMT to submit "any controversy or claim arising out of or
relating to the Agreement" to arbitration administered by the American
Arbitration Association in New York.74 Finally, these provisions provide for
arbitration in the United States, which is a signatory to the Convention.
Accordingly, the Convention embraces the pig iron sale contracts, and 9 U.S.C.
§ 203 vests this Court with federal question jurisdiction over Daewoo's suit to
compel arbitration and secure pre-arbitration attachment of AMT's property.
Daewoo's failure to allege that it has been "aggrieved" by AMT's refusal
to arbitrate does not change this result. To support its argument that a party
must be "aggrieved" to maintain suit under the Convention, TKM cites 9
U.S.C. § 4. That provision, which appears in Chapter One of the FAA,

74

R. Doc. 441-1 at 32, ¶ 10.
33

provides: "[a] party aggrieved by the alleged failure, neglect, or refusal of
another to arbitrate under a written agreement for arbitration may petition
any United States district court . . . for an order directing that such arbitration
proceed in the manner provided for in such agreement." 9 U.S.C. § 4. Courts
have interpreted section four's grievance reference to mean that "the right to
petition for arbitration under § 4 only arises after the adverse party has
refused arbitration." PaineWebber Inc. v. Faragalli, 61 F.3d 1063, 1067 (3d
Cir. 1995) (collecting cases).
Even assuming section four applies to cases to compel arbitration
pursuant to the Convention,75 TKM's reliance on this provision is misplaced.
Although Daewoo's complaint requests an order compelling arbitration, the
gravamen of Daewoo's suit--and the subject of TKM's motion to vacate--is its
attempt to attach AMT's assets and hold them as security pending arbitration.

75

As noted, 9 U.S.C. § 208 provides that the provisions of Chapter One apply to
Chapter Two cases only "to the extent that chapter is not in conflict with this chapter or
the Convention. . . ." In the context of suits to compel arbitration, section 204's
requirement that a party be "aggrieved" appears to conflict with Chapter Two, which
does not require a party to obtain any particularly status before filing suit in federal
court. See 9 U.S.C. § 206 (providing that in suits falling under the Convention "[a] court
. . . may direct that arbitration be held in accordance with the agreement at any place
therein provided for. . . ."). At least one court has reached this conclusion, holding that
the "aggrieved party" requirement is inapplicable to suits to compel arbitration under
the Convention. See Daye Nonferrouse Metals Co. v. Trafigura Beheer B.V., No. 96
CIV. 9740 (RWS), 1997 WL 375680, at *9 (S.D.N.Y. 1997). Another court taken the
opposite position. See Hartford Acc. & Indem. Co. v. Equitas Reinsurance Ltd., 200 F.
Supp. 2d 102, 108-09 (D. Conn. 2002).
34

If the Convention and its implementing legislation permit Daewoo to seek
provisional remedies in aid of arbitration, then Daewoo's suit for a prearbitration attachment is an "action or proceeding" under the Convention, and
federal jurisdiction exists. See 9 U.S.C. § 203 (providing federal jurisdiction
over any "action or proceeding falling under the Convention"); see also
Venconsul N.V. v. TIM Int'l N.V., No. 03–CV–5387, 2003 WL 21804833, at
*3 (S.D.N.Y. 2003) (holding that courts have "power to entertain requests for
provisional remedies in aid of arbitration even where the request for remedies
does not accompany a motion to compel arbitration or to confirm an award").
The Court must therefore determine whether the Convention permits suits to
obtain provisional remedies.
3.

Provisional Remedies in Aid of Arbitration

Federal Rule of Civil Procedure 64(a) provides:
At the commencement of and throughout an action, every remedy
is available that, under the law of the state where the court is
located, provides for seizing a person or property to secure
satisfaction of the potential judgment. But a federal statute
governs to the extent it applies.
Fed. R. Civ. P. 64(a). Subsection (b) further provides that the remedies
available under Rule 64 include, among other things, attachment and other
"equivalent remedies." Fed. R. Civ. P. 64(b). Thus, in most suits brought in
federal court, a party may request provisional remedies available under state
35

law, and courts may grant those remedies, subject to any federal statute or
constitutional limitations. See 11A Charles Alan Wright, Arthur R. Miller &
Mary Kay Kane, Federal Practice and Procedure § 2931 (3d ed.).
Courts are divided, however, on whether the Convention and Chapter
Two of the FAA limit courts' authority to issue provisional remedies in aid of
arbitral disputes. The leading case holding that the Convention forbids
provisional remedies, such as a prejudgment attachment, is McCreary Tire &
Rubber Co. v. CEAT S.p.A., 501 F.2d 1032 (3d Cir. 1974). There, a plaintiff
sued an Italian company in state court for breach of contract and obtained an
attachment. Id. at 1033. The Italian company removed the case and, citing
the contract's arbitration provision, moved the district court to vacate the
attachment. Id. The district court denied the motion, and the Third Circuit
reversed. The court reasoned that the plaintiff's attempt to provisionally
attach the Italian company's property under state law violated the parties'
agreement to submit all disputes to arbitration. Id. at 1038. Because the
Convention "forbids the courts of a contracting state from entertaining a suit
which violates an agreement to arbitrate," this maneuver was barred by the
Convention and its implementing legislation. Id.
The Ninth Circuit has also held that federal courts may not provide
provisional remedies in aid of arbitration, at least when the plaintiff's claims
36

are arbitrable and the designated arbitrators are authorized to grant interim
relief. See Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 726 (9th Cir. 1999).
Unlike the Third Circuit in McCreary, the Ninth Circuit did not base its
holding on the text of the Convention. Rather, it emphasized the need for
deference to the powers of the arbitral tribunal. See id. (reasoning that if the
designated arbitrators have power to order interim measures, a court should
refuse to grant provisional relief "[o]n [that] basis alone.").
Like the Third Circuit and the Ninth Circuit, the Second Circuit initially
took a restrictive approach to provisional relief under the Convention. In
International Shipping Co. v. Hydra Offshore, Inc., 875 F.2d 388 (2d Cir.
1989), a case upon which TKM heavily relies, a foreign plaintiff sued a foreign
defendant in New York, seeking an injunction preventing the defendant from
disposing of property pending arbitration. Id. at 389-9o. On appeal, the
Second Circuit noted with approval the district court's conclusion that the
Convention deprived it of jurisdiction to grant a preliminary injunction,
reasoning that the plaintiff "did not seek either to compel arbitration or to
enforce an arbitral award." Id. at 391 n. 5.
More recently, the Second Circuit has expanded its view of jurisdiction
under the Convention. In Borden, Inc. v. Meiji Milk Products Co., 919 F.2d
822 (2d Cir. 1990), the court found jurisdiction to entertain a plaintiff's motion
37

for a preliminary injunction in connection with its suit to compel arbitration.
Id. at 826. The court reasoned that "entertaining an application for a
preliminary injunction in aid of arbitration is consistent with the court's
powers pursuant to [9 U.S.C.] § 206." Id. (emphasis added). "The desire for
speedy decisions in arbitration is entirely consistent with a desire to make as
effective as possible recovery upon awards, after they have been made, which
is what provisional remedies do." Id. (quoting Murray Oil Products Co. v.
Mitsui & Co., 146 F.2d 381, 384 (2d Cir. 1944)). Thus, requests for interim
relief adhere to the "provisions and . . . spirit" of the Convention. As to the
Third Circuit's contrary ruling, the court distinguished McCreary as involving
a plaintiff who sought attachment as an alternative to arbitration, rather than
in aid of it. See id. ("In the instant case, far from trying to bypass arbitration,
[plaintiff] sought to have the court compel arbitration.").
Following Borden, numerous courts have held that the Convention does
not divest district courts of jurisdiction to grant preliminary injunctions, prearbitration attachments, and other provisional remedies in aid of arbitration.
See, e.g., CRT Capital Grp. v. SLS Capital, S.A., 63 F. Supp. 3d 367, 373
(S.D.N.Y. 2014) (finding jurisdiction over proceeding to enjoin an arbitration;
collecting cases); Emirates Int'l Inv. Co., LLC v. ECP Mena Growth Fund,
LLC, No. 11 CIV. 9227 JGK, 2012 WL 2198436, at *5–6 (S.D.N.Y. June 15,
38

2012) (noting case law providing for federal jurisdiction to grant provisional
remedies in aid of arbitration); Bahrain Telecommunications Co. v.
Discoverytel, Inc., 476 F. Supp. 2d 176, 182 (D. Conn. 2007) (finding that state
law attachment is permissible through Rule 64 in cases involving pending
arbitrations, including international arbitrations); Venconsul, 2003 WL
21804833, at *3 (interpreting Borden "as recognizing a court's power to
entertain requests for provisional remedies in aid of arbitration"); China Nat.
Metal Products Imp./Exp. Co. v. Apex Digital, Inc., 155 F. Supp. 2d 1174, 1180
(C.D. Cal. 2001) (holding that the Convention does not deprive the court of
jurisdiction to order attachment pending arbitration). Like the Second Circuit
in Borden, these courts reason that provisional remedies are consistent with
the Convention because they protect the integrity of the arbitral process and
"ensure that an arbitration panel can afford meaningful relief." Gerling Global
Reinsurance Corp. v. Sompo Japan Ins. Co., 348 F.Supp.2d 102, 105 (S.D.N.Y.
2004); see China Nat. Metal Products, 155 F. Supp. 2d at 1180 (reasoning that
"provisional remedies such as attachment reinforce arbitration agreements by
ensuring that assets from which an arbitration award would be satisfied are
secured while arbitration is pending").
Although the Fifth Circuit has not ruled on whether the Convention
proscribes attachment in non-admiralty arbitrations, it has expressed
39

skepticism of the Third Circuit's McCreary decision and sympathy for a
broader view of a federal jurisdiction.

In E.A.S.T., Inc. of Stamford,

Connecticut v. M/V Alaia, 876 F.2d 1168 (5th Cir. 1989), the court held that
the Convention does not prevent courts from employing maritime attachment
procedures in connection with arbitrable claims that fall within admiralty
jurisdiction. Id. at 1173. Rather than distinguishing McCreary as involving a
non-admiralty dispute, the court challenged the ruling directly, noting that
"McCreary has been criticized expressly by a number of courts and
commentators--particularly in the admiralty context." Id. The court also
noted that attachment may serve as an important "security device in aid of
arbitration" and suggested that a prejudgment attachment by a party seeking
to compel arbitration would not conflict with the Convention's goals. Id.
Although E.A.S.T. does not address the precise issue before the Court,
the Fifth Circuit's reasoning is instructive. Like the plaintiff in E.A.S.T.,
Daewoo initiated this suit to force its opponent to arbitrate a breach of
contract claim.76 Far from attempting to circumvent arbitration, Daewoo
sought to attach AMT's property as a means of facilitating the arbitration
process and increasing its chance of recovering on a possible award. These

76

R. Doc. 8 at 14 (Daewoo's prayer for relief, asking "that arbitration be
compelled" pursuant to the Daewoo-AMT agreements).
40

facts distinguish McCreary and reduce whatever persuasive authority that
case retains in light of the criticism identified by the Fifth Circuit. In addition,
E.A.S.T. highlights the practical importance of provisional remedies in aid of
arbitration proceedings. By permitting parties to seize property pending
arbitration, attachment ensures that assets will be available to satisfy any
award the arbitrators may provide. This, in turn, promotes the pro-arbitration
goals of the Convention and its implementing legislation by ensuring that
arbitration provides a forum for meaningful relief.

See Bahrain

Telecommunications, 476 F. Supp. 2d at 182 ("A prejudgment remedy does
not interfere with the arbitral process but merely ensures that there will be
assets available to satisfy any judgment the arbitrators themselves may
render."); Tennessee Imports, Inc. v. Filippi, 745 F. Supp. 1314, 1329 (M.D.
Tenn. 1990) (explaining that, in certain cases, provisional remedies may
"necessary to protect the integrity of the applicable dispute resolution
process"). The Court therefore finds no conflict between a request for prearbitration attachment and the "provisions and . . . spirit" of the Convention.
See Borden, 919 F.2d at 826.
For these reasons, the Court rejects McCreary and Simula and adopts
the Second Circuit's interpretation of jurisdiction under the Convention.
Contrary to TKM's assertion, the Convention does not deprive this Court of
41

jurisdiction or Rule 64 authority to order provisional remedies available under
state law in connection with arbitral disputes. The Court therefore turns to the
merits of Daewoo's request for provisional relief under Louisiana's nonresident attachment statute.
4.

Non-Resident Attachment under Louisiana Law

That the Court has jurisdiction to entertain Daewoo's request for a
provisional remedy does not mean that Daewoo meets the requirements for
its issuance. As noted, Rule 64 permits district courts to borrow state
remedies for the seizure of property to secure a potential judgment. Fed. R.
Civ. Proc. 64(a). While the Federal Rules of Civil Procedure govern the
conduct of an action in federal court, "state law determines when and how a
provisional remedy is obtained." 11A Charles Alan Wright, Arthur R. Miller &
Mary Kay Kane, Federal Practice and Procedure § 2932 (3d ed.). Federal
courts must therefore honor state laws and procedural rules limiting the
manner and circumstances in which a court may grant provisional relief. Id.;
see also Nat'l Loan v. Fid. Bank, 51 F.3d 1045 (5th Cir. 1995) (applying state
rules governing garnishment proceedings); Bahrain Telecommunications, 476
F. Supp. 2d at 186–87 (applying state statutory limitations on issuance of
provisional remedies in aid of arbitration).

42

Under Louisiana law, a party may obtain a writ of attachment 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 Louisiana Code of Civil Procedure provides a
number of grounds for attachment, including, as relevant here, that the
defendant "[i]s a nonresident who has no duly appointed agent for service of
process within the state." La. Code Civ. Proc. art. 3541(5). There is no dispute
that the defendant in this case, AMT, lacks an agent for service of process in
Louisiana. At issue is whether Daewoo's suit to compel arbitration and obtain
provisional relief is an "action for a money judgment" to which Louisiana's
non-resident attachment statute applies.
According to Black's Law Dictionary, a "money judgment" is "a judgment
for damages subject to immediate execution, as distinguished from equitable
or injunctive relief." Black's Law Dictionary (10th ed. 2014) (emphasis added).
Daewoo's complaint does not ask this court for an immediately executable
damages award. It seeks a provisional attachment and an order compelling
AMT to arbitrate Daewoo's contract claims in the parties designated tribunal.
That Daewoo seeks a provisional attachment remedy does not itself render
Daewoo's suit a "money judgment" action. Otherwise, attachments would be
43

self-justifying; through its issuance, every attachment would automatically
satisfy article 3542, rendering that provision's limiting language superfluous
and without legal effect.
Nor does Daewoo's request to compel arbitration bring its suit within the
ambit of article 3542. In ruling on a petition to compel arbitration, a court
does not rule on the merits of the underlying claims, much less award damages
to the prevailing party. Instead, it conducts only a limited inquiry into
whether there is a agreement to arbitrate the matter that falls under the
Convention. See Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327,
339 (5th Cir. 2004). In that sense, a petition to compel arbitration resembles
a declaratory judgment action, which, according to Black's Law Dictionary, is
the antithesis of an action for a "money judgment." See Webb v. Investacorp,
Inc., 89 F.3d 252, 260 (5th Cir. 1996) (affirming district court's summary
dismissal of plaintiff's suit for a declaratory judgment that its dispute was not
subject to arbitration because the court's earlier order granting the defendant's
motion to compel arbitration "dispose[d] of the same issue" raised in plaintiff's
complaint). Given the disconnect between the attachment statute's language
and the nature of Daewoo's suit, it is telling that Daewoo fails to cite a single
Louisiana case permitting a party to attach property under the non-resident
attachment statute pending arbitration.
44

Nonetheless, Daewoo argues that a suit to compel arbitration under the
FAA is, as a practical matter, indistinguishable from a suit seeking money
damages from a domestic court.

In support, Daewoo cites what it

characterizes as "the inevitable confirmation of an arbitration award that
follows a successful arbitration."77 It is true that in an FAA suit, an order
compelling the parties to arbitrate does not necessarily end the litigation.
Upon a party's motion, courts may stay an arbitrable dispute pending the
arbitrator's ruling. 9 U.S.C. § 3. This stay permits parties "to complete the
arbitration and then return to the court with appropriate jurisdiction to either
confirm or vacate the arbitrator's award." In re Jamster Mktg. Litig., No.
MDL 1751, 2009 WL 250089, at *2 (S.D. Cal. Feb. 2, 2009) (describing the
"prototypical case" under the FAA).78 But a party is not required to seek
confirmation of an arbitral award in the court where it sought to compel
arbitration. A party that prevails in arbitration may bring a confirmation suit
in any court with jurisdiction under the Convention. 9 U.S.C. § 207. Further,
although this suit has been pending for over three years, Daewoo has not

77

R. Doc. 443 at 11.

78

Although Chapter Two does not explicitly authorize staying litigation pending
arbitration, Chapter One's stay provision is incorporated into Chapter Two through 9
U.S.C. § 208. See DiMercurio v. Sphere Drake Ins., PLC, 202 F.3d 71, 78 (1st Cir.
2000); Energy Transp., Ltd. v. M.V. San Sebastian, 348 F. Supp. 2d 186, 201 (S.D.N.Y.
2004).
45

asked the Court to stay proceedings pending arbitration or to confirm an
arbitral award, which somewhat undermines its reliance on these
"prototypical" FAA procedures in this case.
In any event, despite the arguable parallels between FAA litigation and
more traditional suits, the Court does not read article 3542's reference to
"money judgment" actions as a broad grant of authority permitting parties to
an arbitration agreement to attach property in aid of arbitration. In addition
to the absence of any case law supporting Daewoo's position, two
considerations support this conclusion. First, Louisiana law requires strict
adherence to the terms and limitations of statutory attachment procedures.
Prejudgment attachment is "a drastic remedy by its very nature." Lavergne
v. de Lavergne, 224 So. 2d 149, 153 (La. Ct. App. 4 Cir. 1969); see also Merrill
Lynch Futures Inc. v. Kelly, 585 F. Supp. 1245, 1259 (S.D.N.Y. 1984)
(describing attachment as "a harsh remedy not lightly to be granted"). Thus,
as one Louisiana court has explained, attachment statutes are "strict[ly]"
interpreted and subject to "rigid application." de Lavergne, 224 So. 2d at 153;
see also Future Tech Int'l, Inc. v. Tae Il Media, Ltd., 944 F. Supp. 1538, 1554
(S.D. Fla. 1996) ("[B]ecause of the extraordinary nature of attachment
proceedings, the terms of the statute must be narrowly construed."). This
principle counsels against expanding Louisiana's non-resident attachment
46

statute by permitting attachments in actions not expressly identified in article
3542's terms.
Second, Louisiana's arbitration statutes suggest that pre-arbitration
attachments are not available under Louisiana law.

The "Louisiana

Arbitration Law," La. Stat. § 9:4201, et seq., governs the conduct of arbitrable
disputes in state courts. That statute contains a number of detailed provisions
outlining the role of state courts and allocating responsibilities among judges
and arbitral tribunals. See, e.g., La Stat. § 9:4204 (authorizing courts to
appoint arbitrators pursuant to an arbitration agreement); id. at § 9:4206
(authorizing arbitrators to summon witnesses and permitting courts to enforce
summonses with orders of contempt); id. at § 9:4207 (permitting courts to
order depositions in connection with arbitration). Although some of these
provisions are highly detailed, none authorizes or even contemplates
attachment of property in connection with arbitration proceedings.

The

statute's silence is significant because, as the Supreme Court of Louisiana has
explained, "when the legislature specifically enumerates a series of things, the
legislature's omission of other items, which could have easily been included
in the statute, is deemed intentional." See Int'l Paper Co. v. Hilton, 966 So.
2d 545, 558–59 (La. 2007).

47

This canon applies with particular force in this case. In recent years, a
number of states have enacted legislation based on the Model Law on
International Commercial Arbitration prepared by the United Nations
Commission on International Trade Law ("UNCITRAL"). Consistent with the
UNCITRAL Model Law, these states expressly authorize courts to attach
property pending arbitration proceedings. See Cal. Civ. Proc. Code § 1297.93;
Conn. Gen. Stat. Ann. § 52-422; N.Y. C.P.L.R. § 7502(c); N.C. Gen. Stat. § 1567.39(c)(1); Ohio Rev. Code Ann. §§ 2712.14-2712.16; Or. Rev. Stat. §
36.470(3)(a); Tex. Civ. Prac. & Rem. Code § 172.175(c)(1). Louisiana has
neither adopted the UNCITRAL Model Law's interim relief provisions nor
enacted anything resembling the legislative model. That Louisiana has not
joined other states in expressly authorizing pre-arbitration attachment
suggests that the remedy is foreign to Louisiana law and policy.
For these reasons, the Court finds that Daewoo's suit to compel
arbitration is not an "action for money judgment" for purposes of Louisiana's
non-resident attachment provisions. Accordingly, article 3542 precludes
Daewoo from using state attachment procedures to seize AMT's property
pending anticipated arbitration proceedings. The Court therefore grants
TKM's motion and vacates Daewoo's December 22, 2012 state law attachment.
C.

Prior Exclusive Jurisdiction
48

Having found that the initial federal attachments in this case were legally
invalid, the Court turns to the second half of TKM's motion. Invoking the
doctrine of prior exclusive jurisdiction, TKM argues that the Court must defer
to TKM's suit in the 24th JDC for Jefferson Parish, vacate all federal
attachments that post-date service of the state court's attachment papers on
December 29 at 7:52 a.m. It further argues that pursuant to the parties' joint
agreement for an interlocutory sale of the pig iron, which is memorialized in
Judge Berrigan's orders on January 16 and January 24, 2013, the Court must
transfer the proceeds of the pig iron sale to the registry of the state court.
The prior exclusive jurisdiction provides that "when one court exercises
in rem jurisdiction over a res, a second court will not assume in rem
jurisdiction over the same res." Marshall v. Marshall, 547 U.S. 293, 311
(2006). The purpose of this rule is "[t]o avoid unseemly and disastrous
conflicts in the administration of our dual judicial system, and to protect the
judicial processes of the court first assuming jurisdiction." Penn Gen. Cas. Co.
v. Commonwealth of Pennsylvania ex rel. Schnader, 294 U.S. 189, 196 (1935).
Importantly, while it is rooted in principles of comity, the prior exclusive
jurisdiction doctrine is not discretionary; it is a mandatory limitation on a
court's jurisdiction. Id. at 195 ("[I]f the two suits are in rem or quasi in rem,
requiring that the court or its officer have possession or control of the property
49

which is the subject of the suit in order to proceed with the cause and to grant
the relief sought, the jurisdiction of one court must of necessity yield to that
of the other." (emphasis added)); State Eng'r of State of Nevada v. S. Fork
Band of Te-Moak Tribe of W. Shoshone Indians of Nevada, 339 F.3d 804, 810
(9th Cir. 2003) (describing the doctrine as a "mandatory jurisdictional
limitation"); United States v. One Hundred Thirty-Four Thousand Nine
Hundred Twenty Dollars ($134,920.00) in U.S. Currency, 25 F.3d 1051 (6th
Cir. 1994) ("The first court to exercise in rem jurisdiction over a particular res
does so to the exclusion of other courts.").
Because the doctrine of prior exclusive jurisdiction establishes a
principle of priority, timing is critical. "Where the assertion of jurisdiction by
the two courts is nearly simultaneous, it becomes important, as in the present
case, to determine the precise time when the jurisdiction attaches." Penn Gen.
Cas. Co., 294 U.S. at 196. As numerous courts have explained, the sina qua
non of jurisdiction in an in rem or quasi in rem action is a lawful seizure and
custody or control of the relevant property. See Donovan v. City of Dallas, 377
U.S. 408, 412 (1964) (holding that "the state or federal court having custody
of such property has exclusive jurisdiction to proceed" in an in rem or quasi
in rem case); Freeman v. Howe, 65 U.S. 450, 454 (1860) ("[T]o give
jurisdiction to the District Court in a proceeding in rem, there must be a valid
50

seizure and an actual control of the res under the process."); Scarabin v. Drug
Enf't Admin., 966 F.2d 989, 993 (5th Cir. 1992) (stating that a court's in rem
jurisdiction over a res attached at the moment of seizure and that a court must
maintain physical control of the property); United States v. Four Parcels of
Real Property, 941 F.2d 1428, 1435 (11th Cir. 1991) ("In rem jurisdiction
derives entirely from the court's control over the defendant res.").
Turning to this case, application of these principles demonstrates that
the 24th JDC for Jefferson Parish has acquired exclusive jurisdiction over the
subject pig iron, leaving this Court powerless to proceed. Both the state
attachment proceedings initiated by TKM and the proceedings in this Court
are in rem or quasi in rem. Article 9 of the Louisiana Code of Civil Procedure
provides that an attachment of a non-resident's property confers quasi in rem
jurisdiction. L a. Code Civ. Proc. art. 9. Maritime attachments under Rule B
attachments have the same effect, while Rule C arrests produce in rem
jurisdiction. See Sembawang Shipyard, Ltd. v. Charger, Inc., 955 F.2d 983,
987 (5th Cir. 1992). As explained above, the initial maritime and state law
attachments in these consolidated cases, which the U.S. Marshals Service
served on December 22, 2012, were issued without jurisdiction and in
violation of Louisiana law. As such, these attachments failed to establish
federal jurisdiction over the res. See Freeman, 65 U.S. at 454 ("[T]o give
51

jurisdiction to the District Court in a proceeding in rem, there must be a valid
seizure and an actual control of the res under the process.").
The 24th JDC for Jefferson Parish asserted quasi in rem jurisdiction by
issuing writs of attachment and sequestration, which the Jefferson Parish
Sheriff served on the pig iron aboard the M/V CLIPPER KASASHIO on
December 29 at 7:52 a.m. At the moment that seizure was effected, the state
court's quasi in rem jurisdiction was established, and the res was withdrawn
from the power of all other courts, including the Eastern District of Louisiana.
See Scarabin, 966 F.2d at 993 (finding that a state court's in rem jurisdiction
over a res attached at the moment of seizure). Thus, the U.S. Marshals
Service's service of federal Rule B attachment papers and a Rule C warrant of
arrest eight minutes after the Jefferson Parish Sheriff's action was legally
invalid. All subsequent federal attachments were also invalid and must be
vacated for lack of jurisdiction.
Stemcor, Daewoo, and ABN AMRO raise three arguments to resist this
conclusion, none of which has merit. First, Stemcor argues that even if the
24th JDC for Jefferson Parish established quasi in rem jurisdiction on
December 29, it subsequently lost jurisdiction when the M/V CLIPPER
KASASHIO left Jefferson Parish on December 30 with the subject pig iron in
its cargo hold. This argument ignores the fact that the vessel departed
52

Jefferson Parish because a judicial order from the Eastern District of Louisiana
authorized the vessel to move within the port to discharge cargo.79 And while
the pig iron was eventually sold and discharged at a location outside of
Jefferson Parish, with the proceeds deposited in the registry of this Court, that
too was done pursuant to a federal court order,80 which was issued after the
state had obtained exclusive jurisdiction over the res. It is axiomatic that
"[p]ossession obtained through an invalid seizure neither strips the first court
of jurisdiction nor vests it in the second." United States v. $79,123.49 in U.S.
Cash & Currency, 830 F.2d 94, 98 (7th Cir. 1987); see also United States v.
One 1985 Cadillac Seville, 866 F.2d 1142, 1146 (9th Cir. 1989) (rejecting the
argument that "the fact of federal possession of the res takes jurisdiction from
the state court and bestows it upon the district court"). Given the federal
court's instrumental role in facilitating the pig iron's removal from the 24th
JDC's control, permitting the pig iron's movement to divest the state court of
jurisdiction would undermine the very purpose of prior exclusive jurisdiction
doctrine. See United States v. One 1979 Chevrolet C-20 Van, 924 F.2d 120,
123 (7th Cir. 1991) (explaining that jurisdiction obtained by possession along
"goes much too far"); One 1985 Cadillac Seville, 866 F.2d at 1146 ("[A]lthough
79

R. Doc. 45.

80

R. Docs. 85, 104.
53

. . . 'possession is nine-tenths of the law,' we prefer to apply the remaining
one-tenth and decline to 'substitute a rule of force for the principle of mutual
respect embodied in the prior exclusive jurisdiction doctrine.'").
Second, Daewoo and ABN AMRO argue that, for purposes of the prior
exclusive jurisdiction doctrine, jurisdiction attaches when a plaintiff files its
complaint, not when its attachment papers are served on the subject property.
Thus, ABN AMRO and Daewoo contend that the Jefferson Parish Sheriff's
"land speed" in serving the 24th JDC's attachment papers is irrelevant because
Daewoo and Stemcor filed their federal suits before the state court litigation
began. Because a court's jurisdiction in an in rem or quasi in rem suit derives
from its control of the subject property, jurisdiction generally attaches at the
point of seizure. Scarabin, 966 F.2d at 993 (explaining that a court's in rem
jurisdiction over a res attached at the moment the property was seized).
Although the Supreme Court has recognized an exception, in which the filling
of a complaint may be treated as constructive possession of the property, that
exception applies only "when the two suits have substantially the same
purpose. . . ." Penn Gen. Cas. Co., 294 U.S. at 196. Thus, when "two suits do
not have substantially the same purpose[,] . . . the rule of constructive
possession on the first filing of the bill is inapplicable, and the court first
acquiring actual possession and control of the property thereby acquires
54

exclusive jurisdiction." Cont'l Bank & Trust Co. v. Apodaca, 239 F.2d 295,
298 (10th Cir. 1956).
The cases at issue in this action involve a number of different creditors
asserting breach of contract claims, liens, and other claims against AMT.
These claims turn on different facts and involve different transactions arising
at different periods of time. The only commonality is that each plaintiff asserts
claims against a single pig iron cargo belonging to defendants. This factor is
not unique to this action; it exists in every litigation involving multiple
creditors that attach the same property. Thus, applying the constructive
possession rule to the facts of this case would cause the exception to swallow
the general rule that in rem jurisdiction requires possession.
Third, ABN AMRO argues that regardless of whether the December 22
attachments served by the U.S. Marshall were valid, their legal effect was to
prevent any other court from attempting jurisdiction over the res until the
Eastern District of Louisiana resolved any disputes concerning its own subject
matter jurisdiction. Thus, ABN AMRO concludes, the 24th JDC's seizure
papers could have had no legal effect because they were served after the
federal attachments but before this Court's ruling vacating those attachments
for lack of jurisdiction. Although ABN AMRO cites several cases, none
supports its interpretation of the prior exclusive jurisdiction doctrine. For
55

instance, ABN AMRO relies heavily on Wabash Railroad Co. v. Adelbert
College of the Western Reserve University, 208 U.S. 38 (1908), quoting the
following summary of the prior exclusive jurisdiction from that opinion:
"[w]hen a court of competent jurisdiction has, by appropriate proceedings,
taken property into its possession through its officers, the property is thereby
withdrawn from the jurisdiction of all other courts." Id. at 54 (emphasis
added). Far from supporting ABN AMRO's position, Wabash Railroad's
emphasis on "appropriate" proceedings as a prerequisite to operation of the
prior exclusive jurisdiction doctrine emphasizes that the doctrine prevents a
second court from asserting jurisdiction only if first court lawfully seizes and
establishes control over the subject property. Other Supreme Court decisions
are to similar effect. See Freeman, 65 U.S. at 454 ("[T]o give jurisdiction to
the District Court in a proceeding in rem, there must be a valid seizure and an
actual control of the res under the process."). ABN AMRO's argument
therefore fails. Because the initial federal seizures in this case were invalid,
federal jurisdiction did not attach, and the prior exclusive jurisdiction doctrine
did not remove the pig iron from the jurisdiction of other courts.
For these reasons, the Courts finds that the 24th JDC for Jefferson
Parish was the first court to validly exercise quasi in rem jurisdiction over the
9,000 tons of pig iron aboard the M/V CLIPPER KASASHIO. By operation of
56

the doctrine of prior exclusive jurisdiction, the Jefferson Parish Sheriff's
service of the 24th JDC's seizure papers on December 29 at 7:52 a.m. deprived
this Court of quasi in rem and in rem jurisdiction over the subject res.
Accordingly, the Court grants TKM's motion to vacate all federal attachments
that post-date the Jefferson Parish Sheriff's service of seizure papers for lack
of subject matter jurisdiction--including the Rule B maritime attachments and
Rule C arrest that Clipper obtained and that the U.S. Marshals Service served
on the vessel eight minutes after the Jefferson Parish Sheriff's action.
In moving for an interlocutory sale of the pig iron in January 2013, the
parties to this action expressly preserved all arguments against federal subject
matter jurisdiction. All parties also agreed that, "in the event is should be
ultimately determined that this Court lacks subject matter jurisdiction . . . and
that jurisdiction is proper in another court, the Clerk shall transfer the
Deposited Funds to the registry of the court having proper jurisdiction subject
to the claims preserved herein."81 This agreement is memorialized in the
stipulated interlocutory sale orders issued by Judge Berrigan in January 2013,
the Court.82 For the reasons discussed, the Court finds that it lacks in rem or
quasi in rem jurisdiction over the res and that jurisdiction is proper in the
81

R. Doc. 104 at 7 ¶ 12.

82

R. Doc. 85, 104.
57

24th JDC for Jefferson Parish. Consistent with the parties' agreed disposition,
the Court therefore orders the proceeds of the sale transferred from the
registry of this Court to the registry for the 24th JDC for Jefferson Parish.

IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS TKM's Motion to Vacate

Attachments for Lack of Jurisdiction and to Transfer the Pig Iron Sale
Proceeds to the Jefferson Parish 24th District Court. The Court ORDERS the
proceeds of the pig iron sale transferred from the registry of this Court to the
registry for the 24th JDC for Jefferson Parish.
In light of this ruling, all plaintiffs' and intervening plaintiffs' claims to
entitlement of the proceeds of the pig iron sale are DISMISSED AS MOOT.
The only claims that potentially remain in this suit are Stemcor's and Daewoos'
claims for remedies under the Convention and its implementing legislation.
Based on the parties' briefs and the proposed pre-trial order, both parties have
completed arbitration against defendants, thus rendering their request for an
order compelling arbitration moot. Although all arbitrations occurred a
significant time ago, neither Stemcor nor Daewoo has moved this Court for
confirmation of any arbitral award.

Accordingly, the Court will enter

judgment DISMISSING Stemcor's and Daewoo's claims under the Convention.
58

4th
New Orleans, Louisiana, this ___ day of August, 2016.

_______________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

59