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

489 F.Supp.3d 511

STEMCOR USA, INC.

v.AMERICA METALS TRADING, LLP and Cia Siderurgica do Para (COSIPAR)

This Document Relates to All Cases

CIVIL ACTION NO. 12-2966,

CIVIL ACTION NO. 12-2966, C/W 12-2968

United States District Court, E.D. Louisiana.

Signed September 28, 2020

Andrew Struben de Klerk, T. Patrick O'Leary, Frilot L.L.C., New Orleans, LA, for Stemcor USA Inc.

CIA Siderurgica do Para Cosipar, pro se.

America Metals Trading LLP, pro se.

SECTION "R" (1)

ORDER AND REASONS

SARAH S. VANCE, UNITED STATES DISTRICT JUDGE

Before the Court is Daewoo International Corporation's motion for summary judgment¹ and Thyssen-Krupp Mannex GMBH's motion for partial summary judgment.² For the following reasons, the Court grants Daewoo's motion for summary judgment, and denies TKM's motion for partial summary judgment.

I. BACKGROUND

This case arises from competing attachments to the proceeds from the sale of 9,000 metric tons of pig iron which were aboard the M/V CLIPPER KASASHIO. Although numerous parties initially claimed rights to the proceeds, only two parties—ThyssenKrupp Mannex GMBH ("TKM"), and Daewoo International Corporation—remain to assert claims to the proceeds.

American Metals Trading, LLP ("AMT") is a British entity that sells pig iron on behalf of Cia Siderurgica do Para ("COSIPAR"), which produces pig iron. AMT LLP also had a United States representative, AMT USA, which did business in the United States.³ Both plaintiffs allege that AMT LLP or AMT USA and COSIPAR 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, both plaintiffs filed a complaint in the United States District Court for the Eastern District of Louisiana. Plaintiffs also moved for and obtained various attachments on 9,000 metric tons of pig iron aboard the M/V CLIPPER KASASHIO. It is the priority of these attachments that remains in dispute.

Between June 2010 and February 2011, TKM entered into six contracts with AMT USA for the purchase and sale of pig iron.⁴ Although TKM provided AMT USA with over $32 million in prepayments, AMT USA allegedly breached the contracts by failing to deliver any of the pig iron.⁵ Following extensive negotiations, the parties reached a settlement on February 2, 2012.⁶ Under that agreement, AMT USA, COSIPAR, and another entity, Usina Siderurgica de Para Limitada, acknowledged liability to TKM. TKM received a promissory note from these parties, secured by the pledge of a certain 20,000 metric tons of pig iron stored in Maraba, Brazil.⁷ TKM purportedly took steps to record the pledge in the Real Estate Registration Office of Maraba.⁸

When COSIPAR failed to pay under the settlement agreement, TKM went to court in Sao Paulo and sued all of the entities on the promissory note to enforce its pledge.⁹ The Court issued an order allowing TKM to arrest up to 20,000 metric tons of pig iron in enforcement of its pledge.¹⁰ TKM purportedly arrested the 20,000 tons of pig iron in Maraba.¹¹ The scope of the arrest was specific to seizing the pig iron that was pledged to TKM.¹² When COSIPAR again failed to pay, TKM returned to court and received an order allowing it to attach any property that could be found of COSIPAR, and TKM attached an additional 9,170 tons of pig iron.¹³ On June 12, 2020, the Maraba court marshal converted the arrest into an attachment.¹⁴

On October 19, 2012, TKM learned that COSIPAR had removed most of the pig iron from Maraba.¹⁵ TKM returned to the same Sao Paulo court and requested an attachment on any of COSIPAR's property, including immovable property.¹⁶ It also requested that the court order COSIPAR to describe what happened to the pig iron in Maraba, and to return it.¹⁷ TKM did not ask for a specific attachment on pig iron of the same kind or quality, nor did it seek to have COSIPAR designate such property that would then be subrogated to TKM's pledge. That court issued an order allowing for "non-specific attachment in respect of as many assets as may be necessary to cover the balance of the debt," but did not extend any pledge to those assets or require them to be of the same quality as the original pledged assets.¹⁸

TKM then arrested the 9,000 tons of pig iron on the M/V CLIPPER KASASHIO in the port of Itaqui.¹⁹ The pig iron in question was the property of AMT LLP,²⁰ which was being shipped to Louisiana for sale to a buyer, David Joseph of the David J. Joseph Company.²¹ Notably, although possible, TKM did not remove the pig iron from the vessel and take it into its own possession. Moreover, TKM cannot trace the 9,000 tons of pig iron on the M/V CLIPPER KASASHIO to the 20,000 pledged to it in Maraba.²²

While the pig iron was docked at the port in Itaqui, ABN AMRO, a former party to this suit, also moved for an attachment of the pig iron, which was granted by a separate judge.²³ Clipper Bulk, which owned the vessel, moved to have the ABN attachment released so that the ship could set sail. The judge who had issued the ABN attachment released the ship, and it set sail for Louisiana.²⁴ ABN appealed the decision, but the appeals court dismissed the appeal as it lacked jurisdiction once the ship set sail.²⁵ TKM went to the judge who had issued its attachment and requested a clarification from that judge that the ship had wrongfully set sail. The judge issued an ex parte order stating that the ship should not have set sail.²⁶ TKM now argues that by virtue of its pledge on the 20,000 metric tons of pig iron in Maraba, its attachment of the 9,000 metric tons aboard the M/V CLIPPER KASASHIO gives it priority to the res.

Daewoo had a contract with AMT LLP for the sale of pig iron.²⁷ However, despite receiving over $14 million in advance payments, AMT LLP never delivered the pig iron.²⁸ Daewoo pursued a money judgment claim in arbitration against AMT LLP and various members of the Montiero family that had ownership interests in AMT LLP. It received an arbitration award in the amount of $15,482,751.04 against those parties.²⁹ A New York Court confirmed and entered judgment on Daewoo's arbitration award.³⁰ Daewoo later filed that judgment in Louisiana state court.³¹

In December 14, 2012, both Daewoo and Stemcor, a former party to this suit, filed suit in the Eastern District of Louisiana.³² Daewoo sued AMT LLP, COSIPAR, and Mineracao Carajas in this Court.³³ Daewoo alleged in the alternative that AMT LLP, COSIPAR and the Mineracao family were alter egos.³⁴ Pursuant to Rule B and the Federal Arbitration Act, both plaintiffs sought writs of attachment of the pig iron cargo belonging to defendants aboard the M/V CLIPPER KASASHIO as security for future arbitration awards.³⁵ Judge Ginger Berrigan and Judge Eldon Fallon issued orders directing the Clerk of Court to issue the writs of attachment requested by Daewoo and Stemcor.³⁶ These cases were consolidated into a single action on December 27, 2012.³⁷

TKM filed a suit in the 24th JDC for Jefferson Parish on December 28, 2012 against COSIPAR and AMT USA.³⁸ In its state suit, TKM sought a writ of attachment and sequestration of the pig iron cargo aboard the M/V CLIPPER KASASHIO. TKM's suit was premised on the idea that the pig iron on the M/V CLIPPER KASASHIO was part of the 20,000 tons of pig iron on which it had a pledge, a premise later discovered to be faulty. The state court approved TKM's request for a writ of attachment. The Jefferson Parish Sheriff then served seizure papers issued by the 24th JDC on the cargo on December 29, 2012.³⁹ At the time, the M/V CLIPPER KASASHIO was anchored in Jefferson Parish at Kenner Bend.

On January 7, 2013, TKM moved to intervene in these proceedings and sought a Louisiana state law writ of attachment and sequestration.⁴⁰ TKM's intervenor complaint alleged claims against COSIPAR and AMT USA.⁴¹ TKM alleged that the cargo was subject to a security interest in its favor, again under the theory that it was part of the pledged pig iron that had been stored in Maraba.⁴² Judge Berrigan granted TKM's motions, and the U.S. Marshals Service served TKM's federal writs of attachment on January 11.⁴³

On January 11, all plaintiffs and intervening plaintiffs who had appeared in this action filed a joint motion for the interlocutory sale of defendant's pig iron cargo to Duferco SA, another party who was dismissed from this suit.⁴⁴ Judge Berrigan granted the parties’ motion, and the 9,000 metric tons of pig iron were sold on January 29.⁴⁵ In accordance with the parties’ agreement, the proceeds were deposited into the registry of court for the Eastern District of Louisiana.⁴⁶

On January 5, 2016, this case was reassigned from Judge Berrigan to Section R of this Court for all further proceedings. TKM filed a motion to vacate attachments for lack of subject-matter jurisdiction and to transfer the pig iron sale proceeds to the Jefferson Parish 24th JDC.⁴⁷ Daewoo opposed the motion, as did other plaintiffs which are no longer parties to this case.⁴⁸ TKM argued that the initial federal attachments in this action were void for lack of subject-matter jurisdiction and that the first court to validly attach the pig iron cargo was the 24th JDC for Jefferson Parish.

On August 4, 2016, the Court issued an order granting TKM's motion to vacate all maritime and state law attachments of the res.⁴⁹ Once Daewoo's December 22, 2012, attachment was vacated, TKM's state court attachment became first in time, and the Court found that jurisdiction to resolve the dispute rested solely with the state court. The Court therefore dismissed all plaintiffs’ and intervening plaintiffs’ claims to entitlement of the proceeds of the pig iron sale without prejudice.⁵⁰ The Court also ordered the proceeds of the pig iron sale transferred from the registry of this Court to the registry for the 24th JDC for Jefferson Parish.⁵¹

Daewoo appealed this Court's order to the Court of Appeals for the Fifth Circuit.⁵² In the meantime, Daewoo also moved to...