Originally from the AAA Yearbook on Arbitration and the Law - 30th Edition

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5.01 Interim Relief by the Court

Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar, 870 F.3d 370 (5th Cir. 2017)

A federal court has jurisdiction to order state law provisional remedies in an international commercial transaction calling for arbitration in the U.S.

An international commercial agreement provided for arbitration of disputes in New York. AMT sold goods to both Daewoo and TKM, and received payment from both, but failed to make delivery.  An attachment opportunity arose because AMT had goods aboard a ship in Louisiana waters. The Fifth Circuit, relying on E.A.S.T., Inc. of Stamford v. M/V Alaia, 876 F.2d 1168 (5th Cir. 1989) and decisions from other jurisdictions, held that arrest of a vessel prior to arbitration was consistent with the New York Convention. Daewoo sought an attachment before commencing an arbitration proceeding. Daewoo met the statutory requirements so the attachment was valid.

The federal court clearly had subject matter federal jurisdiction. The difficult issue was whether this proceeding itself fell under the Convention, as required by 9 U.S.C. § 203. The court answered in the affirmative. The dispute related to the arbitration agreement because Daewoo was seeking its attachment in order to facilitate the very arbitration provided for in the AMT agreements. Case law favors recognizing subject matter jurisdiction based on the Convention to issue provisional remedies in aid of arbitration. Under the Convention, courts have subject matter jurisdiction to order state-law provisional remedies such as attachment. Here, Daewoo specifically contemplated obtaining a pre-confirmation attachment in order to secure a later monetary arbitral award.  Attachment was thus available, because an eventual confirmation suit was contemplated.