PITTSBURGH — The U.S. Marshals Service has been ordered to seize nearly $14.5 million in pig iron en route on the Mississippi River to be held as collateral for money allegedly owed South Korean trading house Daewoo International Corp. by a Brazilian supplier and its related trading company.

The writ of foreign attachment allowing the cargo seizure, signed Dec. 17 in U.S. District Court for the Middle District of Louisiana, comes just three days after Seoul-based Daewoo filed a lawsuit against Marabá, Brazil-based pig iron producer Cia. Siderúrgica do Pará Ltda. (Cosipar) and London-based America Metals Trading LLP (AMT) for allegedly failing to deliver millions of dollars worth of prepaid material.

São Paulo-based miner Mineracao Carajas Ltda. was also named in the suit for allegedly acting as the agent for Cosipar and AMT in transporting the material.

According to the lawsuit, Daewoo signed a deal in May to buy Cosipar-produced pig iron from AMT that it planned to sell into the United States and other markets once the material arrived in New Orleans.

Daewoo told the court it paid nearly $14.5 million, or about 85 percent of the total value of the material, in advance but hasn’t received any material despite alleged attempts to negotiate.

Daewoo said it believed a shipment of Cosipar-manufactured pig iron was on the vessel M/V Clipper Kasashio, which it said was headed upstream on the Mississippi River, and asked the court to order the U.S. Marshals Service to hold the material.

That request was granted, and Blue Marine Security LLC, Gretna, La., will serve as the shipment’s custodian until further notice, court documents show.

The South Korean trading house isn’t the only company to have raised legal issues with Cosipar and related companies in recent months. Earlier this fall, Stemcor USA Inc. filed its own $5-million lawsuit against Cosipar and AMT in U.S. District Court in Louisiana over material it said hadn’t been delivered (amm.com, Oct. 9).

The trading house, a division of London-based Stemcor Ltd., filed a writ of foreign attachment to have Cosipar-produced material aboard the vessel M/V UBC Santos seized, which was granted by a judge before the case’s voluntary dismissal on Oct. 23.

Stemcor has since filed another suit against the pig iron company and AMT. That suit, filed Dec. 14, claims $2.6 million in damages and asks the court to allow the U.S. Marshals Service to seize the M/V Clipper Kasashio, the same vessel named in Daewoo’s separate complaint.

A source close to the case told AMM that the M/V Clipper Kasashio contains about 30,000 tonnes of pig iron that was en route to another purchaser in the United States, which is said to be mulling its own lawsuit.

Stemcor and Daewoo declined to comment.

Cosipar couldn’t be reached for comment. E-mails to the company’s management weren’t returned this week, while numerous calls placed to the company by AMM sister publication Steel First’s Brazilian bureau this fall had also gone unreturned.

Meanwhile, an employee reached at Cosipar’s Marabá plant in Pará state this week said the company wasn’t currently in operation. A source at Pará-based pig iron producer association Sindiferpa also told Steel First that Cosipar wasn’t operating.

Daewoo made the same allegation in its suit, alleging that as of Nov. 1 Cosipar "suspended the manufacture of pig iron in Brazil and let most of its employees go."

While it’s still too early to know how the cases will play out, a New York-based maritime law expert told AMM that the pig iron could be condemned and sold to pay judgments filed by plaintiffs who had the material seized.