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
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 hasnt 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
shipments custodian until further notice, court documents
The South Korean trading house
isnt 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 hadnt 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
cases 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 Daewoos separate
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
Stemcor and Daewoo declined to
Cosipar couldnt be reached
for comment. E-mails to the companys management
werent returned this week, while numerous calls placed to
the company by AMM sister publication Steel
Firsts Brazilian bureau this fall had also gone
Meanwhile, an employee reached
at Cosipars Marabá plant in Pará state this
week said the company wasnt currently in operation. A
source at Pará-based pig iron producer association
Sindiferpa also told Steel First that Cosipar
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
While its 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.
Juan Weik, São Paulo,
contributed to this story.