Justia International Trade Opinion Summaries

Germany and Thailand signed a treaty, providing that disputes concerning investments between Germany or Thailand and an investor of the other party may be resolved by arbitration at the request of either party. The treaty applies to “approved investments” made before the treaty by investors of either country in the territory of the other. Bau initiated arbitration, claiming that Thailand had interfered with investments made, 1989-1997, in a Thai tollway project. An arbitration tribunal convened under agreed terms, which empowered the tribunal to consider objections to jurisdiction and provided that U.N. Commission on International Trade Law Arbitration Rules would apply. Thailand objected to jurisdiction on the ground that Bau’s were not “approved investments” because Bau never obtained a “Certificate of Admission” from Thailand’s Ministry of Foreign Affairs. Bau responded that the project was comprised of “approved investments” because Bau was invited to make the investments by the Thai Council of Ministers, which approved the project at various stages, and because the Thai Board of Investment issued certificates of investment for the project. The tribunal held that it had jurisdiction and made an award in favor of Bau. The district court confirmed. The Second Circuit affirmed, rejecting an argument that the court should have independently adjudicated jurisdiction instead of performing deferential review.View "Schneider v. Kingdom of Thailand" on Justia Law

In 1996 Beloit agreed to build high-speed paper-making machines for Indonesian paper companies. Two of the companies executed promissory notes in favor of Beloit reflecting a principal indebtedness of $43.8 million. The paper companies guaranteed the notes; Beloit assigned them to JPMorgan in exchange for construction financing. The machines were delivered in 1998 but did not run as specified. In 2000 the parties settled claims pertaining to the machines but preserved obligations under the notes. JPMorgan sued for nonpayment. The district court held that warranty-based claims were foreclosed by the settlement and that other defenses lacked merit; it awarded JPMorgan $53 million. After the appeal was filed, JPMorgan issued citations to discover assets. Although the companies raised an international conflict-of-law question, the district court ordered compliance with the citations. The Seventh Circuit affirmed. The settlement waived implied warranty defenses and counterclaims. The fraud defense is also mostly barred; to the extent it is not, the evidence was insufficient to survive summary judgment. The court also rejected defenses that the notes lacked consideration; that the notes were issued for a “special purpose” and were not intended to be repaid; and that JPMorgan is not a holder in due course. The discovery order was not appealable. View "JPMorgan Chase & Co., N.A. v. Asia Pulp & Paper Co., Ltd." on Justia Law

Avisma produces magnesium and titanium sponge in Russia. The process starts with a dehydration step. Most of the resultant raw magnesium is then processed into pure and alloyed magnesium, the subject of an antidumping order issued by Commerce in response to a petition by domestic producers. A portion of the raw magnesium is used to produce titanium sponge. After Commerce imposed a 15.77 percent duty, the Trade Court remanded the case. On remand, Commerce declined to alter the determination. The Trade Court then held that, when determining Avisma’s magnesium production costs for purposes of calculating the constructed value of Avisma’s magnesium, Commerce was required to take into account Avisma’s entire production process, which includes titanium, as well as magnesium. In its second remand determination, Commerce determined the constructed value of Avisma’s magnesium by taking into account Avisma’s entire production process, resulting in an antidumping duty of 8.51 percent. The Trade Court issued final judgment accordingly. The Federal Circuit reversed and reinstated Commerce’s earlier decision. The Trade Court erred in requiring Commerce to consider an affidavit by Avisma’s accountant that Commerce had determined was untimely. View "PSC VSMPO-Avisma Corp. v. United States" on Justia Law

CS manufactures and sells X-ray and metal detection devices for use in public facilities around the world. Tecapro is a private, state-owned company that was formed by the Vietnamese government to advanced technologies into the Vietnamese market. In 2010, Tecapro purchased 28 customized AutoClear X-ray machines from CS for $1,021,156. The contract provides that disputes shall be settled at International Arbitration Center of European countries for claim in the suing party’s country under the rule of the Center. Tecapro initiated arbitration proceedings in Belgium in November 2010. In December 2010, CS notified Tecapro of its intention to commence arbitration proceedings in New Jersey. In January 2011, CS filed its petition to compel arbitration in New Jersey and enjoin Tecapro from proceeding with arbitration in Belgium. The district court concluded that it had subject matter jurisdiction under the U.N.Convention on the Recognition and Enforcement of Foreign Arbitral Awards, that it had personal jurisdiction over Tecapro, and that Tecapro could have sought to arbitrate in Vietnam and CS in New Jersey. The latter is what happened, so “the arbitration shall proceed in New Jersey.” After determining that it had jurisdiction under the Federal Arbitration Act, 9 U.S.C. 1, the Third Circuit affirmed.View "Control Screening LLC v. Technological Application & Prod. Co." on Justia Law

The now-repealed Continued Dumping and Subsidy Offset Act of 2000 (Byrd Amendment) allowed affected domestic producers (ADPs) to receive distributions of antidumping duties collected by the U.S., 19 U.S.C. 1675c. In order to be included on the list of ADPS, a domestic producer must have been either a petitioner or an “interested party in support of the petition” for an antidumping order. Domestic producers could show support either “by letter or through questionnaire response.” The U.S. International Trade Commission found that plaintiff did not qualify as an ADP because its final questionnaire response indicated that it took no position regarding the underlying petition, concerning dumping of crawfish tail meat from China. On remand, the ITC determined that plaintiff qualified, but U.S. Customs found that plaintiff was eligible for distributions for fiscal years 2002 and 2003, but that eligibility applied only to the extent that funds are either recoverable from the affected domestic producers who initially received them or are available in the Special Account. The Federal Circuit reversed, holding that plaintiff is an ADP under the Byrd Amendment and should not be treated as a “second class” ADP.View "PS Chez Sidney,L.L.P. v. United States Int'l Trade Comm'n" on Justia Law

Plaintiff sought damages resulting from a delayed delivery of perishable food items from Puerto Limón, Costa Rica to San Juan, Puerto Rico. The district court dismissed as time-barred by the statute of limitations in the Carriage of Goods by Sea Act, 46 U.S.C. 30701. The First Circuit affirmed,rejecting and argument that the parties meant to incorporate COGSA solely for the purpose of limiting the carrier's liability to $500, per COGSA's limitation of liability provision and equitable arguments.View "Greenpack of PR, Inc. v. Am. President Lines" on Justia Law

Most of the world's reserves of potash, a mineral used primarily in fertilizer, are in Canada, Russia, and Belarus. Defendants are producers with mines in those countries. Plaintiffs are direct and indirect potash purchasers in the U.S. They allege that producers operated a cartel through which they fixed prices in Brazil, China, and India, and that inflated prices in those markets influenced the price of potash in the U.S. Defendants moved to dismiss, arguing that the district court lacked jurisdiction under the Foreign Trade Antitrust Improvements Act, 15 U.S.C. 6a. The district court denied the motion. The Seventh Circuit affirmed. The world market for potash is highly concentrated and U.S. customers account for a high percentage of sales. This is not a “House-that-Jack-Built situation in which action in a foreign country filters through many layers and finally causes a few ripples” in the U.S. Foreign sellers allegedly created a cartel, took steps outside the U.S. to drive the price up of a product that is wanted in the U.S., and, after succeeding, sold that product to U.S. customers. The payment of overcharges by those customers was objectively foreseeable, and the amount of commerce is substantial. View "Minn-Chem, Inc. v. Agrium, Inc." on Justia Law

This case arose from a foreign shipping contract billing dispute between Consorcio Ecuatoriano de Telecomunicaciones S.A. (CONECEL) and Jet Air Service Equador S.A. (JASE). CONECEL filed an application in the Southern District of Florida under 28 U.S.C. 1782 to obtain discovery for use in foreign proceedings in Ecuador. According to CONECEL, the foreign proceedings included both a pending arbitration brought by JASE against CONECEL for nonpayment under the contract, and contemplated civil and private criminal suits CONECEL might bring against two of its former employees who, CONECEL claims, may have violated Ecuador's collusion laws in connection with processing and approving JASE's allegedly inflated invoices. CONECEL's application sought discovery from JASE's United States counterpart, JAS Forwarding (USA), Inc. (JAS USA), which does business in Miami and was involved in the invoicing operations at issue in the dispute. The district court granted the application and authorized CONECEL to issue a subpoena. Thereafter, JASE intervened and moved to quash the subpoena and vacate the order granting the application. The district court denied the motion, as well as a subsequent motion for reconsideration. JASE appealed the denial of both. After thorough review and having had the benefit of oral argument, the Eleventh Circuit affirmed the orders of the district court. the Court concluded that the panel before which which JASE and CONECEL's dispute was pending acts as a first-instance decisionmaker; it permits the gathering and submission of evidence; it resolves the dispute; it issues a binding order; and its order is subject to judicial review. The discovery statute requires nothing more. The Court also held that the district court did not abuse its considerable discretion in granting the section 1782 discovery application over JASE's objections that it would be forced to produce proprietary and confidential information. The application was narrowly tailored and primarily requested information concerning JASE's billing of CONECEL, which was undeniably at issue in the current dispute between the parties." Finally, the district court did not abuse its discretion in denying JASE's motion for reconsideration. View "In re: Application of Consorcio Ecuatoriano" on Justia Law

In its tax return for the year 1997, ConEd claimed multiple deductions pertaining to a lease-in/lease-out (LILO) tax shelter transaction under which a Dutch utility, EZH, a tax-indifferent entity because it is not subject to U.S. taxation, conveyed to ConEd a gas-fired cogeneration plant that delivers power to customers in the Netherlands, then leased it back, followed by a reconveyance to EZH and a sublease. The stated purpose of the arrangement was tax avoidance. LILO transactions accelerate losses to the taxpayer and defer gains. The transaction provided several upfront deductions that allowed ConEd to pay lower taxes in 1997 (and in later years) than it otherwise would have. The IRS disallowed these claimed deductions and assessed a deficiency of $328,066. ConEd paid the deficiency and filed a refund claim; when this claim was denied, ConEd filed suit. The Claims Court awarded ConEd a full refund. The Federal Circuit reversed, applying the substance-over-form doctrine to conclude that ConEd’s claimed deductions must be disallowed. There was a reasonable likelihood that EZH would exercise its purchase option at the conclusion of the ConEd sublease, thus rendering the master lease illusory. View "Consol. Edison Co. of NY v. United States" on Justia Law

When merchandise is sold in the U.S. at less than fair value, the Commerce Department may impose antidumping duties, 19 U.S.C. 1673e(a)(1), 1677b(a)(1), 1677a(a). Commerce generally determines individual margins for each exporter or producer, but if that is not practicable, may investigate a reasonable number of respondents. Others are assigned a separate “all-others” rate. In proceedings involving non-market economy countries, including China, Commerce presumes that exporters and producers are state-controlled, and assigns them a state-wide rate. This presumption is rebuttable; a company that demonstrates sufficient independence from state control may apply for a separate rate. Commerce concluded that the Jiangsu Jianghai Chemical was entitled to a separate rate. The company subsequently challenged the rate calculation. The Court of International Trade held that Commerce did not exceed the scope of a remand order when it recalculated the U.S. price and that the explanation given for calculation of the separate rate was not unreasonable. The Federal Circuit reversed in part and remanded to Commerce to again reconsider its approach to calculating the separate rate. “Commerce must act non-arbitrarily and must explain why its approach is a ‘reasonable method,’” in light alternatives available and with recognition that the calculation will affect only cooperating respondents. View "Changzhou Wujin Fine Chem. Factory Co., Ltd. v. United States" on Justia Law