Carolina Power & Light Co. v. Uranex

451 F. Supp. 1044 (1977)

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Carolina Power & Light Co. v. Uranex

United States District Court for the Northern District of California
451 F. Supp. 1044 (1977)

Facts

In 1973, Carolina Power & Light Company (CP&L) (plaintiff), a public utility company, entered a contract with Uranex (defendant), a French groupement d'interet economique that marketed uranium. The contract provided for Uranex to deliver uranium concentrates to CP&L. The contract also provided that the parties would submit disputes to arbitration in New York. Following a dramatic rise in the price of uranium fuel in the world market, Uranex could not deliver at the contract price and requested renegotiation. In 1977, CP&L filed a lawsuit in the district court against Uranex. CP&L also proceeded ex parte to attach an 85-million-dollar debt owed to Uranex by Homestake Mining Company (Homestake), a San Francisco–based corporation that marketed uranium in the United States. The debt due to Uranex from Homestake had no relationship to the litigation except as a potential source for CP&L to satisfy any arbitration award or judgment. At the time CP&L filed the lawsuit, CP&L sought to compel Uranex to enter arbitration, but Uranex voluntarily entered arbitration. The arbitration proceedings began in New York as the district court contemplated the lawsuit. Both parties agreed that the district court lacked the power to adjudicate the merits of the dispute due to the arbitration agreement. However, CP&L asked the district court to stay the action and maintain the attachment in order to protect any award that CP&L might receive in the New York arbitration. CP&L asserted that Uranex lacked assets in the United States to satisfy a judgment. Uranex, however, argued that it would be inconsistent with the New York Convention for the district court to maintain the attachment pending the arbitration, citing McCreary Tire & Rubber Co. v. CEAT, S.p.A.)

Rule of Law

Issue

Holding and Reasoning (Peckham, C.J.)

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