## Facts

- Carolina Power & Light Co. (CP&L), a North Carolina nuclear utility, contracted in 1973 with Uranex, a French entity marketing uranium, for deliveries of uranium concentrates from 1977 to 1986 at agreed prices.
- The contract included an arbitration clause requiring arbitration in New York.
- After a sharp rise in global uranium prices, Uranex sought renegotiation and indicated it could not deliver on the agreed terms; CP&L refused to renegotiate.
- CP&L filed suit in federal court in California and obtained an ex parte writ of attachment against an approximately $85 million debt owed to Uranex by Homestake Mining Co., a California-based company, under a separate uranium contract.
- CP&L asserted the Homestake debt was Uranex’s only substantial U.S. asset and that, without attachment, the funds would be transferred abroad in the ordinary course.
- Uranex voluntarily proceeded to New York arbitration but moved to vacate the attachment, arguing the New York Convention barred such prejudgment security and that quasi in rem attachment was unconstitutional after Shaffer v. Heitner.

## Issues

1. Whether the New York Convention, as implemented in U.S. law, forbids prejudgment attachment to secure satisfaction of a potential arbitral award.
2. Whether, after Shaffer v. Heitner, quasi in rem jurisdiction based on attaching forum property is constitutional when the underlying dispute is unrelated to that property and the defendant is foreign.
3. Whether the federal court may stay merits litigation pending arbitration while maintaining the attachment as security.

## Decision

- The court held the New York Convention does not bar prejudgment attachment used as a conservatory measure that does not interfere with arbitration.
- The court held quasi in rem jurisdiction was consistent with due process because Uranex had sufficient minimum contacts with California through its substantial, purposeful commercial relationship with a California company giving rise to the attached debt.
- The court stayed merits proceedings pending the New York arbitration and maintained the attachment to secure any eventual arbitral award.
- On partial reconsideration, the court clarified aspects of its analysis but did not materially change the result.

## Legal Principles

- The New York Convention does not categorically preclude provisional judicial remedies (including attachment) in aid of arbitration when the measures do not undermine the arbitration agreement or process and are authorized by domestic law.
- After Shaffer v. Heitner, quasi in rem jurisdiction based on attached property must satisfy International Shoe minimum contacts and fair play and substantial justice; the mere presence of property is insufficient.
- A defendant’s purposeful, substantial forum-related commercial activity connected to the attached property can supply the required contacts, even if the merits dispute arises from a different contract.
- A court may stay merits adjudication in favor of arbitration while preserving attached assets to prevent an arbitral award from becoming practically unenforceable.

## Conclusion

The court permitted a prejudgment attachment of a foreign party’s U.S.-based debt as security pending New York arbitration, concluding the New York Convention allowed such conservatory relief and that Shaffer required (and was satisfied by) minimum contacts tied to the attached obligation.


Carolina Power & Light Co. v. Uranex, 451 F. Supp. 1044 (N.D. Cal. 1977)