Consolidated Electrical Distributors, Inc. v. United Renewable Energy Co. [2024]
Applicant Consolidated Electrical Distributors ex parte motion for temporary restraining order against issuer Bank of America.
No. 23-CV-2353 TWR (DEB), slip op. (S.D. Cal. Feb. 13, 2024) [USA]
Type of Lawsuit: Applicant ex parte motion for temporary restraining order against issuer.
Topics: Breach of Contract; Fraud; Injunction; Irreparable Harm; US UCC Rev. Section 5-103; US UCC Section 5-109
Parties:
• Plaintiff/Buyer/Applicant – Consolidated Electrical Distributors, Inc., a Delaware company
• Defendant/Seller/Beneficiary – United Renewable Energy Co., Ltd., a Taiwanese company
• Issuer – Bank of America, N.A.
Underlying Transaction: Non-exclusive Distribution Agreement for import of solar panels to US.
LC: USD 35 million LC; silent as to practice rules and choice of law.
Decision: The US District Court for the Southern District of California, Robinson, J., denied the motion.
Rationale: Temporary restraining order will not issue absent showing of likelihood of success on material fraud claim; insufficient showing of irreparable harm where other avenues available to enforce judgment in foreign jurisdiction.
Factual Summary:
To support its credit line under an amended distribution agreement for solar panels, Consolidated Electrical Distributors, Inc. (Buyer/Applicant) applied for and caused Bank of America, N.A. (Issuer) to issue a USD 35 million standby letter of credit in favor of United Renewable Energy Co., Ltd. (Seller/Beneficiary). The underlying contract was entered late 2020. By early 2022, the parties grew concerned over potential US tariffs on imported solar panels. Accordingly, the parties agreed to another contract amendment whereby Seller/Beneficiary would be protected from significant losses through higher prices, “but agreed to give [Buyer/Applicant] a rebate if the tariff did not go into effect and the right to cancel certain orders”. The amendment, which Seller/Beneficiary claimed was a “side agreement”, stipulated that the right to cancel orders would not apply to “[a]ny product on the water or arrived in the U.S. … until further clarification.” The price increase was agreed April 2022, and Seller/Beneficiary alleged the agreement “and any cancellation right that might have existed” ended when the US announced a solar panel tariff moratorium.
• See other cases with a Temporary Restraining Order TRO.