Santiago Appeals Court Annuls US$300 Million Australis Arbitration Award Against Isidoro Quiroga
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TL;DR
- The Santiago Court of Appeals annulled a US$300 million arbitration award against Isidoro Quiroga
- The arbitration involved the sale of Australis Seafoods to China's Joyvio
- The Court found the arbitral tribunal ruled on grounds outside the original claim
- The decision does not address the substance of the underlying dispute
Overview
On a procedural challenge, the Santiago Court of Appeals has annulled an arbitral award ordering Chilean businessman Isidoro Quiroga to pay US$300 million to the Chinese company Joyvio. The dispute arose following the 2019 sale of Australis Seafoods, with Joyvio alleging overpayment as a result of information allegedly concealed during the due diligence process. The Court's ruling voids the CAM Santiago arbitral award in its entirety on procedural grounds.
What Happened
In August 2023, a tribunal under the CAM Santiago ordered Isidoro Quiroga to pay Joyvio US$300 million for an alleged overprice paid during the 2019 sale of Australis Seafoods.
Joyvio claimed Quiroga and associates concealed a policy of overproduction, leading Joyvio to pay an excessive price.
The arbitral tribunal did not attribute fraud but found for compensation based on overpricing.
Quiroga challenged the award in the Santiago Court of Appeals, arguing the award went beyond the original claim for damages and instead imposed a remedy akin to price restitution.
The Court, by majority, agreed with Quiroga and annulled the award entirely, holding that the tribunal exceeded its remit by granting relief on a legal basis not pleaded.
Context
This is reportedly the first time the Santiago Court of Appeals has annulled an arbitral award under Chile's International Commercial Arbitration Law, where annulment grounds are strictly interpreted.
The case is cited as significant among practitioners for its implications on the congruence between arbitral relief and claims pleaded.
The annulment relates only to procedure and does not rule on whether wrongdoing occurred or the merits of the dispute.
Why It Matters
- The annulment marks a rare intervention by the Santiago Court of Appeals in international arbitration awards under Chilean law.
- Legal commentators note this may impact future arbitral practice and interpretations of procedural limits in Chile.
- The outcome leaves uncertainty as to whether Joyvio may file a new arbitration, particularly given questions of prescription and the binding nature of the initial process.