Chilean Appeals Court Annuls CAM Arbitral Award in Australis Sale Dispute
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TL;DR
- Santiago appeals court annulled arbitration award in Australis sale dispute.
- The annulled award required Isidoro Quiroga to pay nearly $300 million to Joyvio.
- The dispute concerned alleged misrepresentation in the 2019 salmon company sale.
- Joyvio can challenge the annulment in the Supreme Court or recommence arbitration.
Overview
A divided panel of the Court of Appeals in Santiago, Chile, has annulled an arbitration award issued by the Arbitration and Mediation Center (CAM) that ordered businessman Isidoro Quiroga to pay nearly $300 million to Chinese company Joyvio. The dispute centers on Joyvio's 2019 purchase of salmon producer Australis from Quiroga, valued at approximately $920 million, and allegations of misrepresentation during the sale.
What Happened
In an arbitration at CAM Santiago, Joyvio alleged that Isidoro Quiroga and related parties concealed excess production at Australis, leading to an inflated sale price. Joyvio initially sought damages of $1 billion and rescission of the share purchase agreement.
The arbitral tribunal, comprising Pedro Pablo Vergara, Andrés Jana, and Ramón Cifuentes, ruled that Quiroga should pay around $217 million plus interest-totaling nearly $300 million-to Joyvio. However, the tribunal rejected Joyvio's main allegations of fraud.
Quiroga's legal team appealed to the Santiago Court of Appeals in October, asserting that the arbitral award unexpectedly ordered restitution that was not specifically requested or argued during the proceedings.
The Santiago appeals court's first chamber accepted these arguments, annulled the award in its entirety, and left the future of the dispute open for further action.
Context
The Australis sale in 2019 was one of the largest M&A transactions in Chile's aquaculture sector. The dispute has drawn attention due to its size and the use of institutional arbitration for resolving high-value commercial claims.
After the annulment, the Santiago Chamber of Commerce's CAM issued a statement supporting the robustness of Chile's arbitral system and the existence of valid oversight mechanisms, while noting that the annulment procedure is expressly provided by Chilean arbitration law.
Why It Matters
- The annulment raises questions about the stability and enforceability of major arbitral awards in Chile.
- Joyvio may pursue further remedies by appealing to the Chilean Supreme Court or initiating a new arbitration proceeding.
- The case highlights both the mechanisms for court oversight of arbitration in Chile and potential risks for parties relying on arbitral awards.