Originally from World Arbitration and Mediation Review

I. INTRODUCTION

On April 19, 2017, the Brazilian Superior Court of Justice (“STJ”) declined the recognition and enforcement of an American award based on a violation of Brazil’s public policy because an arbitrator failed to disclose material facts that affected his independence and impartiality.

Case 9.412 US, involved the sale of the group Dedini Agro, a Brazilian group of companies  owned by Adriano Giannetti Dedini Ometto (“Ometto”), to the group ASA Bioenergy Holding A.G. from Spain.   The Spanish corporation entered into a purchase and sale agreement with Adriano Ometto, who transferred his totality of shares and control of the group Dedini Agro, and, consequently, the ownership of sugar and ethanol factories located in São Paulo, Brazil, to ASA Bioenergy.  

When ASA Bioenergy (“Abengoa”) assumed control of the group, Dedini, Abengoa’s officials noticed that Ometto’s factory production was below expectation and Ometto’s representations during the negotiations.  Group Dedini Agro affirmed through Adriano Ometto’s negotiations that the sugar cane mill could produce approximately 7.1 million tons of sugar cane each year, which represented an average value of $100.00 U.S. dollars per ton.  However, this information was not confirmed during the production when the mill capacity was demonstrated to be one million tons below expectations. 

Assuming that Ometto’s representatives omitted and manipulated information during the negotiations, Abengoa initiated two arbitrations under the International Chamber of Commerce (“ICC”) against Adriano Giannetti Dedini Ometto and Adriano Ometto Agrícola Ltda.  The arbitrations were seated in New York with Brazilian Law governing the contract.   In both proceedings, the panel of three arbitrators was composed by Guilhermo Aguiar from King & Spalding LLP; José Emílio from Jose Emilio Nunes Pinto Advogados; and David Rivkin, the chairman, from Debevoise & Plimpton LLP.