Case of the Day: EGI-VSR v. Coderch

The case of the day is EGI-VSR, LLC v. Coderch (11th Cir. 2020). EGI and Juan Carlos Celestino Coderch Mitjans were parties to an arbitration in Chile that resulted in an award granting specific performance of a stock purchase agreement to EGI, which had sought to sell its shares in a Chilean wine company, Viña San Rafael S.A., to Coderch, one of the controlling shareholders. EGI sought recognition and enforcement of the award in Miami. Coderch moved to dismiss on the grounds of insufficient service of process and on the grounds that an award of specific performance could not be confirmed under the Panama Convention. (There were other arguments, too, which I’ll ignore). The court denied the motion and confirmed the award, and on appeal, the Eleventh Circuit affirmed.

EGI sought to serve process on Coderch in Brazil by a letter rogatory under the Inter-American Convention. The Brazilian central authority made several efforts to serve process, which were unavailing. EGI therefore asked the Superior Court of Justice to serve the process by citação por hora certa, a particularly formal and fancy form of what we would call service as the defendant’s last and usual place of abode. The Eleventh Circuit made just the point I made the other day about the reasons not to second-guess a foreign central authority that says it has served process under its own law: “Principles of comity counsel against reviewing a foreign court’s determination regarding the interpretation and application of the foreign country’s own laws—especially here, where the operative treaty confers jurisdiction over the issue to the foreign court.” Coderch complained that he had not had an opportunity to contest the use of the hora certa procedure in the STJ, and that if he had challenged it, his appearance in court would have been deemed constructive service. The court rejected this argument on the grounds that the Brazilian public defender had been appointed to represent Coderch’s interests in the proceeding. That’s a good point, but I would add a question: what possible legitimate interest does Coderch have in not being served with process? The court also rejected, on the merits, the view that EGI was guilty of fraud in its arguments to the STJ in favor of the hora certa procedure.

The argument that only awards for money damages can be recognized under the Convention has some appeal, since the uniform laws governing recognition of foreign judgments are limited to money judgments. The appeal is superficial, though: even in the judgments context, judgments other than money judgments can be confirmed as a matter of comity, even though they cannot be confirmed under the statute. In any case, the court found nothing in the Panama Convention limiting recognition of awards to awards of money damages.

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