Dispute for control of Eldorado can be defined this month
By the end of July, the Justice must take a stand on the request for annulment of the arbitration made by the Batista brothers
This month, the dispute between J&F Investimentos and Paper Excellence (PE) for control of Eldorado Brasil, which has been going on for almost four years, will be the subject of a crucial judgment. By the end of July, the court must decide on the request for annulment of the arbitration made by the Batista brothers, opening space for the Indonesian company to finally take over the pulp producer, or taking the conflict back to square one.
The two sides will still be able to appeal the decision and lengthen the R$15 billion dispute, which gets more expensive as time goes on. This time, however, even if litigation is delayed, a potential transfer of control would be quicker, as Eldorado no longer has J&F-guaranteed debt.
According to sources close to the case, Judge Renata Maciel, from the 2nd Business Court and Arbitration Conflicts, has committed to concluding the judgment on the annulment request by the end of the month, before heading to Brasília, where she will act as a judge. assistant in the cabinet of Minister Villas Bôas Cueva of the Superior Court of Justice (STJ).
If its decision is contrary to J&F, the arbitral tribunal may order the sale of control of Eldorado to be completed. The operation would be relatively simple since the shares held by J&F (50.59% of the total) and the PE resources (about US$ 1 billion) are deposited in court at the bank.
In this case, the transfer of control could not be carried out in at least two situations: if the court is not complete, with the three arbitrators, and if J&F obtains an injunction from the São Paulo Court of Justice (TJ-SP) in the very short-term suspending the effects of the arbitration award, as happened in the current stage of the dispute.
Last year, Judge Renata Maciel herself authorized the transfer of shares to the PE, but J&F managed to suspend it with the 2nd Reserved Chamber of Business Law of the TJ-SP. In case of appeal to the new decision, the analysis will take place in that same chamber.
If the judge decides on the annulment request, a new arbitration would have to be initiated if the PE is not successful in appealing to the other instances.
In the forest-based sector and in the financial market, it is estimated that the loss and damage account to be paid by the loser may exceed US$ 1.3 billion, considering only the free cash generation of the expansion project of the Eldorado, which has yet to get off the ground. So far, the Batista holding company has been defeated by three to zero in the arbitration process.
PE did not comment on the matter. In a statement, J&F stated that it “trusts that the Court will guarantee its right to due process of law: fair, impartial and balanced”.
