Eldorado case: J&F tries to remove another arbitrator from the court

The dispute over the arbitration control of Eldorado Brasil, which has been going on for almost four years, has gained a new chapter: J&F has appealed to the courts in a new attempt to remove another arbitrator who is judging the R$15 billion case. Since the decision in favor of Paper Excellence, two arbitrators who formed the court have already resigned, amid questions from the Batista brothers’ holding company.

According to sources close to the dispute, J&F claims that lawyer Paulo Mota Pinto, appointed by the minority partner to replace Anderson Schreiber, who resigned last year, could not join the court because he holds political office in Portugal.

According to the holding company, the Constitution does not allow judges in the country to engage in party-political activities and, therefore, the Portuguese jurist could not be an arbitrator. In the Paper Excellence’s understanding, however, this is a distorted interpretation, given that the position of arbitrator is temporary and not that of a State employee, as is the case with judges.

J&F took this argument to the International Chamber of Commerce (ICC Brasil) on two occasions and requested Mota Pinto’s impeachment but was defeated. Now, a similar request will be analyzed by the common court – in the newly initiated action, J&F requests, in an injunction, the removal of the arbitrator.

In PE, questions to arbitrators, including José Emilio Nunes Pinto, who was chosen by J&F and resigned in April, are seen as a maneuver by the losing part to prevent the arbitration from proceeding. In another arbitration dispute between J&F and PE regarding Eldorado, on the Stock Exchange, the holding company would have resorted to the same strategy, resulting in the resignation of arbitrator Juliana Pela.

The proceedings on the case, which were entering the stage of discussion and calculation of losses and damages, are at a standstill and a potential transfer of control from Eldorado to PE can only occur with the authorization of the court, which must have the complete formation of three arbitrators. This operation depends on a court decision for the request for annulment of the arbitration made by J&F.

Today, the court is composed of President Juan Fernández-Armesto, the only one who remains since the beginning of the procedure, and the Portuguese Paulo Mota Pinto. A source indicates that J&F would have already appointed a replacement for José Emilio Nunes Pinto, but his appointment has not yet been formalized.

J&F appealed to the ordinary court with a request for annulment of the arbitration, also on the grounds of conflict of interest, but there is still no decision in the first instance. The expectation was that Judge Renata Mota Maciel, from the 2nd Business Court and Arbitration Conflicts of the District of São Paulo, would decide on the request between this month and next, but this deadline would have been extended to July, sources point out. While the request is not judged, the effects of the arbitration sentence that determined the forwarding of the sale of control of Eldorado to PE are suspended by preliminary injunction.