Chinese seafood firm Joyvio, which owns Chilean salmon-farming company Australis, has launched a new legal proceeding against former Australis owner Isidoro Quiroga, marking the latest offensive in a court battle that has carried legal fees for both parties of around USD 50 million (EUR 44 million).
The legal battle commenced in 2023 when Joyvio filed a lawsuit against Quiroga seeking USD 1.22 billion (EUR 1.07 billion) in restitution and damages, accusing him and former Australis executives of fraud and unfair administration during the USD 921 million (EUR 809 million) sale of the firm in 2018. Joyvio alleged that Quiroga and the firm’s board of directors at the time hid, falsified, and adulterated critical information during the sale’s due diligence process, artificially inflating the company’s valuation when it came time to negotiate a sale.
The defendants have called the accusations falsehoods and slander, questioning why the accusations surfaced years after the purchase.
In June of this year, a Santiago, Chile-based appeals court annulled a previous ruling from a Chilean arbitration tribunal that ordered Quiroga and members of his family to pay USD 292 million (EUR 256 million) to Joyvio over what the tribunal had determined was overpricing in the sales process.
The appeals court determined that the tribunal’s decision was outside its scope of action under the terms of the arbitration agreement.
The overturned decision was unprecedented as it marked the first time in Chilean history that an international arbitration tribunal’s decision was overturned.
Within six days of the ruling’s annulment, two executives left Joyvio Food: Qingtong Zhou stepped down from the board, while Shaopeng Chen resigned from the presidency, though he still holds the same position at parent firm Joyvio Group.
“The obvious reading is that they were a consequence of the defeat,” newspaper El Mostrador reported.
Joyvio has now shifted gears and filed a request for new arbitration, which the same tribunal – the Santiago Chamber of Commerce (CAM) – has accepted.
Joyvio insisted in the new request that the appeals court's ruling only overturned the arbitration award but did not address the merits of the case or annul CAM's competence in dispute resolution, a source close to Joyvio told SeafoodSource, confirming local press reports.
For this new round, Joyvio has nominated lawyer Sabina Sacco, who specializes in international investment arbitration, as its co-arbitrator at CAM. Meanwhile, Quiroga’s holding company, Inversiones Benjamín, has until 3 August to nominate its own co-arbitrator, according to reports.
The protracted courtroom sparring is considered the most expensive legal conflict between private parties in Chile’s history, with the altercation spilling out beyond Chile’s borders and reaching jurisdictions in the U.S. and England.
Five experts consulted by El Mostrador estimate that in the international chapter alone, Joyvio has disbursed about USD 23 million (EUR 20.2 million) in legal fees and court costs. It is estimated to have spent another USD 1.7 million (EUR 1.5 million) on commissioning 31 legal, economic, technical, and criminal reports.
In turn, Quiroga’s defense contracted another 31 reports, estimated to cost USD 1.9 million (EUR 1.7 million).
The five experts consulted calculated that in Chile, Joyvio has paid a fixed amount of about USD 3.5 million (EUR 3.1 million) in legal fees, while the defense of Quiroga has racked up USD 6 million (EUR 5.3 million) in fees. The same defense is expected to reap a USD 10 million (EUR 8.8 million) award for overcoming an adverse result in getting the CAM ruling overturned, which would be paid when the case is definitively closed.
Finally, payment to the arbiters at CAM is expected to have cost USD 2.4 million (EUR 2.1 million) so far, bringing the estimated total spent between both sides to USD 48.5 million (EUR 42.6 million), El Mostrador reported.
The total amount does not consider potential payments that could be awarded to the plaintiff’s legal team if they win the overarching lawsuit, which would be a prize equivalent to 15 percent of the recovered amount, with an upper limit of USD 45 million (EUR 39.5 million).
