963 F.3d 1112
11th Cir.2020Background
- EGI purchased preferred shares in Chilean company Viña San Rafael and entered a Shareholders’ Agreement granting EGI a put right (Section 10) to force controlling shareholders to buy EGI’s preferred shares at a formulaic price: original purchase price (in UF) + 4% p.a. compounded semiannually + 3% premium.
- Juan C. Coderch guaranteed the payment obligations of the controlling shareholders (Section 11) and was jointly and severally liable.
- EGI exercised the put in 2009; a Chilean arbitrator (Jan. 13, 2012) found breaches and ordered the controlling shareholders (including Coderch) to buy EGI’s shares per the Agreement’s formula; the Award set UF-based figures but did not convert to a final dollar amount.
- EGI sought confirmation in S.D. Fla. under the Panama Convention/FAA; service on Coderch in Brazil was effected via letters rogatory and Brazil’s hora certa (constructive service) procedure; Brazil’s STJ certified service as valid.
- The District Court confirmed the Award and entered a money judgment based on EGI’s conversion (using Jan. 23, 2012), but did not require EGI to tender the shares upon payment.
- On appeal the Eleventh Circuit upheld service and confirmed the Award’s enforceability but vacated and remanded to (1) use Jan. 13, 2012 as the conversion date under the breach-day rule, and (2) require both payment and tender of shares (i.e., mutual performance).
Issues
| Issue | Plaintiff's Argument (EGI) | Defendant's Argument (Coderch) | Held |
|---|---|---|---|
| Validity of foreign service via letters rogatory / hora certa | Service followed the Convention; Brazil’s STJ properly authorized and executed hora certa | Hora certa was ex parte, denied fair opportunity, and procured by fraud — service invalid | Court refused to review Brazil’s ruling on service; comity and treaty allocate jurisdiction to Brazil; service was proper |
| Finality of the Award (currency/conversion omitted) | Award sets final formula; conversion date can be set by law; confirmable | Award non-final because it omits currency/conversion date; must remand to arbitrator | Award is final for confirmation; court applies breach-day rule because EGI’s cause of action arises under U.S. law; conversion date is Jan. 13, 2012 |
| Proper conversion rule (breach-day vs judgment-day) | Use breach-day (date award made) to convert UF to USD | Use Preferred Closing or another date, not award date | Breach-day rule applies; conversion date is the award date (Jan. 13, 2012) |
| Form of relief: specific performance vs money judgment | Confirmation and money judgment appropriate to enforce Award | Award orders specific performance; converting to money judgment gives EGI windfall and fails to enforce tender of shares | Award is an order of specific performance; confirmable, but remedy must require mutual performance — payment by Coderch and tender of shares by EGI (remand to correct enforcement) |
Key Cases Cited
- Prewitt Enters., Inc. v. Org. of Petroleum Exp. Countries, 353 F.3d 916 (11th Cir.) (standards for review of service and foreign-law findings)
- Turner Entm’t Co. v. Degeto Film GmbH, 25 F.3d 1512 (11th Cir.) (factors for international comity review)
- Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co. v. Navimpex Centrala Navala, 989 F.2d 572 (2d Cir.) (when an arbitration award is "made" for purposes of confirmation)
- Rintin Corp. v. Domar, Ltd., 476 F.3d 1254 (11th Cir.) (standard of review on confirmation/vacatur of arbitration awards)
- Hicks v. Guinness, 269 U.S. 71 (U.S. Supreme Court) (breach-day rule for currency conversion)
- Die Deutsche Bank Filiale Nurnberg v. Humphrey, 272 U.S. 517 (U.S. Supreme Court) (judgment-day rule for currency conversion)
- Hilton v. Guyot, 159 U.S. 113 (U.S. Supreme Court) (principles of international comity)