In yet another episode of the legal dispute between the J&F group, of the brothers Joesley and Wesley Batista, and the paper and pulp producer Paper Excellence, judge Renata Maciel, of the 2nd Business Court and Arbitration Conflicts, upheld the arbitration decision that obliges the J&F to transfer to Paper Excellence full control of the capital of Eldorado Brasil Celulose, headquartered in Três Lagoas (MS).
There was previously a decision, won by J&F, which suspended the arbitration award and gave control to Paper Excellence. Paper had made an offer of BRL 15 billion to buy all of Eldorado’s shares, but was left with only 49.4% of the capital.
Eldorado was sold in September 2017 to businessman Jackson Widjaya, from the same family that controls the Asian giant Asia Pulp and Paper (APP), which owns Paper. Disagreements between buyer and seller led the negotiation to court arbitration.
Paper made payments of R$3.8 billion, equivalent to 49.4% of Eldorado. The deal was not concluded because the Batista brothers claimed that the Asians did not release the guarantees provided by the holding company in Eldorado’s debts to pay the creditors.
What companies say
Paper, in a note, says that after the decision of Judge Renata Maciel, it will be able to continue the transfer of the remaining shares of Eldorado and expects to start another arbitration process against J&F to assess losses and damages to be paid in favor of Paper.
“Our focus will now be on integrating and operating Paper Excellence’s new Brazilian unit. Subsequently, we will assess the appropriate time for the expansion of the plant”, said Cláudio Cotrim, CEO of Paper Excellence in Brazil, in a note.
J&F said it was surprised with the publication of the sentence because the action is suspended by decision of the Court of Justice. “If it were not null, the sentence would be reversed in a higher court, since it ignores evidence produced in the records themselves”. The group did not say what steps it would take after the setback.
The previous decision won by J&F considered referee Anderson Scheiber’s duty of disclosure to be breached. J&F says there was eavesdropping on communications between J&F and its lawyers, confessed to before the court and law enforcement authorities and supported by evidence.
“In addition to juggling the evidence, the sentence rewards the opposing party’s lawyers with R$ 600 million in fees for succumbence, an amount higher than what they themselves requested,” J&F reported.
After J&F’s position was published, Paper Excellence issued a statement saying the sentences were not suspended.
“Paper Excellence became aware of a public note released by J&F in which the company once again alleges nullity, now a court decision. We regret that J&F, after maliciously violating the Eldorado sales contract and failing to comply with the arbitration award, attacks the sentence handed down by the Brazilian Courts. It is evident that J&F changes its targets according to its defeats. J&F’s statement about the nullity of the sentence is yet another demonstration of J&F’s absolute lack of respect, this time with the decisions of the Justice. The lawsuits pending in the 2nd Business Court of São Paulo whose sentences were handed down yesterday are not and never have been suspended and this fact was analyzed by Judge Renata Maciel in her sentence”, says the company’s note.
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