EGI-VSR, LLC v. Richard Leslie Huber, Alexander Leslie Huber, Catrex Limitada, and Dicrex Limitada

At a glance

Parties

EGI-VSR, LLC (petitioner) v. Richard Leslie Huber, Alexander Leslie Huber, Catrex Limitada and Dicrex Limitada (respondents)

Case no.

No. 19 Civ. 6099 (ER)

Court

U.S. District Court, Southern District of New York (Edgardo Ramos, U.S.D.J.)

Underlying award(s)

Final arbitral award rendered in Chile on 13 January 2012 under the arbitration clause of the VSR Shareholders' Agreement

Treaty

Inter-American Convention on International Commercial Arbitration (Panama Convention), as implemented by the FAA, 9 U.S.C. § 300 et seq.

Sector

Wine production; shareholder put right

Outcome

Petition to enforce dismissed as time-barred (27 March 2020). The Court upheld personal jurisdiction and rejected every Panama Convention defence.

Amount

EGI sought USD 28,700,450.07, the put purchase price. Nothing was enforced.

The dispute

EGI-VSR, LLC, a Delaware company, invested about USD 17 million in Viña San Rafael (VSR), a Chilean boutique winery. All VSR shareholders signed a Shareholders' Agreement. It gave EGI a Put Right against the "Controlling Shareholders", among them Richard and Alex Huber, and provided for arbitration in Chile. EGI exercised the Put Right in October 2009. On 13 January 2012 the arbitrator ordered all respondents, jointly and severally, to buy EGI's shares. After a Standstill Agreement with the Hubers was terminated, EGI petitioned in New York on 28 June 2019 to enforce the award against them under the Panama Convention. The Hubers argued that the Court lacked personal jurisdiction over Alex Huber, Catrex and Dicrex, that Article 5 defences applied, and that the petition was time-barred under the FAA's three-year limitation period.

Key holdings

1. The Court has personal jurisdiction over all respondents. They consented through the Standstill Agreement's New York forum selection clause covering "any dispute under this Agreement" and its consent-to-service clause. That consent is effective even though the Agreement's tolling provision is unenforceable. The Court did not decide whether New York's long-arm statute also applied. pp. 11–15
2. The Article 5(1)(b) defence fails. The Hubers chose not to defend themselves in the arbitration, relying on what they understood from EGI. That choice is not an inability to present a defence. pp. 15–16
3. The Article 5(1)(c) and (d) defences fail. Richard and Alex Huber signed the Shareholders' Agreement and are defined as Controlling Shareholders regardless of how many shares they held. All four respondents appeared in the arbitration and agreed to arbitrate by a notarized document dated 27 November 2009. pp. 16–17
4. The Article 5(1)(e) and public policy defences fail. The award gives the framework for calculating a specific monetary sum. Converting it into a judgment is not the improper enforcement of a money judgment. The Court noted that the Hubers had failed to have the award annulled in Chile. pp. 17–19 and n. 8
5. The petition is time-barred under 9 U.S.C. § 207. The enforcement action "arises out of a contract" (the Put Right), so New York General Obligations Law § 17-103 governs the Standstill Agreement. Under that statute, a tolling agreement that purports to toll a limitation period indefinitely is invalid. pp. 19–24
6. Equitable tolling is not warranted, because EGI showed no extraordinary circumstances that prevented timely filing. There is no colorable laches defence. New York's borrowing provision (CPLR § 202) does not apply to a federal Convention enforcement action governed by § 207. pp. 19 n. 9, 24 n. 12, 24–26
7. The motion to dismiss is granted. EGI's motion to strike the second declaration of the Hubers' Chilean law expert is denied as moot. p. 26

Procedural history

1. 19 October 2005EGI buys 4,240,000 preferred shares of VSR.
2. 13 October 2009EGI exercises the Put Right and invokes the arbitration clause. The dispute is submitted to arbitration on 27 November 2009.
3. 13 January 2012Final arbitral award: the respondents are ordered to buy and pay for all of EGI's VSR shares.
4. 12 January 2015EGI begins enforcement proceedings against Juan Coderch in the Southern District of Florida. About a month earlier, EGI had signed a Standstill Agreement with the Hubers.
5. 4 June 2018The Southern District of Florida recognizes the award against Coderch for USD 28,700,450.07. Coderch appealed to the Eleventh Circuit.
6. 7 May 2019EGI gives notice terminating the Standstill Agreement, effective thirty days later.
7. 28 June 2019EGI files its petition in the Southern District of New York. The Hubers move to dismiss on 16 August 2019.
8. 27 March 2020Opinion & Order: the petition is dismissed as time-barred.

Tribunal, counsel and experts

Decided by

• Edgardo Ramos Judge, U.S. District Court, Southern District of New York

Experts

Carolina Coppo Diez (respondent)

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Keywords

• Panama Convention
• enforcement
• statute of limitations
• 9 U.S.C. § 207
• tolling agreement
• standstill agreement
• General Obligations Law § 17-103
• CPLR § 202
• borrowing statute
• personal jurisdiction
• forum selection clause
• put right
• shareholders' agreement
• Viña San Rafael
• Chile
• winery
• equitable tolling

Summary generated with AI from the published documents — refer to the award for the authoritative text.