TBC Consultoria EM Investimentos Financeiros Ltda. v. Gradual Corretora de Cambio, Titulos e Valores Mobiliarios S.A.

At a glance

Parties

TBC Consultoria em Investimentos Financeiros Ltda. (Brazil) v. Gradual Corretora de Cambio, Titulos e Valores Mobiliarios S.A. (Brazil)

Case no.

No. 17 Civ. 3145 (PGG)

Court

U.S. District Court, Southern District of New York (Judge Paul G. Gardephe)

Underlying award(s)

Award of 28 April 2014 by an arbitral tribunal of the Chamber of Conciliation, Mediation and Arbitration CIESP/FIESP (Brazil)

Forum and rules

Petition to confirm under the New York Convention and the Federal Arbitration Act, 9 U.S.C. § 201 et seq.

Treaty

Arbitration clause (Section 12) of the Service Agreement of 14 September 2011

Sector

Securities brokerage

Outcome

Petition granted and the award confirmed (28 August 2020); Gradual did not appear.

Amount

Award: R$5,345,163.61 (bonus payment), R$49,150.42 (damages), R$79,570.99 (arbitration costs) and R$200,000 (legal fees). Judgment: USD 3,145,573.51, including penalty, inflation adjustment and interest, plus post-judgment interest.

The dispute

On 14 September 2011, TBC and Gradual signed a Service Agreement under which TBC acted as Gradual's exclusive autonomous investment agent in Ribeirão Preto, Uberlândia and Goiânia. Gradual owed TBC a Bonus Payment of 1.70 times 12 months' net income if either side chose not to renew the agreement or if Gradual terminated it without cause. TBC gave notice on 4 September 2012 that it would not renew. Gradual then blocked TBC's access to the "Gradual System", which stopped TBC from performing until the term ended. A CIESP/FIESP tribunal found that Gradual had terminated the agreement without cause and awarded TBC the bonus, damages and costs. TBC then petitioned in New York to confirm the award. Gradual was served but did not oppose the petition or appear.

Key holdings

1. Gradual did not respond, so the court treated the petition as akin to an unopposed motion for summary judgment. It reviewed the merits of the record rather than entering a default judgment. pp. 6–7
2. Under 9 U.S.C. § 207, the court must confirm a Convention award unless a ground for refusal applies. Gradual offered no ground for vacating, modifying or correcting the award. pp. 6–7
3. Section 12 of the Service Agreement empowered the tribunal to decide whether Gradual terminated without cause and what damages followed. The award explained its reasons. There was no evidence of corruption, fraud or other impropriety, so there was no basis to deny confirmation. p. 8
4. The award is confirmed and TBC is awarded USD 3,145,573.51. This covers the bonus payment, damages, arbitration costs, legal fees, the late-payment penalty, the inflation adjustment and accrued interest. Post-judgment interest runs under 28 U.S.C. § 1961(a). pp. 8–9

Procedural history

1. 14 September 2011TBC and Gradual sign the Service Agreement.
2. 4 September 2012TBC gives notice that it will not renew the agreement. Gradual then blocks TBC's access to the Gradual System.
3. 27 September 2012TBC files a notice of arbitration with the CIESP/FIESP Chamber.
4. 28 and 31 October 2013The arbitral tribunal holds the hearing; closing arguments follow on 10 January 2014.
5. 28 April 2014The tribunal issues a 59-page award in favour of TBC.
6. 28 August 2020The S.D.N.Y. confirms the award and enters judgment for USD 3,145,573.51.

Tribunal, counsel and experts

Decided by

• Paul G. Gardephe Judge, U.S. District Court, Southern District of New York

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Keywords

• New York Convention
• confirmation of foreign award
• enforcement
• Federal Arbitration Act
• 9 U.S.C. § 207
• unopposed petition
• CIESP/FIESP
• Brazil
• securities brokerage
• investment agent
• termination without cause
• non-renewal
• bonus payment
• IGP-M inflation adjustment
• Southern District of New York

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