This is very unfortunate. Instead of picking fights maybe it would have been a smarter move to previously negotiate with the creditor and pay up to 50% of the debt to avoid higher losses to shareholders. Actually this is not the first arbitration they lost. By appealing they're postponing cash disbursement only. Bad management is bad for business.
Verde Agritech, MD&A, November 10, 2017 (Sedar)
"Financial condition - During the quarter the Company made a provision of $488,000 against an unfavourable arbitration decision in favour of a private Brazilian consultancy company that undertook environmental studies between 2010 and 2013. The Company is appealing the decision and estimate that a final decision in this case may take up to 6 years".
Peculiarities of the execution of the arbitration award in Brazil
1. Arbitral decision, judicial title - It is not new the attribution of the status of judicial executive title to the arbitral decision. And it could not be different, given the equation between the arbitration and the judicial sentence provided for in the Brazilian Arbitration Law. Being a judicial title, its enforcement takes place in the form of compliance with the sentence, similar to the execution of a judicial conviction. In a similar way, but not identical.
2. Initial petition - The arbiter lacks ius imperium, the power of execution. Although the arbitrator has the obligation to recognize the obligation, only the judge may forcefully require the debtor to comply with it. Thus, once the arbitration is concluded, and the debtor refuses to comply with the arbitration decision, the creditor is still seeking judicial intervention, inaugurating a new procedural legal relationship.
3. The hypotetical defense of the executed - Specifically in relation to compliance with the arbitration decision, there is a remote hypothesis that the objection may be upheld: the nullity of the arbitration decision for serious defects indicated in the special law itself. Better explaining: the arbitration decision does not depend on judicial approval for its validity, but it is up to the judge to supervise compliance with the unsustainable guarantees of the arbitration process, provided that it is provoked by means of a judicial action with an annulment of the arbitration decision.
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