On 22 May 2018, the Florida District Court confirms an award rendered in favor of the Australian infrastructure company Cardno, except with respect to one of the four sellers who had passed away. This dispute originated in the purchase by Cardno of Caminosca SA, an Ecuadorian company. After the sale, Cardno discovered that the sellers had been engaged in a corruption scheme to secure Ecuadorian government contracts. Cardno filed for arbitration in order to rescind the contract. The Arbitral Tribunal granted its request. Cardno applied to the Florida courts to confirm the award and the sellers applied to have it vacated.
None of the arguments put forward by the sellers convinced the Court. First, they argued that the tribunal exceeded its authority as awarding rescission of a stock market transaction would create an obligation on non-parties to the arbitration such as third-party broker-dealers to complete transfer. The Court held that it was “no more persuasive” than to argue that a transfer is impermissible because it requires the involvement of banks. Then, the Court also rejected the sellers’ argument that the stock exchange transaction was outside of the arbitration agreement’s scope as each transaction constitutes separate and independent agreements because the SPA did govern the stock transactions.