Multi-million dollar Chilean arbitration settles

A multi-million US dollar ICC arbitration involving control of the leading beverage company in Chile, Compañia Cervecerias Unida (CCU) was recently settled between Quiñenco (controlled by the Chilean Luksic Group) and Bayerische Brauholding (controlled by the German Schörghuber Group), with the participation of the Dutch giant Heineken. International law firm Freshfields Bruckhaus Deringer and Chilean firm Claro y Cia represented Quiñenco in the dispute.

The dispute arose when Bayerische Brauholding, Quiñenco's joint venture partner in CCU since 1986, announced in February 2001 that it had entered into a joint venture with Heineken, which included its stake in CCU. At that time, Heineken held a 15 per cent stake in both the Argentinean brewer Quilmes, CCU's principal competitor in Argentina and its subsidiary Cervecerias Chile, CCU's principal competitor in Chile.

In July 2001, Quiñenco commenced international arbitration before the ICC against the Schörghuber Group, alleging breach of the shareholders' agreement existing between the Chilean and German partners. After nearly completing the arbitration procedure, agreements were reached between the parties on 14 January 2003.

The agreement results in not only the settlement of the arbitration between Quiñenco and the Schörghuber Group, but the arbitration between Heineken and Quilmes, a previous dispute arising from the latter's merger with the Brazilian giant, AmBev.

Heineken also agreed to acquire the Schörghuber Group's entire stake in CCU, and replace the German brewer as Quiñenco's joint venture partner in CCU. In turn, Schörghuber agreed to make a payment to Quiñenco in July 2001. Simultaneously, Heineken announced that it had agreed with Quilmes on the termination of the Heineken license agreement in Argentina, and the sale by Heineken of its 15 per cent stake in Quilmes.

Freshfields Bruckhaus Deringer's team was led by partner Nigel Blackaby, head of the firm's Latin American dispute resolution team in Paris, together with associate Sylvia Noury; Claro y Cia's team was led by partner Jose María Eyzaguirre, head of the firm's litigation practice, together with associates Nicolás Luco and Ricardo Riesco. Chilean litigation specialist Pablo Rodríguez Grez also acted as counsel for Quiñenco.