Australis Seafoods wins battle in court war with former owner

A Chilean court rejected a labor lawsuit against Australis filed by Santiago Garretón, a trusted executive of the former owner, Isidoro Quiroga.
Panoramic view of an Australis Seafoods salmon farm. The company's war in court against the former owner and his inner circle continues, but it has won a battle against its former CFO, Santiago Garretón.

Panoramic view of an Australis Seafoods salmon farm. The company's war in court against the former owner and his inner circle continues, but it has won a battle against its former CFO, Santiago Garretón.

Photo: Australis Seafoods.

Today, we have learned a new chapter in the saga of the judicial confrontation between the new and former owners of Australis Seafoods. The Second Labor Court of Santiago, Chile's capital, rejected the labor lawsuit against the company filed by its former Chief Financial Officer, Santiago Garretón. According to the salmon company's release, in the ruling, the court confirmed that the trusted executive of the former owner, Isidoro Quiroga, "seriously breached his contractual responsibilities."

The company states that "this sentence reinforces the lawsuit for unfair administration filed by Australis against Isidoro Quiroga and his inner circle." Garretón is one of the defendants in that lawsuit - known as the Australis case - by the current owner, the Chinese transnational Joyvio.

Cross-claims between Australis and its former CFO

Santiago Garretón filed a labor lawsuit accusing Australis that his dismissal from the company had been unjustified and demanding the payment of $841,769,308. However, in the judgment now known, the court only granted him $10,132,841 for outstanding vacation.

According to Fernando Santibáñez, partner of CS Abogados - and representative of Australis in this case - this judicial decision "ratifies the unconscionability of the claim as well as the forcefulness of the opposing defenses."

The sentence is a severe legal setback for the former CFO of Australis Seafoods and the trusted man of the previous owner, Isidoro Quiroga. As mentioned, Garretón is being sued for disloyal administration in the Australis case, "the biggest fraud ever recorded in Chile's business history," according to the new owners' opinion.

The dispute between the two parties began when, upon his arrival to the position, the current CEO, Andrés Lyon, detected "strong inconsistencies and anomalies in the operation of the company." He immediately informed Joyvio representatives, who requested an arbitration procedure, which led the Asian company to initiate legal action.

The problem was aggravated when, subsequently, the salmon company had to face sanctioning procedures by the Environmental Superintendency of Chile (SMA) for infractions related to overproduction in five sites, and Joyvio accused Quiroga of having concealed this information during the sale of the company.

Later, Australis Seafoods also accused Quiroga and his inner circle - among them Santiago Garretón and the late Ricardo Misraji, who was former Chief Executive Officer - of fraudulent administration during the time they remained at the head of their positions while Joyvio already owned the company. The legal setback suffered now by Garretón is one more argument for this dispute.

Garretón failed to comply with its contractual obligations

"In this case, the basis of the sue is directly linked to the discussion before the labor court since the unfair administration is based on the violation by the directors and executives of their fiduciary duties with Australis," said attorney Jorge Bofill, partner of Bofill, Escobar, Silva.

The judge determined the background information presented by Australis was sufficient to prove the cause for dismissal and that Garretón seriously breached his contractual obligations to the company after being acquired by the Chinese transnational Joyvio.

"It is very remarkable how precise and detailed the judgment is, which analyzed all the evidence rendered in relation to the claims in the lawsuit and dismissed them one by one, ratifying that the conducts described in the dismissal letter are serious and cannot be accepted in the normal development of an employment relationship," explained attorney Fernando Santibáñez.

Likewise, the court's ruling also considers it proven that Australis' ex-CFO violated "the integrity of the systems and the confidentiality of the information" by allowing former CEO Ricardo Misraji to have access to the systems and his corporate email - and so, to confidential information of the company - when the latter was no longer part of it.

"Garretón's conducts that motivated his dismissal occurred at the same time that Misraji had demanded Isidoro Quiroga to pay the amounts to which the latter had committed in 2019 so that he would continue to watch over his interests from his position in Australis," stated attorney Bofill.

As WeAreAquaculture reported last year, the emails between Misraji and Garretón were a fundamental part of their defense against Australis Seafoods. However, this time it seems that those same emails have turned against the former CFO.

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