After examining nginx logs:
"/var/lib/nginx/tmp/client/0000000001" failed (13: Permission denied), client: 192.168.10.100, server: moodle35.mimosinnet.org, request[0/977] /moodle/repository/repository_ajax.php?action=upload HTTP/1.0", host: "192.168.10.101:82", referrer: "http://moodle35.mimosinnet.org/moodle/user/editadvanced.php?id=2&course=1&returnto=profile"
Setting correct permissions in /var/lib/nginx solved the issue.
Cheers!