Mexico international investment arbitration disputes

Mexico has been involved in several international investment disputes regarding treaty protections under NAFTA and USMCA.

In the case of Legacy Vulcan LLC, an international arbitral tribunal ruled that the Mexican government violated NAFTA by failing to provide fair and equitable treatment. However, the final award from the International Centre for Settlement of Investment Disputes (ICSID) limited compensation to approximately $15.88 million, which is less than 1% of the $1.7 billion originally claimed. This award specifically covers damages related to the closure of the El Corchalito site.

In a separate dispute involving Cyrus Capital Partners, L.P. and Contrarian Capital Management, LLC, an ICSID tribunal ruled that it lacked jurisdiction. The claimants had alleged that a Mexican court injunction regarding TV Azteca debt securities constituted a denial of justice. The tribunal determined the claimants did not qualify as “investors” under NAFTA and did not hold a “legacy investment” as defined by the USMCA, distinguishing between managing an investment and owning or controlling it.