Proceedings are bifurcated to hear most of Mexico’s preliminary objections, but assessment of Salini criteria is joined with the merits

You are not logged in. If you are a subscriber, please Login to access. If you are not a subscriber, you can contact us for a rate quote at subscribe@iareporter.com. Alternatively, you can sign up to receive free email headlines here.

Tribunal focuses on likely simplification of proceedings deriving from bifurcation, with consequent savings in terms of time and costs

Multiple preliminary objections require holistic assessment of their potential impact on proceedings when deciding on appropriateness of bifurcation

Mexico raises seven preliminary objections under NAFTA, the UMCA, and the ICSID Convention

Claimants are directed to pay costs

Tribunal majority declines to find jurisdiction based on unclean hands or estoppel doctrines

Tribunal majority rejects claimants’ argument that NAFTA’s substantive provisions remained applicable due to a choice-of-law provision for legacy claims under USMCA

Negotiation history mostly indicates USA’s internal views rather than position of all USMCA parties, and in any event supports USA’s position

Restrictive Interpretation is consistent with USMCA’s object and purpose and other obligations under international law

Good faith cannot be used to contradict treaty’s ordinary meaning

Claimants’ reliance on footnotes and other provisions is unfounded, according to majority

Footnotes and general structure of USMCA confirms Restrictive Interpretation

Ordinary meaning indicates that USMCA parties only agreed to extend NAFTA’s arbitration provisions, and not its substantive provisions, during NAFTA-USMCA transition period

Tribunal sees no presumption either in favor or against jurisdiction

Background: Revocation of pipeline permit leads to NAFTA legacy claim under USMCA

Costs were split according to relative outcome of different stages of the proceedings

Interest set at LIBOR + 2%, compounded semi-annually

Tribunal awarded 42.2 million USD, based on expected exchange rate and country risk premium

Tribunal referred to World Bank Guidelines to define fair market value

Circumstances of the case warranted setting valuation date at day prior to illegal expropriation

Counterfactual scenario cannot ignore regulatory risk

Claimant failed to substantiate multi-million-dollar valuation proposed by commission established under Venezuelan law

Enactment of a general law did not constitute a commitment for the purposes of the BIT’s umbrella clause

Venezuela’s disregard of its own procedures amounted to arbitrary conduct

Tribunal distinguished current MST from Neer v. Mexico standard

Archives