Lion Mexico Consolidated wins case against Mexico for US47 million
Lion Mexico Consolidated won a case against Mexico caused by an impact on the investments of this company, for which it obtained a compensation of 47 million dollars.
The case was conducted at the International Center for Settlement of Investment Disputes (ICSID) of the World Bank.
In general, States have agreed that ICSID be a forum for the settlement of investor-State disputes in most international investment treaties, as well as in numerous investment contracts and legislation.
The panel was established pursuant to Chapter XI of the North American Free Trade Agreement (NAFTA) and the ICSID Additional Mechanism Regulations.
Likewise, the court determined that Mexico incurred in denial of justice by local courts and failed to provide LMC with fair and equitable treatment pursuant to Article 1105 of NAFTA.
«The Government of Mexico regrets the decision of the Arbitral Tribunal and will carefully analyze the content of the arbitration award to determine the legal actions available to it,» said the Ministry of Economy.
Lion Mexico Consolidated
The company initiated this arbitration against Mexico since 2015.
Likewise, Lion Mexico Consolidated’s claim arose from a ruling issued by the Ninth Commercial Court of the State of Jalisco, on June 27, 2012, which resulted in the cancellation of three promissory notes and three mortgages that existed in favor of of LMC.
This was followed by various judicial and criminal actions. LMC pointed out that the cancellation of the promissory notes and mortgages that existed in their favor, as well as all the other actions presented irregularities to their detriment and argued that said measures constituted a violation by the Government of Mexico of NAFTA.
The Court determined that Mexico had violated NAFTA, derived from the actions of the Judicial Power, for which the Arbitral Tribunal ordered Mexico to pay in favor of the investor 47 million dollars as compensation for the damages, plus the payment of a proportional part of the costs of the procedure.
The claim initially filed by LMC against Mexico exceeded $ 220 million.
However, Mexico submitted jurisdictional objections to the Tribunal as the notes are not an investment under NAFTA. The Tribunal ruled in favor of Mexico on these objections.
Additionally, during the merits phase, the Court dismissed part of the claims for damages presented by LMC, including the application of a 6 percent interest.
