US, Canada Issue Three Arbitration Proceedings Against Mexico
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US, Canada Issue Three Arbitration Proceedings Against Mexico

Photo by:   Image by Sergei Tokmakov, Esq. https://Terms.Law from Pixabay
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Tomás Lujambio By Tomás Lujambio | Journalist & Industry Analyst - Tue, 07/25/2023 - 12:48

According to the International Centre for Settlement of Investment Disputes (ICSID), the US and Canada have issued three sets of arbitration proceedings against Mexico, arguing that the country has violated specific terms of the USMCA. 

The cases have been submitted by Canadian companies' Majestic Silver and Silver Bull Resources and US food firm Arbor Confections. The companies argue that Mexico violated manufacturing agreements between the country and the company's executives. 

Mining company Silver Bull filed a lawsuit against Mexico for US$178 million due to the illegal blocking of its project in Sierra Mojada, Coahuila. The Canadian company argues that the Mexican government breached the contract established for the construction of its mining project, which has been halted since September 2019 due to the active opposition from the Cooperative Society of Mining Exploitation known as Mineros Norteños. 

Silver Bull aimed to begin arbitration proceedings in March but decided to delay them. In May 2023, both parties carried out a conciliation meeting but were unable to reach an agreement, so the Canadian company presented its commercial lawsuit. 

Canadian company First Majestic stated that it had started arbitration proceedings against Mexico following a tax dispute. First Majestic argues that "the Government’s actions are contrary to the terms of the Advance Pricing Agreement, which established the methodology for determining PEM’s revenues and taxes for the 2010 to 2014 fiscal years.” While the conflict remains unresolved, First Majestic executives are still developing its existing mineral property assets located in Mexico.

US company Arbor Confections is advocating for the compensation of US$80 million for the unpaid lease of an industrial warehouse in Ciudad Juarez, Chihuahua. Arbor Confections’s Founders Mark Alan and Brad Ducorsky argue that Mexican authorities favored the logistics and warehousing group Accel, granting the latter ownership of a disputed warehouse. The US company says that the Mexican government violated specific parameters expressed within the USMCA by making trade decisions based on political influences and interests. 

Mexico has received 17 arbitration lawsuits in the past three years. The most recent lawsuits might require the appointment of three arbitrators to resolve them, a process that could take several years and costs millions of dollars.

Photo by:   Image by Sergei Tokmakov, Esq. https://Terms.Law from Pixabay

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