Investment Treaty Arbitration

Last verified on Monday 21st August 2023

Investment Treaty Arbitration: Mexico

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Overview of investment treaty programme

1. What are the key features of the investment treaties to which this country is a party?

Mexico

BIT/MIT

Substantive protections

Procedural rights

Fair and Equitable Treatment (FET)

Expropriation

Protection and security

Most-

favoured-

nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

Argentina (22 July 1998)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Austria (26 March 2001)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Bahrain (30 July 2014)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Belarus (27 August 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Belgium-Luxembourg (18 March 2003)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

China (6 June 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Cuba (5 april 2002)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Czech Republic (13 March 2004)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Denmark (24 September 2000)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Finland (20 August 2000)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

France (11 October 2000)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Germany (23 February 2001)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Greece (3 October 2002)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Hong Kong (16 June 2021)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Iceland (28 April 2006)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

India (23 February 2008)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Italy (5 December 2002)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Korea (28 June 2002)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Kuwait (28 April 2016)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Netherlands (1 October 1999)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Portugal (4 September 2000)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Singapore (3 April 2011)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Slovakia (8 April 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Spain (3 April 2008)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Sweden (1 July 2001)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Switzerland (14 March 1996)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Trinidad and Tobago (16 September 2007)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Turkey (17 December 2017)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

United Arab Emirates (25 January 2018)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

United Kingdom (25 July 2007)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Uruguay (7 July 2002)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

 

FTA

 

 

 

Substantive protections

Procedural rights

Fair and Equitable Treatment (FET)

Expropriation

Protection and security

Most-

Favoured-

nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

Central America (1 September 2012)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Chile (1 August 1990)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Colombia (11 June 2011)

No

Yes

No

Yes

No

6 months

Yes

Yes

CPTPP (30 December 2018)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

EFTA (1 July 2001)

 

Yes

No

Yes

Yes

No

No

No

Yes

Israel (1 July 2000)

No

No

No

Yes

No

No

Yes

Yes

Japan (1 April 2005)

Yes

Yes

Yes

Yes

No

180 days

Yes

Yes

Pacific Alliance (6 June 2012) and its Additional Protocol (1 May 2016)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Panama (1 July 2015)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Peru (1 February 2012)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Uruguay (15 July 2004)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

USMCA (1 July 2020)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

 

Answer contributed by , , , and

Qualifying criteria – any unique or distinguishing features?

2. What are the distinguishing features of the definition of “investor” in this country’s investment treaties?

Mexico

Issue

Distinguishing features

General definition of investor

Investors are broadly defined in most Mexican investment instruments as either legal entities or natural persons that “have made” or “are making” and investment in Mexico’s territory. However, some investment treaties have broadened such definition to encompass persons or entities that “seek to make an investment” and have made concrete actions in accordance with legitimate expectations regarding a prospective investment (eg, Cuba and Switzerland BITs, as well as CPTPP, Central America, Pacific Alliance, USMCA, Uruguay, Chile and Japan FTAs).

Legal entities

For a legal entity to be considered a foreign investor, most Mexican investment instruments require such an entity to be incorporated under the laws and regulations of the counterparty to the relevant investment treaty. Additionally, some investment instruments provide additional requirements that a legal entity must meet to be deemed a foreign investor under the relevant treaties.

Namely, some instruments require the relevant legal entity to have its seat of business be located in the same place where it was incorporated (eg, Argentina, Belgium–Luxembourg, Czech Republic, Denmark, France, Italy, Portugal, Spain and Uruguay BITs) and/or to conduct substantive business activity in the territory of the counterparty of the host country (eg, Bahrain, Belarus, China, Hong Kong, India, Kuwait, Singapore, Slovakia, Trinidad and Tobago, Turkey, the United Arab Emirates and the United Kingdom BITs).

Natural persons

For natural persons to be regarded as foreign investors, most Mexican investment treaties require that such persons be deemed a “national” or “citizen” of the relevant treaty’s counterparty. Apart from a few exceptions (Cuba BIT), Mexican investment treaties do not impose a permanent residency requirement to consider a natural person a foreign investor. Thus, insofar as domestic law does not impose a residency requirement to consider a natural person as a “national” or “citizen” to the relevant country, such residency requirement does not need to be met to deem a natural person as a foreign investor.

Some investment treaties (eg, Uruguay BIT) exclude natural persons that are nationals of both Mexico and the other contracting party. Other investment treaties (eg, Pacific Alliance and USMCA) establish that, whenever a natural person has a dual nationality or citizenship, the dominant and effective nationality shall prevail to consider the natural person as a foreign investor.

Government and state enterprises

Some Mexican investment instruments include the government of the other contracting party in their definition of investor (eg, Kuwait, Singapore and United Arab Emirates). Further, some Mexican treaties also consider state-owned or controlled enterprises as foreign investors, even though the respective governments do not fall under such a definition (eg, Chile, Colombia, Panama and Peru FTAs).

Answer contributed by , , , and

3. What are the distinguishing features of the definition of "investment" in this country’s investment treaties?

Mexico

Issue

Distinguishing features

General definition of investment

Most Mexican investment treaties provide a broad definition for investment, relying on limitations to the list of eligible assets to limit its scope, rather than in restricting the definition itself. Nonetheless, certain investment instruments limit the scope of their definition of investment as follows:

  • The Central America, CPTPP, India, Pacific Alliance, Panama and USMCA treaties establish that an investment must have one of the following characteristics: commitment of capital or other resources, expectation of gain or profit or assumption of risks.
  • The Belgium–Luxembourg, Finland, Greece, Iceland and Uruguay BITs establish that an investment must be made for economic objectives/benefits. The France and Germany BITs also provide that the investment should be acquired or used for “other business purposes/management objectives”.
  • Also, the Austria, Belgium-Luxembourg, Denmark and Germany BITs provide that the investment must have the purpose of establishing lasting economic relationships that allow effective influence in its management or administration.

Eligible assets

As explained above, the definition of investment under most Mexican treaties is broad and, hence, whether a specific asset falls into the scope of the definition should be construed according to such broadness. Nonetheless, most Mexican investment instruments provide a list of assets which can considered an investment under their respective definitions. Some of the most common examples of eligible assets included in such non-exhaustive lists are the following:

  • shares, stocks, and any form of equity participation;
  • tangible or intangible property acquired for economic or business purposes;
  • intellectual property rights (except for China, Bahrain, Slovakia and Trinidad and Tobago BITs);
  • loans, credits, security debts, and claims of money or to any performance under contract depending on such assets’ maturity; and
  • enterprises.

Non-eligible assets

Some investment treaties expressly exclude assets from the definition of investment. For instance, some instruments exclude debt securities, loans to enterprises and credits and monetary claims from state enterprises or foreign governments (eg, Bahrain, Belarus, China, Czech Republic, Denmark, France, Hong Kong, Iceland, India, Italy, Kuwait, Netherlands, Portugal, Slovakia, Trinidad and Tobago, the United Arab Emirates and Uruguay BITs), while other instruments exclude payment obligations and credit grants to state enterprises or foreign governments (eg, Denmark, Finland, Greece, Korea, Sweden and Switzerland BITs).

Changes in the form of an investment

Some of Mexico’s investment instruments establish that an investment’s changes to its form will not affect its treatment and protection, insofar as such change conforms with the definition of investment under the relevant treaty (Germany, Portugal, Slovakia, Sweden, the United Kingdom and Uruguay BITs).

Indirect control of an investment

Some investment treaties grant investment status to assets that are indirectly controlled or owned by an investor (eg, Austria, Central America, CPTPP, Germany, Kuwait, Pacific Alliance, Panama, Singapore, Sweden, Switzerland and USMCA).

Answer contributed by , , , and

Substantive protections – any unique or distinguishing features?

4. What are the distinguishing features of the fair and equitable treatment standard in this country’s investment treaties?

Mexico

Issue

Distinguishing features

Scope of standard

In most cases, Mexico’s investment instruments broadly provide that Mexico shall give FET to investments. Nonetheless, FET has been equated to the minimum standard of treatment for aliens under customary international law. This construction of the FET standard is expressly formulated in many of the most recent BITs executed by Mexico (Bahrain, India, Singapore, Trinidad and Tobago and the United Arab Emirates, for example). It should also be noted that certain treaties (eg, Italy) extend the protection granted by the FET standard to reinvestment of returns and increases in capital in relation to the initial investment.

Specific situations that constitute violations to the FET standard

Despite the broad definition of FET under most of Mexico’s investment instruments, some treaties explicitly categorise certain situations as violations of the FET protections. Some of the most relevant examples of these specifications are the following:

  • Some treaties consider access to justice before criminal, civil and administrative courts and under the principles of due process as a requirement set by the FET standard (eg, Central America, CPTPP, Hong Kong, India, Pacific Alliance, Panama and USMCA).
  • Some treaties clarify that the FET standard prohibits the contracting parties from imposing arbitrary or discriminatory measures to the management, operation, maintenance, use, enjoyment, sale, and liquidation of investments (eg, Belgium–Luxembourg, Cuba, Denmark, Finland, Germany, Greece, India, Korea, Netherlands, Sweden and Switzerland).

Specific situations that do not constitute violations to the FET standard

Some investment treaties specify certain situations that shall not be construed as a violation of the FET standard. Some of the most relevant examples of such exclusions are the following.

  • Non-discriminatory or arbitrary measures regarding public order/public policy or national security do not constitute a breach of the FET standard (eg, Belgium–Luxembourg).
  • The mere fact of taking or failing to take actions consistent with an investor’s expectations does not constitute a breach, even if there is loss or damages (eg, CPTPP and USMCA FTAs).

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5. What are the distinguishing features of the protection against expropriation standard in this country’s investment treaties?

Mexico

Issue

Distinguishing features

Conditions for expropiation

Most of Mexico’s investment instruments prohibit expropriation or nationalisation of a protected investment, unless the measures are:

  • aimed at a public purpose, such as a security or national interest;
  • based on non-discriminatory grounds;
  • made in accordance with the due process of law; and
  • accompanied by payment as compensation/indemnification.

Indirect expropriation

Most of Mexico’s investment instruments prohibit both “direct and indirect” expropriation or nationalisation of protected investments, with some treaties further clarifying that measures that are “tantamount or equivalent” to nationalisation or expropriation are prohibited (eg, Belgium–Luxembourg, Denmark, Italy, Korea and Switzerland).

Further, some treaties (CPTPP, Hong Kong, Pacific Alliance, for example) expressly define indirect expropriation by stating that such measures have an effect that is equivalent to expropriation, but without formal transfer of title or outright seizure. Establishing an indirect expropriation requires a case-by-case and fact-intensive analysis but, nevertheless, some of these treaties include a series of guiding criteria to categorise a measure as an indirect expropriation, such as:

  • the economic impact of the measures on the investment;
  • the extent of the impact on distinct, reasonable investment-backed expectations; and
  • the nature of the measures adopted by the relevant government.

Content of compensation

The specific content of the compensation stemming from an expropriation varies in each specific treaty. Notwithstanding, concerning the content of an expropriation related compensation, most of Mexico’s investment treaties state that any compensation be:

  • paid promptly;
  • paid in freely usable currency without delay; and
  • be fully realisable and freely transferable.

Finally, most investment instruments include “interest at a commercially reasonable rate for that currency from the date of expropriation until the date of actual payment” as part of the compensation. However, Bahrain BIT defines it as “a daily rate of compensation”.

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6. What are the distinguishing features of the national treatment/most-favoured-nation treatment standard in this country’s investment treaties?

Mexico

Issue

Distinguishing features

Scope of application of national treatment (NT) and most favoured nation (MFN) standard 

The majority of Mexico’s investment treaties include the NT and MFN substantive protections. Under the NT standard, each contracting party is bound to accord to investors and their investments treatment no less favourable than it affords to its own investors and investments. The MFN standard requires parties to grant investors and their investments treatment no less favourable than the applicable to investors and investments of any third state. Under some BITs (eg, Czech Republic, Italy, Korea and the United Kingdom) NT and MFN are applicable not only to investments but also to their returns. Similarly, the Finland and Uruguay BIT provide that NT and MFN also covered the rents related or generated by the covered investments.

In most BITs, both protections relate to the management, maintenance, use, enjoyment or disposition of the investments. Therefore, NT and MFN normally do not extend to the establishment, acquisition or expansion of the investments. However, FTAs such as USMCA or CPTPP provide that MFN and NT are applicable to the establishment, acquisition, and expansion of investments.

Most treaties do not establish specific circumstances in which these protections are applicable. A notable exception is the economic partnership treaty between Mexico and Japan, which specifically provides that MFN is applicable “with respect to access to the courts of justice and administrative tribunals and agencies in all degrees of jurisdiction, both in pursuit and in defense of such investor’s rights”.

“In like circumstances”

Some of Mexico’s investment treaties specify that the NT and MFN protections should be accorded only to investors and investments that are “in like circumstances” to the investors and investments of national and third-party investors, respectively. Some treaties, such as USMCA and CPTPP, provide that the “in like circumstances” test shall depend “on the totality of the circumstances, including relevant treatment between investors or investments on the basis of legitimate public welfare objectives”.

Among the treaties that do not include the “in like circumstances” requirement are the Argentina, Austria, Belgium–Luxembourg, Denmark, Finland, France, Germany, Greece, Italy, Korea, Portugal and Sweden BITs.

Common limitations

Most of the BITs provide that NT and MFN do not generate the obligation to accord investors and their investments the benefits, treatment, privilege or preference derived from (i) existing or future regional economic integration organisations, free trade areas, customs unions, monetary unions or similar arrangements of which either contracting party is a party thereof, and (ii) any rights or obligations of a contracting party resulting from international agreements related to taxation.

Extension to the whole treaty

Most of the BITs are silent on the issue of whether MFN treatment is also applicable to dispute settlement provisions. Some treaties (eg, CPTPP, Central America, Panama and United Arab Emirates) expressly provide that MFN does not apply to dispute settlement provisions of other treaties.

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7. What are the distinguishing features of the obligation to provide protection and security to qualifying investments in this country’s investment treaties?

Mexico

Issue

Distinguishing features

Scope of obligation

Most of the investment treaties executed by Mexico afford the investments made by investors of the contracting parties full protection and security (FPS). Generally, this standard of treatment is referred to as “full protection and security”. Some treaties, however, use different wordings. For example, the Austria and Finland BITs refer to “full and constant protection and security”. The Belgium/Luxembourg BIT uses “continued protection and security”, and the France BIT refers to “full and complete protection and security”. Most treaties do not define the scope of the obligations that arise under the FPS standard.

Relationship with customary international law

Most of the most recent BITs executed by Mexico link FPS to customary international law. Some of these treaties include United Arab Emirates, Hong Kong, Turkey, Singapore, Spain, Panama, Kuwait, Central America, CPTPP and USMCA. These treaties specify that the FPS standard does not impose obligations beyond those inherent to the minimum standard of treatment under customary international law. The Central America, CPTPP, Pacific Alliance, Panama and USMCA FTAs require the contracting parties to provide “the level of police protection required under customary international law”.

Answer contributed by , , , and

8. What are the distinguishing features of the umbrella clauses contained within this country’s investment treaties?

Mexico

Issue

Distinguishing features

Scope of the obligation

Approximately one-third of Mexico’s BITs contain umbrella clauses. As a rule, the formulation of the umbrella clauses is the following: “Each Contracting State shall observe any other obligation in writing, it has assumed with regard to investments in its territory by nationals or companies of the other Contracting State; the disputes arising from such obligations, shall be settled only under the terms and conditions of the respective contract.” One notable exception is the Switzerland BIT, which provides for a broader scope of protection by referring to “any obligation” each party assumed with regards to covered investments, not limiting it to obligations in writing.

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9. What are the other most important substantive rights provided to qualifying investors in this country?

Mexico

Issue

Distinguishing features

More favourable treatment

Many of Mexico’s BITs provide that if a particular matter or issue is governed simultaneously by the investment treaty and another international agreement or the national legislation of the contracting parties, the most favourable treatment shall apply to the investor. Among the BIT that include this provision are Argentina, Bahrain, Belgium–Luxembourg, Cuba, Czech Republic, Finland, France, Germany, Greece, Italy, Korea, Netherlands, Portugal, Switzerland, the United Kingdom and Uruguay.

Compensations for losses

Except for the Denmark BIT, all other treaties indicate that investors who suffer losses owing to war, armed conflict, riot, civil unrest, state of national emergency or similar events shall receive treatment no less favourable to the treatment given to national and third-party investors with regards to the restitution, compensation and indemnification of the losses.

USMCA and CPTPP provide that this protection encompasses both the requisitioning of the investment or by the contracting parties’ armed forces, as well as the destruction of the investment by the contracting parties’ armed forces, which was not required by the necessity of the situation.

The Switzerland BIT uses as particularly extensive language in connection with this protection as it covers situations of war and riot, as well as acts of God and force majeure events.

Free transfer of payments

Most of the BITs entered into by Mexico guarantee the free transfer of all payments relating to investments and their returns. Some BITs grant this specific protection only to investors (eg, Switzerland, Italy or Korea), while others use a more general wording stating that it applies to “transfers relating to a covered investment” (eg, USMCA) or “payments relating to an investment by nationals or companies of the other Contracting State” (eg, Germany).

Answer contributed by , , , and

10. Do this country’s investment treaties exclude liability through carve-outs, non-precluded measures clauses, or denial of benefits clauses?

Mexico

Issue

Distinguishing features

Exclusions

Some of Mexico’s BITs provide that their dispute settlement provisions shall not apply with respect to certain kinds of resolutions which prohibit or restrict the acquisition of an investment for national security reasons. Among the treaties that include this kind of provision are Austria, Belgium-Luxembourg, Chile, Cuba, Finland, Germany, Iceland, Italy, Peru, Sweden, Switzerland and Uruguay.

General exceptions

Recent Mexico BITs indicate that their content shall not prevent contracting parties from adopting and enforcing non-discriminatory measures appropriate to safeguard certain interests. Among these are:

  • Ensuring that investment activity in its area is undertaken in a manner sensitive to Environmental, health, or other regulatory objectives (eg, Central America, Chile, Colombia, CPTPP, Hong Kong, Japan, Pacific Alliance, Peru, Turkey).
  • Essential security interests or circumstances of extreme emergency in accordance with its laws (eg, India).
  • International peace and security under the UN Charter (eg, Chile and Turkey).

Denial of benefits

Recent generation BITs include denial of benefits clauses for different scenarios. For example, Mexico’s BIT provides that contracting parties may deny benefits to (i) investments owned or controlled by nationals or companies of third parties (eg, China, the United Arab Emirates or Kuwait), and (ii) investor companies of the other contracting party when the company is controlled by a person of a non-party or of the denying party and the enterprise does not have substantial activities in the territory of any party other than the denying party (eg, USMCA).

The BITs also contemplate different mechanisms for the application of the denial of benefits clauses. For example, some treaties provide that the decision should be made jointly and in consultation with the other party (eg, Belarus, Kuwait, Trinidad and Tobago, or the United Arab Emirates). Others only require that the decision be previously notified to the other contracting party (eg, Turkey or Peru).

Answer contributed by , , , and

Procedural rights in this country’s investment treaties

11. Are there any relevant issues related to procedural rights in this country’s investment treaties?

Mexico

Issue

Distinguishing features

Fork-in-the-road

Some of Mexico’s investment instruments include fork-in-the-road clauses. Generally, these clauses indicate that investors may not submit claim arising from the investment treaty to the national courts and to a ICSID tribunal and their choice of forum for the settlement of the dispute will be final. Among the treaties that include fork-in-the-road clauses are: (eg, Central America, Chile, CPTPP, Czech Republic, Iceland, India, Japan, Korea, Pacific Alliance, Panama, Spain, Sweden, Switzerland and the United Kingdom).

Fork-in-the-road clauses may include limitations of exceptions. For example, the fork-in-the-road clause of USMCA provides that it is only applicable to investors of the United States that alleged breaches of the treaty as distinguished from the breach of other obligations under Mexican law. Other fork-in-the-road clauses establish that they are not applicable to administrative proceedings against authorities the presumptive breaching measure (eg, Argentina or Colombia) or proceedings for injunctive, declaratory or extraordinary relief not involving the payment of damages (eg, Korea, Greece and Portugal), among others.

A couple of BITs provide that investors may submit a dispute that was previously brought to the domestic courts before an arbitral tribunal provided that the competent court has not rendered judgment in the first instance or on the merits of the case.

Waiver

Many investment instruments require that prior to submitting a claim to arbitration the investor and, where applicable, the relevant enterprise waive its right to initiate or continue before any administrative tribunal or court of a contracting party any proceedings with respect to the allegedly breaching measure (eg, Turkey, USMCA, Korea, Iceland, Slovakia or India).

Limitation periods 

Most of Mexico's treaties establish a limitation period for the submission of claims to arbitration. Generally, the limitation period is three years from the moment in which the claimant first acquired or should have acquired knowledge of the breach and the resulting loss or damage. Some instruments deviate from this general rule. For example, Argentina, Austria, Denmark, Finland, France, Germany, Sweden, Turkey and USMCA treaties set the limitation period to four years. The CPTPP FTA establishes a three year and six months limitations period.

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12. What is the approach taken in this country’s investment treaties to standing dispute resolution bodies, bilateral or multilateral?

Mexico

Mexico’s BITs do not establish any standing dispute resolution body.

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13. What is the status of this country’s investment treaties?

Mexico

General remarks

Most of Mexico BITs contain termination provisions that establish that the relevant treaty shall remain in force indefinitely, in periods of 10 years or five years (eg, Italy) until any of the contracting parties submit a written notice of termination 12 months in advance, or six months (eg, Belgium-Luxembourg). At this moment, the Bahrain BIT is the treaty closest to its natural termination date, but there is no information on a notice of termination filed by any of the parties. Additionally, most of Mexico's BITs contain sunset clauses meaning that, regarding investments established while the relevant treaty remained in force, such provisions will retain protection under the treaty for a set period following the treaty’s termination.

Investment treaties in force

The following BITs executed by Mexico remain in force: Hong Kong, Brazil, the United Arab Emirates, Turkey, Kuwait, Bahrain, Singapore, Belarus, China, Slovakia, Spain, Trinidad and Tobago, the United Kingdom, Iceland, Czech Republic, BLEU (Belgium–Luxembourg Economic Union), Italy, Greece, Uruguay, Republic of Korea, Cuba, Sweden, Austria, Germany, France, Denmark, Portugal, Finland, Netherlands, Argentina and Switzerland.

The following treaties with investment provisions (other than BITs) executed by Mexico remain in force: USMCA, CPTPP, Pacific Alliance Additional Protocol, Mexico–Panama FTA, Central America–Mexico FTA, Mexico–Peru FTA, MERCOSUR–Mexico Complementation Agreement, Japan–Mexico EPA, Mexico–Uruguay FTA, EFTA–Mexico FTA, Mexico–EC Cooperation Agreement, Mexico–Chile FTA, Mexico–New Zealand TIFA, Colombia–Mexico–Venezuela FTA and LAIA Treaty.

Investment treaties that were terminated or not in force

The following BITs executed by Mexico have been terminated or are otherwise not in force: Spain (1995), Australia, Panama (2005), India and Haiti (signed but not in force).

The following treaties with investment provisions (other than BITs) executed by Mexico have been terminated or are otherwise not in force: Mexico–Nicaragua FTA, TPP (signed but not in force) and NAFTA (substituted by USMCA).

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Practicalities of commencing an investment treaty claim against this country

14. To which governmental entity should notice of a dispute against this country under an investment treaty be sent? Is there a particular person or office to whom a dispute notice against this country should be addressed?

Mexico

Government entity to which claim notices are sent

The notice of intent for an arbitration against Mexico shall be delivered at the Dirección General de Consultoría Jurídica de Comercio Internacional, which is an office of the Mexican Ministry of Economy.

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15. Which government department or departments manage investment treaty arbitrations on behalf of this country?

Mexico

Government department that manages investment treaty arbitrations

The Ministry of Economy, through the Dirección General de Consultoría Jurídica de Comercio Internacional manages all investment treaty arbitrations filed against Mexico.  

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16. Are internal or external counsel used, or expected to be used, by the state in investment treaty arbitrations? If external counsel are used, does the state normally go through a formal public procurement process when hiring them?

Mexico

Internal/External counsel

As explained, Mexico handles arbitrations through the Dirección General de Consultoría Jurídica de Comercio Internacional, which has its own legal team and who are involved in every arbitration brought against Mexico. However, this office is typically assisted by external counsel, so participation of both internal and external counsel should be expected.

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Practicalities of enforcing an investment treaty claim against this country

17. Has the country signed and ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)? Please identify any legislation implementing the Washington Convention.

Mexico

Washington Convention implementing legislation

Mexico signed, ratified, and published the Washington Convention in 2018, and it entered into force on 26 August 2018.

Under article 133 of the Mexican Constitution, approved and published international treaties automatically become part of Mexican law, obviating the need for additional legislation for their implementation.

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18. Has the country signed and ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention)? Please identify any legislation implementing the New York Convention.

Mexico

New York Convention implementing legislation

Mexico signed the New York Convention on 14 April 1971 and published it on 22 June 1971. Additionally, Mexico incorporated the UNCITRAL Model Law on Arbitration in its domestic legislation by incorporating it into its Commerce Code.

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19. Does the country have legislation governing non-ICSID investment arbitrations seated within its territory?

Mexico

Legislation governing non-ICSID arbitrations

Despite Mexico’s involvement in UNCITRAL arbitrations, such as the cases of GAMI Investments, Inc and International Thunderbird Gaming Corporation, there is currently no dedicated legislation for non-ICSID arbitrations in the country.

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20. Does the state have a history of voluntary compliance with adverse investment treaty awards; or have additional proceedings been necessary to enforce these against the state?

Mexico

Compliance with adverse awards

To date, Mexico has honoured all publicly available adverse awards.

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21. Describe the national government’s attitude towards investment treaty arbitration.

Mexico

Attitude of government towards investment treaty arbitration

Mexico’s government attitude towards investment treaty arbitration is favourable, evidenced by the over 30 BITs entered into by Mexico as well as several free trade agreements.

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22. To what extent have local courts been supportive and respectful of investment treaty arbitration, including the enforcement of awards?

Mexico

Attitude of local courts towards investment treaty arbitration

From the cases publicly available, there has been no reluctance towards investment treaty arbitration, as Mexico has willingly and voluntarily complied with the awards rendered in investment arbitrations.

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National legislation protecting inward investments

23. Is there any national legislation that protects inward foreign investment enacted in this country? Describe the content.

Mexico

National legislation

Substantive protections

Procedural rights

Fair and Equitable Treatment (FET)

Expropriation

Other

Local courts

Arbitration

Foreign Investment Law

No

No

 

The Foreign Investment Law establishes the general framework for foreign investors interested in participating in Mexico's economy, generally allowing all foreign investment to operate in Mexico, with some exceptions in specific sectors. However, this law does not explicitly contemplate specific types of protections or rights for foreign investors.

No

No

Expropriation Law

No

Yes

The Expropriation Law protects private property of foreign and domestic investors against expropriation, by regulating the procedures, modalities and execution of expropriations in Mexican territory.

Yes

No

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National legislation protecting outgoing foreign investment

24. Does the country have an investment guarantee scheme or offer political risk insurance that protects local investors when investing abroad? If so, what are the qualifying criteria, substantive protections provided and the means by which an investor can invoke the protections?

Mexico

Relevant guarantee scheme

Qualifying criteria, substantive protections provided and practical considerations

No

N/A

 

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Awards

25. Please provide a list of any available arbitration awards or cases initiated involving this country’s investment treaties.

Mexico

Awards

CIADI case No. ARB(AF)/97/01 Metalclad Corporation

CIADI case No. ARB(AF)/97/02 Robert Azinian, et al

CIADI case No. ARB(AF)/98/02 Waste Management Inc

CIADI case No. ARB(AF)/99/01 Marvin Roy Feldman Karpa

CIADI case No. ARB(AF)/00/2 Técnicas Medioambientales, SA (TECMED)

CIADI case No. ARB(AF)/00/3 Waste Management Inc

UNCITRAL GAMI Investments, Inc

CIADI case No. ARB(AF)/02/1 Fireman’s Fund Insurance Company (Fireman’s)

UNCITRAL International Thunderbird Gaming Corporation

CIADI case No. ARB(AF)/04/01 Corn Products International, Inc (CPI)

CIADI case No. ARB(AF)/04/3 Gemplus, SA, SLP, SA and Gemplus Industrial, SA de CV

CIADI case No. ARB(AF)/04/4 Talsud, SA

CIADI case No. ARB(AF)/04/5 Archer Daniels Midland Co and Tate & Lyle Ingredients Americas, Inc

CIADI case No. ARB(AF)/04/5 Archer Daniels Midland Co and Tate & Lyle Ingredients Americas

CIADI case No. ARB(AF)/05/1 Bayview Irrigation et al

CIADI case No. ARB(AF)/05/02 Cargill Inc

CIADI case No. ARB (AF)/09/2) Abengoa, SA and COFIDES, SA

CIADI case No. ARB(AF)/12/4 Telefonica SA

CIADI case No. UNCT/14/1 KBR, Inc and Corporación Mexicana de Mantenimiento Integral

CIADI case No. UNCT/17/1 Joshua Dean Nelson

CIADI case No. ARB(AF)/17/2 Eutelsat SA

CIADI case No. ARB(AF)/17/3 Vento Motorcycles, Inc

CIADI case No. No. UNCT/18/5 PACC Offshore Services Holdings Ltd

CIADI case No. UNCT/20/2 Carlos Sastre and others

CIADI case No. ARB/20/23 Coӧperative Rabobank UA

 

Pending proceedings

CIADI case No. ARB/23/29 Mario Noriega Willars

CIADI case No. ARB/23/28 First Majestic Silver Corp       

CIADI case No. ARB/23/25 Arbor Confections Inc, Mark Alan Ducorsky and Brad Ducorsky

CIADI case No. ARB/23/24 Silver Bull Resources, Inc

CIADI case No. ARB/23/22 Enerflex US Holdings Inc and Exterran Energy Solutions, LP

CIADI case No. ARB/23/15 Access Business Group LLC

CIADI case No. ARB/23/6 Sepadeve International LLC

CIADI case No. ARB/23/4 Goldgroup Resources, Inc

CIADI case No. UNCT/23/1 Amerra Capital Management LLC and others

CIADI case No. ARB/22/24 Doups Holdings LLC

CIADI case No. ARB/22/6 Consolidated Water Coöperatief, UA

CIADI case No. ARB(AF)/16/3 B-Mex, LLC and others

CIADI case No. UNCT/18/4 Alicia Grace and others

CIADI case No. ARB/19/1 Legacy Vulcan, LLC

CIADI case No. ARB/19/26 Terence Highlands 

CIADI case No. UNCT/20/1 Odyssey Marine Exploration, Inc

CIADI case No. ARB/20/13 Espíritu Santo Holdings, LP and L1bre Holding, LLC

CIADI case No. ARB/21/14 First Majestic Silver Corp

CIADI case No. ARB/21/25 Finley Resources Inc, MWS Management Inc and Prize Permanent Holdings, LLC

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Reading List

26. Please provide a list of any articles or books that discuss this country’s investment treaties.

Mexico

Article/Book

Gonzalez de Cossio, Francisco: Arbitraje de Inversión, Porrúa: México, 2009

Gonzalez de Cossio, Francisco: Arbitraje, Porrúa: México, 3rd ed., 2011

Islas Colín, Alfredo and Domínguez Vázquez Julio, Alberto: México Ante El Arbitraje De Inversión Ciadi, La Justicia Alternativa En Materiales De Inversores, Revista Lex Mercatoria, Vol. 13, 2019

Leng Lim, Chin et al.: International Investment Law and Arbitration, Cambridge University Press.

Mortimore, Michael: International arbitration based on investor-state dispute settlement clauses in international investment agreements: challenges for Latin America and the Caribbean, CEPAL Desarrollo Productivo No. 188, Chile, 2009

Rodriguez Jimenez, Sonia: El Sistema Arbitral CIADI, Porrúa: México, 2006

Dolores Bentolila: Hacia Una Jurisprudencia Arbitral En El Arbitraje Internacional De Inversiones, Anuario Mexicano de Derecho Internacional: México, Décimo Aniversario, 2012, pp. 373–420.

González de Cossío, Francisco, The Mexican Experience with Investment Arbitration, Journal of World Investment, June 2002, Vol. 3, No. 3.

 

The authors thank Rodrigo Alejandro López Ortiz for his valuable contribution to this publication.

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