United Mexican States v. Metalclad Corporation

Abstract

Municipal law — Choice between two laws — International Commercial Arbitration Act — Exclusive application to international commercial arbitration — Relationship between Claimant and Respondent not regulatory in nature but concerned treatment of investors — Grounds for annulment

Applicable law — nafta Chapter 11 arbitration restricted to claims for breach of Chapter 11 and Chapter 15 obligations — Interpretation of Article 1105 — Minimum standard of protection — Tribunal misstated applicable law to include Chapter 18 obligation of transparency — Obligation to ensure transparent and predictable framework for investment — Matter beyond scope of submission to arbitration

Expropriation — nafta Article 1110 — Measures tantamount to expropriation — State permitted or tolerated conduct of municipality amounting to unfair and inequitable treatment in breach of Article 1105 — Analysis infected by erroneous application of principle of transparency — Matter beyond scope of submission to arbitration

Expropriation — nafta Article 1110 — Implementation of Ecological Decree — Effect of barring operation of landfill — Indirect expropriation — Alternative and independent finding of expropriation

Damages — Excessive damage claim — No deliberate attempt to deceive Tribunal — Arguable basis for claim — No evidence of fraud — Aggressive claim for damages — No basis for annulment

Interest — Inclusion of interest in calculation of damages — Interest flows only from date of proper finding of expropriation — Prior interest and compounding effects excluded from award