B-Mex, LLC and Others v. United Mexican States
ICSID · Investment (ICSID and treaty) · Mexico · 19 Jul 2019
Why it matters
This partial award clarifies procedural requirements under NAFTA for investor-state arbitration, particularly the strict application of Article 1119's notice requirement for each claimant and the interpretation of 'control' under Article 1117. It distinguishes between jurisdictional and admissibility issues, and emphasizes the need for clear evidence of ownership or control at relevant times.
Summary
The case involves 39 U.S. investors claiming that Mexico breached NAFTA by revoking casino permits and other measures. The Tribunal bifurcated proceedings to address jurisdictional objections. Key issues included: (1) whether Additional Claimants (who were not named in the original Notice of Intent) could join the arbitration; (2) whether the Original Claimants owned or controlled the Mexican companies on whose behalf they brought claims under Article 1117; and (3) whether the Mexican companies had properly consented to arbitration. The Tribunal held that the Additional Claimants' claims were inadmissible because they failed to provide a notice of intent as required by Article 1119, which is a mandatory condition precedent. Regarding Article 1117, the Tribunal interpreted 'control' to include both legal and de facto control, and found that the Original Claimants had not proven ownership of the Juegos Companies (except JVE Mexico) or E-Games, but had proven de facto control over E-Games. The Tribunal also found that the Juegos Companies had validly consented to arbitration, but Operadora Pesa had not. Consequently, the Tribunal upheld jurisdiction over claims by Original Claimants under Article 1116 and on behalf of JVE Mexico and E-Games under Article 1117, but dismissed claims by Additional Claimants and on behalf of other Mexican companies. The award includes a partial dissent by Arbitrator Vinuesa, who argued that the Additional Claimants' claims should be dismissed for lack of jurisdiction, not admissibility, and that the Original Claimants did not control the Juegos Companies.
The detail
Parties: B-Mex, LLC and Others v. United Mexican States
Case number: ICSID Case No. ARB(AF)/16/3
Outcome: The Tribunal upheld jurisdiction over claims by Original Claimants under Article 1116 and on behalf of JVE Mexico and E-Games under Article 1117, but declined jurisdiction over Additional Claimants and claims on behalf of other Mexican Companies due to procedural defects.
Applicable law: NAFTA (North American Free Trade Agreement), ICSID Additional Facility Rules
Issues in play: Interpretation of NAFTA Articles 1116, 1117, 1119, 1121, and 1122 regarding notice requirements, consent to arbitration, and ownership/control of enterprises.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.