Carlos Sastre and others v. Mexico, ICSID Case No. UNCT/20/2
ICSID · Investment (ICSID and treaty) · Mexico · 21 Nov 2022
Why it matters
This award is significant for its detailed analysis of domicile under the Mexico-Argentina BIT, the effect of renouncing nationality on treaty protection, and the requirement that an investor must own or control the investment directly. It clarifies that a shareholder cannot bring a claim on his own behalf for assets owned by a separate legal entity.
Summary
Six foreign nationals claimed that Mexico unlawfully expropriated their beachfront hotels and assets in Tulum. The claims were brought under NAFTA and three BITs (Argentina, France, Portugal). Mexico objected to jurisdiction on multiple grounds. The Tribunal bifurcated the proceedings to address jurisdiction first. It found that Mr. Sastre was domiciled in Mexico at the relevant times, thus excluded from the Mexico-Argentina BIT. Mr. Sastre, Ms. Abreu, and Mr. Silva had renounced their original nationalities, losing treaty protection. Mr. Jacquet failed to prove he made an investment under the Mexico-France BIT. Ms. Galán's claim failed because she was a Mexican national at the time of the alleged breach, and NAFTA does not protect host-state nationals. Mr. Alexander could not show he owned or controlled the investment; the assets were held by his ex-wife or a company not a party to the arbitration. The Tribunal dismissed all claims for lack of jurisdiction and ordered each party to bear its own costs and share the arbitration costs equally.
The detail
Parties: Carlos Sastre and others v. Mexico, ICSID Case No. UNCT/20/2
Case number: italaw/cases/7217
Outcome: The Tribunal declined jurisdiction over all claims, finding that none of the claimants had standing or a qualifying investment under the applicable treaties.
Applicable law: NAFTA, Mexico-Argentina BIT, Mexico-France BIT, Mexico-Portugal BIT, UNCITRAL Arbitration Rules (1976)
Issues in play: The case involved issues of domicile, nationality renunciation, and the definition of 'investment' under multiple BITs and NAFTA, as well as the distinction between direct and indirect ownership.
Read the full decision at italaw ↗
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