First NAFTA Chapter 11 Dispute Settled
 
November 30, 2001
 

In compliance with the ruling of a NAFTA Chapter 11 arbitration panel, Mexico paid $16 million to a U.S. company, Metalclad. Chapter 11 of the NAFTA treaty permits a foreign investor to directly sue a government and is a departure from most international dispute settlement mechanisms (such as the WTO) that permit only government-to-government suits. In this case, Metalclad sued Mexico on the grounds that the declaration of an ecological reserve on property to be used by Metalclad as a toxic waste dump represented an effective expropriation of Metalclad’s investment.