Vulcan and Mexico Both Lose After Unsatisfactory Ruling

Constitutional law attorney Margarita Ríos-Farjat was interviewed by Reforma about the International Centre for Settlement of Investment Disputes' (ICSID) decision in the international arbitration brought by Vulcan's British subsidiary against Mexico. Although the tribunal determined that Mexico must pay approximately $15 million, compared with the $1.7 billion claimed by the company, the ruling does not represent a total victory for either party and comes amid uncertainty regarding the protections afforded to foreign direct investment in the country. Margarita summarized ICSID's conclusions for each party.

"Mexico prevailed on the remainder of the arbitration, including the foreign investor's claims that the Mexican State had afforded it inequitable and unfair treatment compared with its Mexican competitors. However, the tribunal did not find it discriminatory for Mexico to establish environmental safeguards addressing the ecological impact of extraction below the water table, or to determine that those safeguards justified a differentiated regulatory framework," she commented.

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