Originally from the Journal of Damages in International Arbitration

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Award September 20, 2021

The Parties

Lion Mexico Consolidated L.P. (Claimant)

United Mexican States (Respondent or Mexico)

Sector

Real Estate

Applicable Treaty

North American Free Trade Agreement (NAFTA)

Members of the Tribunal

Juan Fernández-Armesto (President), David J.A. Cairns (Claimant’s Appointee) and Laurence Boisson de Chazournes (Respondent’s Appointee)

I.  Background

In 2007, Claimant, a Canadian company, granted three loans to a group of Mexican companies (Debtors) to develop three separate real estate properties in Mexico’s Pacific Coast and Midwest. Each loan was secured by a promissory note and a mortgage on the plots of land on which the real estate projects were to be built. By 2009, the Debtors defaulted on the loans and started negotiations with Claimant to avoid foreclosure. The parties negotiated for years without success.