1999

AT

Azinian v Mexico NAFTA, ICSID ARB (AF)/97/2

Azinian, Argentinean, with other American Citizens established a company in Naucalpan to waste collect and disposal. They signed a concession contract with the Ayuntamiento for 20 years, for $20,000,000 but the Ayuntamiento annul the concession contract for irregularities on its conclusion and performance. The company initiated proceeding in the Ayuntamiento, then State administrative tribunal, to the federal administrative tribunal, and then an Amparo. All the courts ruled in favour of Ayuntamiento. The claimant initiated proceedings under NAFTA, chapter XI, ISCID AF., relief sought, payment of $19,000,000 for the wrongful repudiation of an ongoing enterprise, violations claimed: 1105 Minimum standard, 1110 Expropriation; NAFTA

Is there a basis for the present arbitral tribunal to declare that the Mexican courts were wrong to uphold the Ayuntamiento’s decision? Since the Mexican courts found that the Ayundatamiento’s decision to nullify the contract was consistent with Mexican law, the question is whether the Mexican court decision violates NAFTA Responsibility of the state for acts of judicial authorities result from: clearly incompatible with a rule of IL, denial of justice, judicial decision contrary to municipal law Possibility of holding a state internationally liable for judicial decision does not entitle a claimant to seek international review of the national court as though the international jurisdiction seised has plenary appellate jurisdiction. What must be shown is that the court decision itself constitutes a violation of the Treaty. Claimants have raised no complaints against Mexican courts. Without exception they have directed their complaints against the Ayuntamiento. The tribunal finds that this circumstance is fatal to the claim. For it there is no complaint against a determination by a competent court that a contract governed by Mexican law was invalid under Mexican law, there is by definition no contract to be expropriated