Case Overview

In Silver Bull v. Mexico, a US investor, Silver Bull Resources, Inc., brought a legacy claim under the North American Free Trade Agreement (NAFTA) through the transitional provisions of the United States-Mexico-Canada Agreement (USMCA). The dispute, administered by ICSID, centered on the Claimant's investment in the Sierra Mojada mining project in Mexico. Silver Bull alleged that Mexico failed to protect its investment from a prolonged blockade by a local mining cooperative, which began in September 2019. The Claimant argued that Mexico's inaction and alleged complicity constituted breaches of NAFTA's provisions on fair and equitable treatment (FET), full protection and security (FPS), national treatment, most-favoured-nation (MFN) treatment, and resulted in an indirect expropriation of its investment.

Procedural History

The Claimant filed its Request for Arbitration on June 28, 2023. The Tribunal, composed of Ian Glick (President), Stephen Drymer (Claimant's appointee), and Philippe Sands (Respondent's appointee), was constituted on January 5, 2024. During the proceedings, the Claimant unsuccessfully challenged the Respondent's-appointed arbitrator, Philippe Sands, based on his expressed views on third-party funding in a separate case; the challenge was dismissed in October 2024. The seat of the arbitration was Washington D.C. The United States and Canada, as non-disputing parties to NAFTA, made submissions on the key jurisdictional question regarding the interpretation of NAFTA's survival provisions under the USMCA. After a full briefing and a hearing on jurisdiction and merits, the Tribunal rendered its final Award on May 29, 2026, dismissing all of the Claimant's claims on jurisdictional and prescription grounds.

Key Issues and Positions

Jurisdiction

The central jurisdictional issue was the temporal scope of the Tribunal's authority following the termination of NAFTA on June 30, 2020. Mexico, supported by the US and Canada, argued that Annex 14-C of the USMCA only preserved jurisdiction over claims for breaches that occurred while NAFTA's substantive obligations were still in force (i.e., before July 1, 2020). Silver Bull contended that for continuing breaches that began before NAFTA's termination, Annex 14-C effectively extended NAFTA's substantive protections for the three-year transition period. This was critical, as Silver Bull's expropriation claim was pegged to the date its project partner, South32, withdrew in August 2022, well after NAFTA's termination.

Prescription

Mexico also raised a statute of limitations defense under NAFTA Articles 1116(2) and 1117(2), which impose a three-year limit from the date an investor first knew, or should have known, of the alleged breach and resulting loss. Mexico argued that since the blockade began in September 2019, the Claimant was aware of the alleged breach and its resulting damages long before the critical date of June 28, 2020 (three years prior to the arbitration request). Silver Bull countered that for a continuing breach, the limitation period is renewed daily, and that the ultimate loss was not crystallized until the project became unviable in August 2022.

Tribunal/Court Reasoning and Holdings

Jurisdiction

The Tribunal conducted a detailed analysis of Annex 14-C of the USMCA, ultimately siding with Mexico and the non-disputing parties. Following the majority reasoning in *TC Energy v. United States*, the Tribunal held that Annex 14-C was a procedural mechanism that extended the *consent to arbitrate* legacy claims but did not extend the life of NAFTA's *substantive obligations*. Consequently, the Tribunal found it lacked jurisdiction *ratione temporis* to adjudicate any claims based on Mexico's conduct after June 30, 2020. This finding was fatal to the Claimant's indirect expropriation claim, which was predicated on events in 2022.

Merits

For the remaining claims (FET, FPS, NT, MFN) based on Mexico's alleged inaction *before* June 30, 2020, the Tribunal addressed the prescription defense. It rejected Silver Bull's theory that a continuing breach perpetually renews the limitation period. Instead, the Tribunal affirmed that the three-year clock begins to run from the first moment an investor has, or should have, knowledge of both the breach and the resulting loss. The Tribunal found that the blockade and Mexico's alleged failure to intervene were known to the Claimant from September 2019, and that it suffered losses (at a minimum, in the form of wasted operational costs) from that time. As this knowledge predated the critical cut-off date of June 28, 2020, the Tribunal concluded that all claims based on pre-termination conduct were time-barred.

Disposition / Relief

Based on its findings, the Tribunal dismissed all of Silver Bull's claims. The expropriation claim was dismissed for lack of jurisdiction, while the remaining claims were dismissed as prescribed. The Tribunal ordered the Claimant to bear 60% of the arbitration costs and to pay the Respondent USD 997,700.11 for its legal fees and expenses, with simple interest to accrue from the date of the Award.