The document is a Request for Arbitration filed by Espíritu Santo Holdings, LP ("Claimant"), a Canadian entity, against the United Mexican States ("Mexico") before the International Centre for Settlement of Investment Disputes (ICSID). The claim is brought pursuant to the North American Free Trade Agreement (NAFTA). The dispute concerns Claimant's investment in a concession granted to its Mexican subsidiary, Servicios Digitales Lusad, S. de R.L. de C.V. ("Lusad"), to install and operate a proprietary digital taximeter and mobile hailing application system for all registered taxis in Mexico City. Claimant alleges that following a change in the municipal government of Mexico City, Mexico engaged in a series of unilateral, arbitrary, and politically motivated measures that destroyed its investment. Claimant's principal contentions are that Mexico, through the actions of the Mexico City government, first unlawfully suspended the installation of the system, then permanently suspended the concession, and ultimately terminated it without due process. Claimant further alleges that Mexico misappropriated Lusad's technology and business concept by developing and launching a state-run replacement application, "Mi Taxi," which offered substantially the same services. Claimant asserts that these actions constitute an unlawful indirect expropriation without compensation in breach of NAFTA Article 1110, a denial of fair and equitable treatment and full protection and security in breach of NAFTA Article 1105, and discriminatory treatment in breach of the national treatment standard under NAFTA Article 1102. As relief, Claimant requests the Tribunal to declare that Mexico has breached its NAFTA obligations, order Mexico to pay compensation for all resulting losses, estimated to be in the billions of U.S. dollars, plus interest, and award all costs of the arbitration.

This document is the Claimant's Memorial on the merits in an ICSID arbitration initiated against the United Mexican States under the North American Free Trade Agreement (NAFTA). The Claimant, Espíritu Santo Holdings, LP, sets forth its claims concerning the alleged destruction of its investment in a concession to modernize and operate a digital taximeter and ride-hailing system for the entire taxi fleet of Mexico City. The Claimant asserts that its Mexican subsidiary, Lusad, after a transparent public bidding process, was awarded a long-term concession by Mexico City's Secretariat of Mobility (Semovi). Following the award, the Claimant invested substantial capital over several years to develop the "L1bre System," obtaining all requisite governmental certifications and approvals. The Claimant contends that just as the system was ready for a mandatory, city-wide rollout in 2018, a newly elected Mexico City administration, for purely political reasons, first temporarily and then indefinitely suspended the Concession. This suspension, the Claimant argues, was a de facto termination that rendered its investment worthless. The Claimant further alleges that the government subsequently developed and launched its own state-run, copy-cat application, "Mi Taxi," which appropriated the core features and business model of the L1bre System. The Claimant frames these actions as breaches of Mexico's obligations under NAFTA, specifically: Article 1110 (unlawful, uncompensated expropriation), Article 1105 (failure to provide fair and equitable treatment and the minimum standard of treatment), and Article 1102 (discriminatory treatment in favor of a domestic, state-owned enterprise). The Claimant requests that the Tribunal declare Mexico in breach of its NAFTA obligations and order the payment of damages of not less than USD $2.802 billion, representing the fair market value of the investment but for the state's actions, inclusive of pre-award interest and a gross-up for taxes. The Claimant also seeks post-award interest and the full costs of the arbitration.

This Procedural Order No. 2 formalizes the parties' agreement to consolidate claims within a single proceeding. The Tribunal records the agreement between the original Claimant (Espíritu Santo Holdings, LP), the Respondent (United Mexican States), and a new party (Libre Holding, LLC) to add Libre Holding as a co-Claimant in ICSID Case No. ARB/20/13. The Order notes that the Respondent's consent does not constitute an acceptance of jurisdiction or admissibility, with the Respondent expressly reserving its rights to raise such objections in due course. Pursuant to the parties' agreement, the Tribunal orders the addition of Libre Holding as a Claimant and directs the ICSID Secretary-General to discontinue the parallel proceeding, ICSID Case No. ARB/21/55. The Tribunal further accepts and incorporates the revised procedural calendar agreed upon by the parties, which is attached as Annex A. The Order confirms that the Tribunal members have submitted updated declarations of independence and impartiality in light of the joinder and that Procedural Order No. 1 remains in effect, subject to the amended calendar.

Procedural Background and Parties' Submissions

This procedural order addresses the Claimants' application for provisional measures pursuant to Article 47 of the ICSID Convention, ICSID Arbitration Rule 39, and Article 1134 of the NAFTA. The Claimants sought an order requiring the United Mexican States ("Mexico") to stay domestic criminal proceedings against their corporate representatives and fact witnesses, Messrs. Zayas and León, secure the release of Mr. Zayas from pre-trial detention, and refrain from any actions that could aggravate the dispute or impair the procedural integrity of the arbitration.

The Claimants contended that the criminal actions were a retaliatory abuse of Mexico's criminal justice system, initiated in response to the arbitration to intimidate key witnesses and undermine their due process rights. They argued that the measures were necessary to preserve their rights, the status quo, and the exclusivity of the ICSID proceedings. Conversely, Mexico argued that the criminal investigations were a legitimate exercise of its sovereign authority, initiated based on credible complaints, some of which predated the arbitration. Mexico asserted that granting the requested measures would improperly interfere with its domestic legal order, affect the rights of third-party victims, and that the Claimants had failed to meet the high evidentiary standard of necessity, urgency, and proportionality required for such relief.

The Tribunal's Analysis and Decision

The Tribunal acknowledged its broad authority to recommend provisional measures, even those concerning domestic criminal proceedings, but emphasized that an "exceptionally high threshold" must be met. The Tribunal's analysis focused on its competence to grant the specific relief sought and whether the Claimants had satisfied the established legal requirements.

The Tribunal found that it was not competent to grant measures that would affect the interests of third-party victims who had initiated some of the criminal complaints, as these individuals were not parties to the arbitration. Furthermore, the Tribunal was not satisfied that the Claimants had established a retaliatory motive. It noted that the timing of the criminal actions did not conclusively support the allegation of reprisal and that Mexico had provided plausible, non-retaliatory explanations for the investigations. Consequently, the Tribunal concluded that the Claimants had failed to demonstrate a sufficient connection between the criminal proceedings and the arbitration, or a clear risk of irreparable harm to the procedural integrity of the case. The requirements of necessity and urgency were therefore not met.

The Tribunal also found the requested measures to be disproportionate, as they would unduly encroach upon Mexico's sovereign right to investigate and prosecute crimes within its jurisdiction. Accordingly, the Tribunal rejected the Claimants' application for provisional measures. However, in the interest of maintaining the integrity of the proceedings, the Tribunal formally invited Mexico to consider in good faith deferring extradition proceedings against Mr. León and to ensure that Mr. Zayas, while in custody, could confidentially meet with counsel and provide testimony without fear of adverse consequences. The allocation of costs was reserved for the final award.