Procedural Posture and Key Issues

This Award resolves all claims brought by Silver Bull Resources, Inc. against the United Mexican States under the North American Free Trade Agreement (NAFTA), pursuant to the legacy investment dispute provisions of the U.S.-Mexico-Canada Agreement (USMCA) Annex 14-C. The claims arose from an alleged failure by Mexican authorities to end a long-standing blockade of the Claimant's mining project, which commenced in September 2019.

The Tribunal addressed several key jurisdictional objections raised by Mexico. The central question was whether USMCA Annex 14-C extended the substantive protections of NAFTA for a three-year period following NAFTA's termination on 30 June 2020, or whether it merely provided a procedural window to arbitrate breaches that occurred while NAFTA was in force. The Tribunal also considered whether the claims were time-barred under NAFTA's three-year limitation period.

Tribunal's Analysis and Findings

The Tribunal first determined the temporal scope of its jurisdiction. Aligning with the majority decision in TC Energy v. United States and the submissions of non-disputing parties Canada and the United States, the Tribunal held that Annex 14-C is procedural in nature. It provides consent to arbitrate claims for breaches that occurred prior to NAFTA's termination but does not extend NAFTA's substantive obligations beyond 30 June 2020. Consequently, the Tribunal found it lacked jurisdiction ratione voluntatis over any alleged breaches based on conduct occurring after this date. This finding was fatal to the Claimant's claim for indirect expropriation under NAFTA Article 1110, which the Claimant had argued crystallized with the loss of its investment partner in August 2022.

For the remaining claims under NAFTA Articles 1102, 1103, and 1105, the Tribunal examined Mexico's time-bar objection. It rejected the Claimant's theory that a "continuing breach" perpetually renews the limitation period. The Tribunal found that under NAFTA Articles 1116(2) and 1117(2), the three-year period begins when an investor first knew, or should have known, of both the alleged breach and the resulting loss or damage. The Tribunal concluded that the Claimant was aware of Mexico's alleged inaction (the breach) and had incurred ascertainable losses in the form of wasted running costs well before the critical cut-off date of 28 June 2020. Accordingly, all claims based on conduct prior to this date were dismissed as time-barred.

For the narrow period between 28 June and 30 June 2020, where claims were not time-barred and fell within the Tribunal's jurisdiction, the Tribunal found that the Claimant had failed to plead or prove any specific loss or damage attributable to Mexico's conduct on those three days. The Claimant's entire case was predicated on a total loss in 2022, a basis the Tribunal had already rejected. The claims under Articles 1102 and 1103 were also dismissed for lack of evidence supporting the required comparison of treatment.

Decision and Costs

The Tribunal dismissed all of the Claimant's claims. The expropriation claim was dismissed for lack of jurisdiction. The remaining claims were dismissed as either time-barred, outside the Tribunal's jurisdiction, or unsupported by a sustainable claim for loss or damage. The Tribunal ordered the Claimant to bear 60% of the costs of the arbitration and 60% of the Respondent's legal fees and expenses, resulting in a net payment due to the Respondent of USD 997,700.11, plus simple interest.