This summary note is machine-generated. Always consult the original materials.
Procedural Posture and Parties' Submissions
This document is the Tribunal's decision on the Claimants' second request for interim measures of protection, filed pursuant to NAFTA Article 1134 and ICSID Arbitration Rule 39. The request followed the Tribunal's November 2024 Decision on Jurisdiction and Liability, which found Mexico in breach of NAFTA Articles 1102 and 1105 concerning actions taken by its state-owned enterprise, Pemex.
The Claimants sought measures to compel Mexico to ensure Pemex ceased conduct inconsistent with the liability finding, specifically the enforcement of a unilateral contract termination (finiquito), a related USD 41.8 million bond claim (the Dorama Bond), and a USD 9.7 million domestic court judgment for litigation costs. The Claimants argued that these measures were urgent and necessary to protect the integrity of the arbitral process and the effectiveness of the eventual award, contending that the standard criteria for interim measures were met, particularly given the prior liability finding. They proposed relief including a partial award and various financial security mechanisms.
The Respondent, Mexico, opposed the request, characterizing it as a procedural maneuver seeking to obtain final relief, which is prohibited under NAFTA Article 1134. Mexico argued that the Claimants failed to satisfy the conjunctive requirements for interim measures, asserting there was no irreparable harm, as the alleged damages were purely pecuniary and compensable. Mexico also contested the urgency of the request, noting the Claimants' delay in filing, and argued that the balance of hardships weighed against granting the measures, which would impose a significant financial burden on the State.
Tribunal's Analysis and Decision
The Tribunal centered its analysis on the requirement of irreparable harm, recalling its prior decision that all conditions for interim measures are conjunctive and the failure to establish one is fatal to the request. The Tribunal found it decisive that the Claimants, in their own submissions on damages, had quantified and sought monetary compensation for the precise losses they alleged would arise from Pemex's call on the Dorama Bond and enforcement of the litigation costs judgment.
The Tribunal reasoned that, by the Claimants' own framing, the potential harm was compensable by a monetary award. Citing the principle articulated in Plama v. Bulgaria, the Tribunal held that harm is not irreparable if it can be compensated for by damages. As the Claimants failed to provide convincing proof of a risk of irreparable damage, the Tribunal concluded that a fundamental condition for granting interim measures was not met. Consequently, it dismissed the Second Request in its entirety without needing to address the parties' other arguments concerning urgency, necessity, or the balance of hardships.
The Tribunal's operative decision was to deny the requested interim measures and to defer the allocation of costs associated with the proceeding to the final award.
