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Cyrus Capital Partners, L.P. and Contrarian Capital Management, LLC v. United Mexican
States
(ICSID Case No. ARB/23/33)
Procedural Order No. 4 – Annex B

REQUEST FOR DOCUMENTS OF THE UNITED MEXICAN STATES

(SEPTEMBER 12, 2024)

Cyrus Capital Partners, L.P. and Contrarian Capital Management, LLC v. United Mexican
States
(ICSID Case No. ARB/23/33)

I. INTRODUCTION

1. This Request for Production of Documents (RfD) is submitted pursuant to §15 as well as Annex C of Procedural Order No. 1 (PO1) dated April 3, 2024.

2. Respondent has formulated this RfD based on the requirements set forth in Article 37 of the ICSID Rules and Article 3.3 of the IBA (International Bar Association) Rules on the Taking of Evidence in International Arbitration 2020 (“IBA Rules”).

3. The terms used in this RfD are defined in Respondent’s Memorial on Jurisdiction.

4. Aditionally, the Respondent adopts the definition of “Document” as defined by the IBA Rules on the Taking of Evidence in International Arbitration 2020 (IBA Rules), i.e., “a writing, communication, picture, drawing, program or data of any kind, whether recorded or maintained on paper or by electronic, audio, visual or any other means”. The term “Communications" includes –but is not limited to– records of discussions, analyses, conferences, conversations, negotiations, agreements, meetings, interviews, presentations, talking points, telephone conversations, letters, written correspondence, e-mails or any other form of communication, including attachments or files attached to the Communications.

5. This RfD identifies documents that are in the custody, possession or control of the Claimants or third parties cited and/or related to them, i.e., shareholders or business partners, attorneys, representatives, advisors or accountants or those persons who, due to their functions, should have the requested documentation.

6. The Respondent has limited and has specified its requests, to the extent possible, so that the Claimants can more easily obtain such documents. Respondent considers that the requested documents exist and are in Claimants' possession, custody or control, or that of any of their

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subsidiaries or any entity that the Claimants alleged to control,¹ because the documents had to have been prepared and/or preserved by them. The Respondent states that the requested documents are not in its possession, custody or control.

7. This RfD should not be construed as the acceptance of any of the Claimants’ claims and their responses to the jurisdictional objections raised by Mexico.

8. Finally, in the event that the Claimants allege that any of the requested documents or categories of documents are confidential and/or “privileged” in nature and refuse to waive confidentiality and/or privilege, Respondent requests the submission of a confidential document record (i.e., privilege log) identifying the request in which the document is located, the date of the document, its author or issuer, the recipient, and a description of the subject or matter.

9. Each request of documents of Mexico has a particular justification. However, the Respondent develops below four general justifications, which should be read in conjunction with the particular justification for each request.

II. RESPONDENT'S GENERAL JUSTIFICATIONS

A. Documents related to the Injuction issued in the Mercantile Lawsuit 995/2022 (Objection 1 and 8 / Requests 1-4)²

10. There is no dispute that the Claimants breached Article 1119 by submitting their Notice of Intent two days before filing their Request for Arbitration instead of waiting the required 90 days. The 90-days waiting period is a mandatory requirement and a precondition for Mexico’s consent, as explained in the Memorial on Jurisdiction.³ This Claimants’ failure should result in the dismissal of their claim.

¹ For clarity, the entities referred to by the Respondent are: Cyrus Opportunities Master Fund II., Ltd., Cyrus Opportunities Fund II, L.P., Cyrus Opportunities Fund II, Cyrus Capital Advisors, L.L.C., Cyrus Capital Partners GP L.L.C., el Sr. Stephen C. Freidheim, Contrarian Capital Management, Sandpiper Limited, Contrarian Funds, L.L.C, Contrarian Emerging Markets, L.P., Boston Patriot Summer St. LLC, Contrarian EM II LP, EMMA 1 Master Fund L.P., and EMMA 2 Fund, L.P. See Counter-Memorial, Section II.A. ↩

² For clarity, the headings identify to which jurisdictional objection and request of documents each general justification refers. ↩

³ See Counter-Memorial on Jurisdiction, ¶ 52. ↩

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11. Despite this, in their Counter-Memorial on Jurisdiction, Claimants have suggested that their failure to comply with Article 1119 is excusable because, allegedly, they were not notified of the September 2022 Injunction until June 2023, and as a result, were unable to file their claim under NAFTA and Annex 14-C of the T-MEC earlier.⁴ The Respondent categorically rejects this argument and reiterates its position on the mandatory nature of compliance with the requirements of Article 1119.

12. As noted in the Memorial on Jurisdiction, the language of Article 1119 is simple and unambiguous: a claimant must wait to file a request for arbitration at least 90 days after filing its notice of intent. This is supported by the language of NAFTA itself, various investment tribunals and the declarations of the NAFTA Free Trade Commission, which compliance is mandatory.⁵ The Respondent wishes to emphasize that there is no reason to justify a breach of Article 1119.

13. In any event, the evidence submitted by Claimants indicates that they became aware of the Injunction at least as early as March 3, 2023 due to an article published by Michael O'Boyle in Bloomberg.⁶ Undoubtedly, Claimants were able to file their Notice of Intent in compliance with the requirements of NAFTA Article 1119.

14. The documents related to Mercantil Lawsuit 995/2022 are relevant and material to the issue of determining that Claimants had knowledge of the issuance of the Injunction prior to March 3, 2023.

15. In addition, the documents requested are relevant and material to Objection 8. Mexico's position is that Contrarian does not have standing to bring a denial of justice claim because Sandpiper was not a party to the proceedings before Mexican courts. Based on the evidence presented, Sandpiper acquired its Notes in March 2023, six months after the injunction was issued. The documents will help to clarify whether Sandpiper was involved in the proceedings and thus determine whether it has standing to bring a claim against the actions of Mexican courts.

⁴ Counter-Memorial, ¶ 115. ↩

⁵ Memorial on Jurisdiction, ¶¶ 55-61. ↩

⁶ Memorial on Jurisdiction, ¶ 34. ↩

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16. The Respondent considers that the documents exist and are in the possession of the Claimants because of what was stated in judicial documents that were filed by the Cayman Islands Funds in the proceedings before the United States courts.

B. Documents Supporting Claimants' Alleged Investment (Objection 2 and 3 / Requests 5-6, 9, 11)

17. The Claimants have not submitted evidence demonstrating that they qualify as investors under NAFTA Article 1116, as they have merely claimed that they, allegedly, have control over Opportunities and Sandpiper.

18. The definition of “investor of a Party” under NAFTA Article 1139 implies that an investor contributes its own resources to the host State with the expectation of making a profit for itself.⁷ The Claimants have not submitted evidence that proves that they have committed their own resources to acquire the Notes.

19. Claimants have also failed to submit documents relating to the ownership or date of acquisition of the Notes by the purported Cayman Islands companies (i.e. Opportunities and Sandpiper) or the Notes themselves.

20. The documents are relevant and material to the resolution of the case because they will allow us to understand whether the Claimants committed any capital or resources of their own to the acquisition of the Notes and thus whether they qualify as investors under NAFTA. Likewise, these documents will help determine who owns the Notes and whether Claimants have an existing investment within the meaning of Annex 14-C of the USMCA.

21. In the same way, the requested documents are not in the possession, custody or control of the Respondent, since these documents should have been issued as a result of the alleged acquisition of the Notes by the Claimants, as reflected in the annexes to the Indenture.⁸

⁷ Memorial on Jurisdiction, ¶ 64. ↩

⁸ See TV Azteca’s Indenture, August 9, 2017. C-0006. ↩

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C. Financial statements, business plans and risk analysis (Objection 2 and 5/ Requests 7, 8, 10, 12)

22. Pursuant to section 3 of the Eight Amended and Restated Investment Management Agreement,⁹ Cyrus Capital Partners, L.P., as investment manager, was required to submit periodic reports to Cyrus Opportunities Fund II, LTD, Cyrus Opportunities Fund II, L.P., and Cyrus Opportunities Master Fund II, LTD. with respect to the activities they had performed. Similarly, pursuant to Section 5 of the Amended and Restated Investment Management Agreement,¹⁰ Contrarian Capital Management, L.L.C. was obligated to provide periodic reports to Contrarian Emerging Markets Offshore Fund, Ltd. and Contrarian Emerging Markets, L.P.

23. Similarly, the Respondent considers that it is reasonable to assume that the Claimants conducted various analyses as part of their due diligence on the risks involved in acquiring the Notes for Cyrus Opportunities Fund II, LTD, Cyrus Opportunities Fund II, L.P., Cyrus Opportunities Master Fund II, LTD, Contrarian Emerging Markets Offshore Fund, Ltd. and Contrarian Emerging Markets, L.P.

24. The documents will prove that the risk assumed by Claimants constitutes only a commercial risk and not an investment risk. This is relevant and material to Mexico’s Objection 5 in which it argues that the Notes do not qualify as an “investment” under Article 25 of the ICSID Convention and the Salini test.¹¹

25. Also, the requested documents are relevant and material to Respondent’s Objection 2, as Mexico argues that Claimants were only acting as investment managers for Opportunities and Sandpiper, and therefore cannot be considered as investors under NAFTA Article 1139, since they did not contribute their own capital or resources to acquire the Notes.¹²

⁹ Eight Amended and Restates Investment Management Agreement (Cyrus Investment Management Agreement). C-0072. ↩

¹⁰ Amended and Restated Investment Management Agreement (Contrarian Emerging Markets, L.P., Contrarian Investment Management Agreement). C-0017. ↩

¹¹ Memorial on Jurisdiction, Section III.F ↩

¹² Memorial on Jurisdiction, Section III.C. ↩

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26. Notwithstanding the foregoing, Claimants intend to argue that they have control over Opportunities and Sandpiper and consequently over the Notes.¹³ The requested documents will prove that Claimants’ alleged control was conditioned to the guidelines established by the Board of Directors of Contrarian Emerging Markets Offshore Fund, Ltd. and Contrarian Emerging Markets, L.P, Cyrus Opportunities Fund II, LTD, Cyrus Opportunities Fund II, L.P., and Cyrus Opportunities Master Fund II, LTD, therefore they cannot qualify as investors within the meaning of NAFTA since they did not even have control over the Notes as they have tried to argue.

27. The requested documents are not in Respondent’s possession, custody or control since they must have been generated as part of the Claimants’ performance of their obligations under the Eight Amended and Restates Investment Management Agreement¹⁴ and the Amended and Restated Investment Management Agreement.¹⁵

D. Documents relating to Claimants' witness (Objection 4/ Requests (13-15)

28. The Claimants attached to their Counter-Memorial on Jurisdiction the Witness Statement of Mr. Kenneth Patrick Smith Ramos, who served as a public official of the Ministry of Economy during the negotiation of the USMCA and who has asserted to be independent of the parties to this arbitration.

29. In his Witness Statement, Mr. Smith states that “I can confirm that the Mexican position regarding the legacy investment claims provisions, and the intention of the negotiators of Mexico, Canada and the United States was to ensure that all of the substantive provisisons of NAFTA Chapter 11, as well as the ISDS mechanism, would be extended for three years after the NAFTA had been replaced by the new agreement."¹⁶ Likewise, Mr. Smith attached to his Witness Statement internal documents such as reports or memoranda that, apparently, were prepared in the

¹³ Counter-Memorial on Jurisdiction, Section V. ↩

¹⁴ Eight Amended and Restates Investment Management Agreement (Cyrus Investment Management Agreement). C-0072. ↩

¹⁵ Amended and Restated Investment Management Agreement (Contrarian Emerging Markets, L.P., Contrarian Investment Management Agreement). C-0017. ↩

¹⁶ Witness Statement of Mr. Smith Ramos, ¶ 24. ↩

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framework of the USMCA negotiations, despite the fact that some of these documents are not in Mexico’s possession.¹⁷

30. Despite having made these assertions, and having various reports and memoranda on the USMCA negotiations, Mr. Smith does not submit any document that confirms his now claimed interpretation of Annex 14-C. Nor did he submit any document that would support his asserted interpretation of Annex 14-C. Nor did he submit any documents that would strengthen his reasoning for adopting such interpretation.¹⁸ Nor did he submit any “written notes” on which he relied in drafting his Witness Statement.¹⁹

31. Therefore, Mexico requests all documents, statements, reports, notes, memoranda that may have been in Mr. Smith's possession and that are related to the negotiations regarding Chapter 14 of the USMCA, including those related to Annex 14-C of the USMCA. These documents are highly relevant and material to corroborate the truth of the assertions made in Mr. Smith's Witness Statement and the dispute between the parties regarding the interpretation of Annex 14-C (Objection 3). A witness cannot selectively choose to present some documents and withhold others that may be contrary to his testimony. Mexico is entitled to review all documents that Mr. Smith had in his possession when he drafted his Witness Statement.

32. In addition, although Mr. Smith has stated that he is independent of the parties to this arbitration, the Respondent is aware that the firm representing the Claimants in this arbitration (Akin Gump Strauss Hauer & Feld LLP) and the firm in which Mr. Smith works (Agon Derecho y Economía) have collaborated in different fora and cases. It is even known that they have worked in a case that recently ended on December 14, 2022, being published the decision of this case a

¹⁷ The Respondent states that, although under Mexican law every public official who leaves office is required to submit a “Handover and Reception of Authority Act" in which is going to give a detailed report of the matters that he was in charge of, as well as to deliver the information related to the activities he performed in accordance with his duties, Mr. Smith's testimony makes it clear that he left the Mexican government at least before January 2019, that is, approximately 6 years ago, a period that makes it difficult the search of information. Respondent has conducted an exhaustive search for Mr. Smith's "Handover and Reception of Authority Act", however, it has not found any documents related to it in its records. ↩

¹⁸ See Witness Statement of Mr. Smith Ramos, ¶ 26. ↩

¹⁹ See Witness Statement of Mr. Smith Ramos, ¶ 28. ↩

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few months before the Claimants filed their Notice of Intent (June 28, 2023). The requested documents will allow us to verify whether Mr. Smith has any conflict of interest.

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Claimants 'general objections to the Respondent's First Request for Production of
Documents.

1. Pursuant to Section 15.7 and Annex A of Procedural Order No. 1 (PO No. 1), Claimants hereby submit their general objections to the Respondent’s Request for Documents (“RD” or “Mexico’s Requests") provided to Claimants on September 12, 2024. Where applicable, Claimants have produced the non-objected documents at the following ShareFile Link, organized in accordance with Mexico’s Request numbers: https://akingump.sharefile.com/i/i3596c1799c646788

2. PO No. 1 provides in section 15.1 that the Tribunal shall be guided by Articles 3 and 9 of the International Bar Association Rules on the Taking of Evidence in International Arbitration (2020) (“IBA Rules”), in relation to document production in this case.

3. Commentary on the revised text of the 2020 IBA Rules on the Taking of Evidence in International Arbitration clarifies that “Article 3 deals with documents that the parties wish to introduce as evidence into the arbitral proceedings”²⁰ and “Articles 9.2 and 9.3 provide the limitations on admissible evidence, whether oral or written. These limitations also apply to the production of documents pursuant to Article 3 and inspections pursuant to Article 7."²¹

4. Particularly, pursuant to section 15.4 of PO1:

All requests for the production of documents shall be in writing and shall set forth the specific reasons for the request with respect to each document or class of documents requested that specifies why the documents sought are relevant to the dispute and material to the outcome of the case. Each request shall include a date or range of dates and the subject matter, and the identity of the recipients and senders to the greatest extent possible. For greater certainty, requests such as 'all documents related to' a particular subject or matter shall not be sufficient under this rule.

5. Claimants' general objections are based on the Respondent's failure to satisfy: (1) the requirements set forth in Article 3.3 of the IBA Rules; (2) the requirements cited above pursuant to PO No. 1; and/or (3) the grounds identified in Article 9.2 of the IBA Rules.²²

²⁰ See, Commentary on the revised text of the 2020 IBA Rules on the Taking of Evidence in International Arbitration, available at https://www.ibanet.org/MediaHandler?id=4F797338-693E-47C7-A92A-1509790ECC9D. ↩

²¹ Id. ↩

²² The Commentary clarifies that “The scope of the permissible document request is also limited by certain objections described in Article 9.2 and (as added by the 2020 Review Task Force) 9.3 (see the discussion of these objections below) or the failure to satisfy the requirements set forth in Article 3.3. A party may raise any of the reasons for objection in opposing the document request.” See, Id. in p. 8. ↩

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6. Article 3.3 of the IBA rules requires that a request to produce documents shall contain:

a) (i) a description of each requested Document sufficient to identify it, or
(ii) a description in sufficient detail (including subject matter) of a narrow and specific requested category of Documents that are reasonably believed to exist; in the case of Documents maintained in electronic form, the requesting Party may, or the Arbitral Tribunal may order that it shall be required to, identify specific files, search terms, individuals or other means of searching for such Documents in an efficient and economical manner;
(b) a statement as to how the Documents requested are relevant to the case and material to its outcome; and
(c) (i) a statement that the Documents requested are not in the possession, custody or control of the requesting Party or a statement of the reasons why it would be unreasonably burdensome for the requesting Party to produce such Documents, and
(ii) a statement of the reasons why the requesting Party assumes the Documents requested are in the possession, custody or control of another Party

7. Among the grounds to object to a request identified by Article 9.2 of the IBA Rules includes:

(a) lack of sufficient relevance to the case or materiality to its outcome;
(b) legal impediment or privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable;
(c) unreasonable burden to produce the requested evidence;
(d) loss or destruction of the Document that has been shown with reasonable likelihood to have occurred;
(e) grounds of commercial or technical confidentiality that the Arbitral Tribunal determines to be compelling;
(f) grounds of special political or institutional sensitivity (including evidence that has been classified as secret by a government or a public international institution) that the Arbitral Tribunal determines to be compelling; or
(g) considerations of procedural economy, proportionality, fairness or equality of the Parties that the Arbitral Tribunal determines to be compelling.

8. Mexico's Requests are either: (i) excessively broad and/or do not provide sufficient specificity (requests 1, 2, 8, 9, 15); (ii) are not relevant to the case or material to the outcome (requests 3, 4, 7, 8, 9); (iii) are documents in a possession, custody or control of Mexico as Respondent based on Claimants' previous inclusion of these documents as Exhibits or based on Mexico's original custody (requests 1, 2, 3, 5, 14) ; or (iv)

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contain privileged and confidential information that is not otherwise relevant to the material outcome of the case (requests 13 and 15).

9. The following grounds of objection are raised in detail in the Redfern Schedule below. Rather than repeating these objections verbatim in each instance, the references to the following grounds of objection in the Redfern Schedule should be read together with the applicable narrative that follows each title below.

A. Mexico's Requests are excessively broad and/or lack specificity.

10. In the first instance, as it stated in item 15.4 of the PO1, requests such as “All documents related to a particular subject or matter" are not sufficient under the rule.²³ In the RD submitted by Mexico, terms such as “[t]odos los documentos y comunicaciones (all documents and communications)”, “[t]odas las Comunicaciones y documentos (all communications and documents"), and "[t]odos los documentos escritos o comunicaciones (all documents, writings or communication)” are mentioned in requests 1, 2, 8, 9 and 15. These unduly broad requests therefore violate both Procedural Order No. 1 and the IBA Rules on their face.

11. Moreover, Art. 3.3 of the IBA Rules provides certain requirements regarding the content of a request to produce, which are generally designed to have the request specifically describe the documents being sought. Article 3.3 is designed to prevent broad “fishing expeditions,” while at the same time permitting parties to request documents that can be identified with reasonable specificity, and which can be shown to be relevant to the case and material to its outcome. This specificity of the information required by Article 3.3 is also designed to help the receiving party decide whether it wants to comply with the request voluntarily (as provided in Article 3.4), or if it wants to raise objections (Article 3.5). Hence, the requests 1, 2, 8, 9 and 15 must be rejected by the Tribunal for being overly broad and not complying with either section 15.4 of the PO1, or Article 3.3 of the IBA Rules.

B. Mexico's Requests are not relevant to the case or material to the outcome and therefore are unreasonably burdensome to Claimants.

12. Under Article 3.3(b) of the IBA Rules, parties are entitled to request documents that are relevant to the case and substantial for its resolution. Several of Mexico's Requests are irrelevant to the Tribunal's resolution of the legal jurisdictional issues at hand, including the notification requirements under NAFTA Article 1119, and the scope of investment under NAFTA Articles 1116 and 1139. Factual information related to these requests have already been conceded or established by Claimants by documents previously produced (including requests 1, 2, 4, 6, 7, 8, 9, 10 and 12).

²³ Procedural Order 1 item 15.4 ↩

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Further production would therefore by unreasonably burdensome under IBA Rule 9.2(c).

13. Furthermore, documents requested by Mexico refer to the misconception of the legal nature of the Notes (requests 7 and 8). The Notes are debt security instruments issued by a Mexican Company to raise income. Business plans, due diligence documentation or internal analysis and/or valuation by Claimants with respect to debt securities are not relevant or material documents required for the Tribunal to conduct this legal analysis.

14. Finally, requests relating to Mr. Smith's witness testimony are not relevant or material to the outcome of this case because there is no prohibition on counsel entering into an agreement with a witness for the provision of testimony (requests 13 and 15). These requests are furthermore redundant to the disclosures that Mr. Smith made in his witness statement, as required by Procedural Order No. 1.

C. Mexico's Requests are for documents in the possession of the Respondent, either as documents already produced pursuant to this arbitration or as originating documents in Mexico's custody.

15. As it is stated in article 3.3 (c) (i) of IBA Rules, the Requesting Party must not be in possession or custody of the requested documents. Requests Nos. 1, 3, 10, 11, and 12 each seek documents that are already in Mexico's possession or custody.

16. With respect to Request No. 14, Claimants object in full because these USMCA documents should be in the original control of Mexico as the negotiating party involved. Claimants confirm that Mr. Kenneth Smith Ramos has produced all the documents that remain in his possession relating to this matter as appendices to the witness statement, i.e. Exhibits KS-0001-KS-0005.

17. Finally, with respect to the form of the Notes, Claimants have already produced documents demonstrating Opportunities Master Fund II Ltd.’s (“Opportunities”) and Sandpiper Limited's (“Sandpiper”) (collectively, “the Funds") ownership of the Notes for the relevant time period. As a factual matter, there are no physical “Notes” that would satisfy Mexico's request No. 5. All records regarding ownership of the Notes are handled electronically, which Claimants have already produced. Where applicable, Claimants produce additional and/or updated documents that further establish this ownership. However, Claimants object in part insofar as Respondent already has these documents in its possession pursuant to previous productions.

D. Certain of Mexico's Requests contain privileged legal information.

18. Article 9.2(b) provides protection for documents and other evidence that may be covered by certain privileges, under the appropriate applicable law, such as the

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attorney-client privilege, professional secrecy or the without-prejudice privilege.²⁴ This includes Requests 13 and 15, relating to contractual agreements between Claimants' counsel and Mr. Smith.

²⁴ See, Commentary on the revised text of the 2020 IBA Rules on the Taking of Evidence in International Arbitration in page 28, available at https://www.ibanet.org/MediaHandler?id=4F797338-693E-47C7-A92A-1509790ECC9D. ↩

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RESPONSE TO THE OBJECTIONS MADE BY THE CLAIMANTS TO THE REQUEST FOR
DOCUMENT PRODUCTION PRESENTED BY THE UNITED MEXICAN STATES

(NOVEMBER 7, 2024)

I. INTRODUCTION

1. This Response is made in accordance with §15.7.3 of Procedural Order No. 1 (PO1) dated on April 3, 2024.

2. Contrary to what the Claimants allege, Mexico contends that its requests for production of documents (the “Requests”) comply with the requirements provided in Articles 3.3 and 9.2 of the IBA Rules, as well as with was established in the PO1. The Respondent provided a detailed description of the documents it was requesting, as well as the search period and the entities or persons that could have them, and also specified the documents in the arbitration file that refer to the requested documents.

3. The majority of the objections raised by the Claimants are repeated on multiple occasions, therefore, and in order to avoid unnecessary repetitions, the Respondent proceeds to submit a series of general replies that are applicable to various objections. Notwithstanding the above, the Respondent in the same way will address the particularities of each of the objections raised by the Claimants.

4. As a general remark, on October 10, 2024, the Claimants partially produced documents related to Requests 5, 6 and 11. However, in Respondent’s view, these do not address Respondent’s Requests.

II. GENERAL REPLIES

A. Contrary to what the Claimants allege in their objections, the Requests presented by Mexico are narrow and specific

5. The Claimants object the Requests of the Respondent on the basis of Article 3.3 of the IBA Rules arguing that they are "excessively broad and/or lack specificity". In this regard, Article 3(3)(a) of the IBA Rules provides as follows:

"3. A Request to Produce shall contain:

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(a) (i) a description of each requested Document sufficient to identify it, or
(ii) a description in sufficient detail (including subject matter) of a narrow and specific requested category of Documents that are reasonably believed to exist; in the case of Documents maintained in electronic form, the requesting Party may, or the Arbitral Tribunal may order that it shall be required to, identify specific files, search terms, individuals or other means of searching for such Documents in an efficient and economical manner"

6. The Commentaries to the IBA Rules recognize the possibility that the requests of some documents may not be particularly identifiable. In such cases, requests may be accepted “if they were carefully tailored to produce relevant and material documents".²⁵

7. In this sense, the description of the documents, the alluded context, the examples of the requested documents, as well as the explanation on the relevance and materiality are elements that enable to clearly identify the nature of the requested documents.

8. In particular, the Claimants state that the Respondent's Requests 1, 2, 8, 9 and 15 are “overly broad and [did] not compl[y] with either section 15.4 of the PO1, or Article 3.3. of the IBA Rules".

9. Claimants' assertions are incorrect. The Tribunal may note that Requests 1, 2, 8, 9 are specific. The fact that the Requests 1, 2, and 8 refer to “all documents and communications” does not mean they are ultra vires of § 15.4 of the PO1. The Requests 1, 2, and 8 contain sufficient context to limit the documents requested and Respondent has also explained the relevance and materiality thereof.

10. In addition, the language used in requests 9 and 15 is different from that to which the Claimants seek to object, so it is unclear to Respondent why the Claimants consider these requests are broad or lack specificity.

11. Therefore, the Tribunal should reject the objections raised by the Claimants and order the production of the documents requested by the Respondent.

²⁵ 1999 IBA Working Party, & 2010 IBA Rules of Evidence Review Subcommittee & 2020 IBA Rules of Evidence Review Task Force, Commentary on the revised text of the 2020 IBA Rules on the Taking of Evidence in International Arbitration, January 2021, p. 10. ↩

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B. The Requests formulated by Mexico are relevant to the case and material to its outcome

12. The Claimants object to a significant number of Respondent's Requests on the grounds that they are "irrelevant to the Tribunal's resolution of the legal jurisdictional issues at hand.”²⁶

13. In this regard, the Claimants argue that “[...] Claimants have already produced documents conceding to constructive knowledge of the September 2022 Injunction as early as late February 2023 or early March 2023.”²⁷ However, they fail to explain why these documents are not relevant or material to the case pursuant to Article 3(3)(b) of the IBA Rules.

14. Throughout its Requests, Respondent explained in detail and with precision both the “relevance” and the “materiality” standards for the requested documents. The Claimants do not dispute the details provided by the Respondent with respect to these standards.

15. Instead, the Claimants insist that these documents are not relevant only because they do not strengthen their position in this arbitration. For example, they point out that “the requested documents are not material to the outcome of the Tribunal's decision on jurisdiction because the Tribunal must find that failure to satisfy NAFTA Article 1119 does not result in the loss of jurisdiction", or they argue that they do not need to demonstrate that: (i) under Article 1116 “they acquired the Notes or made specific financial or economic contributions for the purpose of acquiring the Notes”; (ii) based on the definition of investment under Article 1139, Claimants are not required to demonstrate a “risk, commercial or otherwise to satisfy this definition and allow the Tribunal to rule in [its] favor”; “[e]conomic loss is not an element relevant to the Tribunal's jurisdictional analysis under NAFTA Article 1116(1), as the Tribunal must only find that Claimants controlled the Notes”. The foregoing cannot be considered a proper explanation.

16. The Claimants do not consider all the elements that are related to the litis of the case, which would have an impact on the outcome of the arbitration. For example, the underlying elements

²⁶ Claimant’s Objections to the Respondent’s Request for Document Production, October 10, 2024, ¶12. ↩

²⁷ Claimants objection to Request 1 of production of documents of the Respondent. ↩

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related to the control of the Notes, the economic resources committed for the acquisition of the Notes, or the due diligence that the Claimants should have performed prior to acquiring the Notes.

17. In relation to Requests 13 and 15, the Claimants allege that the aspects related to Mr. Smith's Witness Statement are not relevant and material to the outcome of the case, as there is no “prohibition on counsel entering into agreement with a witness for the provision of testimony”.

18. The Respondent does not share Claimants' view, as any compensation that Mr. Smith or his firm received for the submission of his Witness Statement is important to determine whether he has or had any economic incentive in the form of either financial compensation or a business arrangement that could undermine Mr. Smith's credibility in this proceeding. These issues are not addressed in Mr. Smith's Witness Statement, nor in Claimants' Counter-Memorial on Jurisdiction, therefore this Request is not redundant.

19. In addition, the Tribunal should not lose sight of the fact that these documents are material to the outcome of the arbitration as they regard key aspects of the case, such as the interpretation of Exhibit 14-C, which are based on the witness statement of Mr. Smith, who: (i) served as a public official; (ii) has had an employment relationship with the Claimants' representatives, and (iii) everything suggests that he currently has a contractual relationship with the Claimants or their legal representatives. This obviously affects his credibility.

20. In view of the foregoing, it is clear that the requested documents in this category are relevant to the case and material to its outcome.

C. The requested documents are not in possession nor custody of the Respondent

21. Contrary to what Claimants allege, the fact that they have submitted in the arbitration certain documents that may be related to Respondent's Requests does not mean that the Respondent has all of these documents.

22. With respect to the requested documents that are related to Mr. Smith, Respondent only requested those documents on which he based and/or referred to in his own Witness Statement. The Respondent has already explained that it has made an exhaustive search on the files of the Ministry of Economy, however, and despite Mr. Smith's obligation to do a Handover and

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Reception of Authority Act, it has not located the files related to the commission of the witness of the Claimants.

23. In addition, contrary to Claimants' position at this document production stage, Respondent produced more than one hundred (100) documents in its custody relating to the negotiations of the USMCA, particularly about Chapter 14.

24. Finally, in connection with the “Form of Notes”, Respondent has used the terms set forth in the Indenture itself, particularly Exhibit A of the Indenture.²⁸ According to this contract, documents with the characteristics set forth therein should have been issued.

25. For ease of reference, the Respondent attaches a screenshot about the “Form of Notes”, in accordance to what is established by Indenture itself.²⁹

²⁸ Indenture. C-0006. ↩

²⁹ C-0006, pp. 126, 131. ↩

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26. In view of the foregoing, it is clear that the requested documents shall be in the possession and custody of the Claimants, and it is reasonable that the Respondent has understood this. Therefore, the Tribunal must dismiss its objections and order the production of such documents.

D. Contrary to what the Claimants' established in their objections, the Requests made by Mexico do not refer to documentation involving legal impediment or privilege.

27. The Claimants object to Mexico's Requests on the basis of Article 9.2 (b) of the IBA Rules on the Taking of Evidence in International Arbitration (IBA Rules), however, they do not clearly explain how Requests 13 and 15 fall into this category.

28. As such, Article 9(2)(b) of the IBA Rules provides:

"The Arbitral Tribunal shall, at the request of a Party or on its own motion, exclude from evidence or production any Document, statement, oral testimony or inspection, in whole or in part, for any of the following reasons:
[...]
(b) legal impediment or privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable (see Article 9.4 below);
[...]".

29. The Commentaries to the IBA Rules recognize that such provision “provides protection for documents and other evidence that may be covered by certain privileges, under the appropriate applicable law, such as the attorney-client privilege, professional secrecy or the without-prejudice privilege".³⁰

30. Both arbitral tribunals and doctrine have also been emphatic in pointing out that the party asserting the privilege has the burden of proving that such privilege applies to each document request.³¹

³⁰ 1999 IBA Working Party, & 2010 IBA Rules of Evidence Review Subcommittee & 2020 IBA Rules of Evidence Review Task Force, Commentary on the revised text of the 2020 IBA Rules on the Taking of Evidence in International Arbitration, January 2021, p. 28. ↩

³¹ Glamis Gold v United States of America, Decision on Parties' Requests for Production of Documents Withheld on Grounds of Privilege, November 17, 2005, ¶ 23. ↩

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In fact, such evidentiary burden applies to demonstrate both the legal privilege to be applied and the factual basis for the assertion of the privilege.³²

31. In Merrill and Ring Forestry L.P. v. Canada, the tribunal recognized that objections based on privilege grounds must meet certain parameters, in particular, identifying the specific documents and explaining in detail and clearly the reasons for invoking the privilege:

The Tribunal is also persuaded, however, that the privilege, as held in Pope & Talbot and the Canada-Aircraft decisions invoked by the Investor, can only be asserted in respect of sufficiently identified documents together with a clear explanation about the reasons for claiming such privilege. The parties would need such information in order to assess whether they agree or disagree about a refusal on these grounds, just as the Tribunal needs it to decide in case of disagreement between the parties.³³

32. The Claimants object to some Requests, particularly Requests 13 and 15, solely on the grounds that they relate to “contractual agreements between Claimants' counsel and Mr. Smith”. However, the Claimants appear to simply assume that the requested documents are somehow protected by privilege. Moreover, the Claimants fail to explain why these documents involve any confidential information and, even if they did contain such information, they have not identified what type of information would be confidential and what would be the legal basis for classifying the information as such or claiming privilege in order for the Tribunal to properly treat such information.

33. As mentioned supra, the Claimants allege that the contracts entered into with Mr. Smith are protected by certain privileges such as “attorney-client privilege, professional secrecy or the without-prejudice privilege”; in that sense, it is evident that the Claimants recognize their contractual relationship with Mr. Smith, which strengthens the Respondent's doubts about the credibility of Mr. Smith's witness statement.

34. Notwithstanding the foregoing, the Claimants do not clearly identify the privilege enjoyed by the contracts entered into with Mr. Smith or the legal basis for such privilege. If Claimants seek to excuse the production of these documents on the basis of this privilege, Mexico requests that

³² Nathan D. O’Malley, Rules of Evidence in International Arbitration: An Annotated Guide, p. 290 (2nd ed. 2019). ↩

³³ Merrill and Ring Forestry L.P. v. Canada, ICSID Case No. UNCT/07/1, Decision on Production of Documents, July 18, 2008, ¶ 19. ↩

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the Tribunal order Claimants to produce a privilege log of all documents related to the Request, detailing the date of the document, the parties to the document (e.g., sender, recipient, contracting parties), and a description of the document.

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