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International Arbitration Forum

Tralje International Finance, B.V. v. United Mexican States

Case summary

At a glance

Parties
Tralje International Finance, B.V. (Netherlands) v. United Mexican States
Forum and rules
Not yet chosen. The notice invokes investor–State arbitration under Article 8 of the Treaty and its Appendix
Treaty
Mexico–Netherlands BIT, signed in Mexico City on 13 May 1998, in force since 1 October 1999
Sector
Food products (sauce manufacturing); shareholding and real estate
Outcome
Only a notice of dispute is published. It opens the amicable-settlement period, and the documents do not show any later proceedings.
Amount
Tralje says its investments in Mexico exceed MXN 70 million. The unenforced ICC award it holds is for more than MXN 300 million. The counter-guarantee ordered to be executed is for more than MXN 5 million.

The dispute

Tralje International Finance, B.V. is a Dutch company. In April 2013 it bought 26% of the shares in Salsas Castillo, S.A.P.I. de C.V., a sauce maker in Hermosillo, Sonora. Through a subsidiary it also bought 26% of the real estate where the company's plant stands. Tralje says the Castillo family shareholders broke the by-laws and the shareholders' agreement in 2016, ending with Tralje's exclusion as a shareholder. Tralje then started an ICC arbitration to enforce its put option. In December 2017 a sole arbitrator awarded it more than MXN 300 million. Tralje claims that Mexican judicial and prosecutorial decisions between November 2016 and May 2019 stopped it from enforcing the award and destroyed the value of its investment. These included suspending the arbitration, lifting interim measures (which let the Castillos move assets away), upholding a challenge to the arbitrator, refusing to investigate a criminal complaint, and executing Tralje's counter-guarantee. It alleges breaches of the BIT's provisions on unjustified or discriminatory measures, fair and equitable treatment, full protection and security, national and most-favoured-nation treatment, and expropriation (Articles 2(1), 3(1), 3(2) and 5(1)).

Key holdings

  1. No decision has been issued. The notice formally raises the dispute under Article 8 of the Treaty and asks for amicable settlement, which starts the 90-day consultation period under Article 4(2) of the Appendix. p. 5
  2. In the notice, Tralje accepts Mexico's offer to arbitrate contained in the Treaty and gives its own consent. The consent takes effect without further notice if no settlement is reached within three months of receipt. p. 5
  3. Tralje attributes to Mexico the acts of its judicial organs and of the Government of the State of Sonora. It characterises the measures as arbitrary, discriminatory and a denial of due process. pp. 3–4

Procedural history

  1. 27 July 2016Tralje starts an ICC arbitration against Salsas Castillo and the Castillos under the shareholders' agreement.
  2. December 2017The ICC sole arbitrator orders Salsas Castillo and the Castillos, jointly and severally, to pay Tralje more than MXN 300 million.
  3. 25 September 2019Tralje's notice of dispute under the Mexico–Netherlands BIT is dated.
  4. 22 October 2019The notice is received by hand, according to the receipt stamp.

Tribunal, counsel and experts

For the claimant
Sartorio Abogados · Dechamps International Law

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Country
Treaty
Mexico - Netherlands BIT (1998)
Documents