First Majestic Silver Corp. v. United Mexican States

Case summary

At a glance

Parties: First Majestic Silver Corp. (Canada), on its own behalf and on behalf of Primero Empresa Minera, S.A. de C.V. (PEM), v. the United Mexican States
Case no.: ICSID Case No. ARB/21/14; consolidation request also covering ICSID Case No. ARB/23/28
Forum and rules: ICSID Convention arbitration under the ICSID Arbitration Rules 2006, place of proceeding Washington, D.C. The consolidation proceeding under NAFTA Article 1126 is conducted under the UNCITRAL Arbitration Rules 1976, place of arbitration Washington, D.C.
Treaty: NAFTA Chapter 11, applicable through the legacy provisions of USMCA Annex 14-C
Tribunal: Prof. Giorgio Sacerdoti (President), Prof. Stanimir A. Alexandrov, Prof. Yves Derains. Consolidation Tribunal: Prof. Albert Jan van den Berg (Presiding), Ms. Tina M. Cicchetti, Mr. Christian Vidal-León
Sector: Silver mining; taxation; transfer pricing
Outcome: Pending; no award is among the published documents. The Tribunal granted one provisional measure on VAT refunds (26 May 2023) and dismissed Mexico's jurisdictional objection (20 December 2023). On 22 September 2025 it found Mexico in breach of the provisional measure.

The dispute

First Majestic, a Canadian company, owns PEM, which operates the San Dimas silver mine in Mexico. In 2012 Mexico's tax authority (SAT) issued an advance pricing agreement (APA) accepting the transfer price for PEM's silver sales to foreign related companies under a Streaming Agreement. In 2015 SAT began a juicio de lesividad to annul the APA, and on 23 September 2020 the Federal Administrative Court (TFJA) annulled it with retroactive effect; PEM challenged that judgment by amparo. First Majestic also challenges tax reassessments for 2010–2013, the freezing of PEM's bank accounts from April 2020 and related enforcement measures, principally as breaches of the minimum standard of treatment (Article 1105) and other NAFTA Chapter 11 obligations. Mexico argues, among other things, that the measures are taxation measures excluded by NAFTA Article 2103(1) and that its actions apply generally applicable Mexican tax law.

Key holdings

The Tribunal has prima facie jurisdiction for provisional measures. Mexico's objection under Article 2103(1) (exclusion of taxation measures) does not prevent this until it is decided. Decision on Provisional Measures ¶¶ 105–106
The request to stay PEM's pending amparo was refused. While the amparo is pending, the TFJA annulment is not effective and the APA stays in force, so there is no imminent serious harm. The amparo also has a different object from the NAFTA claim and does not threaten the integrity or exclusivity of the ICSID proceeding. Decision on Provisional Measures ¶¶ 113–119
The request to bar Mexican officials from speaking to the media was refused. Statements by high officials that single out an investor could justify such a measure, but the President's statement of 7 February 2022 was informative in tone. The Minister of Economy's December 2022 remark did not name the Claimant. Neither statement affected the arbitration. Decision on Provisional Measures ¶¶ 123–126
The Tribunal unanimously recommended that Mexico not block VAT refunds owed to PEM from 4 January 2023 onward, and that it pay them into accounts indicated by PEM and kept freely available to it. Article 1134 NAFTA does not bar this, because the denial of access to future VAT refunds is not a measure challenged in the arbitration. Requests to stay tax enforcement and audits, and proceedings against management personnel, were refused for lack of necessity and urgency. Decision on Provisional Measures ¶¶ 134–135, 139–143
Mexico's objection that the second arbitration (ARB/23/28) breached First Majestic's Article 1121 waiver was dismissed. Payment of VAT refunds into blocked accounts is not a measure challenged in this arbitration. The blocking of PEM's accounts since April 2020 is challenged here but not in the second arbitration. The objection was decided without suspending the merits, so the bifurcation requests were moot. Decision on Preliminary Objection ¶¶ 33, 80–82, 84
The Consolidation Tribunal rejected First Majestic's objection that it was constituted 26 days after the 60-day period in NAFTA Article 1126(5). The time limit is mandatory but falls on the ICSID Secretary-General; it is not a condition of the parties' consent. The delay arose largely from the parties' own requests, and its constitution cured the defect without prejudice to either side. Consolidation PO No. 2 ¶¶ 60–73, 76
Mexico is in breach of the provisional measure. It must make available to PEM the August–October 2023 VAT refunds held in the blocked Banamex account. It must also remedy the 29 August 2024 blocking of the Banorte account that PEM opened to receive refunds. Mexico's arguments about guaranteeing tax liabilities and continued coordination with SAT were rejected. PO No. 8 ¶¶ 16–21