Mexico wins international arbitration case against U.S. mining company

Mexico has secured a significant victory in an international arbitration case, successfully defending itself against a claim of over $315 million brought by U.S. firm Silver Bull Resources, Inc. The dispute, heard at the International Centre for Settlement of Investment Disputes (ICSID), an arm of the World Bank, centered on allegations that Mexican authorities improperly interfered with the company's mining project.

The Secretariat of Economy announced that on May 29, the Arbitral Tribunal delivered a unanimous decision in favor of Mexico. The tribunal rejected the core accusation that the Mexican state had actively obstructed Silver Bull's project in Sierra Mojada, Coahuila. Furthermore, the tribunal determined it lacked jurisdiction over certain aspects of the claim, leading to the dismissal of Silver Bull's demands.

Silver Bull Resources had argued that its mining concessions, acquired between 1996 and 2002, were hindered by a local cooperative allegedly supported by authorities since September 2019. Mexico countered that state authorities in Coahuila acted reasonably in response to social conflicts stirred by Silver Bull's actions. The country also contended that the claims were either time-barred or fell outside the scope of the North American Free Trade Agreement (NAFTA), and that Silver Bull lacked the necessary technical and financial capacity for the project.

The tribunal found that the events cited by Silver Bull occurred outside the period reviewable under NAFTA. As a result, the company was ordered to reimburse Mexico for a substantial amount of arbitration expenses and costs. This ruling is expected to reinforce legal certainty for international investment in Mexico, affirming the boundaries of the country's obligations.