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Metalclad Corp. v. Mexico

Type of decisionAward
Date of decision30 August 2000
Tribunal
Elihu Lauterpacht (President)
Benjamin R. Civiletti
José Luis Siqueiros
Legal instrumentNorth American Free Trade Agreement
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Statements from this decision

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A party of NAFTA is responsible for the conduct of all territorial units, even in case of ultra vires-acts
In determining whether an indirect expropriation took place, a tribunal may pay particular attention to the investor’s justified reliance on the government’s representation
Protection against expropriation under NAFTA includes protection against covert or incidental interferences with the use of property, which have the effect of depriving the owner in whole or in significant part of the use or reasonably-to-be-expected economic benefit
The relinquishment of title in the investment is an additional consequence of being compensated for an indirect expropriation
Article 1105 NAFTA requires the host state to ensure a transparent and predictable framework for the investor’s business activities
Exhaustion of local remedies is not a precondition to filing a claim under NAFTA
While confidentiality is regarded as advantageous, there is no general principle of confidentiality
Tax filings, together with independent audit documents supporting the filings, are to be accorded substantial evidentiary weight; difficulties in verifying expense items due to incomplete files do not necessarily render the expenses claimed fundamentally erroneous
The claimant must show a causal relationship between the host state’s actions and the asserted damages
Where the investment was never operative and any award based on future profits would be wholly speculative, the tribunal may determine the fair market value by reference to the actual investment in the project
The fair market value of a going concern may be based on an estimate of future profits subject to a discounted cash flow analysis unless the investment was never operative and any award based on future profits would be wholly speculative
Article 1105 requires the host state to ensure a transparent and predictable framework for the investor’s business activities
Protection against expropriation under NAFTA includes protection against covert or incidental interferences with the use of property, which have the effect of depriving the owner in whole or in significant part of the use or reasonably-to-be-expected economic benefit
In determining whether an indirect expropriation took place, a tribunal may pay particular regard to the investor’s justified reliance on the government’s representation
Exhaustion of local remedies is not a precondition to filing a claim under NAFTA
Article 1120 NAFTA does not modify Article 48 of the Additional Facility Rules

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