On January 25, 2011, Corn Products International issued a press release that it had received $58.4 million from the Government of Mexico as payment of an arbitral award issued in respect of a Chapter 11 of NAFTA claim. Corn Products International had challenged Mexico's discriminatory taxation of beverages containing high fructose corn syrup and won.
The press release states:
Corn Products International, Inc. (NYSE: CPO), a leading global provider of ingredient solutions to diversified industries, received payments totaling US$58.4 million on January 25, 2011, from the Government of the United Mexican States pursuant to an award rendered in its favor by a North American Free Trade Agreement (NAFTA) Chapter 11 Tribunal in 2009.
The award was the result of a claim Corn Products submitted to arbitration in 2003 under the investment protection provisions of NAFTA arising out of a tax Mexico had imposed on beverages sweetened with high fructose corn syrup. In 2008 the NAFTA Tribunal found that the tax violated NAFTA's national treatment provisions by discriminating in favor of domestic producers of cane sugar.
Mexico made this payment pursuant to an agreement with Corn Products International that provides for terminating pending post-award litigation and waiving post-award interest.
While I do not want to steal the thunder of this large award, it is small in comparison with the 2010 settlement received by AbitibiBowater from the Government of Canada in respect of a Chapter 11 of NAFTA claim relating to its assets and rights in Newfoundland and Labrador, Canada that were expropriated by the provincial government under Bill 75 in December 2008. This settlement was for $130 Million. Please see the following link - http://abitibibowater.mediaroom.com/index.php?s=9363&item=12843
While the United States has never lost a NAFTA Chapter 11 case, Canada and Mexico have paid BIG sums. The lesson to be learned is that the some cases will end with a payout - but, the facts will be very very very important.