Key moment to protect investments under NAFTA

By Santamarina Steta

U.S. and Canadian companies that have made investments in Mexico between January 1, 1994 and July 1, 2020 are in time to file a claim against the Mexican State under the North American Free Trade Agreement ("NAFTA").

In this regard, it is key to take into consideration that on July 1, 2020, the Treaty between the United States of America, the United Mexican States and Canada ("T-MEC"), which replaced NAFTA, entered into force. However, investments made during that period (January 1994 to July 2020) may give rise to investment arbitration under NAFTA.

This is relevant because, although it is true that the T-MEC also includes dispute resolution mechanisms, it is possible that certain NAFTA rules grant investors a higher level of protection.

Therefore, it is essential that investors carefully analyze whether they have a claim for compensation from the Mexican State and, if so, whether it is more convenient to file such a claim under NAFTA rules.en el caso de inversionistas estadounidenses-.

Investors who wish to take action on the grounds that their investment has been unjustifiably affected should implement certain preparatory actions prior to the April 1st, 2023, in order to be able to avail themselves of the protection of NAFTA.

Santamarina + Steta's dispute resolution team, together with the energy law area, has extensive experience advising clients on investment matters.

If you would like to explore the alternatives available to you to file a claim and protect your investments in Mexico, do not hesitate to contact our experts.

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