The United Mexican States appealed a Superior Court decision dismissing its application to set aside a portion of a NAFTA Chapter 11 arbitration award in favour of Cargill, Incorporated.
The arbitral tribunal had awarded Cargill damages for both its Mexican subsidiary's lost sales and its own lost sales of high fructose corn syrup to the subsidiary ('up-stream losses') resulting from Mexico's trade barriers.
Mexico argued the tribunal lacked jurisdiction to award up-stream losses.
The Court of Appeal held that the standard of review for true questions of jurisdiction under Article 34(2)(a)(iii) of the Model Law is correctness.
However, the Court found that the tribunal correctly identified its jurisdictional limits and that the determination of whether the up-stream losses arose out of Mexico's breaches was a matter for the tribunal's expertise, not a jurisdictional issue.
The appeal was dismissed.
