COURT OF APPEAL FOR ONTARIO
Roberts, Thorburn and Sossin JJ.A.
BETWEEN
The United Mexican States
Applicant (Appellant)
and
Gordon G. Burr; Erin J. Burr; John Conley; Neil Ayervais; Deana Anthone; Douglas Black; Howard Burns; Mark Burr; David Figueiredo; Louis Fohn; Deborah Lombardi; P. Scott Lowery; Thomas Malley; Ralph Pittman; Daniel Rudden; Marjorie “Peg” Rudden; Robert E. Sawdon; Randall Taylor; James H. Watson Jr.; B-Mex, LLC; B-Mex II, LLC; Oaxaca Investments, LLC; Palmas South, LLC; B-Cabo, LLC; Colorado Cancun, LLC; Santa Fe Mexico Investments, LLC; Caddis Capital, LLC; Diamond Financial Group, Inc.; J. Paul Consulting; LAS KDL, LLC; Mathis Family Partners, Ltd.; Palmas Holdings, Inc.; Trude Fund II, LLC; Trude Fund III, LLC; Victory Fund, LLC
Respondents (Respondents)
Daniel Hohnstein, Stephanie Desjardins and Hugh Jones, for the appellant
John Terry, Emily Sherkey and Natasha Williams, for the respondents Gordon G. Burr, Erin J. Burr, John Conley, Neil Ayervais, Deana Anthone, Douglas Black, Howard Burns, Mark Burr, David Figueiredo, Louis Fohn, Deborah Lombardi, P. Scott Lowery, Thomas Malley, Ralph Pittman, Daniel Rudden, Marjorie "Peg" Rudden, Robert E. Sawdon, James H. Watson Jr., B-Mex, LLC, B-Mex II, LLC, Oaxaca Investments, LLC, Palmas South, LLC, B-Cabo, LLC, Colorado Cancun, LLC, Santa Fe Mexico Investments, LLC, Caddis Capital, LLC, Diamond Financial Group, Inc., Family Vacation Spending, LLC, Financial Visions, Inc., J. Johnson Consulting, LLC, J. Paul Consulting, LAS KDL, LLC, Mathis Family Partners, Ltd., Palmas Holdings, Inc., Trude Fund II, LLC, Trude Fund III, LLC and Victory Fund, LLC
No one appearing for the respondent Randall Taylor
Heard and rendered orally: July 2, 2026
On appeal from the judgment of Justice William Black of the Superior Court of Justice, dated October 8, 2025, with reasons reported at 2025 ONSC 5724.
REASONS FOR DECISION
1The appellant appeals from the dismissal of its application to set aside an international arbitral award. The arbitral tribunal (the “Tribunal”) found that the appellant had failed to accord fair and equitable treatment to the respondents under art. 1105 of the North American Free Trade Agreement (“NAFTA”).
2The Tribunal found that about ten months after issuing a gambling permit to the respondents allowing them to operate games of chance in casinos in Mexico, the appellant revoked it and then shut down the casinos despite an injunction, and refused to issue a new permit, entirely undermining the respondents’ business. The Tribunal concluded that this was for “no discernible reason” other than because of a change in political leadership, and that it represented an “extraordinary change of heart” from the appellant’s previous position expressly recorded in the 2012 permit that the respondents’ casinos had been operated in compliance with applicable law. The Tribunal held that the appellant had ample opportunity to preserve the respondents’ operations but that the new government had instead opted to terminate the business without identifying a public or regulatory concern. The Tribunal ordered the appellant to pay the respondents over $80 million in damages.
3The appellant raises two overarching grounds of appeal: 1) the application judge’s analysis of the Tribunal’s decision was tainted by his failure to apply the correct standard of review; and 2) the application judge erred by failing to set aside the arbitral award when the appellant was denied procedural fairness and deprived of a full and fair opportunity to present its case.
4We are not persuaded that the application judge made any reversible error.
5First, the application judge analyzed the Tribunal decision through the correct standard of review: he framed his analysis by correctly stating that intervention “will be warranted only when the Tribunal’s conduct is so serious that it cannot be condoned” and that “the standard is whether a Tribunal’s impugned decision, or actions in reaching that decision ‘offend our most basic notions of morality and justice,’ thereby constituting a breach of procedural fairness”: see Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, 70 C.L.R. (4th) 5, at para. 65, leave to appeal refused, [2018] S.C.C.A. No. 46 When read in the entire context of his reasons, his references to “extreme departures from basic tenets of procedural fairness” and “unconscionable procedural unfairness” did not elevate the standard of review but were aptly descriptive of the exceptional nature of the court’s intervention as set out in the governing principles that guided his analysis. In any event, even assuming for the sake of the appellant’s argument that the application judge referenced an elevated standard, it is of no moment because the application judge found that there was no procedural fairness breach of any nature. As he stated: “I do not accept that there was anything unfair about this process, let alone anything of the fundamental nature that would be required in order to justify a setting aside.”
6Second, applying the correct standard of review, the application judge rejected the same arguments about procedural unfairness that the appellant repeats on appeal and determined, correctly in our view, that there was no basis to interfere with the Tribunal’s decision. As the application judge noted, the Tribunal’s decision that spanned over 100 pages was the culmination of over 9 years of heavily contested litigation, extensive documentary discovery and production, 9 days of hearing involving over 20 fact and expert witnesses, thousands of exhibits, and over 1500 pages of written submissions by the parties. The appellant’s contention that it did not have the opportunity to fully and properly present its case has no foundation on this record.
7Moreover, the Tribunal’s reasons clearly belie the appellant’s contention that the documentary production and judicial review issues were of central importance and led to procedural unfairness. The application judge properly characterized the appellant’s arguments about documentary production as “selectively ‘cherry picking’ aspects of the evidence, showcasing those aspects in isolation, ignoring the context and the process, and presenting a revisionist history of what were in fact routine and largely inconsequential documentary orders.” That the appellant’s submissions about judicial review occupied only three paragraphs of its hundreds of pages of written submissions and one sentence of its opening submissions also reveals their inconsequential importance. Nothing turned on these issues. We agree with the application judge’s analysis and disposition of these issues.
8For these reasons, the appeal is dismissed.
9As agreed, the appellant shall pay the respondents their costs in the all-inclusive amount of $60,000.
“L.B. Roberts J.A.”
“Thorburn J.A.”
“L. Sossin J.A.”