Debtwire Quotes Dinsmore's Ivan Bilaniuk in Article Discussing TV Azteca USMCA Arbitration in Mexico

Head of Dinsmore's International Dispute Resolution Practice and Washington, D.C. partner Ivan W. Bilaniuk spoke to Debtwire for a story about a USMCA case that will likely be decided in the summer of 2024. The publication reports that an affirmative decision would trigger the International Centre for Settlement of Investment Disputes (ICSID's) acceptance of the case involving TV Azteca creditors. An excerpt is below:

A decision from an International Centre for Settlement of Investment Disputes (ICSID) arbitration tribunal on whether the body is able to hear the case of TV Azteca creditors Cyrus Capital Partners and Contrarian Capital Management against the Mexican government is expected as soon as June or July, according to two sources close to the matter.

“This is not the prototypical investment arbitration dispute in which an aggrieved foreign investor brings a claim against a foreign state for expropriating its investment directly or constructively through state action,” said Ivan Bilaniuk, Head of the International Dispute Resolution Practice at US law firm Dinsmore & Shohl, which is not involved in the case. “Here in the TV Azteca case, the dispute is between private parties - TV Azteca and its foreign creditors. The foreign credit holders are TV Azteca bondholders and they were unable to prevail in litigation before local Mexican courts when TV Azteca sought relief from having to make payments during the COVID-19epidemic.”

“We surmise that in such a dispute between private parties of a national of one country and a foreign investor in that national, and where there is a decision issued by a local court against the foreign investors, that a denial of justice claim against Mexico under the USMCA is a prominent claim that the foreign investors have made,” added Bilaniuk. “This is a claim grounded in customary law in which a host state has not protected a foreign investment via a court system that fails to comply with international standards of justice. Such a claim is supported by investment arbitration case law.”

TV Azteca has been ordered by a Mexican court not to release to the public any information regarding its financial information and has received injunctions excusing missed interest payments in Mexican courts on the basis that, among other things, the outbreak of the COVID-19 pandemic and subsequent related orders by the Mexican government represented “Acts of God and Force Majeure events,” as reported.

“There have been multiple such investment arbitrations under NAFTA with some cases finding in favor of the host state, but at least one case finding in favor of the investor,” added Bilaniuk. “But, under NAFTA, an investor was required to exhaust local remedies in the host state legal system before filing an investment arbitration and in some cases, the investors lost because the tribunal ruled it had not exhausted such remedies.”

Read the full article here.