Chicago Journal of International Law


The North American Free Trade Agreement ("NAFTA") entered into force in January 1994. For Mexico, this was an important step. Before NAFTA, all foreign investor disputes were resolved in domestic administrative tribunals and judicial courts because Mexico did not recognize international claims by foreign investors. Since NAFTA, however, Mexico has changed its policy and now allows investors of the other NAFTA Party to submit a claim against it before an international tribunal for breach of its obligations under NAFTA Chapter 11. NAFTA Chapter Eleven is divided in two sections: Section A contains the substantive rules such as National Treatment, Minimum Standards of Treatment, Performance Requirements, Transfers and Expropriation, and Compensation. Section B contains the dispute settlement rules for investor-State arbitrations. The disputing party is able to choose among three different arbitration rules: the Convention on the Settlement of Investment Disputes between States and Nationals of Other States ("ICSID Convention"), the International Centre for Settlement of Investment Disputes ("ICSID") Additional Facility Arbitration Rules, or the United Nations Commission on International Trade Law ("UNCITRAL") arbitration rules. NAFTA Chapter 11 is similar to the Bilateral Investment Treaties ("BITs") signed by the United States. The investor-State mechanism has been used by investors to claim damages for alleged breach of their investments. This mechanism allows the investor of one Party to bring a claim against another Party for alleged breaches of Section A of NAFTA Chapter 11. Given the importance of this chapter for both investments and investors in the North American region, I will proceed to make a general overview of some issues regarding Minimum Standards of Treatment and Expropriation principles. I will also comment on the recent decision in the Metalclad case and on the acceptance of amicus curiae briefs in investor-State arbitrations.

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