Silver Bull formalizes arbitration proceedings against Mexico

Silver Bull formally started international arbitration proceedings against Mexico under the US, Mexico and Canada trade agreement (USMCA) and the North American Free Trade Agreement (NAFTA). 

The claim seeks to recover around US$178mn in damages for what the Vancouver-based company describes as Mexico's unlawful expropriation and the blockade of its US$300mn Sierra Mojada project in Coahuila since September 2019.

The arbitration has been initiated under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States process, which falls under the auspices of the World Bank's International Centre for Settlement of Investment Disputes (ICSID), to which Mexico is a signatory, the company said in a statement. 

On March 2, Silver Bull officially notified Mexico of its intention “to initiate an arbitration owing to Mexico’s breaches of NAFTA by unlawfully expropriating Silver Bull’s investments without compensation, failing to provide Silver Bull and its investments with fair and equitable treatment or full protection and security, and not upholding NAFTA’s national treatment standard,” it said.

"Silver Bull held a meeting with Mexican government officials in Mexico City on May 30, 2023, in an attempt to explore amicable settlement options and avoid arbitration. However, the 90-day period for amicable settlement under NAFTA expired on June 2, 2023, without a resolution," the statement said. 

The US$178mn includes sunk costs of US$82.5mn, usually considered minimum damages in such cases, it added.