Mexico obtained a favorable ruling in an international arbitration promoted by the US funds Cyrus Capital Partners and Contrarian Capital Management, thereby avoiding assuming a claim for more than 219 million dollars derived from the financial conflict between those creditors and TV Azteca.

The Ministry of Economy reported that the arbitration tribunal of the International Center for Settlement of Investment Disputes (ICSID) dismissed in its entirety the claim presented by both funds, concluding that it lacked jurisdiction to hear the case.

The investors had argued that resolutions issued by Mexican courts unduly favored TV Azteca in the litigation related to non-payment of international bonds, for which they sought the Mexican State to respond for the damages caused.

However, the court determined that the plaintiffs could not be considered protected investors nor did they prove that they had an investment covered by the North American Free Trade Agreement (NAFTA), so it rejected their claims without analyzing the merits of the matter.

Likewise, it ordered Cyrus Capital Partners and Contrarian Capital Management to cover the expenses and costs of the arbitration procedure in favor of Mexico.

The origin of the conflict

The controversy dates back to the debt derived from bonds for 400 million dollars issued by TV Azteca in 2017. After the economic impact of the covid-19 pandemic, the television station stopped complying with the agreed payments and sought to restructure its financial obligations.

In 2022, a court in Mexico City granted precautionary measures that limited creditors' legal actions while the litigation was resolved, a decision that the US funds considered a violation of Mexico's international obligations regarding investment protection.

Based on these arguments, in 2023 they promoted international arbitration under the mechanism provided for in NAFTA, demanding compensation of more than $219 million, in addition to interest, expenses and legal costs.

The resolution represents a setback for the investment funds, which sought to transfer to the Mexican State the responsibility derived from the conflict with Ricardo Salinas Pliego's company.

The ruling also reinforces the Mexican government's position that commercial disputes between individuals do not automatically generate international responsibility of the State, particularly when the requirements to access the investment protection mechanisms provided for in international treaties are not met.

Although the arbitration was concluded in favor of Mexico, the litigation between TV Azteca and its creditors for the payment of the debt continues through other judicial and commercial means, so the resolution does not imply the extinction of the television station's financial obligations, but only that the Mexican government will not have to respond for them.

This news has been tken from authentic news syndicates and agencies and only the wordings has been changed keeping the menaing intact. We have not done personal research yet and do not guarantee the complete genuinity and request you to verify from other sources too.