México v.

Azinian
 Parties
 Robert Azinian, Kenneth Davitian and Ellen
Baca
○ DESONA shareholders

 México –originally Naucalpan

México v. Azinian
 1992, negotiations between
Naucalpan´major & Azinian –the latter
pretending to represent Global Waste
 Intending to involve “Sunlaw Energy” as well
 1993, Mexico´s state legislature
approved Concession contract, signed
on November.
 DESONA begins operations
México v. Azinian
 DESONA deception
 1994, new administration
 It questions concession contract and
multiple irregularities
 DESONA initiates proceedings before
State Administrative Tribunal
 March, 1994, Concession contract is
cancelled
México v. Azinian
 June 14th, Administrative tribunal
dismissed DESONA´s claims
 December 10th, 1994, DESONA files
Amparo
 1995, Federal Court rules in favor of
Naucalpan
 1997, DESONA´s shareholders initiate
international arbitration against México,
under chapter 11 of NAFTA
México v. Azinian
 DESONA real intentions: to obtain
profitable contract, and associate with
real waste recycling corporations
 DESONA seek recovery of the loss of
the “value of the concession as an on-
going enterprise”
 Global Waste: ghost company
México v. Azinian
 Azinian wanted $19.2 million in
compensation damages for Naucalpan
municipality´s actions –cancellation
 Naucalpan authorities naivety
 Needed stronger requirements for contractors
 1996, claimants sent respondent a notice
of intention to file a claim of investors as a
result of an expropriation of a business
venture by Naucalpan municipality, being
the respondent México
México v. Azinian
 1997, ICSID informs parties that Arbitral
Tribunal has been constituted.
 Claimants stated they had legal
standing, under NAFTA 1116, 1117 and
1139
México v. Azinian
 Claimants allegations: Naucalpan
wrongful repudiation of Concession
Contract violates Articles 1110 and 1105
 They were asking for thousands, by applying
different value methods, plus interests, legal
fees, additional expenses, giving 70% to
Robert Azinian and 30% to Ellen Baca
Arbitration tribunal analysis
 Concession contracts with govt may
carry problems anywhere; NAFTA is not
the forum to deal with all of them
 Annulment of Concession, not an
expropriation
 Concession contract invalid, held by
three Mexican tribunals
Arbitration tribunal analysis
 Court decision must be a violation of
treaty
 There must be a denial of justice
 Concession contract did not
contemplate sub-contracts, intuitu
personae
 Ayuntamiento –municipality was led to
sign contract under false pretenses
 Claimants did not prove their allegations