The award orders the country to pay $37.1 million plus interest at the one-year Mexican Treasury bond rate, compounded annually, beginning October 12, 2018, until the award is paid in full, as well as the arbitrators’ fees and administrative costs.
In light of this, the Government of Mexico disapproves of the ruling issued by an international tribunal administered by ICSID.
“After more than two years of the procedure being completed, on September 17, the majority of the court finally issued the award in favor of the company Odyssey Marine Exploration, which obliges our country to pay compensation of 37.1 million dollars for having denied the permit for the marine dredging project in Baja California Sur. This figure represents around 1.18% of the amount that the company originally claimed in the arbitration,” the Mexican agencies said.
Between 2016 and 2018, Semarnat denied the Environmental Impact Statement (EIS) for the project “Dredging of black phosphatic sands in the Don Diego deposit”, which is why the company Odyssey initiated an international arbitration against Mexico within the framework of NAFTA.
The Mexican government claims that the partners included Diego Fernández de Cevallos and Alonso Ancira.
During the international arbitration, Mexico demonstrated that the company has no experience in extracting phosphate sand from the seabed.
“In the arbitration process, Mexico argued that the project affected an ecologically sensitive area where the loggerhead turtle, blue and gray whales, and sea lions, among others, live. It also provided evidence that demonstrated the company’s lack of experience in the mining sector, since its main activity is the search for marine treasures. In addition, it was stated that the marine dredging techniques that Odyssey wanted to implement had not been put into practice anywhere in the world,” they detail.
The agencies say that disproportionate weight was given to the statements of two former directors of the General Directorate of Environmental Impact and Risk of Semarnat presented as witnesses by Odyssey, who declared that the denial of the MIA was due to political and not scientific reasons.
But Mexico’s defense showed that both witnesses were involved in conflicts of interest by receiving “substantial” payments for testifying, which was not taken into account by the majority of the court.
For this reason, the Ministry of Economy will initiate a trial to annul the award before the competent courts. Likewise, the Government of Mexico will use all possible means of defense.
