ARBITRATION UNDER CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE
AGREEMENT AND THE CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES
BETWEEN STATES AND NATIONALS OF OTHER STATES
REQUEST FOR ARBITRATION
II. THE PARTIES
III. JURISDICTIONAL AND PROCEDURAL REQUIREMENTS
A. The Parties Have Consented to Arbitrate GG Resources' Claims Pursuant to the ICSID Convention and the ICSID Arbitration Rules
B. GG Resources is a Protected Investor under NAFTA with Protected Investments in Mexico
C. All Other Conditions to Commence Arbitration Have Been Satisfied
IV. ADDITIONAL PROCEDURAL MATTERS
A. Applicable Procedural Rules
B. Constitution of the Arbitral Tribunal
C. Place and Language of the Arbitration
V. FACTUAL BACKGROUND TO THE DISPUTE
A. Disputes Between Other Dyna Mex Shareholders and GG Resources After the Acquisition
1. Dispute Regarding GG Mining's Public Disclosures
2. Disputes Regarding the Improper Shareholder Actions
VI. FACTUAL BASIS FOR THE CLAIMS
A. GG Resources' Opposition Lawsuit Challenging the Outcome of the March 15,
Dyna Mex Shareholder Meeting
B. Annulment Proceeding
C. The US$48 Million Lawsuit
VII. MEXICO VIOLATED ITS OBLIGATIONS UNDER NAFTA
A. Mexico Breached Its Minimum Standard of Treatment Obligation
B. Mexico Unlawfully Expropriated Claimant's Investment
VIII. CLAIMANT'S REQUEST FOR RELIEF
IX. RESERVATION OF RIGHTS
1. Goldgroup Resources, Inc. ("GG Resources" or "Claimant"),1 a company incorporated under the laws of British Columbia, Canada, hereby submits this request for arbitration ("RFA") to the Secretary General of the International Centre for Settlement of Investment Disputes ("ICSID") and, thereby, commences arbitration proceedings against the United Mexican States ("Mexico" or "State" or "Respondent") on its own behalf pursuant to Chapter 14, Annex 14-C of the Agreement between the United States of America, the United Mexican States, and Canada ("USMCA"), Chapter 11 of the North American Free Trade Agreement ("NAFTA" or the "Treaty"), 3 Article 36 of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States ("ICSID Convention"), and Article 4 of the ICSID Institution Rules.
2. This RFA is accompanied by 22 factual exhibits, numbered C1 through C-22, and 7 legal authorities, numbered CL-1 through CL-7. Electronic versions of such exhibits have been submitted via the document sharing platform, Box
3. This dispute concerns Respondent's unlawful expropriation of Claimant's investment in Mexico through a series of acts by the Mexican judiciary that stripped Claimant of the shares that backed Claimant's protected investment in the San José de Gracia gold mining project. The alarming acts undertaken by the Mexican judiciary, that form the basis of Respondent's breaches of the Treaty in this case, are a textbook example of a shocking and "willful disregard of due process of law."5
4. This case involves three distinct, but related, proceedings in the Mexican courts that relate to Claimant's investment in Mexico. Claimant commenced two judicial proceedings to protect its investment in Mexico, and even though those proceedings have been pending for close to a decade, the two Mexican courts have, to this day, still failed to reach any decision on the merits. As a result, Claimant has been deprived of the opportunity to obtain justice or relief from the Mexican courts.
5. Further demonstrating the absurdity and irrationality of the timeline of the two cases commenced by GG Resources, in the third case, which was filed against GG Resources and its parent company, the Mexican judiciary issued a judgment in a mere 10 months. This third case has likewise resulted in a violation of Claimant's rights under NAFTA. This third proceeding has been plagued with incomprehensible procedural defects and has resulted in an extraordinarily shocking ruling that has no basis in law. Among the most flagrant of a plethora of procedural violations in this third case have been that (i) Claimant was never properly served, (ii) the court did not have jurisdiction to render a judgment, and (iii) the judgment was executed without real notification to Claimant.
Moreover, the judgment in the third proceeding is evidently improper because (i) the court expressly acknowledged that the principle of res judicata bars the issuance of a contradictory judgment on claims that have already been adjudicated, yet ignored that very principle by awarding US$48 million damages in direct contradiction to a prior judgment denying damages on the same claims, and (ii) the judgment resulted in an incoherent and irrational damages award.
6. These actions of the Mexican judiciary ("Measures") taken together, amount to a denial of justice and are tantamount to expropriation. Each of the Measures will be explained in greater detail below in Section VI of this RFA.
7. The Measures violate Mexico's obligations to Claimant, a Canadian investor, under NAFTA. The obligations violated include, but are not limited to, those established in:
7.1 NAFTA Article 1105, paragraph 1, "Minimum Standard of Treatment" ("Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security");6 and
7.2 NAFTA Article 1110, paragraph 1, "Expropriation and Compensation" ("No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation"), except: (a) for a public purpose; (b) on a non- discriminatory basis; (c) in accordance with due process of law and Article 1105(1); and (d) on payment of compensation in accordance with paragraphs 2 through 6")
8. Claimant gave Mexico written notice of its claims under NAFTA Article 1118 by notice dated November 18, 2022 (the "Notice of Intent")
9. In this RFA, Claimant sets forth the jurisdictional and substantive bases for its claims under the Treaty. Claimant reserves its right to further specify, supplement or amend the factual and legal claims and arguments herein.
VIII. CLAIMANT'S REQUEST FOR RELIEF
92. On the basis of the foregoing, without limitation and reserving Claimant's right to supplement this request for relief, Claimant respectfully requests that the arbitral tribunal:
92.1 DECLARE that Mexico has breached its obligations under NAFTA Articles 1105 and 1110;
92.2 ORDER Mexico to pay to Claimant:
(a) compensation in accordance with Mexico's obligations under Article 1110 of the Treaty; or
(b) full reparation for all loss and damage caused by Mexico's breaches of Article 1105 of the Treaty;
which amounts shall be properly quantified during the course of these proceedings, but which are preliminary estimated at approximately at least US$100 million; plus
(c) pre-award and post-award interest.
92.3 AWARD such other relief as the arbitral tribunal considers appropriate; and
92.4 ORDER Mexico to pay all of the costs and expenses of this arbitration, including Claimant's legal and expert fees and expenses, the fees and expenses of any experts appointed by the arbitral tribunal, the fees and expenses of the arbitral tribunal and any other costs and fees.
IX. RESERVATION OF RIGHTS
93. Claimant hereby reserves the right to submit such additional claims, defenses, evidence and arguments as they may deem appropriate, either to supplement or augment the claims presented herein or to respond to any allegation or claim made by Respondent in connection with this arbitration.