The Metalclad Corporation, a U.S. waste disposal company, instituted arbitration proceedings against Mexico under the ICSID Additional Facility Rules. Metalclad alleged breaches of NAFTA Articles 1102, 1103, 1104, 1105, 1106(1)(f), 1110 and 1111. Its notice of arbitration asserted that Mexico wrongfully refused to permit Metalclad's subsidiary to open and operate a hazardous waste facility that Metalclad had built in La Pedrera, San Luis Potosi, despite the fact that the project was allegedly built in response to the invitation of certain Mexican officials and allegedly met all Mexican legal requirements. The notice sought damages of US$43,125,000 "plus damages for the value of the enterprise taken."
Hearings on the merits were held from late August through early September 1999. On August 30, 2000, the Metalclad tribunal issued an award in favor of the investor in the amount of $16.7 million. Mexico petitioned the Supreme Court of British Columbia to set aside the award on the grounds that the Metalclad tribunal exceeded its jurisdiction and that enforcing the award would violate public policy. The British Columbia court set aside the award in part.
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