Petition for Writ of Certiorari — United Mexican States, Petitioner v. Lion Mexico Consolidated L.P.
Supreme Court briefAug 5, 2026
Ask Donna
What actually matters in this document.
Text
No.
IN THE
SUPREME COURT OF THE UNITED STATES
______________________
UNITED MEXICAN STATES
Petitioner,
v.
LION MEXICO
CONSOLIDATED, L.P.,
Respondent.
______________________
On Petition for a Writ of Certiorari to the
United States Court of Appeals for the District of
Columbia Circuit
______________________
PETITION FOR A WRIT OF CERTIORARI
______________________
STEPHAN E. BECKER
Counsel of Record
Gary J. Shaw
PILLSBURY WINTHROP SHAW
PITTMAN LLP
1200 Seventeenth Street, NW
Washington, D.C. 20036
Tel.: (202) 663-8000
stephan.becker@pillsburylaw.com
gary.shaw@pillsburylaw.com
Counsel for Petitioner
i
QUESTION PRESENTED
The Federal Arbitration Act (“FAA”) authorizes
courts to vacate an arbitration award when an
arbitrator has “exceeded [its] powers.” 9 U.S.C. §
10(a)(4). Under this Court’s decisions, an arbitrator
“may not ignore the plain language of the contract.”
United Paperworkers Int’l Union v. Misco, Inc., 484
U.S. 29, 38 (1987). But if the arbitrator even arguably
construes or applies the parties’ agreement, courts
must let the award stand. See id.
The courts of appeals have developed notably
different methods for determining when arbitrators
are arguably interpreting an agreement versus
ignoring the plain text. Some courts examine the
language of the contract and will vacate an award
when there is no plausible connection between the
text and the arbitrator’s conclusions. Others ask only
whether the arbitrator purported to interpret the
agreement, in other words, whether the arbitrator
looked to and construed the agreement.
The court below adopted the latter approach, and
in doing so, materially prejudiced the right to relief of
the United Mexican States under the FAA. The text of
the agreement – in this case, a treaty – was plain and
unambiguous and there is no plausible connection
between the text and the arbitrators’ conclusions.
The question presented is:
Whether arbitrators have “exceeded their powers”
under 9 U.S.C. § 10(a) when the award has no
plausible basis in the governing instrument.
ii
PARTIES TO THE PROCEEDING
Petitioner United Mexican States was appellant in
the court of appeals and petitioner and crossrespondent in the district court.
Respondent Lion Mexico Consolidated, L.P. was
appellee in the court of appeals and respondent and
cross-petitioner in the district court.
*Movant Hector Cardenas was an appellant in the
court of appeals and movant in the district court. The
district court denied his motion to intervene and the
D.C. Circuit upheld the lower court’s decision.
Accordingly, Mr. Cardenas is not a party to the
proceedings.
RELATED PROCEEDINGS
United States District Court for the District of
Columbia:
United Mexican States v. Lion Mexico
Consolidated, L.P., No. 1:21-cv-03185ACR (Nov. 8, 2024)
United States Court of Appeals for the District of
Columbia Circuit:
United Mexican States v. Lion Mexico
Consolidated L.P., Nos. 24-7185, 24-7186
(consol.) (Apr. 7, 2026)
iii
TABLE OF CONTENTS
QUESTION PRESENTED......................................... i
PARTIES TO THE PROCEEDING .......................... ii
RELATED PROCEEDINGS ..................................... ii
PETITION FOR A WRIT OF CERTIORARI ........... 1
INTRODUCTION ...................................................... 1
OPINIONS BELOW .................................................. 4
JURISDICTIONAL STATEMENT ........................... 4
RELEVANT AWARD EXPERTS, TREATY
PROVISIONS AND STATUTES .............................. 4
STATEMENT ............................................................ 5
A.
The Arbitration Agreement ...................... 5
B.
The Arbitration ......................................... 6
C.
Procedural History .................................... 8
REASONS FOR GRANTING THE PETITION ..... 10
I.
II.
THERE IS A CLEAR SPLIT ON THE
QUESTION PRESENTED.............................. 11
A.
The Second, Seventh, And Ninth
Circuits Ask Whether the Arbitrator’s
Interpretation is Plausible. ..................... 12
B.
The First, Fifth, and D.C. Circuits
Focus On Whether The Arbitrator
Purported
To
Interpret
The
Agreement. .............................................. 14
THE COURT SHOULD RESOLVE THE
CIRCUIT SPLIT .............................................. 16
A.
The Split Is Outcome-Determinative
and Recurring. ......................................... 17
iv
B.
The Split Encourages Forum Shopping
and Wastes Judicial Resources............... 18
C.
This Case Is an Ideal Vehicle for
Resolving the Split. ................................. 19
CONCLUSION ........................................................ 20
TABLE OF APPENDICES
APPENDIX A — OPINION OF THE UNITED
STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA CIRCUIT,
FILED APRIL 7, 2026 ....................................... 1a
APPENDIX B — MEMORANDUM OPINION
AND ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF
COLUMBIA, FILED NOVEMBER 8, 2024 .... 21a
APPENDIX C — EXCERPT OF THE AWARD ... 57a
APPENDIX D — NAFTA ARTICLE 1105 ........... 60a
APPENDIX E — 9 U.S.C. § 10 ............................. 61a
v
TABLE OF AUTHORITIES
Page(s)
Cases
BNSF Railway Co. v. Alstom Transportation,
Inc.,
777 F.3d 785 (5th Cir. 2015) ...................... 2, 15, 16
Chicago Typographical Union No. 16 v.
Chicago Sun-Times, Inc.,
935 F.2d 1501 (7th Cir. 1991) .............................. 13
Employers Ins. of Wausau v. Nat’l Union Fire
Ins. Co. of Pittsburgh,
933 F.2d 1481 (9th Cir. 1991) .............................. 14
Ethyl Corp. v. United Steelworkers of Am.,
768 F.2d 180 (7th Cir. 1985) ................................ 13
First State Insurance Co. v. National Casualty
Co.,
781 F.3d 7 (1st Cir. 2015) .................................... 16
HayDay Farms, Inc. v. FeeDx Holdings, Inc.,
55 F.4th 1232 (9th Cir. 2022) .......................... 3, 14
Hoolahan v. IBC Advanced Alloys Corp.,
947 F.3d 101 (1st Cir. 2020) ................................ 16
Kemper Corporate Services, Inc. v. Computer
Sciences Corp.,
946 F.3d 817 (5th Cir. 2020) .......................... 15, 16
vi
Lagstein v. Certain Underwriters at Lloyd’s,
London,
607 F.3d 634 (9th Cir. 2010) ............................ 3, 14
Madison Hotel v. Hotel & Restaurant
Employees, Local 25, AFL-CIO
144 F.3d 855 (D.C. Cir. 1998) .......................... 2, 15
Major League Baseball Players Ass’n v.
Garvey,
532 U.S. 504 (2001) (Stevens, J.,
dissenting)
.......................................................................... 2, 20
Northern Indiana Public Service Co. v. United
Steelworkers of America,
243 F.3d 345 (7th Cir. 2001) ................................ 13
Oxford Health Plans LLC v. Sutter,
569 U.S. 564 (2013) .......................................... 1, 13
ReliaStar Life Ins. Co. of N.Y. v. EMC Nat’l
Life Co.,
564 F.3d 81 (2d Cir. 2009) ............................... 3, 12
Smarter Tools Inc. v. Chongqing SENCI
Import & Export Trade Co., Ltd.,
57 F.4th 372 (2d. 2023) .................................... 3, 12
Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,
559 U.S. 662 (2010) ................................................ 1
United Mexican States v. Lion Mexico
Consolidated L.P.,
172 F.4th 1 (D.C. Cir. 2026) .................................. 4
vii
United Mexican States v. Lion Mexico
Consolidated, L.P.,
757 F. Supp. 3d 18 (D.D.C. 2024) .......................... 4
United Paperworkers Int’l Union v. Misco, Inc.,
484 U.S. 29 (1987) ...................................... 1, 10, 11
United States Soccer Fed’n, Inc. v. United
States Nat’l Soccer Team Players Ass’n,
838 F.3d 826 (7th Cir. 2016) .......... 2, 12, 13, 14, 18
United Steelworkers v. Enterprise Wheel & Car
Corp.,
363 U.S. 593 (1960) .......................................... 1, 11
USAA Savings Bank v. Goff,
170 F. 4th 1051 (7th Cir. 2026) ................. 3, 13, 14
Willemijn Houdstermaatschappij, BV v.
Standard Microsystems Corp.,
103 F.3d 9 (2d Cir. 1997) ..................................... 12
Statutes and Codes
United States Code
Title 9, Section 10 .............................................. 5, 8
Title 9, Section 10(a)(4) .................. 1, 4, 8, 9, 17, 19
Title 28, Section 1254(1) ........................................ 4
North American Free Trade Agreement
Implementation Act, Pub. L. No. 103-182,
107 Stat. 2057 (1993) ............................................. 5
Other Authorities
North American Free Trade Agreement
Article 1105(1) .......................... 6, 7, 8, 9, 10, 15, 19
viii
North American Free Trade Agreement
Article 1122 ............................................................ 5
North American Free Trade Agreement
Article 1131(1) ........................................................ 5
Vienna Convention on the Law of Treaties,
Article 31, May 3, 1969, 1155 U.N.T.S. 331
(1980) ...................................................................... 5
1
PETITION FOR A WRIT OF CERTIORARI
Petitioner United Mexican States (“Mexico”)
respectfully petitions for a writ of certiorari to review
the judgment of the United States Court of Appeals
for the District of Columbia Circuit.
INTRODUCTION
In United Paperworkers Int’l Union v. Misco, Inc.,
the Court affirmed that an “arbitrator may not ignore
the plain language of the contract; but the parties
having authorized the arbitrator to give meaning to
the language of the agreement, a court should not
reject an award on the ground that the arbitrator
misread the contract.” 484 U.S. 29, 38 (1987)
(“Misco”); see also Stolt-Nielsen S.A. v. AnimalFeeds
Int’l Corp., 559 U.S. 662, 671–72, 676–77 (2010)
(“Stolt-Nielsen”). Accordingly, “as long as the
arbitrator is even arguably construing or applying the
contract and acting within the scope of his authority,
the court cannot overturn his decision simply because
it disagrees with his factual findings, contract
interpretations, or choice of remedies.” Id.; see also
United Steelworkers v. Enterprise Wheel & Car Corp.,
363 U.S. 593, 597 (1960) (“Enterprise Wheel”); Oxford
Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013)
(“Oxford”). This case presents an important and
recurring question of federal arbitration law over
which appellate courts have subsequently split:
Following Misco, how should courts determine
whether an arbitrator “ignored the plain language of
the contract” instead of construed the contract so as to
warrant vacatur under § 10(a)(4) of the FAA?
2
More than two decades ago, Justice Stevens
identified the precise problem, observing that this
Court’s precedents “do not provide significant
guidance as to what standards a federal court should
use in assessing whether an arbitrator’s behavior is so
untethered to either the agreement of the parties or
the factual record so as to constitute” an excess of
power. Major League Baseball Players Ass’n v. Garvey,
532 U.S. 504, 512 (2001) (Stevens, J., dissenting).
Today, the lower courts still lack a uniform method for
determining when an arbitrator disregards the
parties’ agreement.
Two Circuits employ an exceptionally deferential
standard, asking only whether the arbitrator
purported to interpret the agreement. See, e.g., BNSF
Railway Co. v. Alstom Transportation, Inc., 777 F.3d
785, 788–89 (5th Cir. 2015) (asking whether the
arbitrator “cites and analyzes the text of the contract”
and whether “her conclusions are framed in terms of
the contract’s meaning”); Madison Hotel v. Hotel &
Restaurant Employees, Local 25, AFL-CIO 144 F.3d
855, 859 (D.C. Cir. 1998) (“In this case it is enough to
sustain the award that the arbitrator … purported to
be interpreting the contract in rendering his final
decision.”) (internal quotes omitted).
Three other Circuits focus on the text. The Seventh
Circuit in particular looks to whether there is any
“interpretive route to the award” and will vacate an
award when no such route can be discerned. United
States Soccer Fed’n, Inc. v. United States Nat’l Soccer
Team Players Ass’n, 838 F.3d 826, 832–37 (7th Cir.
2016) (“Because the arbitrator is typically limited to
interpreting the contract, if ‘there is no possible
3
interpretive route to the award,’ then a
“noncontractual basis can be inferred and the award
set aside.”); USAA Savings Bank v. Goff, 170 F. 4th
1051, 1055 (7th Cir. 2026). The Second Circuit takes
a similar approach, asking whether there is a “barely
colorable justification for the outcome reached.”
ReliaStar Life Ins. Co. of N.Y. v. EMC Nat’l Life Co.,
564 F.3d 81, 86 (2d Cir. 2009); Smarter Tools Inc. v.
Chongqing SENCI Import & Export Trade Co., Ltd.,
57 F.4th 372 (2d. 2023) (“A ‘barely colorable
justification’ exists so long as the arbitrators had
reasoning on which they ‘could have justifiably rested
their decision.’”). The Ninth Circuit asks whether the
arbitrator’s interpretation was “plausible.” Lagstein v.
Certain Underwriters at Lloyd’s, London, 607 F.3d
634, 643 (9th Cir. 2010); HayDay Farms, Inc. v. FeeDx
Holdings, Inc., 55 F.4th 1232, 1241 (9th Cir. 2022).
These two approaches can lead to opposite
outcomes for the same award. One court may find that
the arbitrator disregarded the plain text because
there is no plausible or colorable justification for the
arbitrator’s conclusions. Another court may find it
sufficient that the arbitrator purported to interpret
the award, and accordingly uphold the award without
even analyzing the text of the agreement.
This case presents an appropriate vehicle for
resolving that split. In line with its previous decisions,
the court below adopted the former approach, and in
doing so, materially prejudiced Mexico’s right to relief
under the FAA. This Court should grant certiorari
and articulate a uniform standard for determining
when an arbitrator is genuinely construing an
agreement and when, instead, the arbitrator has
4
exceeded the powers delegated by the parties under §
10(a)(4).
OPINIONS BELOW
The court of appeals’ published decision affirming
that judgment is reported at United Mexican States v.
Lion Mexico Consolidated L.P., 172 F.4th 1 (D.C. Cir.
2026). Pet. App. A.
The district court’s decision denying Mexico’s
petition to vacate the arbitral award is reported at
United Mexican States v. Lion Mexico Consolidated,
L.P., 757 F. Supp. 3d 18 (D.D.C. 2024). See Pet. App.
B.
JURISDICTIONAL STATEMENT
This petition is timely filed. The judgment of the
court of appeals was entered on April 7, 2026. Pet.
App. A. Upon Petitioner’s request, this Court
extended the deadline to file a petition for writ of
certiorari until August 5, 2026.
The jurisdiction of this Court is invoked under 28
U.S.C. § 1254(1).
RELEVANT AWARD EXPERTS, TREATY
PROVISIONS AND STATUTES
The pertinent sections of the arbitration award are
reproduced in the appendix to this petition. See Pet.
App. C.
The relevant provisions of the NAFTA are
reproduced in the appendix to this petition. See Pet.
App. D.
5
The pertinent sections of the U.S. Code, 9 U.S.C. §
10, are reproduced in the appendix to this petition. See
Pet. App. E.
STATEMENT
A.
The Arbitration Agreement
The arbitration agreement at issue in this case is
Chapter Eleven of the North American Free Trade
Agreement (“NAFTA”), to which the United States,
Mexico and Canada were signatories until the treaty
was superseded by the United States-Mexico-Canada
Trade Agreement. North American Free Trade
Agreement Implementation Act, Pub. L. No. 103-182,
107 Stat. 2057 (1993). See C.A. App. JA295. In
NAFTA Article 1122, each NAFTA country offered
standing consent to arbitrate disputes with investors
in accordance with the provisions of Chapter Eleven.
C.A. App JA304. LMC consented to the arbitration in
its Request for Arbitration, and Mexico was deemed to
have consented when LMC met the procedural
requirements for initiating the arbitration.
Article 1131(1) (entitled “Governing Law”)
provides that arbitrations shall be decided “in
accordance with [the NAFTA] and applicable rules of
international law.” C.A. App JA307. The “applicable
rules of international law” for interpreting treaties
are set out in Article 31 of the Vienna Convention on
the Law of Treaties, May 3, 1969, 1155 U.N.T.S. 331
(1980) (“Vienna Convention”).
Section A of NAFTA’s Chapter Eleven required
each signatory to accord specific legal protections to
investors from other NAFTA countries and their
6
investments within each country. Article 1105(1), the
provision at issue here, required that “[e]ach 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.” Pet. App. D, at 60a. The
terms “investors” and “investment” are specifically
defined and treated as separate subjects throughout
Chapter 11. By its clear terms, the text of Article
1105(1) only requires protection of investments.
B.
The Arbitration
LMC initiated arbitration proceedings against
Mexico in December 2015, claiming that Mexico,
through its courts, violated Article 1105(1) by denying
LMC relief under Mexican law. C.A. App JA37. The
arbitration was seated in Washington D.C. The
arbitral tribunal (the “Tribunal”) issued its award on
September 20, 2021, holding that Mexico breached
Article 1105(1) and ordering Mexico to pay LMC
approximately $47 million in damages, plus interest,
costs, and attorney's fees. C.A. App. JA202, JA216.
A key issue was the Tribunal’s construction of
Article 1105(1). LMC had claimed that the Mexican
courts had denied justice to LMC as an investor.
Mexico argued that Article 1105(1), by its plain text,
protects only “investments of investors” and not
“investors”. The distinction was not trivial. If Article
1105(1) did not protect investors, then the Mexican
courts could not have denied justice to LMC in
violation of Article 1105(1).
Mexico’s argument was supported by the text of
Chapter Eleven. The terms “investor” and
7
“investment” are carefully defined and precisely used
throughout the text. See C.A. App. JA311-312. For
example, Articles 1102 and 1103 of Chapter Eleven
set out similar – but separate – protections for
“investors” and “investments.” See C.A. App. JA295296. Article 1105(2) protects investors and
investments separately as well. Pet. App. D, at 60a.
Article 1105(1) was different. It did not provide any
protection to investors.
In the award, the Tribunal acknowledged that a
“literal reading” of Article 1105(1) extends protection
only to investments, but nevertheless concluded that
the provision protects both investments and investors,
and held Mexico liable under Article 1105(1). Pet.
App. C, at 58a. The Tribunal reasoned that the phrase
“treatment in accordance with international law” in
Article 1105(1) meant the same as the “minimum
standard treatment of aliens,” and on that basis, the
Tribunal concluded that investors must be protected
under Article 1105(1). Pet. App. C, at 59a. Chapter
Eleven does not mention aliens.
For support, the Tribunal relied primarily on a
document issued jointly by the three NAFTA
countries in 2001 interpreting Article 1105(1) through
the Free Trade Commission (“FTC Note”). Pet. App.
C, at 59a. However, the FTC Note did not address
whether investors (or aliens) were protected under
Article 1105(1). The part relied on by the Tribunal –
Section B.1 – states: “Article 1105(1) prescribes the
customary international law minimum standard of
treatment of aliens as the minimum standard of
treatment to be afforded to investments of investors of
another Party.” C.A. App. JA325. In other words,
8
investments were to receive the same standard of
treatment under Article 1105(1) as aliens (foreigners)
receive under customary international law. Aliens are
protected under customary international law, while
investments are protected under Article 1105(1). C.A.
App. JA325. Section B.1 does not insert the words
“investors” or “aliens” into Article 1105(1). Section B.1
therefore offered no plausible or colorable justification
for the Tribunal’s conclusion.
The Tribunal also cited three arbitration awards
deciding claims under Article 1105(1) of the NAFTA.
Pet. App. C, at 59a. However, none of those decisions
addressed whether investors were protected under
Article 1105(1), and the Tribunal did not explain why
those cases were instructive authority.
C.
Procedural History
Mexico filed a petition in the United States District
Court for the District of Columbia seeking vacatur of
the award under Section 10(a)(4) of the FAA. Mexico
argued that the Tribunal exceeded its powers by
disregarding the plain and unambiguous language of
Article 1105(1) and showed that Chapter Eleven
expressly distinguished between “investors” and
“investments,” and that Article 1105(1) only included
investments.
Because the award was rendered in the District of
Columbia, Mexico’s petition to vacate was subject to
Title 9, Chapter 1. See 9 U.S.C. § 10 (“[T]he United
States court in and for the district wherein the award
was made may make an order vacating the award.”).
LMC filed an opposition and a cross-petition seeking
confirmation of the award.
9
The district court held a hearing on Mexico’s
petition to vacate, during which the court stated that
“a literal reading of 1105(1) clearly does not apply to
investors.” C.A. App. JA772; see also C.A. App. JA770.
Despite this statement, the district court denied
Mexico’s petition and entered LMC’s cross-petition
for confirmation, finding that the Tribunal arguably
interpreted the provision. Pet. App. B, at 39a. Without
addressing the language of Article 1105(1), the court
ruled the Tribunal’s decision fell “comfortably within
the realm of interpretation” because the Tribunal had
“identified and rejected Mexico’s argument, applied
existing guidance interpreting Article 1105(1), cited
cases, and explained its reasoning.” Pet. App. B, at
39a. The district court did not consider whether the
cited materials offered any plausible support for the
Tribunal’s conclusion. For the district court, the fact
that the Tribunal cited to anything “confirmed that it
was ‘arguably interpreting’ Article 1105(1).” Pet. App.
B, at 40a.
The appeals court affirmed the district court’s
decision. The court stated that the “sole question”
under Section 10(a)(4) is “whether the arbitrator
(even
arguably)
interpreted”
the
governing
agreement, Pet. App. B, at 34a, and found that the
Tribunal arguably interpreted Article 1105(1) by
discussing the text of Article 1105(1) and citing to the
FTC Note. Pet. App. A, at 10a-12a. Without
addressing whether the Tribunal disregarded the
plain language of Article 1105(1), the court concluded
that the Tribunal’s analysis was an interpretation and
could not be disturbed under Section 10(a)(4). Pet.
App. A, at 13a.
10
That was judicial error. Arbitrators “may not
ignore the plain language of the contract.” See Misco,
484 U.S. at 38. In line with Misco, the lower courts
should have asked whether there was any plausible or
colorable justification for the Tribunal’s conclusions.
Had the lower courts adopted this approach,
Mexico’s petition to vacate would have been reviewed
under a different standard. The court would have
been required to engage with the text and determine
whether the arbitrator’s conclusions were plausible.
Applying this standard, the award would have been
vacated because the relevant language of the NAFTA
is plain and needs no interpretation. There is no
question that investors are not mentioned in the text
of Article 1105(1). The Tribunal failed to provide any
plausible or colorable justification for concluding
otherwise, and the materials on which the Tribunal
purported to rely do not address whether investors are
protected.
REASONS FOR GRANTING THE PETITION
The courts of appeals are deeply divided over how
to determine whether an arbitrator disregarded the
plain language of an agreement. The decision below
deepens that conflict. Rather than examining whether
the Tribunal’s conclusions were even plausible, the
D.C. Circuit considered it sufficient that the Tribunal
purported to interpret the text. That approach is
contrary to decisions holding that courts must
determine whether the arbitrator’s conclusions have
any connection to the text. Because this conflict
presents a recurring and important question about
the scope of judicial review, this Court should grant
the petition.
11
I.
THERE IS A CLEAR SPLIT ON THE
QUESTION PRESENTED.
The courts of appeals agree on the formulation
that an award must stand if the arbitrator was “even
arguably construing or applying the contract,” but
that an arbitrator may not “ignore the plain language
of the contract” or dispense “his own brand of
industrial justice.” United Paperworkers Int’l Union v.
Misco, Inc., 484 U.S. 29, 38 (1987) (“Misco”); United
Steelworkers of Am. v. Enterprise Wheel & Car Corp.,
363 U.S. 593, 597 (1960). Nonetheless, the circuit
courts are split on how a reviewing court gives effect
to both prongs of the standard when the award adopts
a reading that the text does not support.
One group of circuits looks at the text of the
agreement and asks whether there is any interpretive
route between the text and the arbitrator’s
conclusions. Another group poses a more methodfocused question: whether the arbitrator looked to the
agreement, cited or analyzed its terms, and framed
the decision as an interpretation of the agreement.
Under the first approach, courts evaluate the result;
under the second, they focus on the process by which
the arbitrator reached that result.
These different approaches can lead to different
outcomes. A court applying the first approach may
conclude arbitrators exceeded their powers because
their interpretation was not plausible. Another court
applying the second approach may conclude the
arbitrators did not exceed their power because they at
least purported to interpret the agreement, regardless
of whether the interpretation has any connection to
the governing text.
12
A.
The Second, Seventh, And Ninth
Circuits Ask Whether the Arbitrator’s
Interpretation is Plausible.
The text-focused circuits review whether the
arbitrator’s conclusion has a plausible or colorable
connection to the text of the arbitration agreement —
not merely whether the arbitrator invoked the
exercise of interpretation.
The Second Circuit asks whether “the arbitrator’s
award draws its essence” from the agreement, “since
the arbitrator is not free merely to dispense his own
brand of industrial justice.” ReliaStar Life Ins. Co. of
N.Y. v. EMC Nat’l Life Co., 564 F.3d 81, 85–86 (2d Cir.
2009). The court will uphold an award “as long as the
arbitrator offers a barely colorable justification for the
outcome reached,” meaning the arbitrator must have
had “reasoning on which they could have justifiably
rested their decision.” Id. at 86; Smarter Tools Inc. v.
Chongqing SENCI Imp. & Exp. Trade Co., 57 F.4th
372, 383 (2d Cir. 2023) (quoting Willemijn
Houdstermaatschappij, BV v. Standard Microsystems
Corp., 103 F.3d 9, 13–14 (2d Cir. 1997)). The “barely
colorable justification” inquiry accordingly requires
the reviewing court to trace a link between the
agreement and the arbitrator’s result, rather than
accepting the arbitrator’s invocation of interpretation
at face value.
The Seventh Circuit asks whether the contract
supplies an “interpretive route” to the award. United
States Soccer Fed’n, Inc. v. United States Nat’l Soccer
Team Players Ass'n, 838 F.3d 826, 832 (7th Cir. 2016).
Because “the arbitrator is typically limited to
interpreting the contract, if there is no possible
13
interpretive route to the award, then a noncontractual
basis can be inferred and the award set aside.” Id.
(quoting Chicago Typographical Union No. 16 v.
Chicago Sun-Times, Inc., 935 F.2d 1501, 1505–06 (7th
Cir. 1991)). The Seventh Circuit vacated the award in
U.S. Soccer Federation because the governing
agreement was “clear and unambiguous” and there
was accordingly “no other reasonable interpretation”
to support the arbitrator’s conclusion. Id. at 833. The
court also rejected the notion that an arbitrator’s
award is “completely insulated from judicial review”
merely because the arbitrator considered the
agreement ambiguous, explaining that "the arbitrator
cannot dress his policy desires up in contract
interpretation clothing." Id. at 835 (quoting Northern
Indiana Public Service Co. v. United Steelworkers of
America, 243 F.3d 345, 347 (7th Cir. 2001)); see also
id. (quoting Ethyl Corp. v. United Steelworkers of Am.,
768 F.2d 180, 187 (7th Cir. 1985)) (“This is not to say
that simply by making the right noises—noises of
contract interpretation—an arbitrator can shield from
judicial correction an outlandish disposition of a
grievance.”).
Most recently, the Seventh Circuit reaffirmed that
a court must ask “not whether the arbitrator
misinterpreted the agreement, but only whether the
arbitrator’s inquiry disregarded the very language of
the agreement itself.” USAA Savings Bank v. Goff,
170 F.4th 1051, 1054–55 (7th Cir. 2026) (quoting
Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569
(2013)). The arbitrator in that case disregarded the
agreement's plain terms governing post-award review
of punitive damages. As a result, the court held that
“there is no ‘no possible interpretive route’ to the
14
arbitrator’s decision,” and vacated the award. Id. at
1056 (quoting U.S. Soccer Fed’n, 838 F.3d at 832).
The Ninth Circuit likewise has held that “an
arbitrator does not exceed its authority if the decision
is a plausible interpretation of the arbitration
contract,” meaning the arbitrator’s decision cannot be
“completely irrational” or “ignores controlling terms of
the parties’ contract.” HayDay Farms, Inc. v. FeeDx
Holdings, Inc., 55 F.4th 1232, 1240–41 (9th Cir. 2022).
The Ninth Circuit has also stated that a court “need
only
determine
whether
the
arbitrators’
interpretation was ‘plausible.’” Lagstein v. Certain
Underwriters at Lloyd’s, London, 607 F.3d 634, 643
(9th Cir. 2010) (quoting Employers Ins. of Wausau v.
Nat’l Union Fire Ins. Co. of Pittsburgh, 933 F.2d 1481,
1486 (9th Cir. 1991)).
Taken together, courts in these circuits consider
that where there is no plausible or colorable
justification for the arbitrator’s interpretation, the
arbitrator is considered to have disregarded the plain
text and the award is vacated. They do not defer to an
arbitrator’s interpretation that departs from the text
of the agreement.
B.
The First, Fifth, and D.C. Circuits Focus
On Whether The Arbitrator Purported
To Interpret The Agreement.
Other circuits apply a markedly different inquiry.
They do not ask whether the arbitrator’s conclusions
are plausible. They instead examine the arbitrator’s
methodology: whether the arbitrator identified the
interpretive task, cited or analyzed the agreement,
and framed the result as a construction of the
15
agreement. If the answer is yes, those courts generally
find that the arbitrator “arguably interpreted” the
agreement.
The D.C. Circuit follows that method-focused
approach. The court has stated it has “no business”
deciding whether particular contractual language
supports the claim submitted to arbitration or
overruling the arbitrator because they would read the
contract differently. Madison Hotel v. Hotel &
Restaurant Employees, Local 25, AFL-CIO, 144 F.3d
855, 859 (D.C. Cir. 1998). The D.C. Circuit adopted the
same hands-off approach in this case, stating that the
“sole question” was whether the Tribunal “arguably
interpreted” Article 1105(1), and upholding the award
because the Tribunal purported to address the treaty
text, cited extrinsic evidence, and framed its
conclusion as treaty interpretation. Pet. App. A, at
10a-12a.
The Fifth Circuit likewise treats the “sole
question” as whether “the arbitrator (even arguably)
interpreted the parties’ contract, not whether he got
its meaning right or wrong.” BNSF Railway Co. v.
Alstom Transportation, Inc., 777 F.3d 785, 787 (5th
Cir. 2015). To answer that question, the Fifth Circuit
looks principally to the face of the award—whether
the arbitrator identified contract interpretation as the
task, cited and analyzed the contractual text, and
framed the conclusions in terms of the contract’s
meaning. Id. at 788; Kemper Corporate Services, Inc.
v. Computer Sciences Corp., 946 F.3d 817, 823 (5th
Cir. 2020). “It is of no consequence whether the
Tribunal’s interpretations of the parties’ agreements
or the governing law were correct … because it is the
16
arbitrator’s construction of the contract which was
bargained for; and so far as the arbitrator’s decision
concerns construction of the contract, the courts have
no business overruling him because their
interpretation of the contract is different from his.”
Kemper 946 F.3d at 823 (cleaned up).
The First Circuit follows this same approach. First
State Insurance Co. v. National Casualty Co., 781 F.3d
7, 11 (1st Cir. 2015). “In ascertaining whether
arbitrators arguably interpreted the underlying
contract,” the court looks to the face of the award
because “the award will often suggest…that the
arbitrator was arguably interpreting the contract.” Id.
(quoting BNSF Railway, 777 F.3d at 788); see also
Hoolahan v. IBC Advanced Alloys Corp., 947 F.3d 101,
118 (1st Cir. 2020). Relying on First State Insurance,
the court in Hoolahan upheld an arbitration award
after finding that the award “cites to articles of the
Agreement,” which was “more than enough” for the
court to conclude that the arbitrator was construing
it. Hoolahan, 947 F.3d at 118.
Thus, the First, Fifth and DC Circuits take a more
deferential approach, simply inquiring whether the
arbitrator structured its reasoning as an
interpretation, without regard as to whether the text
of the agreement can support the interpretation.
II.
THE COURT SHOULD RESOLVE THE
CIRCUIT SPLIT
The Court should grant review because the split
described above is not an abstract or academic
disagreement — it produces materially different
17
outcomes on identical facts and undermines the
predictability the FAA is supposed to deliver.
A.
The Split Is Outcome-Determinative
and Recurring.
The split among the Circuits concerns a question
that arises in every case in which a party contends
that an arbitrator disregarded the plain language of a
contract: how should a reviewing court determine
whether an arbitrator’s reading of a contract is so
untethered from the text that the arbitrator “exceeded
its authority” under the FAA? Courts confronting
that question have not converged on an answer, and
the divergence appears across labor, commercial, and
treaty-based arbitration, among others. Bringing
clarity to this question will benefit parties in all these
sectors.
In forming contracts, parties negotiate specific
terms, allocate specific risks, and choose arbitration
on the understanding that the arbitrator’s role is to
enforce the terms to which the parties actually agreed,
not to substitute the arbitrator’s own judgment for the
parties’ bargain. The role of a reviewing court under §
10(a)(4) is to police that boundary — to ensure that an
arbitrator’s award remains connected to the text the
parties adopted, rather than to the arbitrator’s own
view of the fairest outcome. When courts of appeals
apply different methodologies to that inquiry, they are
applying a different degree of protection to the parties’
bargain.
Courts adopting the method-focused-approach are
less effective at policing that boundary because, by
asking only whether the arbitrator invoked the
18
vocabulary of interpretation, they effectively permit
arbitrators to enforce their own view of policy while
merely reciting the language of construction. That is
precisely the outcome the Seventh Circuit condemned
when it explained that “ simply by making the right
noises — noises of contract interpretation — an
arbitrator can shield from judicial correction an
outlandish disposition of a grievance.” United States
Soccer Fed'n, Inc. v. United States Nat’l Soccer Team
Players Ass’n, 838 F.3d 826, 835 (7th Cir. 2016)
B.
The Split Encourages Forum Shopping
and and Leads to Inconsistent
Treatment of Arbitration Agreements.
Because the same award potentially could be
confirmed in one circuit and vacated in another
depending solely on which methodology applies,
parties have every incentive to litigate confirmation
and vacatur proceedings strategically rather than on
the merits. A party favoring finality will seek out
circuits applying the deferential, process-focused test;
a party seeking meaningful review will seek out
circuits applying the text-focused, plausibility-based
test.
This problem with the inconsistency extends to
arbitrations under treaties involving foreign
governments, such as this case. In particular,
arbitrations involving foreign governments are
frequently seated in Washington, DC. Accordingly,
the DC Circuit’s methods-based approach has become
the predominant method for arbitrations involving
governments, which are therefore systematically
subject to a different standard of review than the
same category of award would receive if it happened
19
to be seated, and challenged, in the Second, Seventh,
or Ninth Circuits.
Granting certiorari would eliminate that anomaly
and ensure that arbitration awards, both commercial
and under treaties, are reviewed under the same
standard.
C.
This Case Is an Ideal Vehicle for
Resolving the Split.
The question presented was squarely raised and
decided below, on a fully developed record. The D.C.
Circuit did not decide whether Article 1105(1) was
actually susceptible to the Tribunal's reading; it held
only that the Tribunal’s citation to the treaty text and
interpretive materials was sufficient to end the
inquiry. Had the Second, Seventh, or Ninth Circuit’s
approach applied instead, they would have focused on
the plain and unambiguous text of Article 1105(1) —
which extends protection only to “investments,” not
“investors” — and would have concluded that there
was no plausible or colorable basis for the Tribunal’s
contrary conclusion. The case therefore squarely
presents whether the outcome of a § 10(a)(4) challenge
should depend on the method a court uses to ask
whether an arbitrator exceeded its powers, and it does
so in a context — international arbitration under a
treaty binding a sovereign state — where the United
States has a heightened interest in ensuring that
federal courts speak with one voice.
For all these reasons, the Court should grant
review now. The existing split distorts the nationwide
application of the FAA, produces unequal treatment
of materially identical awards, invites forum
20
shopping, and leaves lower courts without guidance
on a question this Court’s own precedents have left
open for more than two decades. See Major League
Baseball Players Ass’n v. Garvey, 532 U.S. 504, 512
(2001) (Stevens, J., dissenting).
CONCLUSION
The petition for a writ of certiorari should be
granted.
Respectfully submitted,
Stephan E. Becker
Counsel of Record
Gary J. Shaw
Pillsbury Winthrop
Shaw Pittman LLP
1200 17th Street NW
Washington, D.C. 20036-3006
Tel.: +1 (202) 663-8000
stephan.becker@pillsburylaw.com
gary.shaw@pillsburylaw.com
Counsel for Petitioner
APPENDIX
TABLE OF APPENDICES
Page
APPENDIX A — OPINION OF THE UNITED
STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA CIRCUIT,
FILED APRIL 7, 2026 ....................................... 1a
APPENDIX B — MEMORANDUM OPINION
AND ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF
COLUMBIA, FILED NOVEMBER 8, 2024 .... 21a
APPENDIX C — EXCERPT OF THE AWARD ... 57a
APPENDIX D — NAFTA ARTICLE 1105 ........... 60a
APPENDIX E — 9 U.S.C. § 10 ............................. 61a
1a
Appendix
A
APPENDIX A — OPINION
OF THE
UNITED STATES
COURT OF APPEALS FOR THE DISTRICT OF
COLUMBIA CIRCUIT, FILED APRIL 7, 2026
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 24-7185
UNITED MEXICAN STATES,
Appellant,
v.
LION MEXICO CONSOLIDATED L.P.,
Appellee,
HECTOR CARDENAS,
Movant-Appellant.
Consolidated with 24-7186
Argued November 3, 2025
Decided April 7, 2026
Appeals from the United States District Court
for the District of Columbia
(No. 1:21-cv-03185)
Before: Pillard, Walker and Childs, Circuit Judges.
Opinion for the Court filed by Circuit Judge Pillard.
2a
Appendix A
P illard, Circuit Judge: Mexico seeks to vacate
an arbitration award resolving an investment dispute
between Mexico and Lion Mexico Consolidated, a Canadian
investor. Applying provisions of the North American Free
Trade Agreement, a panel of arbitrators ordered Mexico
to pay Lion $47 million in compensation for the country’s
failure to protect the company’s investments in real estate
projects in Mexico. Mexico petitioned our district court
to vacate the arbitral award on the grounds that the
arbitrators exceeded their powers and acted in manifest
disregard of the law. The district court held the arbitrators
acted within their authority and with appropriate regard
for the law, so denied Mexico’s petition and granted the
investor’s cross-petition for confirmation of the award.
Mexico appeals. Separately, Héctor Cárdenas Curiel, a
Mexican businessman involved in the events that gave
rise to the arbitration, moved to intervene in the district
court proceedings. The district court denied intervention,
and Cárdenas appeals. We affirm in full.
I.
A.
The Nor th A mer ican Free Trade Ag reement
(NAFTA) was a multilateral treaty between the United
States of America, Mexico, and Canada that sought to
facilitate trade and economic activity, including crossborder investment, among the three nations. North
American Free Trade Agreement, Dec. 17, 1992, 107 Stat.
2057, 32 I.L.M. 289. NAFTA is no longer in effect since
it was superseded on July 1, 2020, by the U.S.-Mexico-
3a
Appendix A
Canada Agreement. See United States-Mexico-Canada
Agreement Implementation Act, Pub. L. No. 116-113,
134 Stat. 11 (2020). But the arbitration at issue here,
instituted in December 2015, was governed by NAFTA,
and NAFTA’s intervening repeal has no effect on its
applicability to this dispute.
Among NAFTA’s provisions to encourage cross-border
investment—memorialized in Chapter 11 of NAFTA—was
the requirement that each party “accord to investments of
investors of another Party treatment in accordance with
international law, including fair and equitable treatment
and full protection and security.” NAFTA art. 1105(1).
NAFTA allowed foreign investors to initiate arbitration
proceedings directly against a party government for
violating the protections of Chapter 11, including Article
1105(1). See id. art. 1120(1). The treaty established the
Free Trade Commission, an entity comprising the trade
ministers of the three NAFTA signatories, to supervise
its implementation and interpretation. The Commission’s
interpretations of NAFTA bound any arbitral tribunal
convened to adjudicate a dispute under the treaty. Id.
arts. 1131(2), 2001(1).
A petition in United States court to confirm an arbitral
award based on a treaty to which the United States is a
party may proceed under the Federal Arbitration Act
(FAA), 9 U.S.C. § 1 et seq., which recognizes such a treaty
as federal law, id. at § 201. See, e.g., BG Grp. PLC v. Rep.
of Argentina, 572 U.S. 25, 44, 134 S. Ct. 1198, 188 L. Ed.
2d 220 (2014); LLC SPC Stileks v. Republic of Moldova,
985 F.3d 871, 879 n.2, 450 U.S. App. D.C. 342 (D.C. Cir.
4a
Appendix A
2021). The FAA establishes a “federal policy favoring
arbitration” and requires federal courts to “rigorously
enforce agreements to arbitrate.” Shearson/Am. Express,
Inc. v. McMahon, 482 U.S. 220, 226, 107 S. Ct. 2332, 96
L. Ed. 2d 185 (1987) (internal quotation marks omitted).
Limited judicial review protects the “prime objective”
of an agreement to arbitrate, which is “to achieve
‘streamlined proceedings and expeditious results.’”
Preston v. Ferrer, 552 U.S. 346, 357, 128 S. Ct. 978, 169
L. Ed. 2d 917 (2008) (quoting Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 633, 105 S.
Ct. 3346, 87 L. Ed. 2d 444 (1985)). Judicial power to vacate
arbitral decisions is accordingly confined to “very unusual
circumstances.” Oxford Health Plans LLC v. Sutter, 569
U.S. 564, 568, 133 S. Ct. 2064, 186 L. Ed. 2d 113 (2013)
(quoting First Options of Chicago, Inc. v. Kaplan, 514
U.S. 938, 942, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995)).
The FAA lists four grounds on which a court may vacate
an arbitration award. See 9 U.S.C. § 10(a). At issue in this
case is the fourth ground: “where the arbitrators exceeded
their powers.” Id.
A party seeking vacatur of an arbitral award on the
ground that the arbitrators “exceeded their powers”
bears a “heavy burden.” Oxford Health Plans, 569 U.S.
at 569. It is not enough for the challenger to show that
the arbitrators “committed an error—or even a serious
error.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559
U.S. 662, 671, 130 S. Ct. 1758, 176 L. Ed. 2d 605 (2010).
Because the parties “bargained for the arbitrator’s
construction of their agreement,” an arbitral award “even
arguably construing or applying the contract” will stand,
5a
Appendix A
“regardless of a court’s view of its (de)merits.” Oxford
Health Plans, 569 U.S. at 569 (internal quotation marks
omitted). Only when arbitrators exceed the scope of their
delegated authority by “issuing an award that simply
reflects [their] own notions of economic justice rather than
drawing its essence from the contract” will the arbitrators’
decision be set aside. Oxford Health Plans, 569 U.S. at 569
(formatting modified). Thus, “the sole question” for a court
entertaining a petition for relief under Section 10(a)(4) is
“whether the arbitrator (even arguably) interpreted the
parties’ contract, not whether [they] got its meaning right
or wrong.” Id.
B.
Lion Mexico Consolidated, L.P. (Lion) is a Canadian
company that made loans to companies owned by a Mexican
businessman named Héctor Cárdenas Curiel (Cárdenas)
to finance real estate projects in Mexico. United Mexican
States v. Lion Mexico Consolidated, L.P., 757 F. Supp. 3d
18, 23 (D.D.C. 2024). The parties documented the loans
through mortgages to Lion on the real property and
promissory notes to Lion as unconditional commitments to
repay the loans. Id.; see Arbitration Award (Award), Annex
A (Decision on Jurisdiction) ¶ 58 (J.A. 252). Cárdenas’s
companies, however, never made a single payment on
the loans. United Mexican States, 757 F. Supp. 3d at 23.
After Lion’s fruitless efforts to recoup its investment
through direct negotiation with Cárdenas and litigation
in Mexican courts that Cárdenas stymied, Lion initiated
arbitration proceedings against the government of Mexico
in December 2015. Award ¶ 12 (J.A. 37).
6a
Appendix A
The arbitration was seated in Washington D.C.
Id. ¶ 40 (J.A. 40). As relevant here, Lion claimed that
Mexico had failed to grant its loan-based investments the
protections required by Article 1105(1) of NAFTA. See
Award ¶ 187 (J.A. 76). Lion contended that Article 1105(1)
protected each form of financing that it had provided to
Cárdenas’s companies: the mortgages and the promissory
notes. See United Mexican States, 757 F. Supp. 3d at 29.
In response, Mexico objected that the arbitral tribunal
(Tribunal) lacked jurisdiction over Lion’s Article 1105(1)
claims because neither the mortgages nor the promissory
notes qualified as “investments” as that term was defined
in NAFTA. See Decision on Jurisdiction ¶ 98 (J.A. 260).
Mexico further contended that, even if Lion had made
qualifying “investments,” Lion could not obtain relief
because Article 1105(1) protected only investments and
not investors. Mexico’s Counter Memorial ¶ 141 (J.A. 322).
On September 9, 2021, the Tribunal handed down its
award in Lion’s favor. The Tribunal found that when Lion
tried to recoup its investments in the Mexican courts,
Cárdenas orchestrated a scheme of “complex judicial
fraud” to frustrate any recovery. Award ¶ 94 (J.A. 51).
Specifically, the Tribunal found that a Mexican court
judgment purporting to cancel Lion’s loans to Cárdenas’s
companies rested on a forged settlement agreement
Cárdenas had prepared. Id. ¶¶ 94-95, 103 (J.A. 51-52, 54).
The Tribunal further found that, despite Lion’s repeated
attempts to establish that the putative agreement
undergirding the apparent cancellation judgment had
been forged, Lion obtained no relief from the Mexican
courts. See id. ¶¶ 138-79 (J.A. 63-72); United Mexican
States, 757 F. Supp. 3d at 23-25.
7a
Appendix A
Based on those findings, the Tribunal determined
that Mexico breached its Article 1105 obligations to Lion.
Award ¶ 354 (J.A. 110). As a threshold matter, the Tribunal
concluded that it had jurisdiction over Lion’s Article 1105
claims as to the mortgages, but not as to the promissory
notes, because only the former qualified as “investments”
under NAFTA. Decision on Jurisdiction ¶ 266 (J.A. 293).
On the merits, the Tribunal concluded that Article 1105(1)
“protects investments and investors,” rejecting Mexico’s
argument that the provision “only extends protection to
investments, but not to investors.” Award ¶ 356 (J.A. 110).
And Mexico breached its Article 1105(1) obligations to
Lion because Mexico’s courts repeatedly failed to provide
Lion a fair opportunity, consistent with the “customary
international law minimum standard of treatment of
aliens,” to vindicate its rights to its investments. Id. ¶¶ 210,
299, 506-509 (J.A. 81, 98, 138). The Tribunal consequently
ordered Mexico to pay Lion $47 million in compensation,
plus costs and attorney’s fees. Id. ¶ 851 (J.A. 216).
C.
On December 6, 2021, Mexico petitioned the United
States District Court for the District of Columbia to vacate
the award on the grounds that the Tribunal “exceeded [its]
powers” under 9 U.S.C. § 10(a)(4) and acted in manifest
disregard of the law. United Mexican States, 757 F. Supp.
3d at 27, 32. Specifically, Mexico argued that the Tribunal
had impermissibly expanded the scope of Article 1105(1) by
entering an award that protected foreign investors—not
just investments—in Mexico. Id. at 29. Lion opposed the
petition and submitted a cross-petition for confirmation
of the award. Id. at 27.
8a
Appendix A
The district court denied Mexico’s petition and
granted Lion’s. Id. at 33. The court first corrected what
it viewed as Mexico’s fundamental misapprehension of
the Tribunal’s ruling: that the Tribunal had interpreted
Article 1105(1) to generally protect foreign investors
from unfair or inequitable treatment, even when the
mistreatment was unconnected to any “investments”
protected under NAFTA. Id. at 29. The district court
explained that such a “sweeping” understanding of the
Tribunal’s decision could not be squared with the award’s
reasoning, including the Tribunal’s dismissal of Lion’s
claims as to the promissory notes for failure to qualify
as “investments” under NAFTA. Id. Thus, the district
court explained, the Tribunal interpreted Article 1105(1)
to protect foreign investors only from unfair treatment
that adversely affects their qualifying investments.
The court then determined that the Tribunal did not
exceed its powers in so concluding because the Tribunal’s
work fell “comfortably within the realm of interpretation.”
Id. at 30. The court explained that the award reflected
the Tribunal’s interpretation because it “identified and
rejected Mexico’s argument, applied existing guidance
interpreting Article 1105(1), cited cases, and explained
its reasoning.” Id. Next, assuming without deciding that
arbitrators’”manifest disregard of the law” could provide
an alternative, non-statutory basis for vacating an arbitral
award, the court concluded that the Tribunal’s award could
not be so characterized for largely the same reasons the
Tribunal did not exceed its powers in entering it. Id. at 28
n.8, 32. The court thus saw nothing warranting vacatur
9a
Appendix A
of the award. Id. at 32. Because a court “must grant” a
timely filed petition to confirm an arbitral award “unless
the award is vacated, modified, or corrected as prescribed
in [S]ections 10 and 11 of [the FAA],” the district court
granted Lion’s timely cross-petition for confirmation. Id.
at 32-33 (quoting 9 U.S.C. § 9).
Separately, while the petition and cross-petition
remained pending in the district court but five months
after the parties had finished their briefing, Cárdenas
moved to intervene. Id. at 27. The arbitrators had found
that Cárdenas orchestrated the fraudulent scheme in
the Mexican courts that harmed Lion. Claiming that the
award had violated his due process rights by “ma[king]
serious findings of unlawful conduct against him during
the arbitration without affording him an opportunity”
to defend himself, Cárdenas sought to intervene in the
district court in support of Mexico’s petition to vacate
the award. United Mexican States v. Lion Mex. Consol.
LP, No. 21-3185 (D.D.C. July 21, 2023), ECF No. 42-1
(Mem. ISO Mot. to Intervene) at 13. He claimed his
intervention would present an argument in support of
vacatur that Mexico had not raised. Id. In the same order
in which it denied Mexico’s petition, the district court
denied Cárdenas’s motion to intervene: Cárdenas failed to
establish that he is entitled to intervene as of right, Fed.
R. Civ. P. 24(a)(2), and provided no basis for permissive
intervention, Fed. R. Civ. P. 24(b). United Mexican States,
757 F. Supp. 3d at 33-37.
Mexico and Cárdenas each timely appealed.
10a
Appendix A
II.
We begin with Mexico’s petition to vacate the arbitral
award. We review de novo the district court’s application
of the highly circumscribed grounds for vacatur. Selden
v. Airbnb, Inc., 4 F.4th 148, 155, 453 U.S. App. D.C. 241
(D.C. Cir. 2021).
A.
Mexico first contends that the award should be
vacated because the Tribunal “exceeded [its] powers.” 9
U.S.C. § 10(a)(4). We are unpersuaded. As already noted,
in reviewing a petition to vacate an arbitral award under
Section 10(a)(4) of the FAA, “the sole question for us is
whether the arbitrator (even arguably) interpreted the
parties’ contract”—or, in this case, the treaty—”not
whether he got its meaning right or wrong.” Oxford Health
Plans, 569 U.S. at 569. If the arbitrator even arguably
interpreted the terms of the agreement to arbitrate,
the petition must be denied. Id. Here, Mexico challenges
the Tribunal’s conclusion that Article 1105(1) protects
investors with regards to their qualifying investments.
Thus, the question is whether the Tribunal arguably
interpreted Article 1105(1) in so concluding. We conclude
that it did.
Describing the Tribunal’s analysis proves the point.
In determining that Article 1105(1) covers investors as
to their protected investments, the Tribunal started,
as interpreters of law routinely do, with the text of that
provision. See Award ¶ 356 (J.A. 110). The key Article
11a
Appendix A
states: “Each Party shall accord to investments of
investors of another Party treatment in accordance with
international law . . . .” NAFTA art. 1105(1). The Tribunal
noted that the “literal” terms of Article 1105(1) referenced
the “treatment” of “investments of investors,” Award
¶ 356 (J.A. 110), so it looked to authorities interpreting
those terms.
Fi rst , the T r ibuna l rel ied on a Free T rade
Commission Interpretation Note from July 31, 2001. In the
Interpretation Note, the Commission understood Article
1105(1) as prescribing “the customary international law
minimum standard of treatment of aliens” as the minimum
standard of treatment to be afforded to investments of
investors of another party. Award ¶¶ 356-58 (J.A. 110)
(emphasis added) (internal quotation marks omitted).
Because in the context of foreign-investor protection the
Interpretation Note’s reference to “aliens” could “only
mean investors,” id. ¶ 358 (J.A. 110), and because NAFTA
makes the Commission’s Interpretation Notes binding on
arbitral tribunals adjudicating claims under that treaty,
see NAFTA art. 1131(2), the Tribunal concluded that it
was bound to interpret Article 1105(1) to protect investors,
Award ¶ 358 (J.A. 110). The Tribunal then relied on several
arbitration decisions that had “construed Art. 1105 as a
source of protection for investors rather than solely for
their investments.” Id. ¶ 358 & n.384 (J.A. 110).
Starting with the text of Article 1105(1) and giving
meaning to that text in accord with binding and persuasive
authorities interpreting it, the Tribunal’s analysis is,
“through and through, [an] interpretation[] of the parties’
12a
Appendix A
agreement.” Oxford Health Plans, 569 U.S. at 570.
Contrary to Mexico’s contentions, this is not a case in
which the Tribunal lacked “any contractual basis” for its
conclusion, such that the Tribunal “simply imposed its own
conception of sound policy.” Id. at 571 (internal quotation
marks omitted); cf. Raymond James Fin. Servs., Inc. v.
Bishop, 596 F.3d 183, 189 (4th Cir. 2010) (vacating arbitral
award that either “disregarded or modified unambiguous
contract provisions” or was based on arbitrators’”own
personal notions of right and wrong”); Mo. River Servs.,
Inc. v. Omaha Tribe of Neb., 267 F.3d 848, 855 (8th Cir.
2001) (vacating arbitral award that “rewrote” the contract
(internal quotation marks omitted)).
Mexico levies two challenges to the contrary. It first
contends that the district court “definitively” recognized
that Article 1105(1) unambiguously excluded investors,
yet its opinion and order impermissibly “ignored its
previous finding.” Mex. Br. 20, 22. As an initial matter, any
such determination by the district court on the meaning
of Article 1105(1)—a legal interpretation that Mexico
inaccurately characterizes as a “finding”—would not bind
us on de novo review. The district court, moreover, never
concluded that Article 1105(1) unambiguously excluded
investors. Mexico cites the district court’s statement,
made while questioning counsel at oral argument, that
“a literal reading of 1105(1) clearly does not apply to
investors.” See Mex. Br. 20-21. But, as the district court
ultimately concluded, the Tribunal’s holding that Article
1105(1) protects investors still fell comfortably within the
realm of interpretation. United Mexican States, 757 F.
13a
Appendix A
Supp. 3d at 29-31. Indeed, as the Tribunal’s interpretation
of Article 1105(1) illustrates, an observation about a
“literal” reading is not the same thing as arriving at
an “unambiguous” interpretation. Ultimately, whether
Article 1105(1) is ambiguous (and whether the district
court so concluded) is relevant only insofar as it bears
on whether the Tribunal interpreted Article 1105(1) in
rendering its award—which the Tribunal plainly did.
Mexico also argues that the district court erred by
inaccurately “refram[ing]” the issue addressed by the
Tribunal as one of “standing.” See Mex. Br. 28-30. But
the district court did not so “reframe” the issue. When
the court said that “[t]he Tribunal held only that investors
had standing to bring claims if a challenged action
affected a qualified investment,” it was simply restating
its observation that the Tribunal did not “rule that Article
1105(1) applied to investors writ large,” but “only that an
investor could bring a claim under Article 1105(1) if the
challenged treatment affected a qualifying investment”
by that investor. United Mexican States, 757 F. Supp.
3d at 29. What matters for judicial review is that the
Tribunal arrived at that understanding by interpreting
Article 1105(1). And, for reasons well explained by the
district court, that is the best reading of how the Tribunal
understood Article 1105(1). See id. at 29-31.
In sum, Mexico has failed to carry its “heavy burden”
to show that the Tribunal exceeded its authority in
concluding that Article 1105(1) protected Lion with regard
to its investments. Oxford Health Plans, 569 U.S. at 569.
14a
Appendix A
B.
As an alternative ground for vacatur, Mexico contends
that the Tribunal acted in manifest disregard of the
“governing law of treaty interpretation” as expressed in
Article 31 of the Vienna Convention on the Law of Treaties.
Mex. Br. 30 (formatting modified). We disagree.
It is “unclear . . . whether manifest disregard remains
a valid ground for vacatur after the Supreme Court’s
decision in Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S.
576, 584-86, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008),”
which held that “the FAA’s list of grounds for refusing
to enforce an award is exclusive.” Selden, 4 F.4th at 160
n.6. The Supreme Court and this court have yet to decide
whether non-statutory grounds for vacatur, including
manifest disregard of the law, survived Hall Street. StoltNielsen S.A., 559 U.S. at 672 n.3; Metro. Mun. of Lima v.
Rutas De Lima S.A.C., 141 F.4th 209, 219 (D.C. Cir. 2025).
And we need not decide that question here. Even assuming,
as the district court did, that manifest disregard of the
law remains a separate ground for vacatur, the Tribunal
did not act in manifest disregard of the law.
The party seeking to vacate an arbitral award bears
the burden of demonstrating that the arbitrators acted in
manifest disregard of the law. LaPrade v. Kidder, Peabody
& Co., 246 F.3d 702, 706, 345 U.S. App. D.C. 358 (D.C.
Cir. 2001). We have ruled that a tribunal acts in manifest
disregard of the law if “(1) the arbitrators knew of a
governing legal principle yet refused to apply it or ignored
it altogether;” and (2) “the law ignored by the arbitrators
15a
Appendix A
was well defined, explicit, and clearly applicable to the
case.” Id. (internal quotation marks omitted). Consistent
with the deference owed to arbitrators’ judgments and
the finality interests that arbitration is designed to serve,
we treat manifest disregard as an “extremely narrow”
standard of review that is unmet “if any justification” for
an award “can be gleaned from the record.” Kurke v. Oscar
Gruss & Son, Inc., 454 F.3d 350, 354, 372 U.S. App. D.C.
154 (D.C. Cir. 2006) (internal quotation marks omitted).
Mexico fails to demonstrate that the Tribunal acted in
manifest disregard of the law in interpreting Article 1105(1)
to protect Lion with respect to its qualifying investments.
Assuming that Article 31 of the Vienna Convention on the
Law of Treaties constitutes a “governing legal principle”
that is “well defined, explicit, and clearly applicable to
the case,” within the meaning of the manifest-disregard
principle, Mexico has not shown that the Tribunal “refused
to apply it or ignored it altogether.” LaPrade, 246 F.3d at
706 (internal quotation marks omitted).
Article 31 of the Vienna Convention provides the
“[g]eneral rule of interpretation” for construing treaties.
Vienna Convention on the Law of Treaties art. 31, May 23,
1969, 1155 U.N.T.S. 331 (Vienna Convention). It instructs
that “[a] treaty shall be interpreted in good faith in
accordance with the ordinary meaning to be given to the
terms of the treaty in their context and in the light of its
object and purpose.” Id. Mexico places great emphasis
on Article 31’s reference to the “ordinary meaning” of
the treaty, which it says “requires fealty to the text.”
Mex. Br. 32. And because the text of Article 1105(1) of
16a
Appendix A
NAFTA only refers to “investments of investors” and not
“investors,” Mexico contends that the Tribunal acted in
manifest disregard of its obligation to interpret the treaty
according to its “ordinary meaning.” Id. at 34.
But Article 31 does not say that a treaty’s interpretation
must end with the text. Rather, it instructs that “ordinary
meaning” is “to be given to the terms of the treaty in their
context and in the light of its object and purpose.” Vienna
Convention art. 31. Mexico interprets Article 1105(1) of
NAFTA to protect only “investments” and not “investors,”
such that it provides no protection to investors whose
investments are mistreated. That interpretation, as the
district court explained, would undermine “NAFTA’s
purpose of encouraging the free flow of goods, services,
and investments among the signatories.” United Mexican
States, 757 F. Supp. 3d at 31 (citing NAFTA art. 102(1)).
Moreover, Article 31 also requires interpreters to
“take[] into account” “any subsequent agreement between
the parties regarding the interpretation of the treaty or
the application of its provisions.” Vienna Convention art.
31. Here, as explained above, Article 1131(2) of NAFTA
required the Tribunal to treat the Free Trade Commission’s
Interpretation Notes as binding. The Tribunal faithfully
complied with Article 1131(2) of NAFTA—and thus,
Article 31 of the Vienna Convention—when it considered
the Free Trade Commission’s Interpretation Note on
Article 1105(1). And that Interpretation Note supports
the Tribunal’s interpretation of Article 1105(1) to protect
investors with regard to their qualifying investments.
See supra at 10; see also United Mexican States, 757 F.
17a
Appendix A
Supp. 3d at 26-27. For these reasons, the Tribunal did not
“refuse[] to apply” or “ignore . . . altogether” Article 31 of
the Vienna Convention. LaPrade, 246 F.3d at 706 (internal
quotation marks omitted). Accordingly, Mexico has not
shown that the Tribunal acted in manifest disregard of
the law.
Because Mexico failed to carry its burden to show that
the Tribunal “exceeded [its] powers,” 9 U.S.C. § 10(a)(4),
or acted in manifest disregard of the law, LaPrade, 246
F.3d at 706, we affirm the district court’s order denying
Mexico’s petition to vacate the arbitral award and granting
Lion’s cross-petition for confirmation.
III.
We next address the district court’s denial of
Cárdenas’s motion to intervene. Reviewing for abuse of
discretion, Campaign Leg. Ctr. v. Fed. Election Comm’n,
68 F.4th 607, 610, 461 U.S. App. D.C. 86 (D.C. Cir. 2023),
we affirm.
Cárdenas first argues that he was entitled to intervene
as of right under Federal Rule of Civil Procedure 24(a)(2).
“Parties have the right under Rule 24(a)(2) to intervene
in an action if they meet four requirements: (1) the
application to intervene must be timely; (2) the applicant
must demonstrate a legally protected interest in the action;
(3) the action must threaten to impair that interest; and (4)
no party to the action can be an adequate representative
of the applicant’s interests.” SEC v. Prudential Sec. Inc.,
136 F.3d 153, 156, 329 U.S. App. D.C. 10 (D.C. Cir. 1998).
18a
Appendix A
The district court denied intervention as of right for three
reasons: First, Cárdenas’s motion was not timely; second,
Cárdenas’s motion would have been futile; and third,
Mexico could adequately represent Cárdenas’s interest.
United Mexican States, 757 F. Supp. 3d at 33-36.
Because Mexico’s ability to adequately represent
Cárdenas’s interest suffices to defeat intervention as
of right, we need not consider the district court’s other
reasons. In his brief to us, Cárdenas says he is “not seeking
to intervene in the vacatur proceeding to challenge the
fraud findings or to try to reopen the other factual findings
by the tribunal.” Cárdenas Br. 31 (formatting modified).
Instead, he seeks to intervene only “in support of Mexico’s
petition to vacate an arbitral award that directly harms
his interests, by making additional arguments in support
of vacatur that Mexico did not make.” Id. Even assuming
that Cárdenas has a cognizable interest in seeking vacatur
of the award, Cárdenas does not contest that the interest
he seeks to protect by intervening—to vacate the entire
award rather than challenge specific findings about
himself—is the same as Mexico’s. Cárdenas Br. 42. Thus,
as the district court explained, Cárdenas’s motion “at
best reflects a strategy disagreement with Mexico” about
which arguments to raise in support of the shared goal
of vacatur. United Mexican States, 757 F. Supp. 3d at 36.
That kind of disagreement about litigation strategy does
“not make inadequate the representation of those whose
interests are identical with that of an existing party.”
Jones v. Prince George’s Cnty., 348 F.3d 1014, 1020, 358
U.S. App. D.C. 276 (D.C. Cir. 2004) (internal quotation
marks omitted). Thus, Mexico could adequately represent
19a
Appendix A
Cárdenas’s interest, which is an independently sufficient
reason to deny intervention as of right. See Fed. R. Civ.
P. 24(a)(2).
Cárdenas alternatively contends that the district
court should have allowed him permissive intervention
under Rule 24(b)(1). A court “may” allow intervention
under Rule 24(b)(1) if the would-be intervenor presents
“(1) an independent ground for subject matter jurisdiction;
(2) a timely motion; and (3) a claim or defense that has a
question of law or fact in common with the main action.”
E.E.O.C. v. Nat’l Children’s Ctr., Inc., 146 F.3d 1042,
1046, 331 U.S. App. D.C. 101 (D.C. Cir. 1998). Even when
a movant meets those criteria, a court retains discretion
to deny intervention. Id. The district court concluded
that Cárdenas did not satisfy the criteria for permissive
intervention because his motion was untimely, and
that in any event his intervention would be “unlikely
to significantly contribute to . . . the just and equitable
adjudication of the legal question presented.” United
Mexican States, 757 F. Supp. 3d at 37 (internal quotation
marks omitted).
The district court acted within its sound discretion
in denying permissive intervention under Rule 24(b)(1).
Even if Cárdenas had timely sought intervention, the
district court, in exercising its discretion, would have
had to consider whether the intervention would “unduly
delay or prejudice the adjudication of the original parties’
rights.” Fed. R. Civ. P. 24(b)(3). And, as the court correctly
explained, allowing Cárdenas to intervene would have
“delay[ed] the proceeding . . . by requiring the parties
20a
Appendix A
to dedicate substantial time and resources briefing
arguments” that both parties agreed were “unrelated
to the existing petitions.” United Mexican States, 757 F.
Supp. 3d at 35. In these circumstances, the district court
did not abuse the “wide latitude afforded to district courts”
under Rule 24(b) when it denied Cárdenas’s motion for
permissive intervention. National Children’s Ctr., 146
F.3d at 1046.
We thus affirm the district court’s denial of Cárdenas’s
motion to intervene.
***
For the foregoing reasons, we affirm the district
court’s order.
So ordered.
21a
B
APPENDIX B — Appendix
MEMORANDUM
OPINION
AND ORDER OF THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF COLUMBIA,
FILED NOVEMBER 8, 2024
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Case No. 1:21-cv-03185 (ACR)
UNITED MEXICAN STATES,
Petitioner,
v.
LION MEXICO CONSOLIDATED, L.P.,
Respondent.
MEMORANDUM OPINION AND ORDER
Article 1105(1) of the North Atlantic Free Trade
Agreement (NAFTA) required Petitioner United Mexican
States (Mexico) to “accord to investments of investors of
[Canada and the United States] treatment in accordance
with international law, including fair and equitable
treatment and full protection and security.”
In 2015, Respondent Lion Mexico Consolidated, L.P.
(Lion), a Canadian limited partnership, brought a NAFTA
Chapter 11 arbitration against Mexico, claiming that
Mexico failed to accord Lion’s investments the protection
22a
Appendix B
Article 1105(1) required. Mexico raised several defenses,
but only one is relevant here. Mexico argued that, by its
plain meaning, the phrase “investments of investors”
applied only to investments. Because Lion is an investor,
not an investment, it could not seek relief under Article
1105(1). Lion countered that Mexico’s interpretation was
mistaken and, if accepted, would have rendered Article
1105(1) toothless. Agreeing with Lion that Article 1105(1)
applied and finding that Mexico had violated it, the
Tribunal awarded Lion over USD 47 million in damages
(Award).
Mexico now petitions to vacate the Award while Lion
cross-petitions to confirm it. Mexico acknowledges, and
Lion readily agrees, that the Court’s power to vacate
an arbitral award is quite circumscribed. So long as the
Tribunal “interpreted” Article 1105(1), the Court must
confirm the Award—indeed, must confirm even if the
Tribunal committed “serious error.” Seeking to sideline
this constraint, Mexico claims that the Tribunal did not
“interpret” anything. The Tribunal instead ignored
the “literal meaning” of “investments of investors” by
granting relief to Lion, an investor.
Mexico’s contention founders at the get-go. The
Tribunal addressed Mexico’s interpretation of Article
1105(1) head on, employed common interpretative tools to
reach a different conclusion, cited authorities in support
of its reading, and explained its reasoning. By any
definition of the word, the Tribunal interpreted Article
1105(1). Because the Court cannot second-guess that
interpretation, it DENIES Mexico’s Petition to Vacate the
23a
Appendix B
Arbitration Award, Dkt. 32, and GRANTS Lion’s CrossPetition for Confirmation, Recognition, and Enforcement
of the Arbitral Award, Dkt. 35.
After addressing the dueling petitions, the Court
addresses a motion to inter vene f iled by Héctor
Cárdenas Curiel. Cárdenas, a Mexican businessman,
contemporaneously knew the arbitration was proceeding.
And he knew that the arbitral demand turned on Lion’s
contention that he had orchestrated a massive fraud in the
Mexican courts. Yet, Cárdenas did not move to participate
in the arbitration and instead seeks to attack the Award
here. That attack comes too late and, in any event, is futile.
Because Cárdenas does not meet the requirements for
intervention under Federal Rule of Civil Procedure 24(a)
(2) or 24(b), the Court DENIES his Motion to Intervene,
Dkt. 42.
I.
BACKGROUND
Petitioner Mexico is a foreign state as defined in the
Foreign Sovereign Immunities Act. Award ¶ 9; 28 U.S.C.
§ 1603(a)-(b). Respondent Lion is a Canadian limited
partnership with its principal place of business in Dallas,
Texas. Award ¶ 7.
A.
Unpaid Loans
In 2007, Lion entered financing relationships with
C&C Ingeniería, S.A. de C.V. and C&C Capital, S.A. de
C.V., two companies owned by Cárdenas. Award ¶¶ 57,
24a
Appendix B
63-85.1 Lion provided financing for Cárdenas—USD
32,805,479 across three loans—to develop two large
real estate projects in Nayarit and Jalisco, Mexico. Id.
¶¶ 63-85. The parties documented the loan agreements in
mortgages for the real property in Lion’s name, promissory
notes to pay on the mortgages, and credit agreements. Id.;
see also id. ¶ 61. The structure of these agreements is
dizzying and, happily, not relevant to these proceedings. 2
The relevant point is that Cárdenas’s companies never
made a single payment on any of the loans. Id. ¶ 90. Lion
tried for years to obtain payment—any payment—to no
avail. Id. ¶¶ 86-91. Tired of waiting for Godot, 3 in 2012,
Lion served Cárdenas and his companies with a formal
demand for payment and threatened to initiate foreclosure
proceedings. Id. ¶ 92.
B. Court Proceedings in Mexico
Lion’s formal demand did not induce Cárdenas or his
companies to repay the loans. The Tribunal found that,
1. The Court takes these facts from the Tribunal’s factual
findings and solely to resolve the pending motions. See Gold Rsrv.
Inc. v. Bolivarian Republic of Venezuela, 146 F. Supp. 3d 112, 130
(D.D.C. 2015). The Court takes no position on whether Cárdenas
in fact engaged in fraud. To put it mildly, Cárdenas disputes the
Tribunal’s findings. Dkt. 42-1 at 16-17.
2. For the reader who cannot get enough of analyzing financing
transactions, the Tribunal summarized the ones here at paragraphs
63 to 85 of the Award.
3. Samuel Becket, Waiting for G odot (Faber & Faber ed.,
2006).
25a
Appendix B
instead, Cárdenas effected a scheme of “complex judicial
fraud” to evade the obligations. Award ¶ 94. That is,
Cárdenas created a forged settlement agreement (forged
agreement), complete with a fake signature of Lion’s
attorney, in which Lion purportedly agreed to cancel all
existing debts. Id. ¶¶ 98-99, 103. The forged agreement
gave jurisdiction to the courts of Jalisco, Mexico, even
though the promissory notes gave jurisdiction to the
courts of Mexico City. Id. ¶ 101. Cárdenas then filed a
lawsuit before the Juez Noveno de lo Mercantil in Jalisco
(Mercantil Court) to enforce the forged agreement and
cancel the loans. Id. ¶¶ 96, 98-99. The forged agreement
also included a fake name and address for notice and
service of process to Lion—the lawyer residing at the
address had no affiliation with Lion and yet accepted
service on its behalf. Id. ¶¶ 94, 102-03, 107. By design,
no one notified Lion of the lawsuit and so Lion did not
appear. Id. ¶ 108.
Cárdenas’s companies submitted evidence purportedly
supporting the forged agreement. Id. ¶¶ 96, 110. On June
27, 2012, the Mercantil Court issued a default judgment
discharging the loans and ordering Lion to cancel the
mortgages (Cancellation Judgment). Id. ¶ 111. It accepted
the amount in controversy to be MEX 500,000 (about
USD 25,000)—a lower amount than required for appeal—
even though the loan documents admitted into evidence
described transactions worth “tens of millions of dollars.”
Id. ¶¶ 112-13. This low amount precluded a standard
appeal, thus cutting off one of only two avenues for Lion
to reinstate the loans once it learned of the Cancellation
Judgment.
26a
Appendix B
Lion could still have pursued the other avenue, a socalled amparo proceeding (i.e., a constitutional challenge)
to contest the Cancellation Judgment once Lion learned of
it. Id. ¶ 119. But Cárdenas was on the case—figuratively and
literally—and quickly cut off this second avenue for Lion
to obtain relief. See id. ¶¶ 116-26. He arranged for another
attorney to act fraudulently on Lion’s behalf using an
identification card stolen from a Lion legal representative.
Id. ¶¶ 124-25. That attorney filed an amparo purportedly
on Lion’s behalf and then purposefully abandoned it. Id.
¶ 129. The abandonment rendered the amparo final and
not subject to further appeal, even after Lion learned of
the Cancellation Judgment. Id.
Six months later, in early 2013, Lion finally learned
of the Cancellation Judgment but not of the forged
agreement. Id. ¶ 138. Unaware of Cárdenas’s preemptive
amparo, Lion filed its own amparo with the Juez de
Distrito en Materia Civil in Jalisco (Juez de Distrito),
challenging the earlier proceedings based on failure
of service. Id. ¶¶ 142-45. After filing its amparo, Lion
finally learned of the forged agreement when a court filing
referenced it. Id. ¶ 145. At that point, Lion sought to admit
evidence proving that the forged agreement was indeed
forged. Id. ¶¶ 146-47. On January 30, 2013, a court clerk
instead dismissed the motion. Id. ¶ 148. Lion then brought
a second complaint before the Juez de Distrito, seeking
for a second time to introduce evidence of the forgery. Id.
¶ 149. The court considered Lion’s request but postponed
its decision until a separate proceeding initiated by one
of Cárdenas’s companies, C&C Ingeniería, was resolved
in yet a different court. Id. ¶¶ 150-51.
27a
Appendix B
C&C Ingeniería had challenged Lion’s actual amparo
proceeding in the Segundo Tribunal Colegiado en Materia
Civil del Tercer Circuito (Tribunal de Queja), an appeal
court. Id. ¶¶ 151, 153. The company claimed that Lion’s
real attorneys had not properly signed the motion to admit
evidence in its amparo proceeding before the Juez de
Distrito, rendering that motion void. Id. The Tribunal de
Queja agreed, ruling that Lion’s legal representative, and
not the attorney representing it in the amparo proceeding,
should have signed the motion. Id. The Tribunal de Queja
did not permit Lion to cure the procedural defect.4 Id.
¶ 154. Thus—because a real Lion lawyer, but not the right
Lion lawyer, signed the motion to admit evidence—Lion
could not introduce evidence that a fake Lion lawyer had
forged the agreement. Id. ¶ 153.
With this separate proceeding resolved, the Juez
de Distrito resumed his work. Relying on the Tribunal
de Queja’s decision, he excluded all evidence that the
agreement had been forged. Id. ¶¶ 155, 163. On December
14, 2013, the Juez de Distrito entered a final judgment
rejecting Lion’s amparo and upholding the Cancellation
Judgment. Id. ¶ 158. He reached this decision even
though a criminal judge had earlier ordered Cárdenas
imprisoned for forging Lion documents and even though
he acknowledged a different instance of a forged Lion
signature. Id. ¶¶ 160-62.
Lion filed a recurso de revisión (i.e., a reconsideration
proceeding) that ultimately landed with the Tribunal
4. That same court permitted Cárdenas’s company to cure a
procedural defect. Id. ¶ 154.
28a
Appendix B
de Queja. Id. ¶¶ 167, 169. By this point, Lion had filed
numerous formal requests for a court to consider that the
agreement was forged. Id. ¶ 170. On April 17, 2015, more
than 16 months after Lion filed the recurso, the Tribunal
de Queja again decided against Lion and remanded to
the Juez de Distrito to determine whether Cárdenas’s
fraudulent amparo exhausted Lion’s right to pursue its
real amparo. Id. ¶ 171. This was the first time Lion learned
of the earlier false amparo. Id. ¶ 173. The Tribunal de
Queja ordered the Juez de Distrito not to consider the
authenticity of the forged agreement, but only to analyze
the admissibility of Lion’s amparo. Id. ¶ 174.
On remand, the Juez de Distrito refused to allow Lion
to introduce evidence of the forgery. Id. By this point, Lion
had spent three years in the Mexican civil courts trying to
undo Cárdenas’s fraud with nothing to show for its efforts
but a new fight about whether the courts had jurisdiction
to consider its claim at all. Id. ¶ 178. On December 11, 2015,
Lion ended its amparo because “it was futile to continue.”
Id. ¶ 179. It turned instead to arbitration.
C.
Arbitration Under NAFTA
NAFTA, Can.-Mex.-U.S., Dec. 17, 1992, 107 Stat.
2057, 32 I.L.M. 289, was a multilateral treaty between
the United States, Mexico, and Canada that aimed to
facilitate trade and strengthen the economic relationship
among the three nations. 5 Id. pmbl. To that end, Chapter
5. NAFTA is no longer operative. The United States—Mexico—
Canada Agreement, which took effect on July 1, 2020, replaced it.
Can. - Mex. U.S., Dec. 10, 2019, 134 Stat. 11.
29a
Appendix B
11 of NAFTA required the signatories to provide certain
protections and standards of treatment to foreign investors
of another signatory and their investments. Id. arts. 110110. Key here is Article 1105(1), which required that “each
Party . . . accord to investments of investors of another
Party treatment in accordance with international law,
including fair and equitable treatment and full protection
and security.” Id. art. 1105(1). Article 1139, NAFTA’s
definition section, provided an exhaustive list of what
constituted an “investment” for purposes of Chapter 11.
Id. art. 1139. And Article 1120(1) established a procedure
for investors to initiate arbitration proceedings directly
against a party government for violating its Chapter 11
protections. Id. art. 1120(1).
In December 2015, Lion filed a request for arbitration
with the International Centre for Settlement of Investment
Disputes (ICSID). Dkt. 56-8; see also Award ¶ 12. The
arbitration was seated in Washington, D.C., under the
ICSID Additional Facility Rules. Award ¶¶ 3, 40; see
also id. Annex A ¶ 28. The Tribunal consisted of three
experienced arbitrators, 6 and the parties were aptly
represented. Id. ¶¶ 13, 40.
Lion alleged that the Mexican courts canceled
Lion’s mortgages based on the forged agreement and
“repeatedly denied [Lion] the opportunity to prove that
6. The arbitrators were: (1) Chair Juan Fernández-Armesto,
appointed by ICSID’s Secretary General by agreement of the parties;
(2) David J.A. Cairns, appointed by Lion; and (3) Professor Laurence
Boisson de Chazournes, appointed by Mexico. Award ¶ 13; see also
Dkts. 33-18, 33-19.
30a
Appendix B
the purported [] agreement [was] a forgery.” Dkt. 56-8
¶ 15. This denial, Lion claimed, breached the International
Minimum Standard of Treatment required by NAFTA
Article 1105(1). Id.
Mexico submitted a preliminary objection to the
Tribunal’s jurisdiction “on the grounds that Lion’s
claims were manifestly without merit.” Award, Annex
A ¶ 21. The Tribunal dismissed this objection after full
briefing. Id. Annex A ¶¶ 21-29. Mexico then requested
bifurcation, raising two additional objections to the
Tribunal’s jurisdiction. Id. Annex A ¶ 31. This time, the
Tribunal granted Mexico’s request in part, deciding to
address Mexico’s objection that “the Tribunal lack[ed]
jurisdiction . . . because Lion did not make an investment
in Mexico within the terms required by Art[icles] 1101 and
1139 [of] NAFTA.” Id. Annex A ¶ 33.
The Tribunal held, after full briefing and a jurisdictional
hearing, that “the Mortgages qualif[ied] as investments
and that the Tribunal ha[d] jurisdiction . . . to adjudicate
claims brought by Lion based on measures adopted by
Mexico which affect[ed] the Mortgages.” Id. Annex A
¶ 266; see also id. ¶ 15. On the other hand, the Tribunal
held that Lion’s promissory notes were not qualifying
investments under Article 1139 and dismissed all claims
related to those notes. Id. Annex A ¶¶ 203-08; see also
id. ¶ 15.
In March 2017, Lion submitted its opening brief along
with 120 factual exhibits, 200 legal authorities, three
witness statements, and an expert report on Mexican law
31a
Appendix B
which included another 122 authorities. Id. Annex A ¶ 30.
Mexico later filed a counter-memorial attaching 33 factual
exhibits, 60 legal authorities, a witness statement, three
expert reports, and a valuation expert report. Id. ¶ 22.
Lion’s reply included an additional 40 factual exhibits, 218
legal authorities, another witness statement, a fourth legal
expert report, an expert evaluation report, and a rebuttal
expert report. Id. ¶ 27.
The Tribunal then held a three-day merits hearing
to address whether Mexico had violated NAFTA Article
1105(1). Id. ¶ 40. Lion argued that the Mexican courts’
conduct was a denial of justice and thus violated Article
1105(1). Award ¶¶ 187, 197. Mexico shot back that Article
1105(1) did not apply at all because, by its plain terms,
it protected only “investments” and did not protect
“investors.” Id. ¶¶ 353, 356.
The Tribunal rendered the Award—which weighed in
at 924 paragraphs across 215 pages—on September 20,
2021. Id. ¶ 214. The Award was unanimous, with Mexico’s
appointed arbitrator joining it. The Tribunal addressed
and rejected Mexico’s “literal reading” that Article 1105(1)
covered only investments. Id. ¶¶ 356-58. Along with the
Article’s language, the Tribunal found that it was bound
by NAFTA to consider a Free Trade Commission Note of
Interpretation (Interpretation Note).7 Id. ¶ 207; NAFTA
art. 1131(2). Section B(1) of the Interpretation Note
equated Article 1105 with “the customary international
7. The Free Trade Commission consisted of the trade ministers
of the three NAFTA signatories. NAFTA art. 1131(2).
32a
Appendix B
law minimum standard of treatment of aliens.” Award
¶¶ 208, 356-58 (quoting Interpretation Note § B(1)). The
Tribunal determined that the reference to “aliens” in
the Interpretation Note meant that investors themselves
received protection under the Article. Id. ¶ 358. The
Tribunal also cited several other arbitration awards
containing language supporting its interpretation. Id.
n.384.
Finding that Article 1105(1) applied, the Tribunal
then concluded that Mexico “failed to provide Lion fair
and equitable treatment under NAFTA Article 1105.” Id.
¶¶ 615, 924. Aware that “the standard for finding a denial
of justice is high,” and required a finding of “improper
and egregious procedural conduct” by the local courts, id.
¶ 370, the Tribunal nonetheless found that the Mexican
courts denied Lion justice. They did so by (1) failing to
ensure proper service and improperly declaring default, (2)
denying Lion the right to appeal, and (3) denying Lion the
right to submit evidence of forgery. Id. ¶ 371. The Tribunal
summarized that the “Mexican judicial system . . . should
have effectively restored [Lion’s] rights,” id. ¶ 614, but
failed to do so “despite multiple opportunities” to get it
right. Id. ¶ 373; see also id. ¶ 508. The Tribunal ordered
Mexico to pay Lion USD 47,000,000 in compensation, USD
583,598.91 in costs, and USD 1,725,000 in attorney’s fees,
all with interest. Id. ¶ 924.
D.
Confirmation Proceeding in the United States
On December 6, 2021, Mexico filed the present
petition to vacate the Award on the grounds that the
33a
Appendix B
Tribunal exceeded its power under 9 U.S.C. § 10(a)(4)
and acted in manifest disregard of the law. Dkt. 1 ¶ 39.
On February 4, 2022, Lion submitted a cross-petition
to confirm, recognize, and enforce the Award. Dkt. 15.
Lion and Mexico filed responses to each other’s petitions
in February and March 2022. Dkts. 14-18. Five months
after the parties finished briefing their cross-petitions, on
August 22, 2024, Cárdenas moved to intervene. Dkt. 23.
While the parties’ petitions were pending, the Court
Clerk reassigned the case to the undersigned. Dkt. Notice
(Feb. 24, 2023). In the interest of judicial efficiency, the
Court dismissed all pending motions without prejudice and
instructed the parties to refile their motions to reflect any
recent developments in the case law. Minute Ord. (May 9,
2023). The parties refiled their motions and updated their
briefing. Dkts. 32-51. The Court heard oral argument on
the Motion to Intervene on October 23, 2023, and on the
Cross-Petitions for Confirmation and Vacatur three days
later.
II. THE AWARD
A.
Legal Standard
The Federal Arbitration Act (FAA), 9 U.S.C. § 1
et seq., represents an “emphatic federal policy in favor
of arbitral dispute resolution” that the Supreme Court
has recognized “applies with special force in the field of
international commerce.” Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth Inc., 473 U.S. 614, 631, 105 S.
Ct. 3346, 87 L. Ed. 2d 444 (1985). The Act “lists only four
34a
Appendix B
grounds upon which an arbitration award may be vacated.”
Kurke v. Oscar Gruss & Son, Inc., 454 F.3d 350, 354, 372
U.S. App. D.C. 154 (D.C. Cir. 2006). Only one—set forth in
Section 10(a)(4)—is at issue here: “where the arbitrators
exceeded their powers, or so imperfectly executed them
that a mutual, final, and definite award upon the subject
matter was not made.” 9 U.S.C. § 10(a)(4).
By design, Section 10(a)(4) leaves a court little room to
maneuver. The “sole question” is “whether the arbitrators
(even arguably) interpreted the parties’ contract, not
whether they got its meaning right or wrong.” Oxford
Health Plans LLC v. Sutter, 569 U.S. 564, 573, 133 S.
Ct. 2064, 186 L. Ed. 2d 113 (2013). It is not enough for a
tribunal to have committed a legal or factual error, even
if that error is “serious.” United Paperworkers Int’l
Union, AFL—CIO v. Misco, Inc., 484 U.S. 29, 38, 108
S. Ct. 364, 98 L. Ed. 2d 286 (1987); see also Kurke, 454
F.3d at 354 (cleaned up) (explaining that “factual or legal
error” is insufficient for vacatur); Stolt-Nielsen S.A. v.
AnimalFeeds Int’l Corp., 559 U.S. 662, 671, 130 S. Ct.
1758, 176 L. Ed. 2d 605 (2010) (holding that even “serious
error” is insufficient for vacatur). More bluntly, “[t]he
arbitrator’s construction holds, however good, bad, or
ugly.” Oxford Health Plans, 569 U.S. at 573 (cleaned up).
“Improvident, even silly, factfinding does not provide a
basis for a reviewing court to refuse to enforce the award.”
Major League Baseball Players Ass’n v. Garvey, 532 U.S.
504, 509, 121 S. Ct. 1724, 149 L. Ed. 2d 740 (cleaned up).
A party seeking vacatur must therefore “clear a high
hurdle,” Stolt-Nielsen S.A., 559 U.S. at 671, and meet an
35a
Appendix B
“onerous” burden, Republic of Arg. v. AWG Grp. Ltd.,
894 F.3d 327, 333, 436 U.S. App. D.C. 385 (D.C. Cir.
2018) (cleaned up). It must show that an arbitral tribunal
acted “outside the scope of [its] contractually delegated
authority.” Eastern Associated Coal Corp. v. Mine
Workers, 531 U.S. 57, 62, 121 S. Ct. 462, 148 L. Ed. 2d
354 (U.S. 2000) (cleaned up). Examples include issuing
an award that reflects the arbitrators’“own notions of
economic justice” or their “own brand of industrial
justice.” Mesa Power Grp., LLC v. Gov’t of Can., 255 F.
Supp. 3d 175, 184 (D.D.C. 2017) (quoting Stolt-Nielsen
S.A., 559 U.S. at 671) (cleaned up).
This standard of review applies with equal force to an
arbitration tribunal’s interpretation of treaty language.
See BG Grp., PLC v. Republic of Arg., 572 U.S. 25, 33,
134 S. Ct. 1198, 188 L. Ed. 2d 220 (2014). “[U]nder our
law,” “it is up to [a] tribunal to determine what [a] treaty
means,” and thus a court has “no authority to delve into
the merits” of that interpretation. LLC SPC Stileks v.
Republic of Moldova, 985 F.3d 871, 879, 450 U.S. App. D.C.
342 (D.C. Cir. 2021); see also State of Libya v. Strabag SE,
No. 20-cv-02600, 2021 U.S. Dist. LEXIS 187715, 2021 WL
4476771 (D.D.C. Nov. 30, 2021); Republic of Arg. v. AWG
Grp. Ltd., 211 F. Supp. 3d 335 (D.D.C. 2016), aff’d, 894 F.3d
327, 436 U.S. App. D.C. 385 (D.C. Cir. 2018).
A court can also vacate an award if the tribunal acted
in “manifest disregard of the law.”8 Like Section 10(a)(4),
8. In Hall Street, the Supreme Court explained that Section 10
“provide[s] the FAA’s exclusive grounds for expedited vacatur.” Hall
St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 584, 128 S. Ct. 1396,
36a
Appendix B
manifest disregard for the law requires “more than error
or misunderstanding with respect to the law.” Petruss
Media Grp., LLC v. Advantage Sales & Mktg., LLC,
No. 22-3278, 2023 U.S. Dist. LEXIS 149655, 2023 WL
5507306, at *15 (D.D.C. Aug. 25, 2023) (quoting Kanuth v.
Prescott, Ball & Turben, Inc., 949 F.2d 1175, 1180, 292 U.S.
App. D.C. 319 (D.C. Cir. 1991)). “Instead, a court must find
that (1) the arbitrators knew of a governing legal principle
yet refused to apply it or ignored it altogether and (2) the
law ignored by the arbitrators was well defined, explicit,
and clearly applicable to the case.” Id. (quoting LaPrade
v. Kidder, Peabody & Co., Inc., 246 F.3d 702, 706, 345 U.S.
App. D.C. 358 (D.C. Cir. 2001)).
B. The Tribunal’s Interpretation
Mexico argued to the Tribunal that Lion could not
recover because the language “shall accord to investments
of investors” applied to “investments and not investors.”
Award ¶ 356. The Tribunal disagreed and held that Article
1105(1) also “grants protection to Lion as an investor.”
Award ¶ 358. Mexico claims that, in doing so, the Tribunal
exceeded its powers and acted in manifest disregard of
the law. Not so.
170 L. Ed. 2d 254 (2008). The D.C. Circuit has “assumed without
deciding that” a tribunal acting in “‘manifest disregard of the law’
survives [Hall Street] as a separate ground for vacatur.” Mesa Power
Grp., 255 F. Supp. 3d at 183. The Court takes the same approach
and assumes without deciding that manifest disregard of the law
remains as a separate ground for vacatur.
37a
Appendix B
1.
The Tribunal’s Ruling Focused on Affected
Qualified Investments
Mexico’s Petition to Vacate is based on its view
that “[t]he Tribunal ruled that Mexico owed Lion—the
investor—an obligation to fair and equitable treatment
under NAFTA” even though Article 1105(1) “extends only
to investments, not investors.” Dkt. 32 ¶ 2. The Tribunal’s
ruling, however, was not so sweeping. The Tribunal held
only that investors had standing to bring claims if a
challenged action affected a qualified investment.
Some background is helpful. Lion’s arbitration demand
alleged that Mexico had failed to grant its “investments”
protection under Article 1105(1). Award ¶ 187. It initially
claimed that Article 1105(1) covered each financing
Cárdenas’s companies received, including the mortgages
and promissory notes. But NAFTA protected only
investments that fell under the definition of “investment”
in Article 1139. Mexico objected that “the Tribunal lack[ed]
jurisdiction . . . because Lion did not make an investment
in Mexico” as defined in that Article. Id. Annex A ¶ 33.
The Tribunal agreed with Mexico in part. It determined
that the mortgages qualified as investments, id. Annex A
¶ 266, but that the promissory notes did not qualify and
dismissed all claims related to those notes, id. ¶¶ 15, 20308. And thus it awarded damages as to the mortgages but
not as to the promissory notes. Id. ¶¶ 171, 924.
The Tribunal did not, therefore, rule that Article
1105(1) applied to investors writ large. Instead, it held
only that an investor could bring a claim under Article
38a
Appendix B
1105(1) if the challenged treatment affected a qualifying
investment. This is fully consistent with the approach
taken by other NAFTA tribunals. For example, in
Grand River Enters. Six Nations, Ltd. v. United States,
the tribunal held that “Article 1105 provides no scope
for individual investors’ claims that they have received
treatment contrary to international law, except as that
treatment affects a covered investment.” UNCITRAL,
Award, ¶ 177 (Jan. 12, 2011), https://2009-2017.state.gov/
documents/organization/156820.pdf (emphasis added).
If, as Mexico urges, investors could not bring Article
1105(1) claims, there would have been no enforcement
mechanism, and the Article would have been rendered
toothless. This is so because, as Lion highlights, “[t]
he mortgages themselves [can]not commence legal
proceedings, nor can they be served or sued. Only Lion
Mexico, as the investor in the investment and as claimant
in the Arbitration, can act to protect its mortgage
investment.” Dkt. 15-1 at 16. Put differently, under
Mexico’s interpretation, no arbitration could ever have
been commenced to protect a qualifying investment. The
Tribunal’s approach in permitting Lion to bring claims as
to investments covered by Article 1139 sidestepped this
fatal flaw in Mexico’s approach.
2.
The Tribunal Interpreted Article 1105(1)
Even putting aside Mexico’s misapprehension as to
the Tribunal’s ruling, its petition fails. The key question
in a confirmation proceeding is whether the tribunal
“interpreted” the language of Article 1105(1). Oxford
39a
Appendix B
Health Plans LLC, 569 U.S. at 573. Somewhat oddly,
however, courts in the FAA context do not appear to have
defined the word “interpret.” Instead, they address what
“to interpret” does not encompass, i.e., making public
policy or administering one’s own brand of industrial
justice. See Stolt-Nielsen S.A., 559 U.S. at 671-72. This
may be because the definition of “interpret” is both
broad and straightforward. To interpret is to “ascertain
the meaning and significance of thoughts expressed in
words.” Interpret, BLACK’S LAW DICTIONARY (12th
ed. 2024). By the same token, interpretation is “the
ascertainment of the thought or meaning of the author of,
or of the parties to, a legal document, as expressed therein,
according to the rules of language and subject to the rules
of law.” ANTONIN SCALIA & BRYAN A. GARNER,
READING LAW: THE INTERPRETATION OF LEGAL
TEXTS 53 (2012) (quoting H.T. Tiffany, Interpretation
and Construction, in 17 AMERICAN AND ENGLISH
ENCYCLOPEDIA OF LAW 1, 2 (David S. Garland &
Lucius P. McGehee eds., 2d ed. 1900)).
The Tribunal’s work falls comfortably within the
realm of interpretation. It identified and rejected Mexico’s
argument, applied existing guidance interpreting Article
1105(1), cited cases, and explained its reasoning. The
Tribunal did not, as Mexico complains, “ignore” the
“literal meaning” of “investments of investors.” Dkt. 32
¶¶ 49-50 (citing Award ¶¶ 356-358). The Tribunal first
regurgitated Mexico’s position: “Mexico’s first argument
is based on a literal reading of Art[icle] 1105 of NAFTA.”
40a
Appendix B
Award ¶ 356. 9 Then, far from ignoring anything, it
explained why it rejected Mexico’s interpretation. Award
¶¶ 357-358.
The Tribunal began by recognizing its mandate.
An “interpretation” of NAFTA by the Free Trade
Commission (FTC) was “binding on a Tribunal.” NAFTA
art. 1131. And the FTC had interpreted Article 1105 as
“prescrib[ing] the customary international law minimum
standard of treatment of aliens as the minimum standard
of treatment to be afforded to investments of investors of
another Party.” Award ¶¶ 207, 357-58; Dkt. 33-4. Applying
this directive, the Tribunal reasoned that: (a) because [as
the FTC opined] the standard of treatment under Article
1105(1) was the same as the customary international
standard protecting aliens; (b) and aliens referred to
individuals; (c) Article 1105(1) must have also protected
individuals; (d) investors were individuals; and so (e)
Article 1105(1) protected investors. Id. This analysis was
assuredly “interpretation” by the Tribunal.
The Tribunal also cited other awards in support of
its holding. Award ¶ 358 n.384. Mexico grumbles that
the Tribunal “tersely cited” these awards. Dkt. 32 ¶ 56.
That the Tribunal cited cases, tersely or in any other
tone, confirms that it was “arguably interpreting”
Article 1105(1), not “ignoring” it. And Mexico’s complaint
9. The Tribunal could have made its intent clearer by writing
“Mexico’s literal reading” instead of “a literal reading.” But in the
context of Mexico’s pleading to the Tribunal and the rest of the
Award, the Tribunal unambiguously did not agree with Mexico’s
“literal reading” of Article 1105.
41a
Appendix B
that these citations were “misplaced,” id. ¶ 52, is but
an inapposite argument that the Tribunal erred. That
said, the Tribunal’s citations were not haphazard. Each
opinion is at least consistent with the conclusion that
Article 1105(1) permitted investors to bring claims. The
tribunal in Merrill & Ring wrote that “Article 1105(1)
provides for the treatment of another Party’s investors
in accordance with international law.” Merrill & Ring
Forestry L.P. v. Canada, ICSID Case No. UNCT/07/01,
Award ¶ 183 (Mar. 31, 2010) (cleaned up). Gami held that
“a government’s failure to implement or abide by its own
law in a manner adversely affecting a foreign investor
may . . . lead to a violation of Article 1105.” Gami Invs. Inc.
v. United Mexican States, Award ¶¶ 91-92 (Nov. 15, 2004).
And in Chematura , a case discussing the Interpretation
Note to Article 1105, the tribunal stated that “Article
1105 of NAFTA seeks to ensure that investors from
NAFTA member States benefit from regulatory fairness.”
Chematura Corp. v. Gov’t of Can., Award ¶ 179 (Aug. 2,
2010).
Mexico complains that the Tribunal ignored the Vienna
Convention on the Law of Treaties (VCLT), which can be
used to understand applicable “customary international
law.” Dkt. 32 ¶ 60. Mexico is correct that the Tribunal
did not cite the VCLT. But that is not germane for two
reasons. First, the Tribunal was not required to set forth
every possible basis for its conclusion. Kurke, 454 F.3d at
354 (cleaned up) (holding that a court must confirm an
award even if the tribunal gave “no explanation . . . if any
justification can be gleaned from the record”). Second, the
VCLT arguably supports the Tribunal’s interpretation. It
42a
Appendix B
requires that “[a] treaty shall be interpreted in good faith
in accordance with the ordinary meaning to be given to
the terms of the treaty in their context and in the light
of its object and purpose.” Dkt. 32 ¶ 60 (quoting VCLT
art. 31(1)) (emphasis added). Here, the context includes
the Interpretation Note and other arbitral opinions the
Tribunal relied on. And permitting investors to bring
arbitration proceedings for the maltreatment of their
investments furthered NAFTA’s purpose of encouraging
the free flow of goods, services, and investments among
the signatories. See NAFTA art. 102(1).
Mexico separately faults the Tribunal for not
acknowledging that the United States filed a nondisputing party brief (essentially an amicus brief) in
which it supported Mexico’s interpretation of Article
1105(1). Dkt. 32 ¶ 50. This complaint is wide of the
proverbial mark. To start, a tribunal is “not require[d] to
address [a non-disputing party’s] submission at any point
in the arbitration.” Free Trade Commission, Statement on
Non-Disputing Party Participation ¶ 9, https://2009-2017.
state.gov/documents/organization/38791.pdf. That said,
the Tribunal quoted and addressed the United States’s
brief at length, including its view as to the application of
Article 1105(1) to judicial acts. See Award ¶ 553; see also
id. ¶¶ 189, 205, 282-84, 287, 553, 556, 806. And, moreover,
the United States nowhere argued that investors could
not bring Article 1105(1) claims. To the contrary, its
discussion of “investments of investors” is fully consistent
with the Tribunal’s approach: to succeed, “a claimant (i.e.,
an investor) must therefore establish that the treatment
accorded to its investment rose to the level of a denial
43a
Appendix B
of justice under customary international law.” Dkt. 67-1
¶ 10.10
While mistakenly faulting the Tribunal for failing to
consider the United States’s brief, Mexico fails to mention
the brief submitted by Canada. This may well be because
Canada flatly contradicted Mexico’s position and arguably
went even further than the Tribunal. It contended that
“Article 1105(1) requires the NAFTA Parties to accord
to investors and their investments the customary law
minimum international law standard.” Dkt. 67-1 ¶ 4
(emphasis added).
3.
The Cases Mexico Cites Do Not Support
Its Petition
Bringing its focus to case law in the United States,
Mexico asks the Court to compare the Tribunal’s work
with those of other tribunals whose awards have been
confirmed and vacated. See Dkt. 32 ¶¶ 63-71. Doing so
fully supports the Court’s decision to confirm.
Mexico directs the Court’s attention to Mesa Power
Grp. LLC v. Gov’t of Can., in which the court confirmed
an arbitral award after finding that the tribunal had
“‘used all the standard interpretative tools’ an arbitrator
‘would normally use.’“ Id. ¶ 64. Mexico contrasts that
10. The United States discussed the meaning of Article 1105(1)
as applied in a “denial of justice” claim, see Dkt. 67-1 ¶ 10, and as
applied to a “minimum standard of treatment” claim, see id. n.21.
The United States does not appear to have attached any meaning
to the two different types of claims.
44a
Appendix B
work with what the Tribunal did here which, in Mexico’s
view, “did not apply . . . any of the methods normally
used by tribunals to interpret treaty text save for terse
citations” to three other inapposite awards. Id. ¶ 65. This
both overstates the Tribunal’s obligations and understates
its work. The law does not require a tribunal to use “all”
or even most of the available interpretative tools or even
to use them correctly. See supra Sections II.A & II.B(2).
And, at a minimum, the Tribunal interpreted the treaty
language by its citation to the FTC’s Interpretation Note
of Article 1105(1) and other awards.
Mexico claims that “[t]he Tribunal’s conduct is similar
to the conduct of other arbitrators whose awards [courts
have] vacated because of their failure to adhere to the
text of the contract.” Dkt. 32 ¶ 63. Not so. Here, the
Tribunal chose one of two competing interpretations of
treaty language. In the cases Mexico cites, the arbitrators
created new contractual terms that unequivocally
contradicted existing terms. In Hay Adams Hotel
LLC v. Hotel & Rest. Emps., Loc. 25, the arbitrator
acknowledged that petitioner had the contractual right
to terminate the respondent employee. No. 06-968, 2007
U.S. Dist. LEXIS 34129, 2007 WL 1378490, at *1 (D.D.C.
May 9, 2007). And yet the arbitrator ordered petitioner
not to fire the employee and instead to have “a qualified
professional [carefully inquire] into [the employee’s]
possible psychological problems.” 2007 U.S. Dist. LEXIS
34129, [WL] at *2. In Raymond James Fin. Servs Inc.
v. Bishop, the arbitrator granted wrongful termination
damages even though the employee was at will and
therefore not entitled to any damages. 596 F.3d 183, 187
45a
Appendix B
(4th Cir. 2010). In Davey v. First Command Fin. Servs.,
Inc., the arbitrator granted punitive damages even though
a contractual term prohibited such damages. No. 11-CV1510, 2012 U.S. Dist. LEXIS 11481, 2012 WL 277968, at
*1 (N.D. Tex. Jan. 31, 2012). And in Mo. River Servs. Inc.
v. Omaha Tribe, the arbitrator had ordered damages be
paid from proceeds of a casino in Iowa even though the
contract unambiguously limited proceeds to be paid from
a casino in Nebraska. 267 F.3d 848, 855 (8th Cir. 2001).
4.
The Tribunal Did Not Act in Manifest
Disregard of the Law
For the same reasons applicable to the Section 10(a)
(4) analysis above, the Tribunal did not act in manifest
disregard of the law. See Mesa Power Grp., 255 F. Supp.
3d at 183-84. Mexico does not deny that it received due
process and that the arbitral proceeding followed the
Additional Facility Rules. And the Tribunal did not replace
the treaty language with a public policy determination,
ignore the treaty language, or otherwise go rogue.
***
Simply put, the Tribunal interpreted Article 1105(1).
Whether it reached the correct interpretation is beyond
this Court’s mandate.
C.
Confirmation
“[A]t any time within one year after” a tribunal issues
an award, “any party to the arbitration may apply . . . for
46a
Appendix B
an order confirming the award.” 9 U.S.C. § 9. The Court
“must grant such an order unless the award is vacated,
modified, or corrected as prescribed in [S]ections 10 and
11 of [the FAA].”11 Id.
Lion timely sought confirmation, see 9 U.S.C. § 9, within
one year of when the Award was issued on September 20,
2021, see Award at 212. Dkt. 1. And for the reasons stated
above, the Court rejects Mexico’s arguments for vacatur.
The Court therefore confirms the Award.
III. INTERVENTION
The Court now turns to the Motion to Intervene. Dkt.
42. Héctor Cárdenas Curiel, who did not participate in
the arbitration, seeks collaterally to attack the Tribunal’s
Award. Dkt. 42. The Tribunal found that Cárdenas
organized and carried out a fraudulent scheme against
Lion, including using the forged agreement in legal
proceedings his companies brought to cancel Lion’s
mortgages. Award ¶¶ 94-95. Cárdenas takes serious
exception to these findings, proclaims his innocence,
and seeks to unwind the Award. Dkt. 42-1 at 16-17. Even
though Cárdenas knew of the arbitration proceedings
and that they concerned allegations that he perpetuated
a fraud on Lion, he made no attempt to intervene in the
arbitration. Instead, Cárdenas first moved to intervene
here nine months after Mexico moved to vacate the Award
11. Though Lion seeks confirmation under 9 U.S.C. § 9, courts
typically confirm foreign arbitral awards under 9 U.S.C. § 207. See
Republic of Arg., 211 F. Supp. 3d at 345-46. The Court need not
decide which applies because Lion satisfies the requirements of both.
47a
Appendix B
and eight months after the applicable limitations period
expired. Dkts. 23, 42.
Lion opposes intervention, arguing mainly that
Cárdenas fails to establish he is entitled to intervene as of
right or provide grounds for permissive intervention. Dkt.
49 at 8. Mexico takes no position, but “emphasizes” “that
the Motion is entirely unrelated to Mexico’s Petition.”
Dkt. 50 at 3.
The Court finds that Cárdenas cannot intervene as of
right under Rule 24(a) and denies permissive intervention
under Rule 24(b).
A.
Intervention as of Right
1.
Legal Standard
Federal Rule of Civil Procedure 24(a)(2) permits
anyone to intervene as of right who, “on timely motion . . .
claims an interest relating to the property or transaction
that is the subject of the action, and is so situated that
disposing of the action may as a practical matter impair or
impede the movant’s ability to protect its interest, unless
existing parties adequately represent that interest.” Fed.
R. Civ. P. 24(a)(2).
A motion to intervene as of right must be timely
as “judged in consideration of all the circumstances,
especially weighing the factors of time elapsed since the
inception of the suit, the purpose for which intervention is
sought, the need for intervention as a means of preserving
48a
Appendix B
the applicant’s rights, and the probability of prejudice to
those already parties in the case.” Karsner v. Lothian,
532 F.3d 876, 886, 382 U.S. App. D.C. 275 (D.C. Cir. 2008)
(quoting United States v. Brit. Am. Tobacco Austl. Servs.,
Ltd., 437 F.3d 1235, 1238, 369 U.S. App. D.C. 383 (D.C.
Cir. 2006)). “The most important circumstance relating
to timeliness is whether a party sought to intervene as
soon as it became clear that its interests would no longer
be protected by the parties in the case.” Campaign Legal
Ctr. v. Fed. Election Comm’n, 68 F.4th 607, 610, 461 U.S.
App. D.C. 86 (D.C. Cir. 2023) (cleaned up).
2.
Cárdenas’s Motion Was Not Timely
a)
Cárdenas Should Have Raised His
Complaints with the Tribunal
Cárdenas complains that the Tribunal’s finding that
he committed widespread fraud caused, and will continue
to cause, him substantial harm. Dkt. 42. Maybe so. But he
should have challenged the fraud allegations during the
arbitration, not as a third party in a vacatur proceeding.
To be sure, failure to intervene in an arbitration
does not make a subsequent attempt to intervene in a
vacatur proceeding untimely per se. See Techcapital
Corp. v. Amoco Corp., No. 99 CIV. 5093, 2001 U.S. Dist.
LEXIS 2822, 2001 WL 267010, at *4 (S.D.N.Y. Mar. 19,
2001). However, courts allow such interventions primarily
where the intervenor could not have intervened earlier.
See Eddystone Rail Co., LLC v. Jamex Transfer Servs.,
LLC, 289 F. Supp. 3d 582, 590 (S.D.N.Y. 2018). This
49a
Appendix B
is not such a case. Cárdenas knew full well about the
arbitration and “was on general notice that there would
be some allegations made about him.” Dkt. 54 at 18:23-24,
21:12-16.12 Yet, he did nothing to try and intervene in the
arbitration to protect his interests.
Cárdenas attempts to explain away his inaction
by bemoaning that the Tribunal never invited him to
participate “as a witness or in any other capacity during
the arbitration.” Dkt. 42-2 ¶ 25; Dkt. 42-1 at 5-6. But a
third party need not wait for an emblazed invitation to
intervene. It was up to Cárdenas, not the Tribunal or the
parties, to act on his behalf.
Cárdenas alternatively contends that he did try to
intervene in the arbitration because his companies sought
“to participate as non-disputing parties” and the Tribunal
rejected that request. Dkt. 42-2 ¶ 26. This is the reddest of
red herrings.13 Yes, Iván Mercado, a legal representative
12. The publicly available Request for Arbitration referenced
Cárdenas eight times, Dkt. 56-8 ¶¶ 33-34, 36-37, 39, 41, and explained
the forged document scheme and the alleged illegitimate legal
proceedings, id. ¶¶ 41-50.
13. The figurative use of “red herring” has a fishy etymology.
In 1667, Gentleman’s Recreation suggested using the scent of
red herring to keep hounds on the trail during a fox hunt. See
Red Herring, O x ford E nglish D ictiona ry, https://w w w.oed.
com/dictionary/red-herring_n (last visited Oct. 17, 2024) (citing
Nicholas Cox, the Gentleman’s Recreation 59 (1674)). But in 1807,
William Cobbett wrote that he had used a red herring as a decoy
to deflect hounds chasing after a hare. See id. He then used that as
a metaphor to claim that the English government had been misled
by false foreign intelligence to divert attention away from domestic
50a
Appendix B
acting on behalf of Cárdenas’s companies, filed letters
with the Tribunal seeking to participate. Dkt. 42-2 ¶ 26.
And yes, the Tribunal denied the request. Dkt. 42-6 at 2.
But Cárdenas’s companies are not seeking to intervene
here—Cárdenas himself is. And at no time did Mercado
act on behalf of Cárdenas in his individual capacity, seek
to defend Cárdenas’s actions, or even contest the alleged
fraud. Instead, in each letter, Mercado represented the
companies and focused solely on challenging the Tribunal’s
jurisdiction. Dkts. 42-7, 42-11.
Even accepting Cárdenas’s argument that he can rely
on his companies’ efforts to intervene does not help him.
Instead, it raises its own obstacle. Cárdenas claims that
he “is best positioned to raise the additional argument
on lack of jurisdiction that the attorney representing Mr.
Cárdenas’s companies tried to raise five different times
during the arbitration but was not allowed.” Dkt. 57 at
7. In other words, he wants this Court to allow the very
intervention the Tribunal rejected. The FAA prohibits
this. See 9 U.S.C. § 10(a); see also supra Section II.A.
matters: “Alas! it was a mere transitory effect of the political redherring; for, on the Saturday, the scent became as cold as a stone.”
Id. (citing Cobbett ’s Wkly. Pol. Reg., Feb. 14, 1807). He retold the
story numerous times, transforming the phrase into its figurative
meaning of a clue used to divert from an issue at hand. See id; see
also Michael Quinion, The Lure of the Red Herring, World Wide
Words (Oct. 25, 2008), https://www.worldwidewords.org/herring.
html (citing Robert Scott Ross & Gerald Cohen, Two Contributions
to the Study of Red Herring, in Comments on Etymology 58, 58-69
(Gerald Cohen ed., 2008)).
51a
Appendix B
b)
Cárdenas Did Not Timely File His
Motion
Even if the Court were inclined to excuse Cárdenas’s
failure to seek to participate in the arbitration, he did not
timely raise his arguments here. He moved to intervene
“to vacate an arbitral award that adversely affects
[him].” Dkt. 57 at 3. But under the FAA, “[n]otice of a
motion to vacate, modify, or correct an award must be
served upon the adverse party or his attorney within
three months after the award is filed or delivered.” 9
U.S.C. § 12. Cárdenas missed this deadline, moving to
intervene to argue vacatur more than eight months after
the limitations period expired. See Dkt. 23 (filed August
22, 2022); Dkt. 42-2 ¶ 57.
Cárdenas claims that this limitation period does not
apply to him. He argues: “[t]he text of Section 10(a) of
the FAA is clear that ‘[i]n any of the following cases the
United States court in and for the district wherein the
award was made may make an order vacating the award
upon the application of any party to the arbitration
— . . . .’” and “[he] was not a party to the arbitration
and the three-month limitations period of Section 12 is
therefore inapplicable to him.” Dkt. 57 at 2 (cleaned up).
By that reasoning, however, Cárdenas could not move to
intervene to vacate the Award at any time because he was
never a party to the arbitration.
The applicability of the limitations period aside, the
“parties to the arbitration”—Lion and Mexico—would
be prejudiced if the Court granted Cárdenas’s belated
52a
Appendix B
motion. By the time he moved, the parties had fully
briefed both the Petition to Vacate and Cross-Motion
to Confirm. Dkts. 16, 18, 23. Given this timing, his
supplemental briefing in support of Mexico’s vacatur
proceeding would be supplemental briefing in name
only. It would, in practice, function as an independent
petition by requiring a fresh round of opposition and reply
briefing on vacatur arguments not raised in the vacatur
and confirmation petitions already ripe for judgment.
Cárdenas’s intervention would delay the proceeding
further by requiring the parties to dedicate substantial
time and resources briefing arguments that they jointly
contend are unrelated to the existing petitions. See Dkt.
49 at 15; Dkt. 50 ¶ 9.
3.
Intervention Would Be Futile
Courts regularly deny motions to intervene when the
intervention would be futile. See, e.g., Stotts v. Memphis
Fire Dep’t, 679 F.2d 579, 582 (6th Cir. 1982); Peters v.
District of Columbia, 873 F. Supp. 2d 158, 210 (D.D.C.
2012); In re Nat’l Football League Players’ Concussion
Inj. Litig., No. 14-1995, 2019 U.S. Dist. LEXIS 6154, 2019
WL 188431, at *4 (E.D. Pa. Jan. 14, 2019); New York Life
Ins. Co. v. Singh, No. 14-CV-5726, 2017 U.S. Dist. LEXIS
231204, 2017 WL 10187670, at *7 (E.D.N.Y. Mar. 8, 2017)
(citing United States v. Glens Falls Newspapers, Inc., 160
F.3d 853, 855 (2d Cir. 1998)). Here, intervention would
indeed be otiose.
Cárdenas contends that “excluding [him] from these
proceedings would deprive the Court of the opportunity
to be briefed on an important jurisdictional defect in the
53a
Appendix B
Award” not raised by Mexico. Dkt. 42-1 at 13. But the
parties agreed to the ICSID Additional Facility Rules,
which provide that “[t]he Tribunal shall have the power to
rule on its jurisdiction and competence.” See NAFTA art.
1120(1)(b) (adopting ICSID Additional Facility Rule 53(1)).
By consenting to proceed under those rules, the parties
delegated all decisions about the Tribunal’s jurisdiction
to the Tribunal itself. Crystallex Int’l Corp. v. Bolivarian
Republic of Venezuela, 244 F. Supp. 3d 100, 111 (D.D.C.
2017), aff’d, 760 F. App’x 1 (D.C. Cir. 2019).
An argument by Cárdenas that the Tribunal lacked
jurisdiction would be futile. Where, as here, the parties
assign arbitrability to the arbitrator, “a court possesses
no power to decide the arbitrability issue,” even if it thinks
the argument for arbitrability is “wholly groundless.” LLC
SPC Stileks, 985 F.3d at 878 (quoting Henry Schein, Inc.
v. Archer and White Sales, Inc., 586 U.S. 63, 68, 139 S.
Ct. 524, 202 L. Ed. 2d 480 (2019)). Instead, “the court’s
standard for reviewing the arbitrator’s decision about that
matter should not differ from the standard courts apply
when they review any other matter that parties have
agreed to arbitrate.” Id. at 878 (quoting First Options of
Chi., Inc. v. Kaplan, 514 U.S. 938, 943, 115 S. Ct. 1920, 131
L. Ed. 2d 985 (1995)); see also supra Section II.A. This
may well explain why Mexico’s petition did not raise lack
of jurisdiction as a basis to vacate the Award.
4.
Mexico Can Protect Cárdenas’s Interests
Intervention is not necessary if the “existing parties
adequately represent [the third party’s] interest.” Fed.
R. Civ. P. 24(a)(2).
54a
Appendix B
Cárdenas claims that neither Lion nor Mexico can
protect his interests before this Court. Dkt. 42-1 at 3.
That is true as to Lion. But Mexico and Cárdenas share
the same goal: vacatur of the Award. Cárdenas seeks to
intervene to raise “an important jurisdictional defect in
the Award” Mexico did not raise. Id. at 13. He does not
explain, however, why Mexico is not equally incentivized
to raise the same jurisdictional defect. And so Cárdenas’s
motion at best reflects a strategy disagreement with
Mexico as to whether to raise a jurisdictional argument
in support of vacatur. Such disagreement is not a basis
to find that Mexico cannot represent Cárdenas’s interest.
See Jones v. Prince George’s Cnty., 348 F.3d 1014, 1020,
358 U.S. App. D.C. 276 (D.C. Cir. 2003).
B. Permissive Intervention
Cárdenas asks, in the alternative, that the Court
allow permissive intervention. Dkt. 42-1 at 1. “As its name
would suggest, permissive intervention is an inherently
discretionary enterprise.” E.E.O.C. v. Nat’l Child.’s Ctr.,
Inc., 146 F.3d 1042, 1046, 331 U.S. App. D.C. 101 (D.C.
Cir. 1998). The Court may allow permissive intervention
under Federal Rule of Civil Procedure 24(b) so long as
the prospective intervenor presents “(1) an independent
ground for subject matter jurisdiction; (2) a timely motion;
and (3) a claim or defense that has a question of law or
fact in common with the main action.” Id. But the Court
also has the discretion to deny such a motion, even if the
proposed intervenor meets these baseline criteria. Id. at
1048.
55a
Appendix B
The final requirement under Rule 24(b)(2), a timely
motion, dooms Cárdenas’s permissive intervention
request. Courts apply a more lenient standard of
timeliness to intervention as of right than to permissive
intervention. Stadnicki on Behalf of Lending Club Corp.
v. Laplanche, 804 F. App’x 519, 522 (9th Cir. 2020); WalMart Stores, Inc. v. Tex. Alcoholic Beverage Comm’n, 834
F.3d 562, 566 n.1 (5th Cir. 2016). The Court has already
explained why Cárdenas’s Motion was not timely under
the more stringent standard and will not regurgitate that
analysis. See supra Section II.A. Suffice it to say that
Cárdenas neither asked to participate in the arbitration
nor filed his motion within the time the FAA prescribes
to move to vacate. Intervention at this late stage would
delay the proceedings and prejudice Lion by allowing the
intervenor to circumvent the statute of limitations.
Even if Cárdenas’s Motion were timely, the Court
would deny permissive intervention. The Rule 24(b)
requirements are the floor where the Court’s discretion
begins, not the ceiling where it ends. See Nat’l Child.’s Ctr.,
146 F.3d at 1048. Like intervention as of right, permissive
intervention is not appropriate because Cárdenas’s
arguments are futile, see supra Section II.A, making his
intervention unlikely to “significantly contribute to . . .
the just and equitable adjudication of the legal question
presented.” Aristotle Int’l, Inc. v. NGP Software, Inc., 714
F. Supp. 2d 1, 18 (D.D.C. 2010).
IV. CONCLUSION
For the reasons stated above, the Court DENIES
Cárdenas’s Motion to Intervene, Dkt. 42; DENIES
56a
Appendix B
Mexico’s Petition to Vacate, Dkt. 32; and GRANTS
Lion’s Cross-Petition for Confirmation, Recognition, and
Enforcement of the Arbitral Award, Dkt. 35.
SO ORDERED.
This is a final appealable Order. See Fed. R. A pp. P.
4(a).
Date: November 8, 2024
/s/ Ana C. Reyes
ANA C. REYES
United States District Judge
57a
Appendix C OF THE AWARD
APPENDIX C — EXCERPT
INTERNATIONAL CENTRE FOR SETTLEMENT
OF INVESTMENT DISPUTES
(ICSID Case No. ARB(AF)/15/2)
LION MEXICO CONSOLIDATED LP
Claimant,
v.
UNITED MEXICAN STATES
Respondent.
AWARD
Members of the Tribunal
Juan Fernández-Armesto, President of the Tribunal
David J.A. Cairns, Arbitrator
Laurence Boisson de Chazournes, Arbitrator
Secretary of the Tribunal
Francisco Grob
Assistant to the Tribunal
Adam Jankowski
Washington D.C., September 20, 2021
***
58a
Appendix C
4. The Tribunal’s decision
354. In the following section, the Tribunal will briefly
analyse and dismiss Respondent’s preliminary
objections (4.1.); then it will establish that Lion
was indeed denied justice by Mexico’s judiciary, in
breach of NAFTA Art. 1105 (4.2.), and thereafter
dismiss Mexico’s counterargument that Lion failed
to exhaust available and reasonable local remedies
(4.3.).
4.1 Respondent’s preliminary objection
355. The Tribunal will first address Mexico’s preliminary
objections (summarized in section 3.4. supra):
NAFTA Art. 1105 protects investments and investors
356. Mexico’s first argument is based on a literal reading
of A rt. 1105 of NA FTA, which provides that
Mexico “shall accord to investments of investors”
of the other treaty Parties treatment in accordance
with international law, including FET and FPS.
Respondent says that A rt. 1105 only extends
protection to investments, but not to investors383.
357. Contrary to Mexico’s submission, the Tribunal finds
that NAFTA Art. 1105 does indeed grant protection
to Lion as an investor.
383. RR, para. 138, RCM, paras. 134-144.
59a
Appendix C
358. The FTC Interpretation Note equates the standard
of protection to be applied under Art. 1105 of
the NAFTA with the standard of “customary
international law minimum standard of treatment
of aliens”. The reference to “aliens”, in a context of
investment protection, can only mean investors. A
multitude of NAFTA Tribunals have also construed
Art. 1105 as a source of protection for investors
rather than solely for their investments384.
***
384. See e.g., Gami, para. 91; Chemtura, para. 179; Exh.
CLA-139; Merrill, para. 83.
60a
APPENDIX DAppendix
— NAFTADARTICLE 1105
Article 1105: Minimum Standard of Treatment
1. 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.
2. Without prejudice to paragraph 1 and notwithstanding
Article 1108(7)(b), each Party shall accord to investors of
another Party, and to investments of investors of another
Party, non-discriminatory treatment with respect to
measures it adopts or maintains relating to losses suffered
by investments in its territory owing to armed conflict or
civil strife.
3. Paragraph 2 does not apply to existing measures
relating to subsidies or grants that would be inconsistent
with Article 1102 but for Article 1108(7)(b).
61a
Appendix
APPENDIX
E — 9E
U.S.C. § 10
9 U.S.C. § 10 — Same; vacation; grounds; rehearing
(a)In any of the following cases the United States court
in and for the district wherein the award was made may
make an order vacating the award upon the application
of any party to the arbitration—
(1) where the award was procured by corruption, fraud,
or undue means;
(2) where there was evident partiality or corruption
in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct
in refusing to postpone the hearing, upon sufficient
cause shown, or in refusing to hear evidence pertinent
and material to the controversy; or of any other
misbehavior by which the rights of any party have
been prejudiced; or
(4) where the arbitrators exceeded their powers, or so
imperfectly executed them that a mutual, final, and
definite award upon the subject matter submitted was
not made.
(b) If an award is vacated and the time within which the
agreement required the award to be made has not expired,
the court may, in its discretion, direct a rehearing by the
arbitrators.
(c) The United States district court for the district wherein
an award was made that was issued pursuant to section
62a
Appendix E
580 of title 5 may make an order vacating the award
upon the application of a person, other than a party to
the arbitration, who is adversely affected or aggrieved
by the award, if the use of arbitration or the award is
clearly inconsistent with the factors set forth in section
572 of title 5.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.