International Thunderbird Gaming Corporation Case Study

THE PARTIES International Thunderbird Gaming Corporation (‘Thunderbird’) is the Claimant, a publicly held Canadian Corporation with its principal offices in San Diego, California, U.S.A.; the United Mexican States (‘Mexico’) is the Respondent. SUMMARY OF THE FACTS OF THE CASE Thunderbird is engaged in the business of operating gaming facilities, conducting investigations in Mexico in 1999-2000 concerning potential “skill machine” opportunities. Pursuant to many meetings and discussions through the first few months of the year 2000, a company Entertainmens de México S.A. de C.V. (“EDM”) was formed by two individuals (Juan Jose Menendez Tlacatelpa and Alejandro Rodriguez Velazquez.) in April, 2000 and entered into a five year lease for a location
1105 of the NAFTA? Has the Respondent engaged in expropriation in violation of Art. 1110 of the NAFTA? DECISION OF THE TRIBUNAL AND ITS REASONS The Tribunal rejected the claims raised by Thunderbird against Mexico in that it specifically and expressly stated that the facts for the issues raised do not support claims of expropriation so raised under Art. 1110. The general view was that the principle of legitimate expectation forms a part of, and is a subcategory of the inherent duty to afford a fair and equitable treatment under Art. 1105 of the NAFTA. The Tribunal, by virtue of a majority also established that there are certain general conditions that ought to be fulfilled to even place the claim of legitimate expectation, “as: An expectation of the investor to be caused by and attributed to the government Must be backed-up by investment relying on such an expectation Requiring the legitimacy of the expectation in terms of the competency of the officials responsible for it and the procedure for issuing it The reasonableness of the investor in relying on the expectation.” National Treatment The Tribunal first gave effect to a plain wording of the NAFTA
In the opinion of the Tribunal, Thunderbird has not sufficiently established, not even on a prima facie basis, that the EDM investments were treated, any differently than Mexican nationals. Minimum Standard of Treatment The Tribunal interpreted Art. 1105(1) of the NAFTA in accordance with the NAFTA in accordance with the NAFTA Free Trade Commission’s Notes of Interpretation of certain Chapter Eleven Provisions that encompass the “Minimum Standard of Treatment in Accordance with International Law”. The Tribunal opined that the content of the minimum standard should not be rigidly interpreted and it should reflect customary law as it evolves. It also observed that the threshold for finding a violation of the minimum standard of treatment still remains high and also cited international jurisprudence for the same. In the opinion of the Tribunal, Thunderbird has not convinced the Tribunal of Mexico’s conduct violating the minimum standard treatment. The Tribunal states that there is complete lack of evidence that could even possibly suggest that Mexico has violated standards established under Art. 1105 of the