City News Service of Los Angeles | October 19, 2001 A Newport Beach firm that failed to settle a five- year, $15.6 million dispute with Mexico under the free trade treaty will argue the case in a Canadian court in April, an executive said today. Anthony C. Dabbene, chief financial officer of Metalclad Corp., said his company was the first to file an arbitration claim under the North American Free Trade Agreement. A tribunal in Washington, D.C., and a court in British Columbia ruled that Mexico owes $15.6 million to Metalclad, but it has been unable to collect the settlement, Dabbene said. "NAFTA was intended to protect investors' rights, so that claims would not be tied up in long-involved processes," Dabbene said. "This would almost equate with what would happen in a local court." Metalclad built an industrial waste landfill in San Luis Potosi, just north of Mexico City. It was supposed to open in March 1995, but the government, which initially supported it, bowed to some political pressure and declared the remote regional an environmental zone to protect cacti, Dabbene said. On Aug. 30, 2000, the company was awarded $16.6 million by the first-ever NAFTA arbitration panel, which included judges from the United States, Great Britain and Mexico. The panel also awarded 6 percent interest, compounded monthly, swelling the total settlement to $17.7 million. On May 4, after hearing Mexico's request to set aside the award, the Supreme Court of British Columbia ruled in Metalclad's favor, but changed the formula for calculating interest. The court also awarded the company 75 percent of its costs and legal fees. A month later, Mexico presented a written offer to settle the case by paying the reduced amount of $15.6 million plus interest at the daily rate of $2,559 from and after June 1, 2001. The company accepted Mexico's offer on June 11. For the last four months, Dabbene said, counsel for Mexico has engaged in a pattern of conduct wherein he would request something and then be unavailable after the request was fulfilled. Enough time has gone by for the company to believe that Mexico has abandoned further attempts to resolve conflicts in their own government associated with the payment and that the settlement will not occur voluntarily, he said. A five-day hearing in the British Columbia Court of Appeal will begin on April 8. "This is saying all bets are off," Dabbene said. "We're back in court. Mexico has not lived up to its word." Mexico's environmental minister, Victor Lichtinger, told the New York Times that Mexico has not reneged. "We are going to pay," he said in remarks published today. The payment will be made after various federal departments and the state of San Luis Potosi can agree how to divide the cost, he said.City News Service of Los Angeles:
