US Firm Wins Landmark Legal Ruling

ORANGE COUNTY, CA-In a landmark decision, an international tribunal has ordered the Mexican government to pay $16.7 million to a California company that built a $20-million project south of the border but then was prevented from opening it.

Legal experts say the ruling, handed down by a three-person tribunal in Washington, DC, is believed to be the first legal victory favoring a US investor under the 1994 North American Free Trade Agreement. It could also force the Mexican government to do a better job of sticking to written contracts and international laws, which at times have been broken by local officials in Mexico.

“This is a groundbreaking decision in international law,” says Jack J. Coe Jr., a lawyer for plaintiff Metalclad who also teaches law at Pepperdine University in Malibu. “It’s huge. The NAFTA system appears to be working.”