CPO Updates NAFTA Proceedings
On October 21, 2003, Corn Products International, Inc. (NYSE: CPO) submitted, on its own behalf and on behalf of its Mexican affiliate, CPIngredientes, S.A. de C.V., a Request for Institution of Arbitration Proceedings (the "Request") against Mexico pursuant to Chapter 11 of the North American Free Trade Agreement ("NAFTA").
In the Request, the Company asserted that the imposition by Mexico of a discriminatory tax on beverages containing HFCS breached various obligations of Mexico under the investment protection provisions of NAFTA. The Company sought damages of not less than $325 million. The case was bifurcated into two phases, liability and damages, and a hearing on liability was held in July 2006.
On December 18, 2007, the Company received an order from the Tribunal indicating that it had completed its decision on the liability phase. Although the reasons underlying the decision are not yet available, the order makes it apparent that the Tribunal has found Mexico in breach of NAFTA. The Tribunal has ordered the parties to submit dates for briefing on the quantum of damages for a breach of Article 1102, National Treatment, and has indicated it intends to issue an order at the beginning of January 2008 setting a timetable for written and oral argument on the damages questions, with a hearing to be held prior to August 2008.
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