Summary

Reproduced from www.worldbank.org/icsid with permission of ICSID.

TABLE OF CONTENTS

I. INTRODUCTION AND PARTIES
II. PROCEDURAL HISTORY
III. FACTUAL BACKGROUND

A. Overwiew
B. Claimant's Investment in Mexico
(1) The GOSH Phase
(2) The SEMCO Phase
(3) The SMP Phase
(4) The Incorporation of Other Supporting Companies
(5) Other Activities of the Claimant in Mexico
(6) POSH's Operations and Alleged Contributions to Mexico
C. The Sanctions, Criminal Investigation, and Insolvency Proceedings

IV. REQUEST FOR RELIEF

V. OBJECTIONS TO THE TRIBUNAL'S JURISDICTION

A. Summary of the Parties' Arguments
B. Assessment by the Tribunal
(1) Preliminary Observations
(2) The Respondent's Objections

VI. MERITS

A. Summary of the Parties' Arguments
(1) Statement of Claim
(2) Statement of Defense
(3) Reply
(4) Rejoinder
B. Assessment by the Tribunal
(1) The Claim of Expropriation
Direct Expropriation of Trust Assets
The Detention Order
The Blocking Order
(2) Breach of Fair and Equitable Treatment
(3) Full Protection and Security

VII. DAMAGES

A. Summary of the Parties' Arguments
B. Assessment by the Tribunal

VIII. INTEREST

IX. COSTS

X. DECISION

I. INTRODUCTION AND PARTIES

1. This case concerns a dispute submitted under the Agreement between the Government of the United Mexican States and the Government of the Republic of Singapore on the Promotion and Reciprocal Protection of Investments, which was signed on November 12, 2009 and entered into force on April 3, 2011 (the "BIT" or "Treaty") and under the Arbitration Rules of the United Nations Commission on International Trade Law ("UNCITRAL"), as revised in 2010 (the "UNCITRAL Rules"). By agreement of the Parties, the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") serves as the administering authority for this proceeding.

2. The claimant is PACC Offshore Services Holding LTD ("POSH" or the "Claimant"), a company incorporated/organized under the laws of Singapore.

3. The Claimant brings the claims for itself, and, as provided for under Articles 11(2) and 11(3)(c) of the BIT, on behalf of the following Mexican enterprises: Servicios Marítimos GOSH, S.A.P.I de C.V. ("GOSH"), Servicios Marítimos POSH, S.A.P.I. de C.V.

("SMP"), POSH Honesto, S.A.P.I. de C.V. ("HONESTO"), POSH Hermosa, S.A.P.I.

de C.V. ("HERMOSA"), Gosh Caballo Eclipse, S.A.P.I. de C.V. ("ECLIPSE") and POSH Fleet Services Mexico, S.A. de C.V. ("PFSM"), which the Claimant submits are its Mexican Subsidiaries ("POSH's Subsidiaries" or the "Subsidiaries").

4. The respondent is the United Mexican States ("Mexico" or the "Respondent").

5. The Claimant and the Respondent are collectively referred to as the "Parties." The Parties' representatives and their addresses are listed above on page (i).

6. This dispute relates to the bareboat charter services that the Claimant provided to Oceanografía, S.A. de C.V ("OSA"), who in turn sub-chartered them to Petróleos Mexicanos ("PEMEX"), a Mexican state-owned oil and gas company. The dispute concerns a series of acts and omissions by the Mexican authorities (the "Measures") relating to the investment of the Claimant in Mexico (the "Investment") and addressing the Claimant or OSA.

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X. DECISION

283. For the above reasons, the Tribunal decides by majority[262]:

1) That the Tribunal has jurisdiction ratione personae, ratione materiae and ratione temporis in respect of the Detention Order and the acts dated after May 4, 2014.

2) That the Respondent breached its obligation to grant the Claimant fair and equitable treatment in breach of Article 4 of the Treaty on account of the detention of the Claimant's vessels.

3) To award the Claimant USD 6,712,226, such amount to be free of taxes, carry interest at LIBOR without any additional percentage points, compounded annually and accruing since May 16, 2014 until payment.

4) Each party shall bear its own costs and 50% of the costs of the Tribunal and the ICSID Secretariat.

5) All other claims and requests are dismissed.

[262] See the attached Concurrent and Dissenting Opinion of Professor W. Michael Reisman.

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Concurring and Dissenting Opinion of Professor W. Michael Reisman

A. Introduction

1. This case concerns a dispute between a Singaporean investor, PACC Offshore Services Holding LTD ("POSH") and the United Mexican States ("Mexico") under the Agreement between the Government of the United Mexican States and the Government of the Republic of Singapore on the Promotion and Reciprocal Protection of Investments, dated November 12, 2009 (the "BIT").

A tribunal instituted under the dispute resolution mechanism in Article 11 of the BIT must apply the BIT, not redraft it. I cannot concur with those parts of the Award which pick, choose, and, in effect, redraft provisions of the BIT.

2. Irrespective of the evidence produced by the Parties, which I believe supports key parts of the Claimant's case, the Award employs, in my view, an impermissible methodology for treaty interpretation and application. The Award redrafts the BIT provisions, cherry-picking its language, and importing conditions from other treaties under cover of "concerns" couched in grand questions of arbitral policy, which go beyond the BIT and the dispute.

3. I will explain my position in three parts. First, the Award's reasoning for excluding the treatment of OSA from the jurisdiction of the tribunal is mistaken and, in addition, creates a problematic precedent. Second, the Award redrafts the BIT's provision on expropriation, transforming the objective standard of expropriation into a subjective analysis akin to denial of justice. Third, the Award's damages calculation disregards the long-term effects of the Detention Order and its expropriative character.

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95. Although my analysis is in terms of expropriation, it could be applied to an FET analysis as well. To use a different valuation date for FET, would allow Mexico to reap the benefits of its unfulfilled assurances to POSH, on the basis of which POSH continued to service PEMEX, irrespective of the unlawful Detention Order. The Respondent, it will be recalled, sequestered the vessels to service PEMEX while stringing the investor along under the pretext that it must prove ownership of the vessels to release them. It led the investor to continue to service PEMEX by providing assurances that its revenue was assured through the trust only to go behind the investor's back and have another one of its organs divert the payments retroactively. Even then it continued sequestering the vessels under the same pretext, until the investment was destroyed. Even if the Diversion Order was not a breach, which I believe it was, the compensation for the Detention Order should include the loss of investment, and at the very least, the loss incurred through the entire unlawful detention period.

96. With respect to the Claimant's claims concerning the Detention Order and compensation, I therefore concur in part and dissent in part. I dissent on the rejection of the expropriation claim with respect to the Detention Order, but concur that the Detention Order was a breach of FET. I dissent on the compensation: (1) the compensation for the Detention Order should extend to include the entire period; (2) damages from the Detention Order should include the long-term effects of the Detention Order on the value of the entire investment.

Concurring in part and dissenting in part,
Prof. W. Michael Reisman
Arbitrator