Mexico signs ICSID Convention

On January 11, 2018, Mexico signed the Convention on the Settlement of Investment Disputes between States and the Nationals of Other States (the “ICSID Convention.”)

The ICSID Convention is a treaty ratified by more than 150 States which lays out a protection framework for investors of contracting States by means of conciliation and arbitration mechanisms involving investment disputes.

In addition to providing the necessary legal framework to settle investment disputes, the ICSID Convention also sets forth an institutional framework for the administration of such disputes with the creation of the International Centre for Settlement of Investment Disputes, which is known for effectively managing investment disputes.

A fundamental step for Mexico’s accession to the ICSID Convention and its entry into force vis á vis Mexico is its ratification by the Mexican Senate, which still is pending. The ICSID Convention will enter into force 30 days after the deposit of the instrument of ratification.

The signing of the ICSID Convention by Mexico reflects its commitment to foreign investors and provides an alternative for investors to settle investment disputes with Mexico, particularly in light of the current uncertainty with the future of NAFTA.