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Mexico loses arbitration case involving Spanish company

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(Globalpost/GlobalPost)

Mexico City, Jun 12 (EFE).- The World Bank's International Center for the Settlement of Investment Disputes has handed down a ruling against the Mexican government in a case involving Befesa, a unit of Spanish industrial company Abengoa, Economy Secretary Ildefonso Guajardo said.

The arbitration panel found that the Mexican government prevented Befesa from operating a hazardous materials dump it built in Zimapan, a city in central Mexico.

"The federal government will have to deal with the outcome of the case," Guajardo told reporters during a tour Tuesday of Hidalgo state, where Zimapan is located.

The panel ruled for Spain, concluding that Mexico violated the Reciprocal Investment Protection Agreement between Madrid and Mexico City, Guajardo said.

The economy secretary, however, did not discuss how much money was involved, telling reporters that the sum would be set "based on the talks held with the investors."

Abengoa and Compañia Española de Financiacion del Desarrollo, or Cofides, will get "between $42 and $45 million," the Reforma newspaper reported.

Construction of the hazmat plant started in August 2006 in an effort to keep dangerous substances out of Mexico's rivers and aquifers.

The Spanish investors obtained permits from the Environment Secretariat and local authorities, but officials later refused to honor the permits amid protests from residents.

http://www.globalpost.com/dispatch/news/agencia-efe/130612/mexico-loses-arbitration-case-involving-spanish-company