The Ministry of Economy reported that it is working to demonstrate that the controversy that exists between TV Azteca and its creditors is not attributable to the Mexican State, despite the fact that the latter initiated arbitration under the Treaty between Mexico, the United States and Canada (TMEC).
In an information card, the agency headed by Marcelo Ebrard indicated that on June 28, 2023, Cyrus Capital Partners and Contrarian Capital Management initiated arbitration against Mexico under the argument of being US investors who, through subsidiaries established in the Cayman Islands acquired debt bonds issued by TV Azteca, with a value of more than 400 million dollars.
He explained that due to the non-payment of the debt arising from bonds issued by TV Azteca, several creditors initiated a series of lawsuits against the company in 2022 in United States courts.
At the same time, in September 2022, TV Azteca initiated a commercial lawsuit against Bank of New York, representative of the creditors who acquired the bonds.
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The commercial trial initiated by the company is still ongoing before the 63rd Civil Court of the Superior Court of Justice of Mexico City, led by Judge Miguel Ángel Robles Villegas.
As part of the trial, in September 2022 a precautionary measure was issued in favor of TV Azteca, under which it was ordered to temporarily suspend the collection of amounts owed by the company to its creditors.
The precautionary measure has been the subject of appeals and amparo trials. Despite this, it is known that the precautionary measure remains in force.
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Cyrus and Contrarian argue in the arbitration that the precautionary measure issued by the court violates the USMCA and affected their investments, as it is equivalent to a denial of justice. Based on this, they claim 220 million dollars from Mexico as compensation.
On June 4, 2024, the Ministry of Economy presented its Memorial of Objection to Jurisdiction in which it argued that Cyrus and Contrarian are not entitled to sue the State in international arbitration for not complying with the requirements set forth in Annex 14. C of the USMCA and NAFTA.
These defenses are intended to demonstrate that the court is not competent to hear the case, so the case should be dismissed.
The case is administered by the International Center for Settlement of Investment Disputes (ICSID), belonging to the World Bank.
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The ICSID is the institution in charge of carrying out the administrative procedures of the arbitration, such as providing interpretation services, serving as a communication channel between the court that hears the dispute and the parties to the arbitration.
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