The government of Mexico separated itself from the debt it owes TV Aztecaproperty of Ricardo Salinas Pliegoin USA for an amount of 448 million dollars.
This was stated by the Ministry of Economy (SE) through a statement in which it affirms that the review appeal filed by US investment funds against Mexico for the businessman’s lack of payment cannot be attributed to the State.
On June 28, 2023, Cyrus Capital Partners, LP (Cyrus) and Contrarian Capital Management, LLC (Contrarian) initiated arbitration against Mexico under the T-MEC, under the argument of being US investors who, through subsidiaries incorporated in the Cayman Islands, They acquired debt bonds issued by TV Azteca.
Ricardo Salinas Pliego: Controversy between TV Azteca and United States companies is not attributable to Mexico, SE assures
According to the SE, the controversy between the United States companies Cyrus and Contrarian “is not attributable to the Mexican State”, so the defense is already moving towards proving this argument.
It was on June 4, 2024 that Mexico, through the SE, presented its Memorial of Objection to Jurisdiction in which it argued that Cyrus and Contrarian nor are entitled to sue the Mexican State in international arbitration.
This is because do not meet the requirements provided for in Annex 14-C of the T-MEC and NAFTA; These defenses are intended to demonstrate that the Court is not competent to hear the case, and based on this the case should be dismissed.
Given the non-payment of the debt arising from the bonds issued by TV Aztecaseveral creditors initiated a series of lawsuits against the company Ricardo Salinas Pliego in United States courts from 2022.
At the same time, in September 2022, TV Azteca initiated a commercial lawsuit against Bank of New Yorkwhich is the representative of the creditors who acquired the aforementioned bonds.
The commercial trial initiated by Ricardo Salinas Pliego’s company (995/2022) 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 said trial, in September 2022, a precautionary measure was issued in favor of TV Azteca, under which it was ordered temporarily suspend the collection of amounts owed by the company against its creditors.
The precautionary measure has been the subject of several appeals and amparo trials; Despite this, it is known that the precautionary measure is still in force.
Ricardo Salinas Pliego: United States companies demand compensation of 220 million dollars from Mexico for non-payment of TV Azteca
Cyrus and Contrarian argue in the arbitration initiated against Mexico that the precautionary measure issued by the 63rd Civil Court violates NAFTA and affected their investments, being equivalent to adenial of justice due to non-payment from Ricardo Salina Pliego’s company, TV Azteca.
Therefore, They demand payment of 220 million dollars from Mexico in the manner of compensation.
Time.news Interview: Understanding the TV Azteca Debt Controversy
Editor: Welcome, everyone, to this special segment of Time.news where we delve into pressing issues affecting international finance and trade. Today, we have a distinguished guest, Dr. María Gómez, an expert in international law and economic relations. Dr. Gómez, thank you for joining us.
Dr. Gómez: Thank you for having me. It’s a pleasure to be here.
Editor: Let’s start with a critical event that has been making headlines—the Mexican government’s separation from its debt obligations to TV Azteca, owned by Ricardo Salinas Pliego, amounting to 448 million dollars. What can you tell us about the implications of this situation?
Dr. Gómez: Absolutely. This situation is quite complex as it involves various layers of legal and financial intricacies. The Mexican Ministry of Economy has stated that the arbitration initiated by US investment firms Cyrus Capital Partners and Contrarian Capital Management does not involve the Mexican state, arguing that the responsibility lies solely with TV Azteca and its owner.
Editor: Right. The Ministry seems to be firm in its stance. How does the T-MEC play into this?
Dr. Gómez: The United States investment firms are arguing their case under the T-MEC treaty, which allows for protections for investors from member countries. The challenge for these firms is proving that they meet the necessary legal criteria to bring a claim against Mexico in this international arbitration. The Mexican government, on the other hand, is contending that these investment firms do not have the standing to sue.
Editor: What are the specific legal grounds Mexico is relying on to dismiss the case?
Dr. Gómez: Mexico has filed a Memorial of Objection to Jurisdiction, stating that Cyrus and Contrarian do not fulfill the requirements set out in Annex 14-C of T-MEC and NAFTA. Essentially, they argue that the court lacks the authority to hear this case due to jurisdictional deficiencies. This defense aims at highlighting that the claims against the Mexican government are baseless.
Editor: In light of this legal battle, what are the potential outcomes for both Mexico and the investors?
Dr. Gómez: If Mexico’s arguments are accepted, the case could be dismissed, which would be a significant win for the government and might reinforce their position in similar future disputes. For the investors, a ruling against them would mean losing their claim and potentially facing significant financial losses. On the flip side, if the courts find in favor of the investors, it could lead to Mexico facing substantial financial penalties which might impact its international credibility.
Editor: It sounds like a high-stakes game for everyone involved. What could be the broader implications for foreign investment in Mexico?
Dr. Gómez: Exactly. This situation sends a message to potential investors about the legal environment in Mexico. A favorable outcome for the investors might attract more foreign investment but could also raise concerns regarding how disputes are handled. Conversely, if Mexico prevails, it may deter international investors fearing that their investments could be treated as liabilities of local firms without state safeguards.
Editor: Thank you, Dr. Gómez. As this situation evolves, it will be crucial to monitor its impact on both the legal landscape and foreign investment strategies. Any final thoughts?
Dr. Gómez: It’s essential for both sides to seek a resolution that promotes stability. The outcome could either foster a more favorable climate for investments or lead to increased skepticism among investors. It is a pivotal moment for economic relations in North America.
Editor: Indeed. Thank you for your insights, Dr. Gómez, and thank you to our viewers for tuning in. We will continue to follow this story as it develops. Until next time!