Corn Products awarded damages in NAFTA dispute | August 19, 2009

Corn Products awarded damages in NAFTA dispute

by World Grain Staff

WESTCHESTER, ILLINOIS, U.S. — Corn Products International, Inc. announced on Aug. 19 that the company was awarded damages in a dispute with Mexico over violations of the North American Free Trade Agreement (NAFTA).

On Aug. 18 the tribunal awarded $58.386 million in damages to Corn Products. The amount represents lost profits in Mexico as a result of a tax and certain out-of-pocket expenses incurred by the company’s Mexican affiliate CPIngredientes, together with accrued interest. Corn Products said it did not know whether any of the parties would seek to set aside the award or pursue other available rights under applicable law.

On Oct. 21, 2003, Corn Products submitted, on its own behalf and on behalf of its Mexican affiliate, CPIngredientes, S.A. de C.V., a Request for Institution of Arbitration Proceedings against Mexico. In the request, the company asserted that the imposition by Mexico of a discriminatory tax on beverages containing high fructose corn syrup (HFCS) breached various obligations of Mexico under the investment protection provisions of NAFTA.

The case was split into two phases, liability and damages. A hearing on liability was held in July 2006. In a decision dated Jan. 15, 2008, the tribunal unanimously held that Mexico had violated NAFTA rules by treating beverages sweetened with HFCS produced by foreign companies differently than those sweetened with domestic sugar. A hearing regarding the amount of damages was held in July 2008 before the same tribunal.