Ocean exploration company, Odyssey Marine Exploration, has won arbitration under the North American Free Trade Agreement(NAFTA) against the United Mexican States. The award, issued by the International Centre for Settlement of Investment Disputes(ICSID), awards Odyssey compensation of $37.1 million plus interest, following the unjustified denial of an environmental permit by the Mexican Ministry of Environment and Natural Resources(SEMARNAT).
Odyssey Marine Exploration’s Subsea Phosphate Project
The arbitration stems from SEMARNAT’s refusal to approve a permit for the Odyssey subsidiary’s underwater phosphate mining project, Exploraciones Oceánicas S. de RL de CV(ExO). The denial of the permit in 2016, which was described as“arbitrary and discriminatory,” led the company to initiate arbitration proceedings to protect its investment. The tribunal found that Mexico violated its NAFTA obligations after failing to grant the permit based on scientific and legal criteria.
Odyssey’s underwater project, aimed to extract phosphates from the seabed to produce fertilizers. SEMARNAT denied the permit despite the fact that Mexico’s Federal Court of Administrative Justice had ruled in favor of the company in 2018, indicating that the denial was not based on the country’s environmental regulations.
With the ICSID decision, Odyssey expects to use the compensation to cover the costs of financing the litigation and to continue developing similar projects globally. Odyssey’s CEO, Mark Gordon, expressed his satisfaction with the ruling and emphasized that the company remains committed to the exploration of offshore mineral resourcesthat contribute to sustainability and climate change mitigation.
The implications for Mexico and foreign investment
This ruling is“a major blow to Mexico in terms of international arbitration” under NAFTA, an agreement that sought to protect investors from arbitrary government decisions. In addition to the $37.1 million compensation, Mexico must cover administrative and arbitration costs and may not tax the award.
The case reflects the growing importance of offshore mining as a source of critical minerals and the outcome may influence how governments manage mining projects involving strategic natural resources. This arbitration underscores the need for environmental environmental decisionses backed by sound science and clear regulations to avoid conflicts with international investors.
With this favorable ruling, Odyssey Marine Exploration is moving forward with its mission to develop subsea mining projects. underwater mining projects projects around the world. The company has more than 30 years of experience in ocean exploration and is focused on the responsible extraction of critical minerals that are vital to industries such as green energy production and agricultural management.
Odyssey will continue to collaborate with governments and partners in different regions to sustainably explore subsea resources, and is already working on several large projects in search of innovative solutions to global mineral supply challenges.
Follow us on social networks and don’t miss any of our publications!
YouTube LinkedIn Facebook Instagram X
Source and photo: Odyssey Marine Exploration
Loading...
