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Source(s) of the information:
Source(s) of the information:

Lawyers and other representatives

Partial Award

GLOSSARY
2009 ResolutionResolution DGAJS/SCEV/0260/2009-BIS issued by SEGOB on 27 May 2009
2012 ResolutionResolution DGJS/SCEV/1426/2012 issued by SEGOB on 16 November 2012
Additional Claimants- Neil Ayervais
- Deana Anthone
- Douglas Black
- Howard Burns
- Mark Burr
- David Figueiredo
- Louis Fohn
- Deborah Lombardi
- P. Scott Lowery
- Thomas Malley
- Ralph Pittman
- Daniel Rudden
- Marjorie "Peg" Rudden
- Robert E. Sawdon
- Randall Taylor
- James H. Watson, Jr.
- Caddis Capital, LLC
- Diamond Financial Group, Inc.
- Family Vacation Spending, LLC
- Financial Visions, Inc.
- J. Johnson Consulting, LLC
- J. Paul Consulting
- LAS KDL, LLC
- Mathis Family Partners, Ltd.
- Palmas Holdings, Inc.
- Trude Fund II, LLC
- Trude Fund III, LLC
- Victory Fund, LLC
- B-Cabo, LLC
- Colorado Cancun, LLC
Amended NoticeAmended Notice of Intent filed by the Claimants on 2 September 2016
ClaimantsThe Original Claimants and the Additional Claimants
E-MexEntretenimiento de Mexico, S.A. de C.V.
GATSGeneral Agreement on Trade in Services
Grand OdysseyGrand Odyssey S.A. de C.V.
ICSID or the CentreInternational Centre for the Settlement of Investment Disputes
Juegos Companies- Juegos de Video y Entretenimiento de México, S. de R.L. de C.V. (JVE Mexico) which owned the casino at Naucalpan (Naucalpan)
- Juegos de Video y Entretenimiento del Sureste, S. de R.L. de C.V. (JVE Sureste) which owned the casino at Villahermosa (Villahermosa)
- Juegos de Video y Entretenimiento del Centro, S. de R.L. de C.V. (JVE Centro) which owned the casino at Puebla (Puebla)
- Juegos y Video de México, S. de R.L de C.V. (JyV Mexico) which owned the casino at Cuernavaca (Cuernavaca)
- Juegos de Video y Entretenimiento del D.F., S. de R.L. de C.V. (JVE DF) which owned the casino at Mexico City (Mexico City)
Mexican Companies- Juegos Companies
- Exciting Games, S. de R.L. de C.V. (E-Games)
- Operadora Pesa, S. de R.L. de C.V. (Operadora Pesa)
MIGA ConventionConvention Establishing the Multilateral Investment Guarantee Agency (MIGA)
NAFTA or TreatyNorth American Free Trade Agreement
NoticeNotice of Intent submitted by the Claimants on 23 May 2014
OECD DeclarationOECD Declaration on International Investment and Multinational Enterprises
Original Claimants- B-Mex, LLC
- B-Mex II, LLC
- Palmas South, LLC
- Gordon G. Burr
- Erin J. Burr
- John Conley
- Oaxaca Investments, LLC (Oaxaca)
- Santa Fe Mexico Investments, LLC
Original Mexican Companies- Juegos Companies
- E-Games
POAPower of Attorney
RespondentThe United Mexican States
RequestRequest for Arbitration filed by the Claimants on 15 June 2016
SEGOBSecretaria de Gobernacion, a Ministry of the Government of Mexico
SPAShare Purchase Agreement
VCLTVienna Convention on the Law of Treaties

I. THE PARTIES AND THEIR REPRESENTATION

1.
The Request was filed by 39 Claimants. All the Claimants are U.S. nationals.1 After the filing of the Request, one Claimant—EMI Consulting, LLC—notified the Tribunal that it withdrew from the arbitration.2 The Claimants pursue claims both under Article 1116 of the Treaty and, on behalf of seven Mexican Companies,3 under Article 1117 of the Treaty.
2.
The Claimants are represented in these proceedings by:

Mr. David M. Orta
Mr. Daniel Salinas-Serrano
Ms. Julianne Jaquith
Mr. Kristopher Yue
Ms. Ana Paula Luna Pino
Quinn Emanuel Urquhart & Sullivan, LLP
Washington DC, USA; and

Mr. Julio Gutiérrez Morales
Ríos-Ferrer Guillén-Llarena, Treviño y Rivera S.C.
Mexico City, Mexico.

3.
The Respondent is represented in these proceedings by:

Mr. Orlando Pérez Gárate
Mr. Hugo Romero Martínez
Mr. Geovanni Hernández Salvador
Ms. Blanca del Carmen Martínez Mendoza
Dirección General de Consultoría Jurídica de Comercio Internacional ;

Mr. James Cameron Mowatt
Mr. Alejandro Barragán
Ms. Ximena Iturriaga
Tereposky & DeRose LLP
Ottawa, Canada; and

Mr. Stephan E. Becker
Pillsbury Winthrop Shaw Pittman LLP
Washington DC, USA.

II. THE PROCEEDING

4.
On 23 May 2014, the Claimants submitted the Notice. The Notice, in a section titled "Identification of the Disputing Investors", identified the eight Original Claimants and the six Original Mexican Companies. It set out the factual basis of the claim, identified the provisions of the Treaty that were alleged to have been breached, and specified the relief requested.
5.
On 15 June 2016, the Claimants filed the Request with the Centre. On 23 June 2016, the Centre acknowledged receipt of the Request.
6.
On 27 June 2016, the Respondent objected to the registration of the Request, claiming, inter alia, the (i) failure by the 31 Additional Claimants to provide a notice of intent at least 90 days prior to the submission to arbitration as required by NAFTA Article 1119 and Article 1122; (ii) failure by the Claimants to identify in the Notice three of the then nine Mexican Companies on whose behalf they intended to pursue a claim under Article 1117; and (iii) failure by the Claimants and the Mexican Companies to consent to arbitration as required by Article 1121.
7.
On 6 July 2016, the Centre sent a questionnaire to the Claimants requesting, inter alia, (i) copies of the written waivers issued by each of the Mexican Companies; (ii) copies of each of the Mexican Companies' written consent to arbitration; and (iii) an explanation as to how each Claimant and each Mexican Company meets the requirements of Article 1119.
8.
On 21 July 2016, the Claimants submitted a written response to the Centre's questionnaire and to the Respondent's objections of 27 June 2016. Attached to the written response were POAs and waivers by four of the then nine Mexican Companies. The Claimants argued that "consents and waivers" from the five Juegos Companies were not required because the Respondent had deprived the Claimants of control of the Juegos Companies, and therefore the exception in NAFTA Article 1121(4) applied.
9.
On 26 July 2016, the Respondent responded to the Claimants' letter of 21 July 2016.
10.
On 2 August 2016, the Centre informed the Claimants that it could not approve access to the Additional Facility or register the Request unless the consents of the Juegos Companies were provided as required by Article 1121(2)(a) NAFTA. ICSID asked the Claimants to respond by 5 August 2016 and inform the Centre of whether they wished to: (i) suspend the approval and registration of the claim until the Request had been supplemented with the necessary consents, or (ii) withdraw the claims made on behalf of the Juegos Companies under Article 1117 of the Treaty.
11.
On 5 August 2016, the Claimants responded to the Centre, attaching the POAs and waivers by the Juegos Companies.
12.
On 11 August 2016, ICSID registered the Request pursuant to Article 4 of the ICSID Arbitration (Additional Facility) Rules.
13.
On 2 September 2016, the Claimants sent the Amended Notice to the Respondent.
14.
By letter of 9 September 2016, the Claimants appointed Professor Gary Born, a U.S. national, as arbitrator. Professor Born accepted his appointment on 14 September 2016.
15.
By letter of 26 September 2016, the Respondent appointed Professor Raúl Vinuesa, an Argentine national, as arbitrator. Professor Vinuesa accepted his appointment on 4 October 2016.
16.
On 31 October 2016, the Claimants wrote to the Centre to request that the Secretary-General of ICSID appoint the presiding arbitrator pursuant to Article 1124 of the Treaty, as the parties had been unable to reach agreement on the designation of the presiding arbitrator.
17.
By letter of 13 January 2017, the Secretary-General of ICSID appointed Dr. Gaëtan Verhoosel, a Belgian national, as the presiding arbitrator. Dr. Verhoosel accepted his appointment on 13 February 2017.
18.
On 14 February 2017, the Centre notified the parties that the Tribunal had been constituted pursuant to ICSID Arbitration (Additional Facility) Rules.
19.
On 28 March 2017, the Tribunal held its first session by telephone conference. The parties agreed to bifurcate the proceeding, with a first phase limited to the preliminary objections raised by the Respondent. On 4 April 2017, the Tribunal issued Procedural Order No. 1, which included a procedural timetable reflecting the parties' agreement.
20.
On 30 May 2017, the Respondent filed its Memorial on Jurisdictional Objections. On 25 July 2017, the Claimants filed their Counter-Memorial on Jurisdictional Objections. On 1 December 2017, the Respondent filed its Reply on Jurisdictional Objections. On 8 January 2018, the Claimants filed their Rejoinder on Jurisdictional Objections. Attached to the Claimants' Rejoinder were 43 additional Witness Statements.
21.
On 22 March 2018, new evidence was tendered by the Claimants with leave of the Tribunal. On 25 April 2018, the Respondent filed its Rebuttal Submission in Response to New Evidence, responding to the new evidence exhibited with the Claimants' Rejoinder and the new evidence tendered by the Claimants on 22 March 2018.
22.
From 21 May 2018 to 25 May 2018, the Tribunal held a hearing on jurisdiction in Washington DC. Present at the hearing were, for the Tribunal: Dr. Gaëtan Verhoosel, Professor Gary Born, Professor Raúl Vinuesa, and Ms. Natalí Sequeira, Secretary to the Tribunal. For the Claimants: Mr. David Orta, Mr. Daniel Salinas, Ms. Julianne Jaquith, Mr. Kristopher Yue, Ms. Ana Paula Luna Pino, Ms. Dominique Lambert, Mr. Milton Segarra (all from Quinn Emanuel Urquhart & Sullivan, LLP, Washington DC, USA), and Mr. Julio Gutiérrez Morales (from Ríos-Ferrer Guillén-Llarena, Treviño y Rivera S.C., Mexico City, Mexico). For the Respondent: Ms. Samantha Atayde Arellano, Ms. Ximena Iturriaga, Mr. Geovanni Hernández Salvador, Ms. Blanca del Carmen Martínez Mendoza (all from Dirección General de Consultoría Jurídica de Comercio Internacional), Mr. James Cameron Mowatt, Mr. Alejandro Barragán, Ms. Jennifer Radford, Mr. Greg Tereposky, Ms. Yuri Perez (all from Tereposky & DeRose LLP, Ottawa, Canada), and Mr. Stephan E. Becker (from Pillsbury Winthrop Shaw Pittman LLP, Washington DC, USA).
23.
At the hearing, the following witnesses or experts were examined:

Mr. Neil Ayervais
Mr. Gordon Burr
Ms. Erin Burr
Mr. Julio Gutiérrez Morales
Mr. José Ramón Moreno
Mr. John Conley
Mr. Benjamín Chow
Mr. René Irra Ibarra
Ms. Ana Carla Martínez Gamba
Mr. Moisés Opatowski
Mr. Luc Pelchat
Mr. José Luis Segura Cárdenas
Mr. Rodrigo Zamora

24.
On 17 August 2018, both parties submitted their Post-Hearing Briefs.
25.
On 1 October 2018, both parties submitted their statements of costs in relation to this phase.
26.
On 23 November 2018, the Tribunal invited the parties and the Non-Disputing Parties, if they so wished, to file submissions addressing the question of whether there are any relevant rules of international law applicable in the relations between the NAFTA Parties within the meaning of Article 31(3)(c) of the VCLT of which the Tribunal should take account in interpreting "own[] or control[]" in Article 1117 of the Treaty. All such responsive submissions were received by 21 December 2018.
27.
In the course of the proceeding, the Tribunal issued seven procedural orders, addressing a variety of procedural issues and incidents and presenting questions to the parties for their post-hearing briefs. All procedural orders are available on the ICSID website and therefore need not be summarized here.

III. FACTUAL BACKGROUND

28.
The Tribunal sets out below a very brief summary of the factual background insofar as relevant to this preliminary phase. This summary reflects only what has been alleged by the Claimants, and not any findings of fact by the Tribunal. The Tribunal need not, and does not, make any factual findings in this Award other than to the extent indicated in Part V below, "The Tribunal's Findings and Conclusions". Therefore, since it would be fastidious to insert "allegedly" before each alleged fact in the summary below, it is to be understood as being expressly qualified as such in toto.

A. THE EXISTING CASINO BUSINESS

29.
The Mexican Companies were involved in the operation of casino businesses.4 From 1 April 2008 to 27 May 2009, the casinos were operated under a casino operation permit held by E-Mex, a Mexican company.5 On 27 May 2009, SEGOB issued a resolution granting E-Games permission to operate the casinos under the same permit but autonomously from E-Mex, based on the doctrine of "acquired rights" (the 2009 Resolution).6
30.
On 16 November 2012, SEGOB issued a resolution granting E-Games an independent casino operation permit with its distinct permit number (the 2012 Resolution).7 This meant that E-Games was no longer operating under E-Mex's permit, whether autonomously or otherwise. The permit was to remain valid until 2030 and the Claimants would have the right to operate up to fourteen gaming establishments (7 remote gambling centres and 7 lottery number rooms), or up to 7 dual-function gaming establishments.8
31.
The Mexican Companies performed the following functions in the business:

a. Each of the five Juegos Companies owned a casino and related assets.9

b. From 16 November 2012, E-Games held the casino operation permit and operated the five dual-function casinos.10 E-Games also leased casino machines from each of the Juegos Companies.11

c. Operadora Pesa provided management and administrative services (such as coordinating with food and beverage vendors) for the five casinos through a services agreement between Operadora Pesa and E-Games.12

32.
Each of the Claimants, with the exception of B-Cabo, LLC and Colorado Cancúun LLC, are shareholders in at least one of the Juegos Companies.13 Two of the Original Claimants—John Conley and Oaxaca—also are shareholders in E-Games.14
33.
Further, some of the Claimants provided loans to the Juegos Companies:

a. Palmas South, LLC provided a loan to JVE Sureste, with US$ 130,000 of the principal outstanding, and a loan to JVE Centro, with US$ 400,000 of the principal outstanding.15

b. Gordon Burr made a loan to JVE DF, with US$ 110,000 of the principal outstanding.16

c. After the casinos were shut down in April 2014, some of the Claimants also made unspecified loans to B-Mex, LLC, which in turn invested the funds to finance upkeep obligations of the various Mexican Companies.17

B. THE LOS CABOS AND CANCÚN PROJECTS

34.
The Claimants were also in the process of developing two other casino ventures in Mexico, in Los Cabos and Cancún. These casinos were to be the two remaining dual-function casinos that E-Games was allowed to operate under its casino operation permit.18 Two Claimants—B-Cabo, LLC and Colorado Cancún, LLC—were set up in connection with this plan.19 These two Claimants are only asserting claims on their own behalf under Article 1116.20
35.
B-Mex II, LLC invested US$ 2.5 million to obtain licenses for the operation of gaming machines in 2006, some of which were intended to be used in the Los Cabos and Cancún projects.21
36.
Colorado Cancún, LLC invested US$ 250,000 in entering into an option to purchase a gaming license from B-Mex II, LLC.22
37.
B-Cabo, LLC invested US$ 600,000 through loans to Medano Beach, S. de R.L. de C.V., a Mexican company, for the purchase of property for the B-Cabo hotel and casino.23 B-Cabo, LLC was also in the process of acquiring a gaming license from B-Mex II, LLC when E-Games's casino permit was revoked by the Respondent.24

C. ALLEGED WRONGFUL CONDUCT BY THE RESPONDENT

38.
On 30 December 2011, E-Mex filed a constitutional challenge—known as an amparo proceeding—against SEGOB, challenging, inter alia, the 2009 Resolution.25 On 30 January 2013, the amparo judge ruled that the 2009 Resolution was unconstitutional and ordered its rescission.26 This ruling was affirmed by the appellate court on 10 July 2013.27 On 19 July 2013, SEGOB complied with the judgment and rescinded the 2009 Resolution.28
39.
The Claimants claim that the Respondent breached Articles 1102 (National Treatment), 1103 (Most-Favored-Nation Treatment), 1105 (Minimum Standard of Treatment) and 1110 (Expropriation and Compensation) of the Treaty by taking the following measures against the Mexican Companies:29

a. On 19 June 2013, the Respondent temporarily and illegally closed the Mexico City casino.30

b. On 22 August 2013, the amparo judge improperly re-opened proceedings upon E-Mex's request.31 On 26 August 2013, the judge issued another judgment ordering SEGOB to rescind all resolutions based on or derived from the 2009 Resolution, and not just the 2009 Resolution.32

c. On 28 August 2013, SEGOB, apparently in compliance with the amparo judge's order of 26 August 2013, rescinded several resolutions, including the 2012 Resolution.33 On 14 October 2013, however, the amparo judge ruled that SEGOB had exceeded the enforcement of the 26 August 2013 amparo order in revoking the 2012 Resolution.34

d. After making this ruling on 14 October 2013, however, the amparo judge chose not to issue an order confirming that the 2012 Resolution should not have been rescinded.35 Instead, the judge sent the matter to the appellate court to decide whether to sanction SEGOB for exceeding its authority.36

e. On 19 February 2014, the appellate court, instead of deciding the issue of whether to sanction SEGOB, instead reinterpreted the amparo judge's decision. The appellate court determined that SEGOB had not exceeded its powers when rescinding the 2012 Resolution.37 The Claimants claim that this decision was "politically motivated and influenced".38 On remand, on 10 March 2014, the amparo judge complied with the appellate court's ruling.39 According to the Claimants, E-Games was deprived of its due process rights during the course of these judicial proceedings described in Paragraphs 39b to 39e.40

f. On 23 April 2014, E-Games filed a writ to the Mexican Supreme Court—known as a recurso de inconformidad —attacking the appellate court's ruling of 19 February 2014, and the amparo judge's compliance on 10 March 2014.41

g. On 3 September 2014, the Supreme Court dismissed the appeal on procedural grounds and remanded the case to the same appellate court that had made the 19 February 2014 decision that was being appealed.42 This meant that the appellate court was reviewing its own decision, and the Claimants allege that they were thus "effectively and practically denied an appeal".43 On 29 January 2015, the appellate court upheld its own prior decision that affirmed SEGOB's rescission of, inter alia, the 2012 Resolution.44

h. The Claimants allege that the Mexican Government may have unlawfully intervened in these Supreme Court and appellate court proceedings by threatening certain judges.45

i. The Claimants further allege that a Mexican company, Producciones Móviles, S.A. de C.V., was allowed to continue operating its casinos despite obtaining its casino permit under circumstances that were materially identical to how E-Games obtained its independent casino permit under the 2012 Resolution.46

j. On 24 April 2014, the day after E-Games had filed its recurso de inconformidad, SEGOB, aided by the federal police, closed down all of the Claimants' casinos. The federal police entered the casinos while armed, blocked all entrances and exits, and confined employees to the offices.47 SEGOB also refused to provide a copy of the closure order.48

k. After the casinos' closure on 24 April 2014, SEGOB blocked any attempts by the Claimants to mitigate their losses. On three occasions around mid-2014, the Claimants approached SEGOB about the possibility of working with a partner to re-open the casinos. SEGOB objected on each occasion.49 On one occasion, SEGOB informed one of the Claimants' prospective partners, Grand Odyssey, that the casinos could not be reopened "if the 'gringos' remained involved".50

l. On 4 April 2014, E-Games made an application to obtain a new independent casino operation permit. On 15 August 2014, SEGOB denied the request, according to the Claimants on purely technical grounds and without affording E-Games the opportunity to correct the errors.51 SEGOB, during this time, granted casino operation permits to mostly Mexican companies.52

m. In September 2012, the Mexican tax authorities commenced a tax audit in relation to E-Games's 2009 operations.53 After a change of government on 1 December 2012, the authorities on 28 February 2014 issued a resolution finding that E-Games had not complied with its reporting obligations and ordering it to pay more than 170 million Mexican Pesos in back taxes.54 The Claimants claim that this was improper as they had always filed E-Games's taxes in the same manner, and a separate audit had found its 2011 filings to be compliant with tax legislation.55

n. Mexican prosecutors also brought criminal charges against E-Games's representatives. These charges were based on E-Games's illegal operation of the casinos between 26 August 2013 (when the amparo judge issued an order to rescind all resolutions derived from the 2009 Resolution), until 24 April 2014 (when the Respondent closed the casinos).56

IV. THE PARTIES' SUBMISSIONS

40.
The Tribunal has carefully reviewed all of the parties' submissions in this arbitration. Those submissions are available on the ICSID website at https://icsid.worldbank.org/ en/Pages/cases/casedetail.aspx?CaseNo=ARB(AF)/16/3. Therefore, rather than attempting to produce summaries of those pleadings, which would almost certainly fail to do justice to them, the Tribunal hereby incorporates the parties' submissions in their entirety by reference into this section of the Award.

V. THE TRIBUNAL'S FINDINGS AND CONCLUSIONS

41.
In this first phase the Tribunal shall decide the following three preliminary issues (the Issues):

Issue 1 : Articles 1121(1) and 1121(2) of the Treaty require that the Claimants and the Mexican Companies, respectively, consent to "arbitration in accordance with the procedures set out in [the Treaty]". Article 1121(3) requires the Claimants and the Mexican Companies to give that consent "in writing"; to "deliver[] [it] to the disputing Party"; and to "include[] [it] in the submission of a claim to arbitration". The Respondent's case is that the Claimants' acceptance in the Request of the Respondent's arbitration offer in Article 1122 of the Treaty and the POAs granted by the Claimants and the Mexican Companies to their counsel are incapable of satisfying these requirements; and that this deprives the Tribunal of jurisdiction.57

Issue 2 : Article 1119 provides that a "disputing investor shall deliver to the disputing Party written notice of its intention to submit a claim to arbitration at least 90 days before the claim is submitted …". Article 1122(1) of the Treaty provides that the Respondent consents to the submission of a claim to "arbitration in accordance with the procedures set out in [the Treaty]". The Respondent submits that "[i]n order to submit their claims to arbitration, the 31 Additional Claimants needed to first deliver a notice of intent under Article 1119 and wait at least 90 days. Failure to do so rendered their purported submission to arbitration void ab initio. They also failed to engage the Respondent's consent to arbitration 'in accordance with the procedures set out in [the NAFTA]' under Article 1122".58

Issue 3 : Article 1117 of the Treaty provides that an investor may submit a claim to arbitration on behalf of an enterprise of another Party that the investor owns or controls directly or indirectly. The Respondent's case is that at the relevant times the Claimants did not own or control directly or indirectly the Mexican Companies on whose behalf they have submitted a claim.59 Closely intertwined with this objection is the Respondent's objection that the Claimants have failed to prove that they owned any particular number and type of shares in the Mexican Companies at the relevant times.60

42.
The Tribunal will first address the first two of these Issues insofar as they apply to the claims under Article 1116 on behalf of the Claimants. The Tribunal will next address each of these Issues insofar as they apply to the claims under Article 1117 on behalf of the Mexican Companies.

A. THE CLAIMANTS' CLAIMS UNDER ARTICLE 1116

1. Article 1121: consent by the Claimants

43.
In addressing this objection, the Tribunal starts by noting that Article 1121 is not a monolith. Instead, it contains three paragraphs, two of which are relevant for current purposes:

a. Paragraph (1) provides that "a disputing investor may submit a claim … to arbitration only if" the investor consents to "arbitration in accordance with the procedures set out in this Agreement" and waives the right to pursue other proceedings relating to the same measures.

b. Paragraph (3) provides that such consent and waiver shall "be in writing, shall be delivered to the disputing Party and shall be included in the submission of a claim to arbitration".

44.
The Tribunal discerns in paragraphs (1) and (3) of Article 1121 two distinct sets of requirements. They are not to be conflated; each must be given meaning.

a. On the one hand, paragraph (1) sets out two substantive conditions precedent that an investor must satisfy before it can pursue a claim in arbitration: consent and waiver. It is clear from the terms of the provision ("may submit a claim … only if") that a NAFTA Party cannot be compelled to arbitrate where those conditions are not met.

b. On the other hand, paragraph (3) sets out the manner in which satisfaction of those two conditions precedent—consent and waiver—is to be conveyed to the Respondent.

45.
Paragraphs (1) and (3) thus elicit separate enquiries, and the Tribunal will pursue each in turn.

a. Article 1121(1): have the Claimants given consent?

46.
Arbitration being a creature of consent, lack of consent equates lack of jurisdiction. Where any Claimant has in fact not consented to arbitrate with the Respondent as required by Article 1121(1), the Tribunal has no jurisdiction in respect of that Claimant. The Tribunal must determine whether, as the Respondent submits, that is the case here.
47.
In paragraph 114 of the Request, the Claimants referred to the Respondent's offer to arbitrate in Article 1122 of the Treaty and stated that "[b]y this Request for Arbitration, Claimants accept Mexico's offer, and hereby submit the present dispute to arbitration under the Additional Facility Rules of ICSID".61 This acceptance was given in a document reviewed and agreed to by the Claimants,62 and signed by the Claimants' counsel pursuant to POAs by the Claimants authorizing counsel to "take any steps required for the initiation of, and to represent [Claimants] and act on [their] behalf against the United Mexican States in, arbitration proceedings under the [Treaty]".63
48.
The Respondent submits on the basis of this record that the Claimants have not consented. According to the Respondent, the POAs "[a]t most … suggests that the Claimants would have been willing to consent to arbitration if asked …";64 and the Claimants' consent as conveyed in paragraph 114 of the Request was only "implied or constructive".65
49.
The Tribunal disagrees. Leaving aside the counterintuitive nature of the Respondent's position—that the Claimants would have spent millions of dollars on an arbitration to which they did not consent—the record permits no other conclusion than that the Claimants did in fact consent:

a. The Claimants, who have all confirmed in testimony that they did consent,66 conveyed that consent in paragraph 114 of the Request when expressly accepting the Respondent's offer in Article 1122. Nothing in that paragraph needs to be implied or construed to enable the conclusion that the Claimants did consent.

b. It is true that the Claimants provided their consent through counsel. That is also irrelevant. Where, as here, there is no suggestion that Quinn Emanuel was not duly authorized or that it acted ultra vires in issuing the Request conveying the Claimants' consent, there is no question that all statements in the Request are attributable to and bind the principals of Quinn Emanuel—the Claimants. Nothing in the Treaty precludes investors from acting through duly authorized legal counsel.

50.
While the Respondent elsewhere concedes that "[c]learly the Claimants authorized Quinn Emmanuel to 'file the arbitration' and to that end consented to the firm doing so", the Respondent suggests "[t]hat is not the point".67 The point, according to the Respondent, is "[w]hat the Claimants did not do in the [POAs] they signed": "to declare in writing—for the benefit of the Respondent—that they 'consent to arbitration in accordance with the procedures set out in [the Treaty]'".68 The argument, therefore, is that a verbatim recitation by the Claimants of the phrase "arbitration in accordance with the procedures set out in" the Treaty is required to satisfy Article 1121(1).69
51.
The Tribunal disagrees. The Request refers to the Respondent's offer in Article 1122 and states that the Claimants "accept Mexico's offer" as set forth in that provision. As further discussed below, Article 1122 in terms already expressly confines the Respondent's offer to "arbitration in accordance with the procedures set out in this Agreement". Accordingly, the only offer to which the Claimants could give their consent in paragraph 114 of the Request was necessarily and already limited to "arbitration in accordance with the procedures set out in this Agreement". A verbatim recitation of that phrase in the Request or in the POAs would not have added anything: the limitation on consent introduced by that phrase is hard-wired into the Respondent's offer. The Claimants could not accept an offer not made in Article 1122.
52.
The Tribunal is not aware of any arbitral authority requiring any particular formulation for giving consent under Article 1121(1). None of the decisions cited by the Respondent, including Methanex, Canfor, Merrill and Ring, Cargill, Detroit International Bridge, Bilcon, Resolute Forest, and Mercer, suggests that a claimant can only validly give consent under Article 1121(1) by verbatim reciting Article 1122 or using any other particular phraseology.70
53.
In sum, the Claimants did give consent as required by Article 1121(1). The only question is whether that consent was conveyed in the manner prescribed by Article 1121(3). The Tribunal turns to this next.

b. Have the Claimants conveyed their consent in the manner prescribed by Article 1121(3)?

54.
Article 1121(3) required the Claimants to give their consent "in writing", to "deliver[] [it] to" the Respondent, and to "include[] [it] in the submission of a claim to arbitration".
55.
The Respondent submits that the Claimants' acceptance of the Respondent's offer in paragraph 114 of the Request, filed on their behalf by Quinn Emanuel, failed to satisfy the three requirements of Article 1121(3).71
56.
It is true that the Claimants did not issue to the Respondent a separate letter affirming their consent to arbitration. That is also irrelevant: nothing in Article 1121(3) required them to do so. All it required was that the consent be (i) "in writing", (ii) "delivered to" the Respondent, and (iii) "included in the submission of a claim to arbitration".
57.
That was done here. To wit, the Request (i) is a written document; (ii) was delivered to the Respondent; and (iii) was included in the submission of the claim to arbitration (which pursuant to Article 1137 of the Treaty occurs when the Request was received by the Secretary-General of ICSID).
58.
The text of Article 1121(3) imposes no other requirements. Its context also militates against implying any. Under Article 1122(2), "the requirement of … the Additional Facility Rules for written consent of the parties" is satisfied by "[t]he consent given by [Article 1122(1)] and the submission by a disputing investor of a claim to arbitration". It would have been surprising if a claimant then could not satisfy Article 1121(3) by doing exactly that.
59.
The cases cited by the Respondent also do not suggest otherwise. None of them have imposed additional requirements as to the manner of conveying consent beyond those already contained in Article 1121(3).72
60.
In any event, even if the Respondent's interpretation of Article 1121(3) were right, that would not then have affected the Tribunal's jurisdiction. While there can be no jurisdiction absent the Claimants' consent (both as a matter of first principles and pursuant to the express terms of Article 1121(1)), the requirements of Article 1121(3) as to the manner in which that consent is to be conveyed to the Respondent do not bear on the Tribunal's jurisdiction. Rather, failure to meet those requirements may affect the claim's admissibility and can be cured.73

2. Articles 1122(1) and 1119(a): the Notice and the Respondent's consent

61.
Article 1119 requires that, at least 90 days prior to commencing arbitration, the investor submit a notice of intent specifying: "(a) the name and address of the disputing investor and, where a claim is made under Article 1117, the name and address of the enterprise; (b) the provisions [of NAFTA] alleged to have been breached …; (c) the issues and the factual basis for the claim; and (d) the relief sought and the approximate amount of damages claimed."
62.
Article 1122(1) provides that the Respondent consents to "the submission of a claim to arbitration in accordance with the procedures set out in this Agreement".
63.
The Respondent contends that (i) the failure by the Additional Claimants "to [submit a notice of intent] rendered their purported submission to arbitration void ab initio" and (ii) "[t]hey also failed to engage the Respondent's consent to arbitration 'in accordance with the procedures set out in [the NAFTA]' under Article 1122".74

a. The undisputed defect in the Notice

64.
The Notice submitted on 23 May 2014 alleged that there had been breaches of Articles 1102, 1103, 1105 and 1110 of the Treaty;75 set out the factual background to the claims;76 and estimated the damages relief sought "in the range of US$ 100 million".77
65.
In a section titled "Identification of the Disputing Investors", it provided the names and addresses of eight investors (who are now eight of the 38 Claimants) and the names of six Mexican companies78 (who are now six of the seven Mexican Companies).79 The Notice, however, did not provide the names and addresses of the remaining 31 Additional Claimants or of Operadora Pesa.80
66.
It is not in dispute that, if the Claimants' contentions as regards their shareholding in the Mexican Companies are found to be correct, the aggregate shareholding held by the Additional Claimants in each of the Juegos Companies and E-Games was at all times smaller than the aggregate shareholding held by the Original Claimants, yet by no means insignificant.
67.
It is also common ground that the only defect in the Notice relates to this failure to identify the Additional Claimants and Operadora Pesa as required under Article 1119(a). The Respondent has not complained about the summary of facts, the identification of the Treaty provisions allegedly breached, or the estimate of damages set out in the Notice.
68.
It remains unclear what led to the omission of the Additional Claimants and Operadora Pesa from the Notice. The Claimants' evidence at the hearing was that they relied on the advice of their specialised arbitration counsel (at that time a different firm from their counsel of record in this arbitration).81 There was a suggestion that the omission was insignificant because the Original Claimants allegedly were the controlling shareholders whereas the Additional Claimants were all "passive investors".82
69.
The Tribunal need not resolve this here. For purposes of interpreting Articles 1119 and 1122, it is irrelevant why the information was omitted. All the Tribunal must determine is whether that omission has the consequences as argued by the Respondent.

b. A matter of jurisdiction or admissibility

70.
The Respondent's case is that the claims by the Additional Claimants should be dismissed because their omission from the notice vitiates its consent ("They … failed to engage the Respondent's consent to arbitration 'in accordance with the procedures set out in [the NAFTA]' under Article 1122")83 and because the defect renders their submission to arbitration void ("Failure to do so rendered their purported submission to arbitration void ab initio").84 The Respondent contests that this Issue is properly characterized as going to admissibility rather than jurisdiction, but that the Additional Claimants' claims should be dismissed even if it were a matter of admissibility.85
71.
The Claimants, on the other hand, contend that: the defective Notice does not preclude jurisdiction over the Additional Claimants;86 the Notice was in fact filed on behalf of the Additional Claimants as well;87 and the matter is one of admissibility and the claims should be admitted because the defect caused the Respondent no prejudice and would not have changed the course of any settlement effort.88
72.
For the Respondent's objection to succeed, the Tribunal must find that the omission of the Additional Claimants from the Notice either (i) deprives the Tribunal of jurisdiction over the Additional Claimants or (ii) renders the claims by the Additional Claimants inadmissible. The Respondent's objections must necessarily come within the purview of that taxonomy. If the Tribunal has jurisdiction and declares the claims in question admissible, there is no other basis to dismiss the claims at this stage.
73.
Jurisdiction pertains to whether a tribunal has the power to adjudicate a particular dispute, whereas admissibility pertains to whether a tribunal—which does have that adjudicative power—should exercise that power over a particular claim. Commentators have emphasized the practical relevance of the distinction: whereas findings pertaining to jurisdiction are subject to set-aside review in most jurisdictions, findings pertaining to admissibility are not.89
74.
The Tribunal must necessarily examine this Issue, and the parties' related submissions, within the confines of that legal framework:

a. The Tribunal understands that the Respondent's objection on at least one iteration ("They … failed to engage the Respondent's consent to arbitration 'in accordance with the procedures set out in [the NAFTA]' under Article 1122")90 raises an objection to the Tribunal's jurisdiction: the Respondent says it simply did not consent to arbitrate with the Additional Claimants where their names were omitted from the Notice.

b. It is less clear whether the other iteration of the Respondent's objection ("Failure to do so rendered their purported submission to arbitration void ab initio")91 is aimed at the Tribunal's jurisdiction or at the claim's admissibility. To say that the defect rendered the submission to arbitration "void ab initio" is tantamount to saying that the current submission to arbitration cannot be given any effect. This will be the case both where the Tribunal finds that it has no jurisdiction over the Additional Claimants and where it dismisses their claims as inadmissible. The Tribunal's findings as regards jurisdiction and admissibility will thus necessarily dispose of this iteration as well.

c. The Claimants' case is that the defect in the Notice only gives rise to an issue of admissibility that does not require dismissal.92 That being so, their contention that the Notice was understood by the Additional Claimants to be sent on their behalf as well, even if proven, is neither here nor there: the information required by Article 1119(a) to be included in the Notice would still be missing; and the question would still remain whether this defect affects the Tribunal's jurisdiction or the claims' admissibility.

75.
Against this backdrop, the Tribunal will first examine whether the defect in the Notice precludes the Tribunal's jurisdiction over the Additional Claimants. Should it find that it does not, it will then examine whether the claims should nonetheless be dismissed as inadmissible.

c. Does the Tribunal have jurisdiction over the Additional Claimants?

(i) The relevant test for jurisdiction

76.
Whether their omission from the Notice deprives the Tribunal of jurisdiction over the Additional Claimants is a question of consent. To wit, the question is whether the consent given by the Respondent in Article 1122(1) was made conditional upon satisfaction of Article 1119(a).
77.
This question is binary and automatic. If satisfaction of Article 1119(a) is a condition to which the Respondent has tethered its consent, the Tribunal cannot have jurisdiction where that condition is not satisfied. By the same token, if satisfaction of Article 1119 is not a condition to which the Respondent has tethered its consent, then a defect in a notice of intent cannot vitiate the Respondent's consent and the Tribunal does have jurisdiction. Siren songs of pragmatism and doomsday warnings of floodgates are alien to this analysis.
78.
To resolve this question, the Tribunal must interpret the Treaty as judiciously and thoughtfully as it can, in accordance with the principles of treaty interpretation as codified in Articles 31 and following of the VCLT. Accordingly, the Tribunal will parse the terms of Articles 1119 and 1122, considered in their context and in light of the Treaty's object and purpose.
79.
As set out below, the Tribunal finds that Article 1119 does not condition the Respondent's consent to arbitration in Article 1122 and that the Additional Claimants' failure to issue a notice of intent therefore does not deprive the Tribunal of jurisdiction over them.

(ii) The ordinary meaning of the text of Articles 1119 and 1122(1)

80.
The Tribunal first examines Article 1119; then Article 1122(1).
81.
First, Article 1119 is stated in mandatory terms: "shall". However, it is entirely silent on the consequences of a failure to include all the required information in the notice of intent. Article 1119 does not in terms refer to Article 1122(1); does not provide that satisfaction of the requirements of Article 1119 is a condition precedent to a NAFTA Party's consent; and does not state that failure to satisfy those requirements will vitiate a NAFTA Party's consent. The text of Article 1119 alone therefore does not compel the conclusion that a failure to include all the required information in the notice of intent vitiates a NAFTA Party's consent under Article 1122(1).
82.
Article 1122(1) also does not in terms refer back to either Article 1119 or the notice of intent. However, Article 1122(1) does provide, in the English version of the Treaty, that "[e]ach Party consents to the submission of a claim to arbitration in accordance with the procedures set out in this Agreement" (emphasis added). In the French and Spanish versions of the Treaty, the italicised terms appear as "l'arbitrage conformément aux modalités établies dans le présent accord" and "arbitraje con apego a los procedimientos establecidos en este Tratado", respectively.
83.
In the Treaty's English and French versions, the exact same language is used in Article 1121(1)(a): "arbitration in accordance with the procedures set out in this Agreement" and "l'arbitrage conformément aux modalités établies dans le présent accord". While slightly different language is used in the Spanish version ("arbitraje en los términos de los procedimientos establecidos en este Tratado"), the parties agree that the phrase as it appears in both Articles 1121 and 1122 must be given the same meaning.93
84.
The Tribunal must accordingly resolve two questions of interpretation:

a. Does "in accordance with the procedures set out in this Agreement" in Article 1122(1) modify "arbitration"?

b. If it does, do "the procedures" with which the "arbitration" must accord include the requirements of Article 1119?

85.
The Tribunal will address each question in turn.

(a) Does "in accordance with the procedures set out in this Agreement" modify "arbitration"?

86.
The parties agree that the phrase "in accordance with the procedures set out in this Agreement" should be understood to modify "arbitration".94 The Tribunal agrees with the parties.
87.
This is of some import. If, on the one hand, "in accordance with the procedures set out in this Agreement" had modified "consents" in Article 1122(1), then the provision would have to be construed as requiring that the parties consent in accordance with the procedures set out in the Treaty. In other words, the procedures referred to would pertain to the procedures by which consent is to be given.
88.
If, on the other hand, "in accordance with the procedures set out in this Agreement" had modified "submission of a claim", then the procedures referred to in Article 1122(1) would pertain to the procedures by which a claim was to be submitted.
89.
But where "in accordance with the procedures set out in this Agreement" modifies "arbitration", the provisions must be construed as providing that the parties' consent is limited to arbitration in accordance with the procedures set out in the Treaty. On that reading, the procedures referred to pertain to the procedures with which the arbitration itself must accord.
90.
This interpretation, subscribed to by both parties, gives meaning to Article 1122(1): the NAFTA Parties did not provide their ex ante consent to just any arbitration: they only consented to an arbitration which accords with the procedures set out in the Treaty.

(b) Do "the procedures" with which the "arbitration" must accord include the requirements of Article 1119?

91.
The question is which provisions of the Treaty can be said to contain the "procedures" with which the "arbitration" must accord. On this point, the parties disagree.
92.
The Claimants' position on this point appears to have evolved.95 In their post-hearing brief, they submitted, in response to questions from the Tribunal, that the "procedures" pertaining to arbitration are those set out in Articles 1123-1138 of the Treaty, which contain the specific rules in accordance with which a Chapter 11 arbitration is to be conducted.96
93.
The Respondent, on the other hand, argues that "since an arbitration commences with the submission of a claim, the phrase 'in accordance with the procedures set out in this Agreement' in Article 1121 includes the procedure that must be followed to validly submit a claim to arbitration";97 and similarly, in respect of Article 1122, that "the 'procedures' in respect of the arbitration itself include the procedures for a valid submission of a claim to arbitration".98
94.
The relevance of the point is clear: on the Respondent's case, the "procedures" would also include the requirements for a notice of intent under Article 1119: the "requirement [of a Notice of Intent containing all the information set out in Article 1119], together with those established in Articles 1120 and 1121 (inter alia) establish the 'procedure' for the submission of a claim to arbitration which … marks the commencement of an arbitral proceeding".99
95.
The Tribunal does not find support for the Respondent's interpretation in the ordinary meaning of the terms of Article 1122(1).
96.
It is axiomatic that the "arbitration" to which the Respondent gives consent in Article 1122(1) does not commence or come into existence until the submission of a claim through the filing of a notice of arbitration.100 Issuing a notice of intent neither commences the "arbitration" nor legally commits an investor to commencing "arbitration". Only the issuance of the notice of arbitration does. After issuing a notice of intent and until the filing of a notice of arbitration, an investor remains entirely free not to commence "arbitration" at all.
97.
The natural and ordinary meaning of "arbitration" is therefore the procedures commenced by, and to be followed upon, the submission of a claim. Filing a notice of intent is, put at its highest, a "procedure" to be followed prior to an arbitration, if any; it is not a procedure with which the subsequent arbitration itself, if any, must accord. As further explained below—when the Tribunal addresses the context of Articles 1119 and 1122(1)—Articles 1123 to 1136 set out precisely those procedures in some detail.
98.
The Respondent counters with the argument that "the 'procedures' in respect of the arbitration itself include the procedures for a valid submission of a claim to arbitration".101 But that argument is circular. To add the qualifier "valid" before "submission of a claim" is to simply assume the very point in issue. The question precisely is whether satisfaction of Article 1119 is or is not required to "validly" submit a claim to arbitration. Simply asserting that it is, as the Respondent's argument does, does not address the question whether in fact it is.
99.
The drafters of the Treaty certainly did not so provide in terms. On the contrary, while Articles 1120 ("Submission of a Claim to Arbitration") and 1121(1) ("Conditions Precedent to Submission of a Claim to Arbitration") do expressly provide that certain conditions must be met before a claim can be "validly" submitted to arbitration, satisfaction of Article 1119 is not stated to be one of them. Nothing in those provisions can be said to condition the "validity" of the submission of a claim to arbitration on the satisfaction of Article 1119.
100.
The Tribunal now turns to the import of these other provisions, which are part of the context of Articles 1119 and 1122(1) that the Tribunal must consider.

(iii) The context provided by the provisions immediately preceding and following Article 1122

101.
Article 31 of the VCLT requires that the text of a treaty provision be interpreted in context. Where the terms of Articles 1119 and 1122(1) do not provide that a failure to satisfy Article 1119 vitiates the Respondent's consent in Article 1122, the Tribunal would need to imply this consequence from the context of those provisions.
102.
Under the applicable principles of treaty interpretation, it is possible in certain circumstances to imply terms from a provision's context. The difficulty here, however, is that the context strongly militates against reading such an implied term into the Treaty. It does so in two ways:

a. First, in nearly all the provisions of Section B of Chapter 11 immediately following Article 1122, the Treaty sets out detailed "procedures" with which an "arbitration" under Chapter 11 must accord.

b. Second, in nearly all the provisions of Section B of Chapter 11 immediately preceding Article 1122, the NAFTA Parties showed that, whenever they wanted to condition access to Treaty arbitration on the investor's satisfaction of certain requirements, they expressly did so.

103.
The Tribunal will address each point in turn.

(a) Articles 1123 to 1136

104.
The fourteen provisions immediately following Articles 1121 and 1122—Articles 1123-1136—set out detailed procedures to be followed in any arbitration pursuant to the Treaty.
105.
They include, among other things, rules regarding the number of arbitrators and the method of their appointment; the appointment of a presiding arbitrator; consolidation; participation by a non-disputing NAFTA party; the place of arbitration; governing law; expert reports; interim measures; and the final award.
106.
The "procedures" with which any "arbitration" under Chapter 11 must accord pursuant to Article 1122 most naturally refer to these detailed procedures for the conduct of the arbitration set out in Articles 1123-1136. The NAFTA Parties did not consent in Article 1122 to just any generic arbitral process; they agreed to the specific arbitral process as organised and regulated by Articles 1123-1136.

(b) Articles 1116 to 1121

107.
On the other hand, the provisions preceding Article 1122 show that, whenever the drafters of the Treaty wished to condition access to Treaty arbitration on the investor's satisfaction of certain requirements, they specifically and expressly did so.
108.
Article 1116 provides that "[a]n investor may not make a claim if more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage".102Article 1117 contains mirroring provisions for claims on behalf of an enterprise. Neither Article 1119 nor any other provision of the Treaty similarly provides that an investor "may not make a claim" if the notice of intent omits some of the information specified in that provision. That choice by the Treaty's drafters cannot be ignored.
109.
Article 1120, styled "Submission of a Claim to Arbitration", provides that an investor may submit the claim to arbitration "provided that six months have elapsed since the events giving rise to a claim" and subject to the exclusions of Annex 1120.1.103 Article 1120 does not similarly add "and provided that a notice of intent was served containing all the information specified in Article 1119". That choice by the Treaty's drafters cannot be ignored.
110.
Article 1121(1)(a), styled "Conditions Precedent to Submission of a Claim to Arbitration", provides that "a disputing investor may submit a claim … to arbitration only if"104 the investor consents provides the requisite consent and waiver. Article 1121(a) does not similarly add "and only if the disputing investor has served a notice of intent in the manner prescribed by Article 1119". Nor is Article 1119 similarly styled a "Condition Precedent to Submission of a Claim to Arbitration". That choice by the Treaty's drafters cannot be ignored.
111.
Respondent's interpretation of Article 1122 would also lead to a strained interpretation of Article 1121(1)(a), where—and on this the parties do agree105—the phrase "arbitration in accordance with …" is to be given the same meaning. On the Respondent's interpretation, at the time an investor submits a claim to arbitration, it would be required by Article 1121(1)(a) to give its "consent" not only to the arbitration that it proposes to commence but also to a pre-arbitral step of its own that lies in the past. It strikes the Tribunal as more natural to read the requirement of giving consent in Article 1121(1)(a) as being prospective in nature, pertaining to a process that lies ahead.
112.
Article 1118 exhorts ("should") the parties to settle a claim through consultation or negotiation. At least one important objective of Article 1119—and on this the parties appear to agree106—is to enable the Respondent to assess whether it can resolve the claim through settlement discussions, as envisaged by Article 1118, and thus avoid international arbitration. That is also apparent from the Free Trade Commission's statement on notices of intent to submit a claim to arbitration (the FTC Statement). After referring to both Articles 1118 and 1119, the FTC states "[t]he notice of intent naturally serves as the basis for consultations or negotiations between the disputing investor and the competent authorities of a Party".107
113.
It is common ground that a failure to pursue such settlement discussions however is no bar to Treaty arbitration.108 That being so, the Respondent's reading of Article 1119 presents a logical challenge. On the Respondent's case, a claimant who fails to include certain information in a notice of intent would forfeit the right to Treaty arbitration. Yet a claimant who fails altogether to pursue the settlement effort that the notice of intent is intended to facilitate, would retain that right undiminished. If failing to pursue settlement discussions does not bar access to Treaty arbitration, then at least bald logic—and at this juncture the Tribunal would not put it higher than that— suggests that neither should a failure to comply with a step designed to facilitate such settlement discussions.

(iv) The Treaty's object and purpose

114.
The Treaty's object and purpose lend further support to the textual and contextual analysis set out above.
115.
In Article 102, styled "Objectives", the NAFTA Parties recorded in paragraph 1(e) that one such objective was to "create effective procedures for … the resolution of disputes".109 In addition, in Article 1115, styled "Purpose", the NAFTA Parties recorded that one purpose of the dispute resolution provisions of Chapter 11 was to "establish[] a mechanism for the settlement of investment disputes that assures … equal treatment among investors of the Parties …".110
116.
This suggests that access to Chapter 11 arbitration was intended to (i) provide investors access to a dispute resolution mechanism that is successful in producing the intended result of resolving investment disputes (ii) without distinction between well and ill-resourced claimants, corporate or natural persons, or more and less sophisticated investors.
117.
It strikes the Tribunal as a difficult proposition that these objectives could be furthered by barring access to that dispute resolution mechanism on the basis that the names of certain investors were omitted from the notice of intent.

(v) Decisions of other tribunals

118.
The Respondent submits that there is a "jurisprudence constante to the effect that 'all pre-conditions and formalities under Articles 1118-1121' must be satisfied by the disputing investor in order to establish a disputing Party's consent under Article 1122".111
119.
There are three independent reasons why, to the Tribunal's mind, that contention does not advance the Respondent's case.

a. First, the Tribunal's mandate is to find the terms of the Treaty as they are and to interpret them in accordance with the VCLT. If other tribunals have arrived at a different interpretation of the same provision, that does not change that mandate.

b. Second, the Tribunal is not persuaded that the decisions cited by the Respondent do form a jurisprudence constante. Other tribunals cited by the Claimants, such as those in in ADF and Chemtura, for example, have dismissed the proposition that a failure to satisfy the requirements of Article 1119 "must result in the loss of jurisdiction".112 The Tribunal therefore does not break new ground by finding that consent in Article 1122 is not tethered to satisfaction of Article 1119.

c. Third, it is not even clear whether any of the decisions cited by the Respondent actually did purport to construe Article 1119 as containing a condition precedent to consent: none of them reveals any attempt to construe Article 1119 at all.113 To the extent that those decisions are cited for the proposition that Articles 1120 and 1121(1) impose conditions that must be met for an investor to have access to Treaty arbitration, the Tribunal does unreservedly agree with them, as explained above.

120.
Based on the foregoing, the Tribunal concludes that the Respondent's consent in Article 1122 is not conditioned upon the satisfaction of the requirement of Article 1119(a) to identify the Additional Claimants in the Notice. The Tribunal accordingly finds that it has jurisdiction over the Additional Claimants and dismisses the Respondent's objection insofar as it resisted the Tribunal's jurisdiction over the Additional Claimants.

d. Are the claims by the Additional Claimants admissible?

121.
As stated earlier, where the Tribunal finds that it has jurisdiction notwithstanding the Additional Claimants' failure to satisfy Article 1119(a), it must next examine whether it is appropriate to exercise that jurisdiction over them—or put differently, whether their claims are admissible.

(i) The relevant test for admissibility

122.
Article 1119 imposes an obligation on the investor, but the existence of an obligation says nothing about the consequences of a failure to meet that obligation.
123.
The Treaty does not in terms require a sanction of dismissal. As seen above, unlike the provisions of Articles 1116, 1117, 1120 and 1121(1), neither Article 1119 nor any other provision of the Treaty provides that a claim can be submitted to arbitration "only if" or "provided that" the requirements of Article 1119 have been met. Similarly, the FTC Statement does not provide that non-compliance with Article 1119 must result in dismissal of the claim. Absent any language in the treaty so mandating, the Tribunal cannot imply a right to dismissal of the claim merely because to some it might seem desirable to do so.114
124.
Where the object and purpose of the Treaty includes the "creat[ion] [of] effective procedures for … the resolution of disputes",115 it is also difficult to see how reading Article 1119 as necessarily and automatically implying a sanction of dismissal could be consistent with that object and purpose.
125.
Decisions by other treaty tribunals exhibit no uniformity in their approaches to these issues. Other tribunals have not always drawn a clear distinction between jurisdiction and admissibility, and whenever in substance they addressed a preliminary objection that the investor had failed to satisfy a pre-arbitral step, they have exhibited a diversity of approaches.
126.
While some treaty tribunals have dismissed claims and required a refiling upon the defect being cured,116 others have admitted the claims when doing so best served the interests of justice, considering factors such as futility, efficiency, due process, prejudice and a balancing of the parties' interests.117
127.
If a common denominator can be derived from these diverging approaches, it is that there is no automaticity between the existence of an admissibility defect and the dismissal of the claim. Instead, the question of whether to admit the claim notwithstanding the defect is one that involves a margin of judicial appreciation by the tribunal.
128.
This is the approach that the Tribunal will adopt here.118 In exercising judgment as to whether the Additional Claimants' claims should be admitted, the Tribunal must do what best serves the interests of justice. To that end, the Tribunal considers that it must give particular weight to whether the defect has caused the Respondent any prejudice and which course is favoured by an efficient administration of justice.
129.
As explained in the next section, in the specific circumstances of this case, the foregoing considerations militate against a dismissal of the Additional Claimants' claims.

(ii) Whether the claims by the Additional Claimants are admissible

130.
As seen earlier, the FTC Statement indicates that the purpose of a notice of intent is to provide a NAFTA Party with the information it needs to assess amicable settlement opportunities as contemplated in Article 1118. It is possible for that purpose to be fulfilled even where the notice of intent fails to include all of the requisite information.
131.
In the same vein, the Respondent acknowledges that Article 1119 may need to be approached with some flexibility when it observes that "there may be room to argue that a notice of intent containing minor flaws—such as a misspelled name or an incorrect postal code—is sufficiently compliant with Article 1119".119 One could think of other examples, such as the estimation of damages required by Article 1119(d): how many notices can be said in hindsight to have included a truly accurate estimate? NAFTA case law may in that sense well be rife with technically inaccurate Article 1119 notices. Yet nobody would suggest that this should have barred those claims.
132.
While the Tribunal takes the Respondent's point that the omission of the names of the Additional Claimants is not a "minor flaw" akin to a misspelling of their names, the fact remains that the addition of those names would not have expanded on the notice given to the Respondent as regards the nature of the dispute. The claims by the Additional Claimants being co-extensive with those asserted by the Original Claimants in the Notice, the Notice still provided the Respondent with sufficient information regarding the dispute to enable a meaningful settlement effort.
133.
This is therefore not a situation where a respondent State has been ambushed, hearing about the dispute as such for the first time upon receipt of the request for arbitration. Where the purpose of the Notice was to facilitate settlement discussions pursuant to Article 1118, the Notice here did serve that purpose.
134.
The Respondent submits that the claims by the Additional Claimants should nonetheless be dismissed because they failed to cure the defect by doing one of two things:

First, the Claimants as a group could have asked the ICSID to suspend registration of the claim during the 57 days that registration was pending. They would then file a fresh notice of intent naming all of the disputing investors, wait 90 days and then refile the RFA. …

The second potential course of action would have been for the Additional Claimants to file their own notice of intent, wait 90 days and then file a request for arbitration in a separate proceeding … and apply later to have the two cases consolidated under NAFTA Article 1126.120

135.
The Claimants did indeed neither of those things. Instead, they served an Amended Notice (including the names of all the Additional Claimants) after the registration of the Request, on 2 September 2016, and they did not refile the Request. The Tribunal was constituted more than five months later, on 14 February 2017.
136.
The Tribunal accepts that the Amended Notice did not allow any renewed settlement effort to take place prior to arbitration, as envisaged—albeit in exhortatory terms only—by Article 1118. In the circumstances of this case, however, the Tribunal cannot see how dismissal on that basis can be either reconciled with the precept of an efficient administration of justice or warranted by the existence of prejudice.
137.
First, where, as here, the Notice did in fact contain information sufficient to enable meaningful settlement discussions prior to the arbitration, there is no discernible prejudice to the Respondent. Second, even if that had not been the case, where the parties then still had more than five months before the constitution of the Tribunal to pursue settlement efforts, the appropriate sanction would not have been dismissal.
138.
Instead, in that case the Respondent would have been entitled to compensation for any resultant financial wastage.121 Where an investor impairs the ability of the NAFTA Party to pursue settlement prior to arbitration, it is well within the powers of a NAFTA tribunal to allocate responsibility for any resultant wastage to the investor. Failure to comply with Article 1119 may in that sense come at considerable financial cost to the investor, and there is no risk of Article 1119 being rendered nugatory.
139.
Based on the foregoing considerations, the Tribunal dismisses the Respondent's objection insofar as it sought the dismissal of the Additional Claimants' claims as inadmissible. The Tribunal emphasizes that it reaches that conclusion in light of the circumstances specific to this case—what best serves the interests of the administration of justice will necessarily yield different conclusions in different circumstances.

B. THE CLAIMANTS' CLAIM UNDER ARTICLE 1117 ON BEHALF OF THE MEXICAN COMPANIES

140.
The Respondent has raised all three Issues in respect of the claims under Article 1117 on behalf of the Mexican Companies: consent by the Mexican Companies (Article 1121); consent by the Respondent (Articles 1119/1122); and ownership or control (Article 1117).
141.
The Tribunal can readily dispose of the second of those objections. As with the Additional Claimants, the failure to identify Operadora Pesa in the original Notice does not vitiate the Respondent's consent under Article 1122. All the reasoning set out in Section V.A.2 above applies mutatis mutandis to the Respondent's objection insofar as it pertains to Operadora Pesa.
142.
The Tribunal will address the two remaining objections in this order: first the objection giving rise to Issue 3 (ownership or control), and then the objection giving rise to Issue 1 (consent by the Mexican Companies).

1. Article 1117: did the Claimants own or control the Mexican Companies at the relevant time(s)?

143.
For the Claimants to be able to pursue claims on behalf of the Mexican Companies under Article 1117, they must establish that they owned or controlled those companies at the relevant time(s). To resolve the Respondent's objection that the Claimants have failed to do so, the Tribunal must answer each of the following questions:

a. What is or are the relevant time(s) at which the Claimants must be able to demonstrate ownership or control?

b. What number and type of shares did the Claimants own at such time(s)?

c. Based on the foregoing, did the Claimants "own" the Mexican Companies at such time(s)?

d. Based on the foregoing, did the Claimants "control" the Mexican Companies at such time(s)?

144.
The Tribunal will address each question in turn.

a. What is or are the relevant time(s) at which the Claimants must be able to demonstrate ownership or control?

145.
The parties agree that the Claimants must establish that they owned or controlled the Mexican Companies at the time of the treaty breaches.122 At least one other NAFTA tribunal to have confronted this issue has so held,123 and this Tribunal agrees.
146.
The parties disagree, however, as to whether the Claimants must also establish that they owned or controlled the Mexican Companies at the time of the submission of the claim. The Claimants submit that they must not.124 The Respondent submits that they must.125
147.
The Tribunal agrees with the Respondent.
148.
This is clear from the terms of Article 1117 itself, which uses the present tense: an investor may make a claim "on behalf of an enterprise of another Party that is a juridical person that the investor owns or controls directly or indirectly".126 Thus, the investor must own or control the enterprise at the time it submits a claim on the enterprise's behalf. The drafters of the Treaty could have said an enterprise "that the investor owned or controlled at the time of the alleged breach". They chose not to.
149.
Similarly, Article 1121(1)(b) requires that an investor submitting a claim to arbitration "and, where the claim is for loss or damage to an interest in an enterprise of another Party that is a juridical person that the investor owns or controls directly or indirectly, the enterprise",127 waive their right to initiate or continue proceedings before any domestic forums. Again, the Treaty clearly envisages that the investor own or control the enterprise at the time arbitration is commenced. The drafters of the Treaty could have used the past tense; they chose not to.
150.
These textual points alone are, in the Tribunal's mind, dispositive: disregarding that unequivocal direction in the text of the Treaty would offend the principles of interpretation of the VCLT that the Tribunal must apply.
151.
The Tribunal observes that the fact that Article 1117 requires the investor to own or control the enterprise at the time it submits a claim on that enterprise's behalf does not deprive an investor of Treaty protection where a NAFTA Party expropriates, otherwise causes the loss of, or destroys the value of, its investment.
152.
In those circumstances, the investor's claims under Article 1116 will survive undiminished. Article 1116 does not require subsistence of the investment at the time a claim is submitted. Indeed, unlawful expropriation being the textbook example of wrongful conduct against which the Treaty seeks to protect, any other interpretation would eviscerate the protections of Chapter 11. However, where the investor no longer owns or controls the enterprise at the time of submission of the claim, it can no longer pursue an Article 1117 claim "on behalf of" that enterprise.
153.
The authorities cited by the Claimants on this point128 are inapposite. None of them addressed the question of whether ownership or control for purposes of Article 1117 must be established at the time of submission of the claim. The Claimants themselves admit that the tribunal in Mondev "did not specifically address ownership/control under Article 1117".129 In Gallo, as the Respondent rightly points out,130 the issue was whether a claimant had to own or control the enterprise at the time of the breach in order to bring an Article 1117 claim.131 Further, Daimler and EnCana are not NAFTA cases and do not shed any light on this point of interpretation of Article 1117. To the extent that any of these cases suggest that a claimant does not need to own or control its investment at the time of submission of the claim, these cases were in the context of an investor bringing claims on its own behalf, similar to claims under Article 1116.132 As already explained, the Tribunal agrees that Article 1116 does not require subsistence of the investment at the time of the claim.

b. What number and type of shares did the Claimants own in the Juegos Companies at the relevant times?

154.
One would have thought that this question would be the least controversial part of the case. Unfortunately it was not. There are three reasons for that:

a. Controversy has arisen as to whether in November 2014 the Claimants transferred their shares in the Juegos Companies to a third party—which the Tribunal will refer to as the Grand Odyssey Controversy.

b. Evidentiary difficulties have arisen from the fact that the Claimants have been unable to produce most of the relevant shareholder registries and capital variation books for the Juegos Companies.

c. Controversy has arisen as to whether asambleas conducted for the Juegos Companies in January 2018 could validly and retroactively approve certain share transfers allegedly made prior to 2014.

155.
The Tribunal will address each point in turn.

(i) The Grand Odyssey controversy

156.
The Respondent alleges that, pursuant to resolutions adopted at asambleas held in 7 November 2014 for four of the Juegos Companies—all except JVE Mexico—the Claimants transferred their shares in those Juegos Companies to a third party, Grand Odyssey.133
157.
The Claimants contend that no such transfer occurred,134 that they called asambleas in early 2018 to declare the asambleas held on 7 November 2014, and the resolutions adopted during those asambleas in favour of Grand Odyssey, to be void ab initio.135
158.
The Tribunal has carefully reviewed the record relating to this matter. On that basis, the Tribunal finds that no transfer of shares to Grand Odyssey occurred, whether prior to, during, or after the November 2014 asambleas. The Tribunal sets out below its findings leading to that conclusion.
159.
Some time prior to August 2014, an individual named Benjamin Chow contacted Gordon Burr, offering to assist the Claimants in reopening the casinos. Chow proposed a plan which involved, amongst other things, giving control of the Boards of the Juegos Companies to Chow and his associates (including an individual named Luc Pelchat), and the transfer of the Claimants' shares in the Juegos Companies to Grand Odyssey.136
160.
On 29 August 2014, the five Juegos Companies each held an asamblea in which the shareholders: (i) granted control of the Boards to Chow, Pelchat and another of their associates;137 and (ii) in the case of four of the Juegos Companies—all except JVE Mexico— authorised the Claimants to execute a transfer of their shares to Grand Odyssey while noting that such transfers would still have to be formalised.138 Subsequently, the Claimants continued negotiating a Share Purchase Agreement with Chow in respect of the transfer of shares to Grand Odyssey.139
161.
On 7 November 2014, Chow called another asamblea for each of the four Juegos Companies (except JVE Mexico). At the asambleas, Chow purported to approve a transfer of shares from the Claimants to Grand Odyssey140 and represented that he had secured proxies from the Claimants to do so.141
162.
However, the evidence on record shows clearly that Chow did not have the proxies and that there was no quorum at the November 2014 asambleas.142 Instead, the record shows that the Claimants, who did not attend the asambleas, had expressly refused to give their proxies to Chow when he asked;143 and that they gave their proxies to their Mexican counsel, Mr. Julio Gutierrez, and his firm, Rios Ferrer.144 The record further shows that, upon hearing Chow's representations, Gutierrez and his associates: immediately objected to the transfer of any shares;145 refused to sign the meeting minutes;146 refused to deliver the proxies (without which there was an insufficient quorum to hold a shareholders vote);147 and then left the meeting.148 The Tribunal accordingly finds that the resolutions purportedly passed by Chow at the November 2014 asambleas were manifestly infected with irregularity.
163.
It is also difficult to see what share transfers those asambleas could have approved: it was not until 15 January 2015 and 3 February 2015 that the Claimants entered into two SPAs with Grand Odyssey.149 It is abundantly cler from the terms of these SPAs themselves that, as of the date of their execution, there was no transfer of shares:

a. The SPAs provided that, until Closing, the shareholders of the Juegos Companies "shall own and control ownership of the [shares in the Juegos Companies]".150

b. In the SPAs, each of the shareholders warranted that they had "all the requisite power and authority to enter into" the SPAs.151

c. The SPAs provided that asambleas would be called to declare the November 2014 resolutions "void and of no effect" and to recognize that no share transfer would occur "until Closing under this Agreement".152

d. The parties subjected that Closing to the condition precedent that "the Facilities are open and operating under the Grand Odyssey License or such other license as may be obtained by Grand Odyssey in substantially the same manner as prior to their closure and there existing no proceedings to terminate or cease the operations of any Facility"—an event which, it is undisputed, never came to pass.153

e. The parties agreed that the SPAs could be terminated "if the Closing Date shall not have occurred on or before June 30, 2015".154

164.
Consistent with these provisions of the SPAs, on 2 June 2015 Ayervais sent an email to Chow asking him to, inter alia, "[c]all for an asamblea to approve the new deal, reverse the stock transfers that occurred in November, approve the financials, change the board of directors until the new deal is completed and deal with the Beiruti situation."155 When read in context, the Tribunal understands Ayervais's reference to "reverse the stock transfers" to be a shorthand paraphrasing of the aforementioned requirement of the SPAs that "actions taken at asambleas conducted on November 7, 2014 which approved a transfer of shares of Class B shareholders of the Casino Companies to Grand Odyssey … are [to be] declared void and of no effect …".156 On 1 July 2015, Ayervais sent an email to the parties to the SPAs notifying them of the termination of the SPAs pursuant to Clause 10.1(f).157 On 6 July 2015, Ayervais followed up with a letter to the parties to the SPAs stating the same.158
165.
In early 2016, there was a phone meeting between Ayervais, Gordon Burr, Gutierrez, Chow and Pelchat in which Ayervais and Burr requested that Chow and Pelchat return Board control to them, and properly document that the 7 November 2014 asambleas minutes were invalid and that no share transfer to Grand Odyssey had occurred. Chow and Pelchat refused and demanded "millions of dollars" for alleged expenses.159 On 6 June 2016, the Claimants eventually filed a Federal Racketeering Influenced and Corrupt Organizations Act (RICO) claim against Chow and Pelchat in the District Court of Colorado in order to recover Board control.160 The Claimants testified that they went down the RICO litigation route for lack of confidence in the Mexican court system.161 The Claimants eventually reached a settlement agreement with Pelchat and Chow in April 2017162 and August 2017163 respectively.
166.
Based on this evidence, it is clear that the condition precedent in Clause 8.2(e) of the SPAs was not met; that the SPAs were terminated; and that the share transfer envisaged in those SPAs never occurred. It is also clear from the SPAs—which were executed between, inter alia, some of the Claimants and Chow (as President of the Board of Grand Odyssey)—that the parties to those instruments understood and recognized that the November 2014 asambleas did not result in a transfer of shares. Not to put too fine a point on it but they would not have entered into SPAs providing for the transfer of those shares if those shares had already been transferred.
167.
This disposes of the point. The Tribunal notes that, in their evidence given to the Tribunal, Chow and Pelchat both also testified that no share transfer had occurred.164 The Tribunal would have reached its conclusion without that evidence, to which it assigns weight commensurate with the credibility of those witnesses. The Tribunal also need not place reliance on the 5 January 2018 asambleas declaring the November 2014 asambleas resolutions to be void ab initio. While those asambleas are confirmatory of the Tribunal's findings, it would have made those findings regardless.

(ii) Evidentiary issues arising from the destruction of evidence

168.
The Claimants contend, and have submitted witness evidence affirming, that many of the corporate documents that would have evidenced the extent of their shareholdings in the Mexican Companies were either destroyed in a May 2017 fire at the Naucalpan casino or were ransacked from the office of their lawyer, Mr. Jose Miguel Ramirez.165
169.
The Respondent does not dispute that the fire at the Naucalpan casino or the ransacking occurred. The Respondent argues, however, that no matter what reasons the Claimants have provided for their failure to provide certain corporate documents, the Claimants have ultimately failed to put forward sufficient evidence to meet their burden of showing ownership of shares in the Mexican Companies.166
170.
The Tribunal discerns nothing in the record that casts doubt on the Claimants' evidence as to how the documentary evidence came to be lost. The witness evidence on this point also stands unchallenged.167 As a matter of first principles, the Claimants should therefore be afforded a fair opportunity to adduce evidence of their shareholding through other means.
171.
The manner in which that evidence was eventually marshalled by the Claimants, however, was less than ideal:

a. First, with its Counter-Memorial, the Claimants only introduced the 2006-2008 capitalisation asambleas and tables in Erin Burr's witness statement purporting to lay out the Claimants' shareholding in the Mexican Companies from 19 June 2013 to 25 July 2017 (i.e. when her witness statement was submitted).168

b. In its Reply Memorial, the Respondent objected that this evidence was insufficient. The Respondent argued that the minutes of the 2006-2008 asambleas were, "at best, evidence of the Claimants' shareholding in the Mexican [Companies] as of the date of the respective asamblea."169 The Respondent submitted that the Claimants had to do more than that:

There is no testimony or documentary evidence of any kind from any of the Additional Claimants, the very parties that allegedly make up the voting control of the Juegos companies. Surely, in the absence of corporate records that are alleged to have been lost in a fire, and the failure to produce copies of such records from secondary sources such as lawyers and accountants, the best evidence of each investor's shareholding, including the identity of the company invested in, the date of acquisition and disposal (if any), the class of shares acquired and the amount paid would be a witness statement from each investor, with supporting documentation, such as lawyers' or notaries' reporting letters, copies of share certificates, cancelled cheques and/or receipts, and dividend statements.170 (emphasis in original)

c. With their Rejoinder, the Claimants then "called the Respondent's bluff",171 as they put it, and produced witness statements by each of the Claimants attesting to their respective shareholdings as of 2006-2008 and from June 2013 through the present.172 The Claimants also adduced additional documentary evidence to prove their share ownership during that period using a combination of the following:

i. Schedule K-1s (Form 8865), which are US tax documents used to report a partner's share of partnership income, deductions, credits, etc. of a foreign partnership.173 The forms reflect every partner's percentage interest in the partnership income at the start and end of the year for which the form is filed. US investors who receive this form from the companies have to file it with their annual income tax returns. For all the Juegos Companies, the forms filed at the end of 2013 and 2014 reflect the Series A shareholding from the beginning of 2013 to the end of 2014. Further, for JVE Sureste and JVE Mexico, the forms filed reflect the Series B shareholding in those companies at that time.

ii. Transfer request forms authorising the payment of dividends or the return of premiums to shareholders, pro rata their interest in the company.174 For all the Juegos Companies except JVE Centro, there were payments to Series A shareholders at various times between 2013 to 2014 that reflect the Series A shareholding. Further, for JVE Sureste and JVE Mexico, there were also payments to Series B shareholders during this period that reflect the Series B shareholding.

iii. An internal worksheet, maintained by the legal departments of the Juegos Companies, depicting the complete shareholding in each company (the 2014 Shareholding Worksheet).175 This 2014 Shareholding Worksheet functioned as an internal business record.176 The version submitted into evidence by the Claimants is current as of March 2014.177 It was attached to an email sent from Erin Burr to José Ramón Moreno on 11 March 2014 in response to his request to have a complete and updated list of shareholdings for the Juegos Companies.178

d. Finally, the Claimants introduced notarized minutes of asambleas of the Juegos Companies held in January 2018 that purported to retroactively approve a list of undated share transfers that had occurred between 2009 and June 2013 (with a handful that occurred between June 2013 and January 2014), and to certify share ownership since those transfers occurred.179

e. The Respondent was afforded the opportunity to respond to that evidence, including with evidence of its own; and to test the evidence of any number of the Claimant-witnesses through examination at the hearing (and the testimony of any Claimant-witnesses examined at the hearing is in the record).

172.
It is the Tribunal's view that the Claimants' approach to corporate formality (which has been at times cavalier—for example, they failed to convene the required annual asambleas at the Juegos Companies, the minutes of which could have recorded how the shares were held at such times) and their drip-feeding of important evidence into the record have made this proceeding more cumbersome than it could have been. That, however, is an observation relevant only to costs, and the Tribunal returns to this in due course. The question for present purposes is what the aggregate of the evidence thus marshalled and placed on the record proves to the Tribunal's satisfaction. The Tribunal turns to this next.

(iii) The Claimants' share ownership in the Juegos Companies and the January 2018 asambleas

173.
The evidentiary record regarding the Claimants' shareholding in the Juegos Companies is bookended on either side by asambleas. Minutes of those asambleas were taken and notarized. As a result, these minutes are a matter of public record.
174.

The notarized minutes record what the shareholding was in the Juegos Companies during the period 2006-2008 (i.e., at the time of their capitalization) and as at January 2018. The Tribunal is satisfied that the Claimants' share ownership in the Juegos Companies as at those times was as recorded in those asamblea minutes.180 Table 1 below reproduces the share ownership in each of the Juegos Companies on either date.

 

JVE Mexico
DateShareholdingEvidence
27 February 2006 A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,0000,00051,000C-89, pp. 69-60; C-154, pp. 2-5. 181

 

 

 Total outstanding shares of each type50,0009,0003,00062,000  
Percentage owned by Claimants84.0%100.0%0.0%82.3%
29 January 2018 A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,0000,00051,000C-229, pp. 15-16; C-230, pp. 13-14.182
Total outstanding shares of each type50,0009,0003,00062,000
Percentage owned by Claimants84.0%100.0%0.0%82.3%
JVE Sureste
DateShareholdingEvidence
28 February 2007 A1 SharesA2 SharesB SharesTotal Shares  
Total shares owned by Claimants0,00013,00024,17537,175C-90, pp. 78-86; C-155, pp. 3-8.183
Total outstanding shares of each type6,50013,00039,00058,500
Percentage owned by Claimants0.0%100.0%62.0%63.5%
29 January 2018 A1 SharesA2 SharesB SharesFixed Shares184Total Shares  
Total shares owned by Claimants0,00013,00020,1750,00033,175C-225, pp. 17-19; C-231, pp. 20-23.185
Total outstanding6,50013,00038,8003,00061,300
 shares of each type      
Percentage owned by Claimants0.0%100.0%52.0%0.0%54.1%
JVE Centro
DateShareholdingEvidence
31 December 2007 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00020,65134,29841,00096,449C-91, pp. 63- 65. 186
Total outstanding shares of each type6,00020,65153,30850,000129,959
Percentage owned by Claimants0.0%100.0%64.3%82.0%74.2%
29 January 2018 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00020,65134,43341,00096,084C-226, pp. 27-31; C-232, pp. 21-25.187
Total outstanding shares of each type6,00020,65152,93350,000129,584
Percentage owned by Claimants0.0%100.0%65.1%82.0%74.1%
JyV Mexico
DateShareholdingEvidence
31 May 2008 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00022,66734,4380,00057,105C-92, pp. 56- 58.188
Total outstanding shares of each type4,00022,66752,5883,00082,255
Percentage owned by Claimants0.0%100.0%65.5%0.0%69.4%
29 January 2018 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,66736,9630,00063,630C-233, pp. 16-19.189
Total outstanding shares of each type8,00022,66754,9633,00088,630
Percentage owned by Claimants50.0%100.0%67.3%0.0%71.8%
JVE DF
DateShareholdingEvidence
2 September 2008 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00028,66937,4620,00066,131C-93, pp. 62- 65190
Total outstanding shares of each type4,00028,66965,3373,000101,006
Percentage owned by Claimants0.0%100.0%57.3%0.0%65.5%
29 January 2018 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00028,66937,9620,00066,631C-234, pp. 16-17.191
Total outstanding shares of each type4,00028,66964,9623,000100,631
Percentage owned by Claimants0.0%100.0%58.4%0.0%66.2%

 

Table 1: The Claimants' shareholding in 2006-2006 and January 2018

175.
As these tables show, both at the time of the Juegos Companies' capitalization and in January 2018, the Claimants held more than 50% of the Series B shares and more than 50% of the outstanding stock in each of the Juegos Companies. The question however is what the Claimants' share ownership was in between those two bookends, and specifically between June 2013 (the first instance of allegedly wrongful conduct) and June 2016 (the submission of the claim to arbitration). As noted above, these are the relevant points in time at which ownership or control must be established.
176.
The Claimants contend that the 2014 Shareholding Worksheet accurately represents the Claimants' share ownership from June 2013 through the present. To the extent there are discrepancies between the 2006-2008 asamblea resolutions and the 2014 Shareholding Worksheet, they submit that those are due to certain share transfers prior to 2014 that were not duly approved by asambleas at the time, as required by the By-Laws of the Juegos Companies.
177.
According to the Claimants, that lack of requisite asamblea approval is inconsequential for two reasons. First, they contend, as a matter of Mexican law, the share transfers were valid and effective as of the date of their execution, regardless of asamblea approval.192 Second, even if asamblea approval were necessary to give effect to the share transfers, the January 2018 asambleas could and did retroactively give them effect.193
178.
The Respondent submits that, as a matter of Mexican law, the share transfers did not come into existence until they were approved by an asamblea, i.e., in January 2018, and that the January 2018 asambleas could not retroactively approve the share transfers.194 As a result, the Respondent contends, there is still no conclusive evidence of share ownership between 2006-2008 and January 2018.195
179.
Both parties presented expert evidence on Mexican law in support of their positions. The examination of both experts revealed a considerable body of agreement between them. The experts agreed that: (i) under Mexican law, the validity inter se of a contract for the transfer of shares does not depend on approval by the company;196 but (ii) approval by the company is still necessary for the transferee to be recognised as a shareholder and to be able to exercise its rights as one vis-à-vis the company, i.e. receive dividends and exercise any voting rights associated with the shares.197
180.
They maintained their disagreement, however, as to whether the company can retroactively recognise such shareholder status by retroactively approving a share transfer. The Claimants' expert insisted that it can because lack of contemporaneous approval infects the transfer only with relative nullity which can be cured retroactively;198 the Respondent's expert, while agreeing that legal acts infected with relative nullity can be retroactively ratified,199 contended the opposite because here it is the company's approval of the transfer that is simply non-existent.200 The Claimants' expert also accepted that there can be no retroactivity even for cases of relative nullity where this causes prejudice to third parties with acquired rights.201
181.
In the Tribunal's view, much of the experts' debate, scholarly and helpful as it was, has limited practical relevance for purposes of this phase, for two reasons.
182.
First, and on this point the experts' examination at the hearing was elucidating, it is now undisputed that the share transfers were valid and effective inter partes as at the time they occurred. It is therefore uncontested that the shares were in fact owned by the transferee shareholders as at that time.
183.
The only point in dispute is whether the transferee shareholders were also recognized as such by the Juegos Companies and could exercise the rights to receive dividends and to vote attached to those shares. In this respect, the record is conclusive that indeed they could and did.
184.
None of the Juegos Companies or any third party has ever contested the validity of the share transfers or denied the transferee shareholders the right to receive dividends or to vote associated with those shares on the basis that the transfers had not been formally approved. On the contrary, the record shows that the Juegos Companies issued dividends consistent with the share transfers, and that those dividend payments were regularly reported for US tax purposes.
185.
On that record, the Tribunal finds that (i) as a matter of Mexican law the transferee shareholders did own the shares upon the transfer of those shares to them, and (ii) as a matter of fact, the transferee shareholders have been able to exercise the rights attached to the shares since the date of their transfer.
186.
Second, even if the Tribunal gave no probative value to the (largely uncontested) witness and documentary evidence evidencing this ownership and de facto recognition and found that the Claimants' share ownership between June 2013 and June 2016 was instead as recorded in the 2006-2008 asambleas, the Claimants would still have owned more than 50% of the Series B shares (or, in the case of JVE Mexico, 50% of the combined Series B and C shares, and at least 50% each of the Series A and B shares), which, as explained below, the parties agree is the relevant threshold for proving the legal capacity to control the Juegos Companies under Article 1117.
187.
Put differently, the share movements between 2006 and 2014 were always insufficient to ever reduce the Claimants' Series B shareholding below that threshold and they therefore do not bear on the Tribunal's determination whether the Claimants controlled the Juegos Companies for purposes of Article 1117 between June 2013 and June 2016.
188.
In light of the foregoing, and based on the evidentiary record as a whole, the Tribunal finds that the Claimants' share ownership between June 2013 and June 2016 was as represented in Tables 2 to 6 below.

(a) JVE Mexico

189.

The Claimants collectively held at all relevant times at least 84.0% of the A shares, 100.0% of the B shares, 75% of the combined B and C shares and 82.3% of the total outstanding stock of JVE Mexico.

 

DateShareholdingEvidence
Beginning 2013 A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,000--C-187 ; CWS-8, Annex E, Table 1.202
Total outstanding shares of each type50,0009,000  
Percentage owned by Claimants84.0%100.0%--
19 June 2013 A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,0000,00051,000CWS-2, Annex C; CWS-16, ¶ 2.203
Total outstanding shares of each type50,0009,0003,00062,000
Percentage owned by Claimants84.0%100.0%0.0%82.3%
End 2013 A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,000--C-187 ; CWS-8, Annex E, Table 1.204
Total outstanding shares of each type50,0009,000  
Percentage owned by Claimants84.0%100.0%--
Beginning 2014 A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,000--C-188 ; CWS-8, Annex E, Table 1.205
Total outstanding shares of each type50,0009,000  
 Percentage owned by Claimants84.0%100.0%-- 
11 March 2014 A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,0000,00051,000C-180, p. 3.206
Total outstanding shares of each type50,0009,0003,00062,000
Percentage owned by Claimants84.0%100.0%0.0%82.3%
End 2014- Present A SharesB SharesC SharesTotal Shares  
Total shares owned by Claimants42,0009,000--C-188 ; CWS-8, Annex E, Table 1.207
Total outstanding shares of each type50,0009,000  
Percentage owned by Claimants84.0%100.0%--

 

Table 2: Claimants' shareholding in JVE Mexico

190.
Claimants' ownership of 84.0% of the Series A shares in JVE Mexico from 7 January 2013 to 9 April 2014 is also evidenced by the transfer requests for the company, which have been omitted from Table 1 above to avoid repetition.208

(b) JVE Sureste

191.

The Claimants collectively held at all relevant times at least 100.0% of the A2 Shares, 50.4% of the B shares and 54.1% of the total outstanding stock of JVE Sureste.

 

DateShareholdingEvidence
19 October 2009 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00019,6750,00032,675C-168, pp. 4-5; CWS-8, ¶ 18.209
Total outstanding shares of each type6,50013,00036,0003,00058,500
Percentage owned by Claimants0.0%100.0%54.7%0.0%55.9%
Beginning 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00019,675  C-191 ; CWS-8, Annex E, Table 2.210
Total outstanding shares of each type6,50013,00039,000  
Percentage owned by Claimants0.0%100.0%50.4%--
3 January / 14 March / 12 April / 23 May 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00019,675  C-169, pp. 4-6, 10-15, 22-24; CWS-8, ¶¶ 22-23, 26.211
Total outstanding shares of each type6,50013,00039,000  
Percentage owned by Claimants0.0%100.0%50.4%--
19 June 2013 A1 SharesA2 SharesB SharesTotal Shares  
Total shares owned by Claimants0,00013,00019,67532,675CWS-2, Annex C; CWS-7, Part I; CWS-8, Part I;
Total outstanding shares of each type6,50013,00038,80058,300
Percentage owned by Claimants0.0%100.0%50.7%56.0%213CWS-12, Part I; CWS-13, Part I; CWS-16 to CWS-47, Part I.212 
6 August / 30 August 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00019,675--C-169, pp. 27-29, 31-33; CWS-8, ¶¶ 22-23, 26.214
Total outstanding shares of each type6,50013,00039,000  
Percentage owned by Claimants0.0%100.0%50.4%215--
End 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00019,675--C-191 ; CWS-8, Annex E, Table 2.216
Total outstanding shares of each type6,50013,00038,800  
Percentage owned by Claimants0.0%100.0%50.7%--
Beginning 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00019,675  C-192 ; CWS-8,
 Total outstanding shares of each type6,50013,00038,800--Annex E, Table 2.217 
Percentage owned by Claimants0.0%100.0%50.7%--
1 January 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00020,175--CWS-8, ¶¶ 38-39; CWS-45, ¶ 2; CWS-30, ¶ 2; CWS-40, ¶ 2; CWS-24, ¶ 2.218
Total outstanding shares of each type6,50013,00038,800--
Percentage owned by Claimants0.0%100.0%52.0%219--
5 March 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00020,175--C-169, pp. 38-40; CWS-8, ¶¶ 22-23, 26, 38- 39.220
Total outstanding shares of each type6,50013,00038,800  
Percentage owned by Claimants0.0%100.0%52.0%--
11 March 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00020,1750,00033,175C-180, pp. 1-2.221
Total outstanding shares of each type6,50013,00038,8003,00061,300
Percentage owned by Claimants0.0%100.0%52.0%0.0%54.1%
26 March 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00020,175--C-169, pp. 44-46; CWS-8, ¶¶ 22-23, 26, 38- 39.222
Total outstanding shares of each type6,50013,00038,800--
Percentage owned by Claimants0.0%100.0%52.0%--
End 2014- Present A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00013,00020,175--C-192 ; CWS-8, Annex E, Table 2.223
Total outstanding shares of each type6,50013,00038,800--
Percentage owned by Claimants0.0%100.0%52.0%--

 

Table 3: Claimants' shareholding in JVE Sureste

(c) JVE Centro

192.

The Claimants collectively held at all relevant times at least 100.0% of the A2 shares, 65.1% of the B shares, and 69.2% of the total outstanding stock of JVE Centro.

 

DateShareholdingEvidence
Beginning 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00020,651   C-189 ; CWS-8, Annex E, Table 3.224
Total outstanding shares of each type6,00020,651   
Percentage owned by Claimants0.0%100.0%   
19 June 2013 A1 SharesA2 SharesB SharesTotal Shares  
Total shares owned by Claimants0,00020,65134,43355,084CWS-2, Annex C; CWS-7, Part I; CWS-8, Part I; CWS-12, Part I; CWS-13, Part I; CWS-16 to CWS-47, Part I.225
Total outstanding shares of each type6,00020,65152,93379,584
Percentage owned by Claimants0.0%100.0%65.1%69.2%226
End 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00020,651---C-189 ; CWS-8, Annex E, Table 3.227
Total outstanding shares of each type6,00020,651   
Percentage owned by Claimants0.0%100.0%---
Beginning 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00020,651---C-190 ; CWS-8, Annex E, Table 3.228
Total outstanding shares of each type6,00020,651   
Percentage owned by Claimants0.0%100.0%---
11 March 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00020,65134,43341,00096,084C-180, pp. 6-7.229
 Total outstanding shares of each type6,00020,65152,93350,000129,584  
Percentage owned by Claimants0.0%100.0%65.1%82.0%74.1% 
End 2014- Present A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00020,651---C-190 ; CWS-8, Annex E, Table 3.230
Total outstanding shares of each type6,00020,651   
Percentage owned by Claimants0.0%100.0%---

 

Table 4: Claimants' shareholding in JVE Centro

(d) JyV Mexico

193.

The Claimants collectively held at all relevant times at least 44.4% of the A1 shares, 100.0% of the A2 shares, 66.6% of the B shares, and 70.6% of the total outstanding stock of JyV Mexico.

 

DateShareholdingEvidence
End 2012 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,66736,9630,00063,630C-79 ; C-80 ; C-81 ; CWS-8, ¶ 37; CWS-26, ¶ 2; CWS-36, ¶ 2; CWS-47, ¶ 2; CWS-22, ¶ 5; CWS-29, ¶ 3; CWS -7, ¶ 9; CWS-13, ¶ 7; CWS-25, ¶ 4; CWS-8, ¶ 37.231
Total outstanding shares of each type9,00022,66755,8383,00090,505
Percentage owned by Claimants44.4%100.0%66.2%0.0%70.3%
Beginning 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,667---C-183 ; CWS-8, Annex E, Table 4.232
Total outstanding shares of each type9,00022,667   
Percentage owned by Claimants44.4%100.0%---
19 June 2013 A1 SharesA2 SharesB SharesTotal Shares  
Total shares owned by Claimants4,00022,66736,96363,630CWS-2, Annex C; CWS-7, Part I; CWS-8, Part I; CWS-12, Part I; CWS-13, Part I; CWS-16 to CWS-47, Part I.233
Total outstanding shares of each type9,00022,66755,46387,130
Percentage owned by Claimants44.4%100.0%66.6%73.0%234
End 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,667---C-183 ; CWS-8, Annex E, Table 4.235
Total outstanding shares of each type9,00022,667   
Percentage owned by Claimants44.4%100.0%---
 Percentage owned by Claimants44.4%100.0%66.6%0.0%70.6%  
Beginning 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,667---C-184 ; CWS-8, Annex E, Table 4.236
Total outstanding shares of each type9,00022,667   
Percentage owned by Claimants44.4%100.0%---
11 March 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,66736,9630,00063,630C-180, pp. 4-5.237
Total outstanding shares of each type9,00022,66755,4633,00090,130
End 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,667---C-184 ; CWS-8, Annex E, Table 4.238
Total outstanding shares of each type9,00022,667   
Percentage owned by Claimants44.4%100.0%---
5 January 2018 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants4,00022,66736,9630,00063,630C-228, pp. 16-19.239
Total outstanding shares of each type9,00022,66755,4633,00090,130
Percentage owned by Claimants44.4%100.0%66.6%0.0%70.6%

 

Table 5: Claimants' shareholding in JyV Mexico

(e) JVE DF

194.

The Claimants collectively held at all relevant times 100.0% of the A2 shares, and at least 58.4% of the B shares and 66.2% of the total outstanding stock of JVE DF.

 

DateShareholdingEvidence
End 2012 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00028,66937,9620,00066,631CWS-8, ¶ 37; CWS-19, ¶ 5; CWS-25, ¶ 5; CWS-13, ¶ 8.240
Total outstanding shares of each type4,00028,66965,3373,000101,006
Percentage owned by Claimants0.0%100.0%58.1%0.0%66.0%
Beginning 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00028,669---C-185 ; CWS-8, Annex E, Table 5.241
Total outstanding shares of each type4,00028,669   
Percentage owned by Claimants0.0%100.0%---
19 June 2013 A1 SharesA2 SharesB SharesTotal Shares  
Total shares owned by Claimants0,00028,66937,96266,631CWS-2, Annex C; CWS-7, Part I; CWS-8, Part I; CWS-12,
Total outstanding shares of each type4,00028,66964,96297,631
 Percentage owned by Claimants0.0%100.0%58.4%68.2%243 Part I; CWS-13, Part I; CWS-16 to CWS-47, Part I.242
End 2013 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00028,669---C-185 ; CWS-8, Annex E, Table 5.244
Total outstanding shares of each type4,00028,669   
Percentage owned by Claimants0.0%100.0%---
Beginning 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00028,669---C-186 ; CWS-8, Annex E, Table 5.245
Total outstanding shares of each type4,00028,669   
Percentage owned by Claimants0.0%100.0%---
11 March 2014 A1 SharesA2 SharesB SharesFixed SharesTotal Shares  
Total shares owned by Claimants0,00028,66937,9620,00066,631C-180, pp. 8-9; CWS-8, ¶ 41.246
Total outstanding shares of each type4,00028,66964,9623,000100,631
Percentage owned by Claimants0.0%100.0%58.4%0.0%66.2%

End 2014- PresentA1 SharesA2 SharesB SharesFixed SharesTotal Shares Total shares owned by Claimants 0,000 28,669C-186 ; CWS-8, Annex E, Table 5.247 Total outstanding shares of each type 4,000 28,669Percentage owned by Claimants0.0%100.0% - - -

 

Table 6: Claimants' shareholding in JVE DF

(iv) The Claimants' share ownership in E-Games and Operadora Pesa

(a) E-Games

195.
The Claimants have introduced the minutes of asambleas held on 6 March 2013, 16 July 2013 and 23 July 2013,248 all recording the Claimants' share ownership in E-Games. This evidence has not been contested by the Respondent.249
196.
From 7 June 2011 to 16 July 2013, the Claimants collectively held 43.33% of the total outstanding stock in E-Games. John Conley further held an option during that period to purchase another 13.33% of the total outstanding stock pursuant to an option agreement with Mr. Alfredo Moreno Quijano.250 Since 16 July 2013, Claimants have held 66.66% of the total outstanding stock in E-Games.

DateShareholderShareholdingEvidence
17 February 2006 Alfredo Moreno Quijano 50.00%C-117, p. 38.251
Antonio Moreno Quijano 50.00%
Percentage owned byClaimants0.00%
9 July 2009 Oaxaca Investments LLC 28.33%
John Conley 28.34%
Alfredo Moreno Quijano 15.00%C-63, pp. 31-32; CWS-19, ¶ 6; CWS-13, ¶ 9.252
Tomás Fernando Ruíz Ramírez 28.33%
Percentage owned byClaimants56.70%
7 June 2011 Oaxaca Investments LLC 28.33%C-63, p. 33; C-83 ; CWS-13, ¶¶ 11-22; CWS-19, ¶ 6; C-139, pp. 1, 3.253
John Conley 15.00%
Alfredo Moreno Quijano 28.34%
Tomás Fernando Ruíz Ramírez 28.33%
Total Shares Owned byClaimants43.33%
4 July 2011 Oaxaca Investments LLC 28.33%C-63, p. 34.254
John Conley 15.00%
Alfredo Moreno Quijano 28.34%
José Ramón Moreno Quijano 28.33%
Total Shares Owned byClaimants43.33%
1 March 2012 Oaxaca Investments LLC 28.33%C-63, p. 36.255
John Conley 15.00%
Alfredo Moreno Quijano 28.33%
José Ramón Moreno Quijano 14.17%
Jorge Armando Guerrero Ortiz 14.17%
Total Shares Owned byClaimants43.33%
19 June 2013 Oaxaca Investments LLC 28.33%CWS-2, Annex B256
John Conley 15.00%
Alfredo Moreno Quijano 28.33%
José Ramón Moreno Quijano 14.17%
Jorge Armando Guerrero Ortiz 14.17%
Total Shares Owned byClaimants43.33%
16 July 2013- Present Oaxaca Investments, LLC 33.32%C-63, p. 40; CWS-19, ¶ 6; CWS-13, ¶¶ 9, 19-21; CWS-2, Annex B; CWS-1, ¶ 18; CWS-7, ¶ 25.257
John Conley 33.34%
José Ramón Moreno Quijano 16.67%
Jorge Armando Guerrero Ortiz 16.67%
Total Shares Owned byClaimants66.66%

Table 7: Claimants' shareholding in E-Games

(b) Operadora Pesa

197.
The Claimants do not own, and have never owned, any shares in Operadora Pesa.258

c. Did the Claimants "own" the Mexican Companies at the relevant times?

198.
The Respondent submits that the Claimants do not own the Mexican Companies because ownership requires "full ownership or virtually full ownership of the company".259 The Claimants submit that they do because majority ownership (50% + 1) of the company's shares is sufficient to "own" the company.260
199.
The Tribunal agrees with the Respondent. To reach that conclusion, the Tribunal has considered the ordinary meaning of the terms of Article 1117, read in context.
200.
First, Article 1117 refers to owning "an enterprise". It does not refer to owning "equity securities of an enterprise". That choice of words should be given due weight. Elsewhere in Chapter 11, when defining "investment", the drafters of the Treaty took care to distinguish between "(a) an enterprise" and "(b) an equity security of an enterprise".261 If the drafters of the Treaty would have wanted to equate ownership of an "enterprise" with ownership of a certain number of the "equity securities of an enterprise", this suggests they knew how to do so, and that they would have done so.
201.
Second, Article 1117 does not refer to any share ownership threshold that, on the Claimants' case, must be reached to "own" the enterprise. The Claimants suggest that it is 50% + 1. But it would have been easy for the drafters of the Treaty to say that if that is what they had in mind. In fact, in another multilateral treaty to which all NAFTA Parties are also parties, that is what was done. Article XXVIII(n) of the GATS specifies that a company is "'owned' by persons of a Member if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Member".262 In the Treaty, the NAFTA Parties chose not to so define ownership of an enterprise.
202.
Third, while Article 1117 does not specify an ownership threshold, its context indicates that the NAFTA Parties envisaged a shareholding threshold that must always, regardless of applicable law or bylaws, be sufficient to confer the legal capacity to control the enterprise:

a. Article 1117(3) addresses the situation where an investor pursues claims under Article 1117 and either the investor "or a non-controlling investor in the enterprise" pursues parallel claims under Article 1116. This paragraph thus assumes that the only investor who can pursue an Article 1117 claim on behalf of an enterprise will be a controlling investor, because a "non-controlling" investor is deemed limited to the pursuit of an Article 1116 claim. It follows that the "ownership" of an enterprise in paragraph 1 of Article 1117 must always be sufficient to give the investor the legal capacity to control.

b. Article 1121(2) requires the enterprise to consent and provide a waiver as a condition precedent to the submission of an Article 1117 claim on its behalf by an investor. This again suggests that the investor has an equity holding that always confers on it the legal capacity to control the enterprise. If it has not, it cannot be presumed capable of procuring the consent and waiver from the enterprise. Article 1121(4) further confirms this when it provides that the waiver from the enterprise is not required when the NAFTA Party has deprived the investor of control.

c. Article 1113 contains the so-called denial of benefits clause. It allows a NAFTA Party to deny the benefits of the Treaty to an investor of another NAFTA Party that is an enterprise of that NAFTA Party when investors from non-NAFTA parties "own or control the enterprise and the enterprise has no substantial business activities in the territory of [that NAFTA Party]." The purpose is to avoid an obligation to extend Treaty benefits to a "sham" company set up by an investor from a non-NAFTA party. It is intrinsic to the notion of a sham company that its shareholders can control it so as to gain access to Treaty benefits. That is also how Canada interpreted this provision in its Statement of Implementation, where it stated "[u]nder [A]rticle 1113, a Party may deny the benefits of this chapter in the case that investors of a non-Party control the investment and the denying Party does not maintain diplomatic relations with the non-Party or the denying Party has prohibited transactions with enterprises of the non-Party which could be circumvented if the NAFTA applied. A Party may also deny benefits in the case of 'sham' investments (i.e., where there are no substantial business activities in a NAFTA country)."263 Thus, again, the requisite ownership threshold is assumed to be one that always confers the legal capacity to control.

203.
As the facts of this case show, the requisite share ownership that confers the legal capacity to control is not necessarily 50% + 1 of the outstanding stock. What that threshold is will vary for each enterprise, depending on what its by laws and/or the governing law provide for. The only equity holding that will always, independently of the circumstances, confer the legal capacity to control is ownership of all or virtually all of the outstanding stock. Contextual analysis therefore suggests that by "ownership" of an enterprise, the NAFTA Parties contemplated ownership of all the outstanding shares of that enterprise.
204.
The Tribunal also did not find "any relevant rules of international law applicable in the relations between the parties" within the meaning of Article 31(3)(c) of the VCLT that would affect this plain reading of "ownership" in Article 1117. The definitions of "ownership" in GATS Article XXVIII(n) and Article 13(a)(ii) of the MIGA Convention264 are of limited import because, as argued by the Respondent, the NAFTA Parties' choice not to further define "ownership" under Article 1117 must be respected.265 The Claimants' reference to Mexico's notification under the OECD Declaration as to the definition of "owned or controlled directly or indirectly" in that instrument is also inapplicable because it is not a rule applicable in the relations between all the NAFTA Parties. In performing an analysis under Article 31(3)(c) of the VCLT, the Tribunal will not "rewrite" or "substitute a plain reading"266 of Article 1117.
205.
This interpretation of "own" also gives meaning to "or control" in Article 1117. As discussed in the next section, "control" can mean both the legal capacity to control and de facto control. Article 1117 thus applies whenever the investor:

a. owns all of the outstanding shares in an enterprise (an enterprise that the investor "owns");

b. owns a lesser number of shares that is still sufficient in the specific circumstances to confer the legal capacity to control (an enterprise that the investor "controls"); or

c. does not own a number of shares sufficient to confer the legal capacity to control but is otherwise able to exercise de facto control (also an enterprise that the investor "controls").

206.
If, as the Claimants contend, "ownership" extended to scenario (b), then "control" would only be relevant to scenario (c). Yet, as explained below, the ordinary meaning of "control" encompasses both scenarios (b) and (c).
207.
Based on the foregoing, the Tribunal finds that the Claimants did not "own" the Juegos Companies or E-Games at the relevant times for purposes of Article 1117. As they never owned any shares in Operadora Pesa, they naturally did not "own" that company either.

d. Did the Claimants "control" the Mexican Companies at the relevant times?

208.
To answer this question, the Tribunal must answer the following questions:

a. Does "control" mean legal capacity to control, de facto control, or both?

b. To have the legal capacity to control, must the Claimants be contractually bound to vote as a block?

c. To have the legal capacity to control, what percentage of which class of shares in the Mexican Companies must the Claimants have owned at the relevant times?

d. On the evidence before the Tribunal, did the Claimants thus "control" the Mexican Companies at the relevant times?

(i) Does "control" mean legal capacity to control, de facto control, or both?

209.
The Respondent submits that "control" can only mean legal capacity to control.267 The Claimants submit that "control" can mean both legal capacity to control and de facto control.268
210.
In the Tribunal's view, the ordinary meaning of "control" favours the Claimants' position.
211.
The Merriam-Webster dictionary defines "control" to mean:

a: to exercise restraining or directing influence over

b: to have power over

c: to reduce the incidence or severity of especially to innocuous levels".269

212.
In the context of Article 1117, any ability to "exercise restraining or directing influence over" or to "have power over" a company would satisfy the ordinary meaning of control. There is no specific manner or form that "control" must take.
213.
The tribunal in Thunderbird determined that this indeed is the ordinary meaning of control:

The Tribunal does not follow Mexico's proposition that Article 1117 of the NAFTA requires a showing of legal control. The term "control" is not defined in the NAFTA. Interpreted in accordance with its ordinary meaning, control can be exercised in various manners. Therefore, a showing of effective or "de facto" control is, in the Tribunal's view, sufficient for the purposes of Article 1117 of the NAFTA.270

214.
The tribunal in that case further observed:

It is quite common in the international corporate world to control a business activity without owning the majority voting rights in shareholders meetings. Control can also be achieved by the power to effectively decide and implement the key decisions of the business activity of an enterprise and, under certain circumstances, control can be achieved by the existence of one or more factors such as technology, access to supplies, access to markets, access to capital, know how, and authoritative reputation. Ownership and legal control may assure that the owner or legally controlling party has the ultimate right to determine key decisions. However, if in practice a person exercises that position with an expectation to receive an economic return for its efforts and eventually be held responsible for improper decisions, one can conceive the existence of a genuine link yielding the control of the enterprise to that person.271

215.
The parties have given less airtime to the Tribunal's decision in Aguas del Tunari. That may be so because that tribunal was called upon to interpret control in the context of another investment treaty. The Tribunal finds the opinion by its preeminent majority (consisting of the late Professor David Caron and Mr. Henri Alvarez QC) to nonetheless provide a helpful disquisition on the subject.
216.
The majority first observed that "the ordinary meaning of 'control' would seemingly encompass both actual exercise of powers or direction and the rights arising from the ownership of shares".272 After an extensive analysis deploying the interpretation tools available under the VCLT, the majority concluded that "control", as used in the treaty under examination in that case, did include the legal capacity to control:

the phrase 'controlled directly or indirectly' means that one entity may be said to control another entity (either directly, that is without an intermediary entity, or indirectly) if that entity possesses the legal capacity to control the other entity. Subject to evidence of particular restrictions on the exercise of voting rights, such legal capacity is to be ascertained with reference to the percentage of shares held.273

217.
Unlike the Respondent's submissions in this case, the respondent in that case had argued that "control" meant only de facto control—and not the legal capacity to control. The majority rejected that proposition:

In the Tribunal's view, the BIT does not require actual day-to-day or ultimate control as part of the 'controlled directly or indirectly' requirement …. The Tribunal observes that it is not charged with determining all forms which control might take. It is the Tribunal's conclusion, by majority, that, in the circumstances of this case, where an entity has both majority shareholdings and ownership of a majority of the voting rights, control as embodied in the operative phrase 'controlled directly or indirectly' exists" (emphasis added).274

218.
While the majority only opined that a showing of de facto control was not required — and thus left open the possibility of establishing control in that manner—it also expressed apprehension about the definitional and evidentiary challenges of a de facto control standard:

Respondent's argument that 'control' can be satisfied by only a certain level of actual control has not been defined by the Respondent with sufficient particularity. Rather, the concept is sufficiently vague as to be unmanageable. … Once one admits of the possibility of several controllers, then the definition of what constitutes sufficient 'actual' control for any particular controller, particularly when an entity may delegate such actual control, becomes problematic. This becomes apparent with Respondent's difficulty in offering the Tribunal the details of its 'actual' control test. … Moreover, the many dimensions of actual control of a corporate entity range from day to day operations up to strategic decision-making. … The difficulty in articulating a test in the Tribunal's view reflects not only the fact that the Respondent did not provide such a test, but also the possibility that it is not practicable to do so and that, as discussed in the next paragraph, the resultant uncertainty would directly frustrate the object and purpose of the BIT.275

219.
This evidentiary challenge of proving de facto control also appears to have been on the mind of the Thunderbird tribunal:

In the absence of legal control however, the Tribunal is of the opinion that de facto control must be established beyond any reasonable doubt.276

220.
The Tribunal is unclear as to whether the Thunderbird tribunal intended to set a different standard of proof for de facto control and, if so, on what basis. What is clear, however, is the dual consonance of the Thunderbird and Aguas del Tunari opinions. To wit, both tribunals considered that: (i) there is nothing in the ordinary meaning of control that precludes either prong of control—legal capacity or de facto ; and (ii) de facto control will typically, and logically, present a greater evidentiary challenge.
221.
This reading of "control" is not affected by "any relevant rules of international law applicable in the relations between the parties" within the meaning of Article 31(3)(c) of the VCLT. As with the meaning of "ownership",277 the definitions of "control" in GATS Article XXVIII(n) and Mexico's reservation to the OECD Declaration are not "relevant rules" for purposes of interpreting Article 1117; and even if they were, the Tribunal would take them into account by concluding that, had the NAFTA Parties wished to apply those definitions to Article 1117, they would have done so in the Treaty. The Tribunal therefore finds that "control" in Article 1117, in accordance with its ordinary meaning, means both legal capacity to control and de facto control.

(ii) To have the legal capacity to control, must the Claimants be contractually bound to vote as a block?

222.
The Respondent submits that a binding agreement among shareholders is required to establish that they collectively control the company.278 The Claimants submit that no such binding agreement is required among shareholders to establish that they collectively control the company.279
223.
The Tribunal agrees with the Claimants. Where they can show that their collective shareholding and voting rights confer upon them the legal capacity to control the Mexican Companies by aligning their votes, there is no further requirement that they are legally bound to do so.
224.
If there were, multiple shareholders in an enterprise would never be able to pursue an Article 1117 claim on behalf of the enterprise absent a binding agreement among them requiring them to vote as a block. Nothing in the text or context of Article 1117 suggests that this was the intention of the drafters of the Treaty.
225.
When the issue has arisen in other treaty arbitrations, it has proven uncontroversial.

a. In Micula, the two individual claimants each held 50% of shares in two of the corporate claimants, and each held 46.72% of shares in the third corporate claimant.280 The tribunal held that it had jurisdiction over the corporate claimants as they were "effectively controlled" by the two Swedish citizens collectively.281 There was no discussion of any binding instrument between the shareholders or the need for it.

b. In von Pezold, eight family members owned indirectly 86.49% of the corporate claimants.282 Again, the tribunal found that it had jurisdiction over the corporate claimants because they were "effectively controlled" by these eight individuals together.283 There was no discussion of any binding instrument between the shareholders or the need for it.

c. In Perenco, the tribunal held that four individuals who each owned 25% of the parent company of the claimant had, collectively, control over that company and its subsidiaries.284 There was no discussion of any binding instrument between the shareholders or the need for it.

d. In Azinian, three claimants asserted a claim on behalf of a company of which they allegedly "collectively 'own[ed] and control[led] 74%'."285 There was no discussion of any binding instrument between the shareholders or the need for it.

(iii) To have the legal capacity to control, which percentage of which class of shares must the Claimants have owned at the relevant times?

226.
The Tribunal will address this question first for the Juegos Companies and then for E-Games.

(a) The Juegos Companies

227.
The Respondent submits that "in order to demonstrate 'control' of the Juegos Companies, the Claimants would need to demonstrate that they held a majority of the Series B shares at all relevant times".286
228.
The Tribunal agrees that a simple majority of the Series B shares suffices to confer the legal capacity to control for the Juegos Companies:

a. The bylaws of the JVE Sureste, JVE Centro, JyV Mexico and JVE DF are broadly similar. Generally, resolutions at a shareholders meeting can be adopted with a simple majority of the Series B shares. A shareholder with more than 50% of the Series B shares can also appoint three out of five members of the Board.287 Only a closed list of five decisions, including dissolution of the company or sale of substantially all its assets, requires a 75% vote of all shareholders. A further closed list of four decisions, including acquisition of a debt over US$ 5 million and increasing the capital stock, requires the vote of 75% of the Series B shares.288 Thus, a shareholder owning a majority of the Series B shares would have the power to (i) appoint a majority on the Board; (ii) adopt shareholder resolutions for most of the company's affairs, and (iii) veto all but a limited number of resolutions.

b. The bylaws of JVE Mexico differ slightly. Shareholder resolutions are generally adopted through a majority vote of the combined Series B and C shares in the company.289 Only a closed list of five major decisions, including dissolution of the company or sale of substantially all its assets, requires a 75% vote of all shareholders. A further closed list of four decisions, including acquisition of a debt over US$ 5 million and increasing the capital stock, require the vote of 75% of the Series B and C shares.290 This means that a shareholder owning 50% of the combined B and C shares will be able to (i) adopt most shareholder resolutions; and (ii) veto all but a limited number of shareholder decisions. Further, a shareholder owning more than 50% of Series A shares and 50% of Series B shares will have power to appoint a majority of the Board of JVE Mexico.291

(b) E-Games

229.
From 7 June 2011 to 16 July 2013, the by-laws of E-Games required a 75% of the vote of the shareholders to adopt any resolution.292 After 16 July 2013, E-Games's bylaws require a 70% shareholding to adopt most resolutions, including the election of members to the Board.293 Only a closed list of 8 major decisions, including acquisition of a debt over US$ 5 million, amendment of the bylaws, dissolution of the company or a sale of substantially all its assets, require 85% of the votes.294
230.
The Claimants must therefore—both parties agree—own 75% or 70% of the shares (as the case may be) in order to prove their legal capacity to control E-Games.295

(iv) On the evidence before the Tribunal, did the Claimants thus "control" the Mexican Companies at the relevant times?

231.
The Tribunal will answer the question first for the Juegos Companies, then for E-Games.

(a) The Juegos Companies

232.
Having found that the Claimants at all relevant times owned at least 50% of the Series B shares in each of JVE Sureste, JVE Centro, JyV Mexico and JVE DF, the Tribunal concludes that they had at all relevant times the legal capacity to control those companies. Further, having found that the Claimants at all relevant times owned at least 50% of each of the Series A and Series B shares, and at least 50% of the combined Series B and C shares, of JVE Mexico, the Tribunal also concludes that they had at all relevant times the legal capacity to control JVE Mexico. The Tribunal therefore concludes, on that basis, that the Claimants at all relevant times "controlled" the Juegos Companies for purposes of Article 1117.
233.
The Tribunal also finds that the Claimants were unable to exercise de facto control over the Juegos Companies (other than JVE Mexico) between, at least, September 2014 and July 2016, as a result of the August 2014 asambleas and their subsequent dispute with Chow and Pelchat. The Claimants squarely conceded as much when on 21 July 2015 they advised ICSID that they "do not have board control of the Juegos Companies".296
234.
The Tribunal, however, has already established that an investor can be said to "control" an enterprise either if it has the legal capacity to control (and regardless of whether it de facto exercises control) or if it exercises de facto control (and regardless of whether it has the legal capacity to control). In this case, the Claimants at all times retained the share ownership necessary to confer the legal capacity to control and, shortly after the Request was filed, recovered their ability to exercise de facto control.
235.
The Claimants' temporary loss of de facto control does therefore not detract from the Tribunal's finding that the Claimants did, at all relevant times, "control" the Juegos Companies for purposes of Article 1117.

(b) E-Games

236.
It is uncontroversial that the Claimants never held 70% of the shares in E-Games. They therefore did not have the legal capacity either to appoint all members of the Board or to push through proposed shareholder resolutions.
237.
They did, however, at all times have sufficient shares (more than 25% or 30%) to veto any proposed shareholder resolutions. In addition, the quorum required for a valid shareholder meeting being 85% of the capital stock on a first call and 70% of the capital stock on second call or later calls, the Claimants had the ability to prevent a quorum from ever being reached for any Board meeting.297 That already gave them a considerable degree of de facto control.
238.
Further, the evidence on record establishes to the Tribunal's satisfaction that the two Original Claimants that are shareholders in E-Games—Oaxaca and John Conley— exercised de facto control over E-Games.
239.
The framework within which the Tribunal has assessed the evidence of de facto control is the one set out by the Thunderbird tribunal, which the Tribunal considered persuasive. The Thunderbird tribunal found that the "ability to exercise significant influence on the decision-making" and being the "driving force" in the company would be significant evidence of de facto control.298 Beyond influence on decision-making, the Thunderbird tribunal also took into account other factors such as (i) being exposed to the economic consequences of decisions in the company299 and (ii) having expertise and involvement in the capitalisation and operation of the business.300 To the Tribunal's mind, these are examples of relevant factors, although by no means the only ones.
240.
The record shows that the Claimants wielded pervasive influence over the decision-making in E-Games:

a. Board control. Prior to 16 July 2013, Jose Ramon Moreno testified that he and his brother, Alfredo Moreno, as Directors on the Board of E-Games "always" acted subject to the instructions of the Claimants, and the "reality" was that "in no case" did he act without the knowledge of Gordon Burr.301 Further, Claimant Gordon Burr has been the President of the Board of E-Games since 16 July 2013 to the present,302 and Claimant John Conley has been a director on the Board since 16 July 2013 to the present.303 This latter point is accepted by the Respondent.304

b. Shareholder voting control. The Claimants were able to always align the votes of the non-Claimant shareholders:

i. José Ramón Moreno, who has been a shareholder in E-Games since 4 July 2011, testified that, while he "always had freedom" in making voting decisions,305 he has always voted—and would have continued to vote306 — with the Claimants on decisions related to the casinos' operations, without exception.307

ii. Alfredo Moreno followed Mr. Conley's vote on "all key issues".308 Further, from June 2011 until 16 July 2013, Alfredo Moreno was contractually prevented under an option agreement from voting 13.34% of his shares in a manner inconsistent with Mr. Conley's views without first providing Conley with the right to purchase those shares at a prearranged price.309

c. Control over incorporation. In 2006, Gordon Burr and Conley instructed José Ramón Moreno and Alfredo Moreno to incorporate E-Games to hold casino assets.310 It was a decision taken by the Claimants "despite [the fact that Jose Ramon Moreno and Alfredo Moreno] are listed in [the] paperwork."311 The Claimants also provided a "significant majority" of the capital used to incorporate the company.312

d. Control over direction and purpose of E-Games. The Claimants have continued to hold decision-making power over the direction and purpose of E-Games after incorporation. In 2008, Claimants Conley, Gordon Burr and Erin Burr decided to "repurpose" E-Games as the permit holder for the casino business.313 Gordon Burr also testified that he had power to "replace[]" employees of E-Games.314

e. Economic exposure to the business. Gordon Burr testified that E-Games never paid out any dividends.315 Instead, at the end of every month, E-Games would transfer all its net profits to each of the Juegos Companies, pursuant to the Machine Lease Agreements316 between E-Games and those companies.317 As a result, the Claimants were exposed to the performance of E-Games through their majority shareholding in the Juegos Companies.

241.
Based on the foregoing, the Tribunal is satisfied, on the preponderance of the evidence, that the Claimants de facto controlled E-Games at all relevant times.

(c) Operadora Pesa

242.
The Claimants own no shares in Operadora Pesa. The Respondent submits that, even if the Claimants did at all relevant times control Operadora Pesa (which it does not concede), the Tribunal would still have no jurisdiction over an Article 1117 claim on its behalf because the Claimants have made no investment in Operadora Pesa.318
243.
The Tribunal agrees with the Respondent.
244.
Article 1101 of the Treaty provides that it "applies to measures adopted or maintained by a Party relating to … (a) investors of another Party; [and] (b) investments of investors of another Party in the territory of the Party …" Article 1117 requires that the enterprise be owned or controlled by an "investor". Article 1139 in turn defines "investor of a Party" as "… a national or an enterprise of such Party, that seeks to make, is making or has made an investment."
245.
Reading these provisions together, the Claimants must establish that they are "investors" in Operadora Pesa for the Treaty to apply to measures allegedly adopted against Operadora Pesa. For the Claimants to be "investors" in Operadora Pesa, they must show that they seek to make, are making or have made an investment in that company. It is undisputed that they have not. The mere fact that the Claimants may control Operadora Pesa—a point the Tribunal need not decide—would still not make Operadora Pesa an "investment of" the Claimants.
246.
Article 1117 cannot be read as allowing the nationals of one NAFTA Party to pursue Treaty claims on behalf of an enterprise of another NAFTA Party if they cannot show to have an investment in that enterprise. If the Claimants were right, it might be possible, for example, for a Mexican company to appoint a US national as its sole director and for that director then to pursue claims under the Treaty on behalf of the Mexican company against Mexico, claiming that she need not be an "investor" herself to pursue such Treaty claim if she exercises de facto control. That proposition runs counter not only to the terms of Chapter 11, but also to its fundamental object and purpose, which is the protection of investments by investors of another NAFTA Party.
247.
For the foregoing reasons, the Tribunal dismisses the Claimants' claim under Article 1117 insofar as it pertains to Operadora Pesa.

2. Article 1121: have the Mexican Companies given consent in accordance with Article 1121?

248.
Article 1121(2) requires that the Mexican Companies have consented to Treaty arbitration and waived the right to pursue domestic proceedings. As explained above, Article 1121(3) required their consent to be conveyed in a certain manner.
249.
The Respondent objects that: (i) the Juegos Companies did not consent, or at least did not consent until 5 August 2016, when the relevant POAs were submitted by Quinn Emanuel;319 and (ii) there is insufficient proof of consent by E-Games where the Respondent received on 24 October 2014 a letter purportedly sent on behalf of E-Games stating that it was "desisting from" the Notice (referred to as the desistimiento).320
250.
The Claimants submit that: (i) the Juegos Companies validly consented as the consents were signed by a member of the Board, Pelchat, who had full authority to execute such waivers;321 (ii) the submission of the Juegos Companies' consents on 5 August 2016 did not change the date of the submission of the claim to arbitration—15 June 2016— as it was a matter of admissibility that could be subsequently cured;322 and (iii) the desistimiento had no effect on the validity of E-Games's consent.323
251.
The Tribunal will address the objection first as it pertains to the Juegos Companies; then as it pertains to E-Games.

(a) The Juegos Companies

252.
The chronology surrounding the submission of the POAs of the Juegos Companies is undisputed. On 6 July 2016, the Centre wrote to the Claimants, requesting "copies of the Mexican Companies' written consent to arbitration" and "copies of the waivers issued by the Mexican Companies".324 The Claimants then admitted, in a reply letter to the Centre on 21 July 2016, that "because Claimants do not have board control of the Juegos Companies, they are not at moment in a position to provide the requested affirmation."325 As Claimants explained then, this was because Chow and Pelchat, who had been elected to the Boards of the Juegos Companies on 29 August 2014,326 still refused to step down at the time of the filing of the Request.327
253.
Eventually, on 5 August 2016, the Claimants sent a letter to the Centre, attaching POAs from the Juegos Companies signed by Pelchat, who was then a member of the Board of the Juegos Companies, albeit one who had overstayed his welcome. Nonetheless, Pelchat had the power to "submit [the company] to arbitration" pursuant to POAs granted by the shareholders of each of the Juegos Companies when Pelchat was elected to their Boards.328
254.
It is clear from the foregoing that, at the time the Request was filed with the Centre, the Claimants did not have de facto control over the Juegos Companies and that this was the reason why they were unable to procure POAs from the Juegos Companies at that time. It is equally clear that when on 5 August 2016 the POAs were submitted, the Claimants had recovered that de facto control.
255.
The POAs for the Juegos Companies are not only prospective in nature. They also ratify all steps taken previously by Quinn Emanuel on the Juegos Companies' behalf in connection with this arbitration, including the filing of the Request.329 No suggestion has been made, and certainly no evidence has been presented to establish, that, as a matter of Mexican (or any other applicable) law, the Juegos Companies could not so ratify all prior actions by their agent, including the acceptance of the Respondent's offer to arbitrate; or that such ratification could not produce its effects ex tunc, as at the time of the ratified act.
256.
The Tribunal therefore concludes that the Juegos Companies have consented to arbitration as required by Article 1121(2) and that their consent was effective as of the date the Request was filed.
257.
While the POAs were submitted some 7 weeks after the Request was filed and were therefore not "included in the submission of a claim to arbitration" as required by Article 1121(3), the Tribunal has already observed that that requirement goes to admissibility and that a defect in this regard can be cured—as indeed here it was.

(b) E-Games

258.
The Respondent's objection as regards consent by E-Games is not based on the belatedness of the relevant POA.330 Rather, the Respondent alleged in its Memorial that E-Games purportedly withdrew "as an enterprise on whose behalf a claim would be brought under the [Notice]", thus casting doubt on whether it ever consented.331 The Respondent based this contention on a document, the desistimiento, signed by a Mr. José Luis Cárdenas Segura (Segura).332 The Respondent has not pressed the point, never returning to it in any of its pleadings after its initial memorial, save for a brief mention in the Reply in a different context—as evidence that the Claimants refused to participate in negotiation discussions.333
259.
The Claimants contend in response that Segura manifestly did not have the authority to sign the desistimiento ; it was done unbeknownst to the Claimants; it was the result of a fraud perpetrated against them; and those circumstances render the desistimiento a document without any legal effect.334 The Claimants also argue that E-Games does not have "standing as an investor under NAFTA to pursue claims on its own behalf" and therefore has no "authority to withdraw or desist from claims advanced on its behalf by the Claimants" under Article 1117.335
260.
The Tribunal has carefully reviewed the record relating to this matter. It finds that, on the preponderance of the evidence, the following facts have been established.

a. Segura started working at E-Games in 2009 in his first job as a lawyer.336 In May 2014, Segura was asked to leave E-Games after the closure of the casinos in April 2014.337 On 10 October 2014, after Mexico initiated investigations against the Claimants for alleged illegal gambling activities (the PGR Investigation), Chow met with Gutiérrez to discuss their legal strategy. Chow asked Gutiérrez to hire Segura to assist with the defence against these investigations.338 Gutiérrez asked Chow to confirm this discussion in writing.339 At this time, Segura apparently continued to hold a valid power of attorney by E-Games that authorized him to act on their behalf in respect of certain limited matters despite no longer working for E-Games.340

b. On 12 October 2014, Chow sent an email to Gutiérrez, copying Gordon Burr, confirming their discussion regarding the hiring of Segura.341 That same day or the following day, Gutierrez spoke with Burr on the phone. Burr, as President of the Board of E-Games, approved the hiring of Segura to assist with the PGR Investigation. Gordon Burr did not give Segura any other authorisation or instruction.342

c. Shortly after, in mid-October 2014, a lawyer by the name of Noriega, called Segura and asked for his help in ongoing efforts to reopen the casinos.343 Segura had only had limited previous interactions with Noriega but knew Noriega as a lawyer who "occasionally" provided advice to E-Games.344 Noriega asked Segura to work with Chow's attorney, a man named Ramírez, in these efforts to reopen the casinos.345 Noriega also told Segura that the Claimants were aware of these efforts.346

d. Two or three days after the call, Noriega met with Segura. Present at the meeting were Noriega, Ramírez, a man by the name of Santillán, and another person whose name Segura could not recall.347 Santillán was allegedly a "former SEGOB official … who owns a company in the casino business in Mexico called Producciones Móviles."348 Producciones Móviles allegedly received a gaming permit under virtually identical circumstances as E-Games: "first as an independent operator under E-Mex's permit, then as an independent permit holder pursuant to a SEGOB resolution in late 2012."349

e. At the meeting, Noriega made representations that new shareholders might buy out the US shareholders in the Juegos Companies in order to allow the casinos to reopen, and asked for Segura's help in this regard.350 He also represented that "all those involved" knew of these efforts, which Segura assumed included the Claimants.351 Ramírez called Gutiérrez and put him on the phone with Segura, and Gutiérrez and Segura briefly discussed the PGR Investigation, but not the NAFTA claim.352 This phone call further led Segura to believe that the Claimants knew of these apparent efforts to reopen the casinos since Gutiérrez was the Claimants' attorney.353 The meeting ended with Noriega telling Segura that he would have to sign some documents necessary for the reopening of the casinos at the next meeting. Noriega showed him one such document, where E-Games purported to accept SEGOB's declaration of the invalidity of E-Games' independent gaming permit (the allanamiento).354

f. On 24 October 2014, Noriega asked to meet Segura again to sign the documents. Noriega did not tell Segura about the contents of the documents, only that they were necessary for the reopening of the casinos.355 When Segura arrived at the meeting at Santillán's offices, Alfredo Moreno, who used to be Segura's "boss" at E-Games, was in the waiting room.356 However, they did not have a conversation other than an exchange of greetings.357 The secretary ushered Segura into a meeting room, and asked Segura to sign several documents.358 One of them turned out later to be the allanamiento and the other turned out to be the desistimiento.

g. Segura testified at the hearing that while he was working at E-Games "it was quite common to sign a lot of documents very rapidly" and that he "often signed [] documents without reading them or reviewing them."359 Segura further testified that he signed the documents as he "trusted" Noriega.360 In relation to the desistimiento, Segura testified that he was not able to read the contents of the document because the secretary did not let go of it.361 He was only able to see that it was for the Ministry of Economy.362 After signing the documents, Segura was not given a copy of the documents, nor did he submit it to the Ministry of Economy.363 The Ministry also never contacted Segura regarding this document, whether to acknowledge receipt or to ratify it.364 Segura, suspicious of the pressure he was being subjected to sign the documents without review, testified that he deliberately altered his normal signature in the event this issue came back to haunt him.365 Segura further testified that Noriega did not contact him again after this.366

h. On the same day, i.e. 24 October 2014, both the Claimants and the Respondent agree, the Ministry of Economy received the desistimiento signed by Mr. Segura.367 Ms. Martínez testified that, at the time, she "most likely [] was thinking that this was something related to the litigation with the [casino operation] permit" and "saw this [as something] separate from the arbitration".368 On 5 November 2014, Ms. Martínez sent an email to Ms. Menaker, a partner at White & Case, following up on the "NOI Questionnaire" sent on 24 July 2014.369 Her email made no mention of the desistimiento. On 18 November 2014, Ms. Menaker responded to Ms. Martínez, stating "I don't have any additional information to provide right now. If the client decides to pursue the claim, I will get in touch with you."370

i. In April 2015, after regaining access to SEGOB's files, Gutiérrez discovered several unauthorized documents with Segura's signature, including the allanamiento and desistimiento.371 Neither Burr nor Gutiérrez knew of these documents, so they approached Segura. Segura explained the facts surrounding the signing of the documents, including the desistimiento, to Burr and Gutiérrez.372 Segura testified at the hearing that this was the first time he had spoken to anyone from E-Games about the signing of the documents.373

j. On 13 July 2016, Gutiérrez met with Vejar (Director of Consulting and Negotiations) from the Ministry of Economy. According to Gutierrez, Vejar told him that the Ministry doubted the validity of the desistimiento, which is why they did not respond to it nor did they issue an official resolution acknowledging its receipt.374

261.
This record suggests that the provenance of the desistimiento was dubious and that Segura may have been used as a pawn in a scheme to which the Claimants were not privy. Whether those circumstances would prevent the desistimiento from having legal effect vis-à-vis the Respondent as a matter of Mexican law remains an open question. No evidence of the relevant Mexican law on this point was proffered.
262.
The Tribunal, however, need not resolve that question to dispose of the Respondent's objection. That objection fails on the terms of the desistimiento and the terms of the Treaty—even if it is assumed that it did have legal effect under Mexican law:

a. First, E-Games is not a party to this proceeding. It could not withdraw a claim it did not submit to arbitration. Only the Claimants could do so. Therefore, the effect of the desistimiento could not be the withdrawal of the Article 1117 claim.

b. Second, the stated object of the desistimiento is not the withdrawal of the Article 1117 claim—the claim had not yet been submitted at the time of the desistimiento. Rather, the desistimiento purports to inform the Respondent that E-Games is "desisting" from the Notice —the notice of intent—issued on its behalf. Accordingly, E-Games would, at most, have "desisted" from the Notice.

c. But third, E-Games could not even do that because it did not issue the Notice. At most, in the desistimiento E-Games would have informed the Respondent that it did not, in fact, intend to consent to the submission of an Article 1117 claim on its behalf.

263.
This is also how the Respondent appears to have deployed the desistimiento in this proceeding: as evidence of E-Games's refusal to consent to arbitration. But that proposition cannot prosper. The Claimants have produced a POA for E-Games that confirms its consent to this arbitration. Even if the effect of the earlier desistimiento were that the Notice should be read to exclude E-Games from its scope (because E-Games "desisted" from that Notice), that could not undo the subsequent confirmation by E-Games of its consent under Article 1121(2) to the submission of the Article 1117 claim on its behalf.
264.
Instead, put at its highest, the desistimiento would give rise to a defect under Article 1119: effectively the Notice would not have been sent on behalf of E-Games, even though later a claim was submitted on its behalf. The Tribunal would dispose of that defect as it did in respect of the Additional Claimants.

VI. COSTS

265.
On 1 October 2018 the parties submitted their statements of costs incurred in connection with this phase of the proceeding. Pursuant to Procedural Order No. 4, the parties' statements were divided into four categories: (a) attorney fees; (b) expert fees; (c) share of each party's advance requested by ICSID to cover the arbitration costs;375 and (d) any other arbitration-related disbursements incurred in connection with this phase. The Claimants claim a total of US$ 8,453,600.11. The Respondent claims a total of US$ 1,699,362.40.
266.
The Tribunal defers its decision regarding category (c) above—arbitration costs incurred in connection with this phase—to the final award in this proceeding. Below the Tribunal proceeds to apportion categories (a), (b) and (d) above—legal costs incurred in connection with this phase.
267.
The Tribunal has wide discretion under the Additional Facility Rules to apportion legal costs. Absent contrary agreement by the parties, the guiding principle should be that costs follow the event.
268.
At first blush, application of that principle in this case should favour the Claimants: they did defeat the Respondent's objections save insofar as Operadora Pesa is concerned.
269.
There are a number of reasons, however, why application of the principle in this case does not warrant an award of all—or even the majority—of the Claimants' legal costs.
270.
First, the Tribunal observes that the Claimants' legal costs are more than 580% of the Respondent's legal costs, even though the Respondent's legal team displayed the same level of professional competence, effectiveness, integrity and courtesy as the Claimants' legal team. Part of that discrepancy may be explained by the fact that the Respondent's legal team was hybrid in composition, including both in-house counsel from the Government and external lawyers from Mr. Mowatt's firm. To fix a benchmark for reasonable legal costs that can be awarded relating to this phase, the Tribunal will therefore take the amount of legal costs incurred by the Respondent and multiply it by two, to US$ 2,798,724.8.
271.
Second, a number of factors militate against an award of 100% of that reasonable amount of legal costs:

a. First, the Respondent was successful in its Article 1117 objection regarding Operadora Pesa.

b. Second, the Tribunal recognises that the Respondent's objections were not frivolous. Issues 2 and 3 in particular raised questions of law that remain largely unsettled.

c. Third, while they were ultimately largely victorious, the Claimants could have avoided all debate for some of these objections and much of the debate for others, if they had: served a fully compliant Notice; observed all applicable corporate formalities at the Juegos Companies, such as holding annual asambleas as required by law and the by laws of those companies;376 and adduced from the outset all of the requisite evidence to prove their control of the Mexican Companies.

d. Fourth, the Tribunal places particular weight on the Claimants' failure to file a fully compliant Notice, not only because it would have avoided the Respondent's objection under Article 1119 but it could have significantly narrowed the issues in dispute relating to the Respondent's Article 1122 objection: had the Additional Claimants been included in the Notice, the Claimants would not have been required, as they were, to hedge their Article 1117 defence by trying a difficult case that the Original Claimants had, in June 2016, de facto control over the Juegos Companies.377

272.
Based on the foregoing, the Tribunal awards the Claimants 50% of US$ 2,798,724.8, i.e., US$ 1,399,362.40, in connection with the legal costs they incurred in this phase.

VII. DISPOSITIF

273.
For the reasons set out above, the Tribunal:

a. Dismisses the Respondent's objection based on Article 1121 of the Treaty in respect of the Claimants and the Mexican Companies;

b. Dismisses the Respondent's objections based on Articles 1119 and 1122 of the Treaty in respect of the Additional Claimants and Operadora Pesa;

c. Grants the Respondent's objection based on Article 1117 of the Treaty in respect of Operadora Pesa;

d. Dismisses the Respondent's objection based on Article 1117 of the Treaty in respect of the Mexican Companies other than Operadora Pesa;

e. Decides accordingly that it has jurisdiction over the claims by the Claimants on their own behalf under Article 1116 of the Treaty and on behalf of the Juegos Companies and E-Games under Article 1117 of the Treaty, and that those claims are admissible;

f. Awards the Claimants US$ 1,399,362.40 in legal costs, payable by the Respondent within sixty (60) days from the date of this Partial Award; and

g. Directs the Parties to confer regarding a procedural timetable for the merits phase and to report to the Tribunal regarding the same by 15 August 2019.

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