Marvin Feldman v. Mexico

Marvin Feldman (plaintiff), a U.S. citizen, owned a Mexican company (CEMSA) that exported cigarettes bought from retail stores. Mexican law offered exporters a tax rebate, but only manufacturers — who refused to deal with exporters or share tax information — had the invoices needed to prove the rebate was owed, making it effectively impossible for any store-supplied exporter to qualify. Despite this, Mexico paid CEMSA rebates for years before abruptly stopping and demanding repayment, while continuing to pay the same rebates to a competing group of Mexican-owned exporters (the Poblano Group) without seeking repayment from them. After CEMSA filed for NAFTA arbitration alleging expropriation and discriminatory treatment, Mexico audited CEMSA and denied its new registration requirement, while approving Poblano Group's registration.