Tecnicas Medioambientales Tecmed S.A. ("Tecmed") v. Mexico
International Centre for Settlement of Investment Disputes
ICSID Case No. ARB(AF)/00/2, Award, 43 I.L.M. 133 (2004)
Tecnicas Medioambientales Tecmed S.A. (Tecmed), a Spanish company, won an auction for assets tied to a hazardous-waste landfill in Mexico and formed a subsidiary, Cytrar, to operate it under a renewable license from Mexico's environmental agency, INE. When Tecmed sought to renew the license, INE rejected the renewal and ordered the landfill closed; Tecmed claimed the denial was really driven by a change in local political leadership rather than any deficiency in its operations, and it brought an ICSID arbitration against Mexico under a Spain-Mexico investment treaty, seeking compensation for what it characterized as an expropriation of its investment.
Whether a government's refusal to renew an operating license, which effectively ends an investor's ability to use its investment, constitutes an indirect expropriation requiring compensation under an investment protection treaty.