This is the final result of an investigation. Developing practices in international
trade and investment law bring new challenges to investors
who are always seeking better and more certain grounds to develop their
businesses abroad. In that regard, free trade agreements and bilateral
investment treaties set a legal frame under which a minimum standard of
treatment is set for both the foreign investor and the Host State. The parties
to NAFTA, especially the United States and Canada were concerned
that Mexico could not be held accountable for measures that would be
tantamount to expropriation. With that purpose Chapter Eleven was created
with a very broad definition on its terms and a procedure that would
allow a foreign investor from another Party, to submit a claim before
an international tribunal without having to exhaust the local remedies.
These two characteristics allowed Metalclad to submit a claim against
Mexico for some domestic measures that allegedly amounted to a creeping
expropriation. The Metalclad award introduced a very broad definition
of indirect expropriation, which according to some academics it would
undermine the regulatory powers of NAFTA Members and would drive
states in a race to the bottom regarding safety, environmental and health
regulations. My hypothesis is that based on the revision of the Tribunal's
award and the recent developments in NAFTA jurisprudence, Metalclad
did not have any relevant impact regarding the definition of expropriation.