Odyssey Marine wins NAFTA arbitration case over denied Mexican offshore phosphate project permit

HOUSTON (ICIS)–US subsea mineral exploration company Odyssey Marine Exploration announced it has been awarded $37.1 million in its arbitration with Mexico under Chapter Eleven of the North American Free Trade Agreement (NAFTA).

Odyssey said it has received notification from the International Centre for Settlement of Investment Disputes (ICSID) of the arbitral award on the claims involving Odyssey and its subsidiary, Exploraciones Oceanicas (ExO) related to a planned offshore phosphate project.

The company took legal action in 2018 over the rejection of an environmental permit in 2016. Finding it difficult to resolve, Odyssey said it took the NAFTA action after it determined it needed to commence the arbitration to protect its shareholders’ investment.

The award orders Mexico to pay the fine for breaching its obligations under NAFTA, plus interest at the one-year Mexico Treasury bond rate, compounded annually, from 12 October 2018, until paid in full as well as the arbitrators’ fees and ICSID administrative costs.

The company said the amounts awarded are net of Mexican taxes and Mexico may not tax the award and that it expects most, or all will be used to satisfy its litigation financing obligations.

Odyssey said ExO is also once again challenging the decision of the environmental agency before Mexico’s highest federal administrative court, the Tribunal Federal de Justicia Administrativa. It did not reveal when it expects a decision.

Company officials said the ruling validates their position that the environmental agency wrongfully denied the permit despite it having received extensive input to determine not only an economically feasible development plan but one which is environmentally responsible.

“The project remains strategically significant and commercially viable,” said Mark Gordon, Odyssey Marine Exploration CEO. “We are poised to continue advancing our projects globally, while also collaborating with nations interested in exploring their underwater mineral resources to meet the escalating demand for critical minerals. “

“Our focus remains on minerals that offer solutions to pressing global challenges, such as mitigating carbon emissions through renewable energy adoption and enhancing fertilizer accessibility to support an ever-growing global population.”