The latest dispute over cancelled Sonora Lithium Project concessions has reignited backlash from trade groups over the alleged toxicity of investor-state dispute settlements.<\/p>\n
London-based investor Cadence Minerals and its subsidiary REM Mexico are suing the Mexican government over various measures, including the revocation of mining concessions<\/a> alleged to have \u201cdestroyed\u201d the value of the companies\u2019 investments in a lucrative mining project.<\/p>\n The international arbitration proceedings<\/a> were launched on 24 July under investor-state dispute settlement<\/a> (ISDS) provisions contained in the 2006 agreement for the Promotion and Reciprocal Protection of Investment between the UK and Mexico (UK-Mexico BIT).<\/p>\n The move has been slammed by trade justice groups Global Justice Now and Trade Justice Movement, who say secretive ISDS proceedings allow foreign corporations to hold governments to \u201cransom\u201d while undermining countries\u2019 ability to manage their own resource industries.<\/p>\n The proceedings<\/p>\n The crux of the arbitration rests on the Sonora Lithium Project, one of the largest lithium resource projects in the world. Cadence holds an interest in the project through a 30% stake in Mexilit and Megalit, the joint-venture vehicles that held seven of the nine mineral concessions in the project. The Sonora Lithium mine is valued at $22.6 billion.<\/p>\n Amid Mexico\u2019s nationalisation of its lithium sector, the country amended its Mining Law by banning lithium concessions, giving state-owned entities exclusive rights over lithium mining operations and declaring lithium a strategic sector.<\/p>\n In a statement published prior to the initiation of the arbitration proceedings, Cadence alleged that, despite the government confirming that existing concessions would be unaffected, the General Directorate of Mines (DGM) reviewed nine lithium concessions held by Mexican subsidiaries and cancelled Mexilit and Megalit\u2019s concessions.<\/p>\n Cadence alleged that Mexico breached \u201cvarious BIT obligations\u201d, including its requirement \u201cnot to unlawfully expropriate the investments of UK investors [\u2026] and its obligation to treat such investments fairly and equitably\u201d.<\/p>\n Cadence and REM Mexico previously confirmed that they had approached the Mexican government for consultations and negotiations under the UK-Mexico BIT but now seek to pursue their claims through arbitration to \u201cprotect the value of their investments and seek appropriate redress\u201d. They said they \u201cremain open to a negotiated settlement with Mexico\u201d.<\/p>\n Cadence Minerals and REM Mexico have entered an arbitration funding agreement (AFA) with LCM Funding, under which LCM has agreed to pay the parties\u2019 legal fees and disbursements with no repayment obligations if the claims are unsuccessful.<\/p>\n In Cadence Minerals and REM Mexico (claimants) v United Mexican States (respondents), the claimants are represented by Clifford Chance. The respondent is represented by the General Counsel for International Trade at the Secretariat of Economy of Mexico.<\/p>\n Mounting disputes<\/p>\n Disputes over cancelled mining concessions connected to the Sonora Lithium Project are piling up.<\/p>\n In 2024, Bacanora, its Chinese parent company Ganfeng and its UK affiliate Sonora Lithium Ltd brought a claim under Mexico\u2019s investment treaties with the UK and China over cancelled mining concessions in Sonora based on failure to comply with minimum investment obligations. Bacanora seeks return of the lithium properties or damages. Those proceedings are ongoing.<\/p>\n The estate of Ian Colin Orr-Ewing, which owns a 3% gross overriding royalty (GORR) in the project, also launched a claim under the UK-Mexico BIT in 2025.<\/p>\n That dispute is complicated by a claim brought by Bacanora against the estate in 2017, challenging the validity of the GORR, which is to be paid by Bacanora on production from Sonora. In 2025, the Court of King\u2019s Bench of Alberta dismissed Bacanora\u2019s request to stay the Orr-Ewing proceedings until the completion of its arbitration with Mexico. That dispute is ongoing.<\/p>\n Held ransom<\/p>\n The Cadence dispute has sparked renewed criticism over ISDS, also known as \u2018corporate courts\u2019, which enables international companies to bypass national laws to take action against alleged profit risks.<\/p>\n In a joint statement, issued in the context of the Cadence arbitration, Global Justice Now and Trade Justice Movement slammed the corporate court system as \u201ctoxic\u201d.<\/p>\n Global Justice Now trade campaign manager Cleodie Rickard said the group had \u201cwatched with grave concern as corporate court cases challenge climate policies, working to block or penalise the green transition\u201d, and is now seeing many, predominately British, companies leverage the claims \u201cto determine who benefits from this transition, as cases over \u2018critical mineral\u2019 projects rise\u201d.<\/p>\n Rickard added that these cases threatened countries\u2019 abilities to oversee their own resource industries in the public interest, while the \u201cfinancial drain and regulatory chilling effect of corporate court cases\u201d pushed critical issues, including how traditional mining harms are creeping into mineral projects, \u201cfurther from governments\u2019 agenda as they are held to ransom by foreign corporations\u201d.<\/p>\n \u201cBritish companies should not have a privileged route to challenge decisions made by another country about how its natural resources are managed,\u201d added Tom Wills, director of the Trade Justice Movement. \u201cISDS gives foreign investors extraordinary powers to attack public-interest policies, while affected communities have no equivalent voice.\u201d<\/p>\n Wills further called on the UK government to \u201cstop defending this toxic system, reject ISDS in new agreements and start withdrawing from the treaties that allow these claims\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"The latest dispute over cancelled Sonora Lithium Project concessions has reignited backlash from trade groups over the alleged…\n","protected":false},"author":2,"featured_media":721497,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[238546,59,57,58,12423,50,56,238547,54,55],"class_list":["post-721496","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-concessions","tag-gb","tag-great-britain","tag-greatbritain","tag-investor-state-dispute-settlement","tag-news","tag-uk","tag-uk-mexico-bit","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/721496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=721496"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/721496\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/721497"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=721496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=721496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=721496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}