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Why this Decision Matters
In The United Mexican States v. Gordon G. Burr, 2025 ONSC 5724, the Ontario Superior Court of Justice (Commercial List) dismissed an application by the United Mexican States ("Mexico") to set aside an international arbitral award of over USD $80 million rendered under Chapter 11 of the North American Free Trade Agreement ("NAFTA").1
The decision reinforces that the threshold for setting aside international arbitral awards on procedural fairness grounds is high and that courts will not second-guess arbitral tribunals' discretionary rulings on evidentiary matters or reweigh substantive arguments.
Background and Factual Overview
The respondents comprised 37 United States nationals who operated a casino business in Mexico. In November 2012, SEGOB, Mexico's gaming regulator, granted them an independent gambling permit. In August 2013, following a change in political leadership earlier that year, SEGOB revoked the permit and, in February 2014, forcibly closed the casinos. The respondents alleged that these actions were arbitrary and politically motivated.
The resulting arbitration spanned nine years, involving over 150 document production requests, four rounds of legal submissions totaling over 1,500 pages, and a nine-day hearing with 24 witnesses. In June 2024, the tribunal found Mexico liable for breaching the fair and equitable treatment standard under Article 1105 of NAFTA and ordered Mexico to pay over USD $80 million in damages.
Mexico's Challenge and the Court's Analysis
Mexico sought to set aside the tribunal's award under Articles 34(2)(a)(ii) and (iv) of the UNCITRAL Model Law on International Commercial Arbitration (the "Model Law"), incorporated in Schedule 2 of the International Commercial Arbitration Act, 2017. Mexico advanced two arguments: first, that the tribunal had denied it access to key documents necessary to present its defence, and second, that the tribunal had failed to consider a submission that the respondents should have exhausted local remedies before bringing their claim.
The application judge emphasized at the outset that setting aside arbitral awards due to procedural unfairness will only be warranted when a tribunal's conduct offends "our most basic notions of morality and justice."2 Courts cannot set aside awards based on alleged errors of fact or law and should not lightly interfere in awards that are the product of years of work.3
1. Document Production Denials
Mexico argued that the tribunal's denial of certain document production requests denied it a full and fair opportunity to present its defence. Of Mexico's 47 requests, the tribunal granted 26 and denied the remainder. The tribunal applied the standards set out in the International Bar Association Rules on the Taking of Evidence in International Arbitration, which require requesting parties to describe with sufficient detail a narrow and specific category of documents that are reasonably believed to exist and explain how the documents are relevant to the case and material to its outcome.
The Court rejected this argument, emphasizing that document production decisions are inherently discretionary. Parties are entitled to "a fair hearing, not a perfect hearing" and courts must focus on "the overall fairness of the proceedings, not individual rulings."4 Intervention is not warranted where "procedural rulings do not lead to a fundamentally flawed process."5
2. Failure to Address a Key Argument
Mexico argued that the tribunal failed to consider its submission that the respondents should have first pursued judicial review in Mexican courts before pursuing arbitration. However, the respondents noted Mexico advanced this argument in only two paragraphs of its 1,006-paragraph Counter-Memorial, one paragraph of its 930-paragraph Rejoinder, and one sentence of its opening submissions.
The Court rejected this argument, noting that the Model Law does not require tribunals to give reasons and that tribunals need not explicitly reference every argument made by the parties.6 A failure by a tribunal to set out each step by which it reached a conclusion or dealt with each point made by a party does not constitute a failure to deal with an issue that was put to it.7 While Mexico asserted this argument was of central importance, its approach at the time belied that assertion.
The Court also noted that even if a procedural fairness breach were found, there must be circumstances of "real unfairness and real practical injustice" flowing from that breach.[8] This was a nine-year arbitration with lengthy discovery, extensive submissions, and a detailed award after two years of deliberation. The application judge was satisfied that nothing in the process was unfair, let alone of the fundamental nature required to justify setting aside the award.
Concluding Thoughts
This decision reinforces that the threshold for setting aside international arbitral awards on procedural fairness grounds is high, requiring conduct that offends basic notions of morality and justice. Routine evidentiary rulings made in the exercise of tribunal discretion, on their own, fall short of this standard.
The decision also confirms that courts focus on the overall fairness of arbitral proceedings rather than evaluating individual rulings in isolation.
For parties to international arbitrations, the practical message is clear: courts generally refrain from intervening in the outcome of such comprehensive processes, but may do so if there are serious deviations from fundamental principles of procedural fairness.
Footnotes
1 The United Mexican States v. Gordon G. Burr, 2025 ONSC 5724 ("Burr").
2 Burr, at para. 75.
3 Burr, at paras. 76-78.
4 Burr, at para. 82, citing ENMAX Energy Corporation v. TransAlta Generation Partnership, 2022 ABCA 206 ("ENMAX"), at para. 66.
5 Burr, at para. 82, citing ENMAX, at para. 67.
6 Burr, at paras. 93-94, citing Consolidated v. Ambatovy, 2016 ONSC 7171 ("Ambatovy"), at paras. 49-52, aff'd 2017 ONCA 939, at para. 62.
7 Burr, at para. 95, citing RAV Bahamas Ltd and another v. Therapy Beach Club Incorporated, [2021] UKPC 8, at para. 43.
8 Burr, at para. 98, citing Ambatovy, at para. 154, aff'd 2017 ONCA 939.
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