US Investors Sue Mexico Over TV Azteca Debt, Seeking US$220M
Mexico faces a $220 million arbitration claim from US investors over TV Azteca's debt dispute. The case, rooted in a Mexican court's precautionary measure, tests NAFTA provisions and Mexico's sovereignty.
In a high-stakes legal clash, Cyrus Capital Partners and Contrarian Capital Management, two prominent U.S. investment funds, have taken on the Mexican government in an international arbitration under the North American Free Trade Agreement (NAFTA). The case, filed with the International Centre for Settlement of Investment Disputes (ICSID), highlights the contentious interplay between private creditors and the Mexican judicial system, which, according to the claimants, is unfairly shielding a major Mexican corporation from repaying substantial debts. This dispute, ultimately seeking compensation of $220 million, underscores broader tensions in international finance and national sovereignty.
The origins of this dispute trace back to debt bonds issued by TV Azteca, a media conglomerate owned by billionaire Ricardo Salinas Pliego. These bonds, valued at over $400 million, were acquired by Cyrus Capital Partners and Contrarian Capital Management through subsidiary entities incorporated in the Cayman Islands. As repayment deadlines approached, TV Azteca’s failure to meet its obligations ignited a wave of legal action. In 2022, multiple creditors filed lawsuits against TV Azteca in U.S. courts, seeking to reclaim the outstanding amounts.