The Ontario Court of Appeal has just released an important decision upholding an arbitration award under NAFTA against Mexico in The United Mexican States v. Cargill, Incorporated.

This decision shows that Canadian courts will be reluctant to interfere on jurisdictional grounds with the remedial decisions of international commercial arbitrations.

The Court of Appeal held that the arbitral tribunal had not exceeded its jurisdiction. It arrived at that conclusion through a number of concessions by Mexico and other conclusions such as damage suffered by an investor is not limited to damage suffered in the country where the investment is located and no territorial limitation for damages or the occurrence of damages is contained in NAFTA.

Clearly, this decision is of great importance to arbitrations under NAFTA. It is also of general importance under the UNCITRAL Model Law.

There are several lessons to be learned from this decision which I explore in my article.