September 20, 2009 5:09 PM

LITIGATION DAILY: Mayer Brown Scores Biggest-Ever NAFTA Award in Mexican Sugar Case

Posted by Alison Frankel

This story was originally published by The Am Law Litigation Daily.

Vengeance is sweet for Cargill, Incorporated, which has secured a record-setting $77.3 million arbitration award in a case involving Mexican trade barriers on high-fructose corn syrup. The award was announced Friday by Cargill's lawyers at Mayer Brown, although the 160-page arbitration panel ruling has not been made public.

Cargill and its rivals in the high-fructose corn syrup market filed for arbitration against Mexico after the passage of a 2001 law that imposed a 20 percent tax on soft-drink companies using high-fructose corn syrup, and established stringent requirements for the importation of corn syrup. The law's intent, said lead Cargill lawyer Jeff Sarles of Mayer Brown, was to force Mexican soft-drink makers to use homegrown sugar rather than imported high-fructose corn syrup. Mexico's restrictions on corn syrup were lifted in 2008, Sarles said, but the country still faced damages for the six years the law was in effect.

At the weeklong hearing before a three-arbitrator panel at the World Bank in Washington, D.C., in October 2007, government lawyer Mariano Gomezparalta led Mexico's defense, with counsel from Stephen Becker of Pillsbury Winthrop Shaw Pittman. Becker referred a call for comment to Gomezparalta, who could not be reached for comment.

Cargill was the last of the high-fructose corn syrup plaintiffs to be awarded damages against Mexico under the auspices of the International Center for Settlement of Investment Disputes. The first award, to a coalition of Archer Daniels Midland and Tate & Lyle, was for $33.5 million. The second, a $58.4 million award to Corn Products International in August, was previously the biggest-ever NAFTA award, according to the Kluwer Arbitration Blog, which offers lengthy analysis of the corn syrup conflict. According to Sarles of Mayer Brown, ADM was represented by Sidley Austin; Tate & Lyle by Akin Gump Strauss Hauer & Feld; and Corn Products International by Steptoe & Johnson.

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