United Mexican States v. Lion Mexico Consolidated L.P.

CourtCourt of Appeals for the D.C. Circuit
DecidedApril 7, 2026
Docket24-7185
StatusPublished

This text of United Mexican States v. Lion Mexico Consolidated L.P. (United Mexican States v. Lion Mexico Consolidated L.P.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Mexican States v. Lion Mexico Consolidated L.P., (D.C. Cir. 2026).

Opinion

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 3, 2025 Decided April 7, 2026

No. 24-7185

UNITED MEXICAN STATES, APPELLANT

v.

LION MEXICO CONSOLIDATED L.P., APPELLEE

HECTOR CARDENAS, MOVANT-APPELLANT

Consolidated with 24-7186

Appeals from the United States District Court for the District of Columbia (No. 1:21-cv-03185)

Stephan E. Becker argued the cause for appellant United Mexican States. With him on the briefs was Gary J. Shaw.

Luis A. Parada argued the cause for movant-appellant Hector Cardenas. With him on the briefs was Csaba M. Rusznak. 2

John M. Conlon argued the cause for appellee. With him on the briefs was Kevin B. Weehunt Jr. Reginald R. Goeke entered an appearance.

Before: PILLARD, WALKER and CHILDS, Circuit Judges.

Opinion for the Court filed by Circuit Judge PILLARD.

PILLARD, Circuit Judge: Mexico seeks to vacate an arbitration award resolving an investment dispute between Mexico and Lion Mexico Consolidated, a Canadian investor. Applying provisions of the North American Free Trade Agreement, a panel of arbitrators ordered Mexico to pay Lion $47 million in compensation for the country’s failure to protect the company’s investments in real estate projects in Mexico. Mexico petitioned our district court to vacate the arbitral award on the grounds that the arbitrators exceeded their powers and acted in manifest disregard of the law. The district court held the arbitrators acted within their authority and with appropriate regard for the law, so denied Mexico’s petition and granted the investor’s cross-petition for confirmation of the award. Mexico appeals. Separately, Héctor Cárdenas Curiel, a Mexican businessman involved in the events that gave rise to the arbitration, moved to intervene in the district court proceedings. The district court denied intervention, and Cárdenas appeals. We affirm in full.

I.

A.

The North American Free Trade Agreement (NAFTA) was a multilateral treaty between the United States of America, Mexico, and Canada that sought to facilitate trade and 3 economic activity, including cross-border investment, among the three nations. North American Free Trade Agreement, Dec. 17, 1992, 107 Stat. 2057, 32 I.L.M. 289. NAFTA is no longer in effect since it was superseded on July 1, 2020, by the U.S.- Mexico-Canada Agreement. See United States-Mexico- Canada Agreement Implementation Act, Pub. L. No. 116-113, 134 Stat. 11 (2020). But the arbitration at issue here, instituted in December 2015, was governed by NAFTA, and NAFTA’s intervening repeal has no effect on its applicability to this dispute.

Among NAFTA’s provisions to encourage cross-border investment—memorialized in Chapter 11 of NAFTA—was the requirement that each party “accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.” NAFTA art. 1105(1). NAFTA allowed foreign investors to initiate arbitration proceedings directly against a party government for violating the protections of Chapter 11, including Article 1105(1). See id. art. 1120(1). The treaty established the Free Trade Commission, an entity comprising the trade ministers of the three NAFTA signatories, to supervise its implementation and interpretation. The Commission’s interpretations of NAFTA bound any arbitral tribunal convened to adjudicate a dispute under the treaty. Id. arts. 1131(2), 2001(1).

A petition in United States court to confirm an arbitral award based on a treaty to which the United States is a party may proceed under the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., which recognizes such a treaty as federal law, id. at § 201. See, e.g., BG Grp. PLC v. Rep. of Argentina, 572 U.S. 25, 44 (2014); LLC SPC Stileks v. Republic of Moldova, 985 F.3d 871, 879 n.2 (D.C. Cir. 2021). The FAA establishes a “federal policy favoring arbitration” and requires 4 federal courts to “rigorously enforce agreements to arbitrate.” Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 226 (1987) (internal quotation marks omitted). Limited judicial review protects the “prime objective” of an agreement to arbitrate, which is “to achieve ‘streamlined proceedings and expeditious results.’” Preston v. Ferrer, 552 U.S. 346, 357 (2008) (quoting Mitsubishi Motors Corp. v. Soler Chrysler- Plymouth, Inc., 473 U.S. 614, 633 (1985)). Judicial power to vacate arbitral decisions is accordingly confined to “very unusual circumstances.” Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 568 (2013) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995)). The FAA lists four grounds on which a court may vacate an arbitration award. See 9 U.S.C. § 10(a). At issue in this case is the fourth ground: “where the arbitrators exceeded their powers.” Id.

A party seeking vacatur of an arbitral award on the ground that the arbitrators “exceeded their powers” bears a “heavy burden.” Oxford Health Plans, 569 U.S. at 569. It is not enough for the challenger to show that the arbitrators “committed an error—or even a serious error.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 671 (2010). Because the parties “bargained for the arbitrator’s construction of their agreement,” an arbitral award “even arguably construing or applying the contract” will stand, “regardless of a court’s view of its (de)merits.” Oxford Health Plans, 569 U.S. at 569 (internal quotation marks omitted). Only when arbitrators exceed the scope of their delegated authority by “issuing an award that simply reflects [their] own notions of economic justice rather than drawing its essence from the contract” will the arbitrators’ decision be set aside. Oxford Health Plans, 569 U.S. at 569 (formatting modified). Thus, “the sole question” for a court entertaining a petition for relief under Section 10(a)(4) is “whether the arbitrator (even 5 arguably) interpreted the parties’ contract, not whether [they] got its meaning right or wrong.” Id.

B.

Lion Mexico Consolidated, L.P. (Lion) is a Canadian company that made loans to companies owned by a Mexican businessman named Héctor Cárdenas Curiel (Cárdenas) to finance real estate projects in Mexico. United Mexican States v. Lion Mexico Consolidated, L.P., 757 F. Supp. 3d 18, 23 (D.D.C. 2024). The parties documented the loans through mortgages to Lion on the real property and promissory notes to Lion as unconditional commitments to repay the loans. Id.; see Arbitration Award (Award), Annex A (Decision on Jurisdiction) ¶ 58 (J.A. 252). Cárdenas’s companies, however, never made a single payment on the loans. United Mexican States, 757 F. Supp. 3d at 23. After Lion’s fruitless efforts to recoup its investment through direct negotiation with Cárdenas and litigation in Mexican courts that Cárdenas stymied, Lion initiated arbitration proceedings against the government of Mexico in December 2015. Award ¶ 12 (J.A. 37).

The arbitration was seated in Washington D.C. Id. ¶ 40 (J.A. 40).

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United Mexican States v. Lion Mexico Consolidated L.P., Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-mexican-states-v-lion-mexico-consolidated-lp-cadc-2026.