Canadian miner First Majestic Silver has initiated arbitration proceedings against the government of Mexico, which is reportedly seeking $534-million from the company in delinquent taxes.
First Majestic, which operates three mines in Mexico, said on Tuesday that it had submitted a request for arbitration to the International Centre for Settlement of Investment Disputes based on Chapter 11 of the North American Free Trade Agreement.
The miner stated that the government’s actions were contrary to the terms of the advance pricing agreement, which established the methodology for determining Primero Empresa Minera’s revenue and taxes for the 2010 to 2014 financial years. It also claimed that the government had refused to participate in the mutual agreement procedures under three international double-taxation treaties signed by Mexico.
Mexican President Andres Manuel Lopez recently criticised First Majestic for failing to pay outstanding taxes and said that the company was hiding behind the threat of international litigation to shirk its obligations.
First Majestic said in a statement that it had made repeated attempts to encourage the government of Mexico to engage in good faith negotiations to resolve the dispute.