The railway giant Canadian Pacific Kansas City (CPKC) has filed an arbitration claim with the International Centre for Settlement of Investment Disputes (ICSID), the World Bank’s arbitration body based in Washington. The case was registered on April 27 and the formation of the tribunal is awaited. According to the claimants, violations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, an agreement of which Mexico and Canada are members, are alleged. The firm has specified to EL PAÍS that this action “considers preserving all rights of CPKC” and rules out operational or financial impacts arising from this claim. “Canadian Pacific Kansas City has respected and will continue to respect the regulatory and judicial processes of Mexico and remains deeply committed to its business, its employees, and the communities it serves throughout the country,” the firm stated in writing.
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The international arbitration request comes amid changes that the federal government has implemented to get passenger trains running in Mexico. Under this new directive, railway companies, traditionally used for transporting grains, minerals, fuels, and bulk goods, must now share infrastructure with passenger cars, which has forced companies like CPKC and others such as Ferromex to adjust their operations. The mission to reactivate passenger cars began in the previous administration of Andrés Manuel López Obrador; however, under Claudia Sheinbaum’s administration, the effort has been doubled. The Executive aims to enable 3,500 kilometers of railway tracks for this type of service and connect six major regions of the country that include 19 metropolitan areas.
The major infrastructure bet of the current administration has come head-on against previously granted freight rail transport concessions. According to specialized media, CPKC’s dispute originates from alleged violations of its rights as a concessionaire of the Northeast Line, the main Mexican railway corridor. This permit was granted in the mid-nineties to Transportación Ferroviaria Mexicana (TFM) and, years later, when CPKC acquired this company, it also obtained the concession.
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Canadian Pacific Kansas City (CPKC) is represented by the international law firm White & Case. On the other hand, Mexico’s representation corresponds to the General Directorate of Legal Consulting for International Trade of the Ministry of Economy. In addition to this dispute, Kansas City has had a lawsuit in courts with the Mexican tax authorities since 2022 over a tax credit of more than 5 billion pesos; this matter is still in litigation.
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