Telefónica seeking 850m euros in damages from Mexico

Spanish telecoms giant Telefónica has filed an 850-million-euro case against Mexico with a World Bank tribunal, according to the institutions’s website. As well as the cited figure, the company may seek more money for damages.

Telefónica’s intention to seek arbitration was registered on June 21, according to information posted online by the International Center for Investment Disputes (ICSID). The basis of the claim is the allegation that Mexico has violated reciprocal investment protection agreements signed between Spain and the North American country.

The Spanish company believes that by lowering the fees it can charge competitors to connect to its network, the regulators in Mexico are penalizing the investments it has made in the country. Telefónica is the second-biggest operator in the Mexican market, but is still way off the market leader América Móvil, which is controlled by Carlos Slim, the wealthiest man in the world.

Telefónica is also objecting to the fact that this change was applied retroactively, meaning it has been forced to refund other companies fees that have already been paid for use of its network.

The ICSID is the world’s leading arbitration institution, and is dedicated to the settlement of investor-state disputes. Repsol is planning on seeking compensation via the body after Argentina’s nationalization of the Spanish oil firm’s subsidiary YPF.