The ruling further clarified that it is not necessary for Vento to prove that the arbitration outcome would have been different absent the alleged bias. The presence of undisclosed incentives alone undermined the fairness of the arbitration process.
At the core of the case were communications between Perezcano and Mexican officials, during which he was offered a position on a roster of arbitrators eligible to serve in future disputes under two separate trade agreements. Vento argued that these opportunities were both “prestigious and potentially lucrative.”
Judge Vermette had agreed that the offers constituted “valuable professional opportunities” and should have been disclosed. However, she had reasoned that because the final arbitration ruling was unanimous, the outcome was unlikely to have been influenced by Perezcano’s bias. The appeals court disagreed, ruling that the entire tribunal was tainted.
NAFTA Dispute at the Heart of the Case
Vento’s $2.7 billion claim against Mexico stems from allegations that the Mexican government violated the North American Free Trade Agreement (NAFTA) by imposing retroactive tariffs on its motorcycles. The company argued that Mexico wrongly determined its bikes were made in China rather than the U.S., leading to unfair financial penalties.
