Rabobank has instituted an arbitration case against the Mexican government and is claiming compensation of some EUR 150 million. This has been confirmed by the bank and credit insurer Atradius following reports in the Financieele Dagblad. The newspaper bases itself on documents and interviews with those involved.
According to Rabobank, Mexico wrongfully seized nine of Oceanografia’s bank-funded offshore vessels in 2014 on suspicion of fraud at the time.
The arbitration case has been filed with the World Bank’s Arbitration Institute. Arbitration is justice outside the ordinary courts. Initiating an arbitration case against a foreign government is seen as a heavy remedy.
Rabobank has lent a total of 236 million euros to Oceanografia since 2007. With that money, the company was able to buy nine ships from a Dutch shipyard. The ships served as collateral for the loans.
After a long legal battle, the Dutch bank was forced to lift the seizure of the nine ships, which had meanwhile fallen sharply in value due to lack of maintenance. With the proceeds from the sale of the fleet, only a small part of the 220 million in outstanding loans could be recovered.
According to Atradius, this leaves a substantial residual debt of around 140 to 160 million. The credit insurer has compensated Rabobank for the damage and is therefore involved in the arbitration case.
In addition to seizing the ships, the Mexican government expropriated Oceanografia in early 2014 on suspicion of fraud. The offshore company was alleged to have obtained trade credits on the basis of forged invoices.
According to Bert Bruning, director of Atradius, the seizure was unjustified because Rabobank had already taken the ships out of the company before the expropriation, so they were no longer of Oceanografia.
“That’s why we’re claiming the damages under the investment agreement with Mexico. It protects investments of foreign companies,” says Bruning in the FD. According to him, the step is mainly a way to talk to the Mexican government.