The Globe and Mail | 26 June 2023

Canada’s Enerflex calls for international arbitration after Mexican court awards ex-employee more than $120-million

by Reuters

Canadian energy infrastructure company Enerflex said on Monday it had requested investment arbitration proceedings before the International Centre for Settlement of Investment Disputes (ICSID) after a Mexican court had awarded an ex-employee more than $120-million in damages.

Enerflex argued the ruling defied regional trade agreements between Mexico, the United States and Canada, also calling the court’s decision “indirect expropriation” and denouncing arbitrary treatment by the Mexican state.

Enerflex said the labor litigation dates back to 2015, when a former mid-level employee filed a suit against subsidiaries of the company. In a 2017 decision, the company paid out 1.41 million pesos, or more than $80,000 to the employee.

However, Enerflex said, a 2022 decision ruled the plaintiff be paid more than 2 billion pesos, or some $120-million.

“This is absurd,” Enerflex said in a statement, arguing the decision calculated a daily salary of 21,735 pesos, whereas the former manager only earned 3,579 pesos a day.

The court, which Enerflex said it had filed an appeal with, did not immediately respond to a request for comment.

The energy company added it had met with Mexican economy ministry officials to discuss the dispute. The ministry did not immediately respond to a request for comment.