GAMI INVESTMENTS, INC. - NAFTAClaims

As a shareholder, what GAMI has is a share in the duty of GAM
in proportion to its shares, 14.18 percent. None of the measures' claims
have undermined the rights of GAMI which are associated with this
participation; that is to say, its rights as a shareholder of GAMI.
GAMI has not been deprived of the rights that it has as a
shareholder. The treatment that, according to GAMI, violates Articles
1102 and 1105 is a treatment towards GAMI towards the sugar mills. On
the other hand, the Government of Mexico expropriated GAM's mills and
stated that it is going to indemnify GAM at a fair market value to those
people that are able to show a legitimate legal interest.
In that regard, GAM, which is the company of which GAMI is a
shareholder, has elected not to accept the compensation offered by the
Government of Mexico and to challenge the legality of the expropriation
decree. No measure of the Government of Mexico has affected the right
that GAMI has to derive benefits from the result of the lawsuit installed
or started by GAM.
Now, if GAM wins the amparo proceedings, there was no
expropriation, and GAM can actually benefit from the sugar business of
GAM. Now, if GAM loses the amparo proceedings, then it is entitled to an
indemnization by the Mexican Government at a fair market value, and GAMI
as a shareholder may benefit of its shareholders--of a shareholder from
the company.
Now, the lawsuit started by GAM is still going on. GAMI as a
shareholder has a right to derive benefit from the result of the claim
started by GAM, whichever that result may be.
The GAMI has said that the measure of the government is
stated there and it keeps the holding of 14.18 percent of the
shareholdings in GAM. The situation connected with the expropriation is
not defined so far, and this has to do with the strategies that GAM has.
And apparently, GAMI is not in agreement with these strategies. GAMI
would want GAM not to have challenged the legality of the expropriation
decree in order to establish, as it suggests in paragraph number 17 of
the Memorial that the expropriation is final and that indemnization has
something paid or that the indemnization or the compensation has not been
paid at a fair market value, as it says in paragraph 2. And it says that
the only thing that is right now at stake is the damages that need to be
paid.
This is not the position of GAMI, however. GAM did not want
to collect the indemnization of the compensation that the law gave to it.
The idea is again to revert the expropriation and to recover the mills.
GAM does not understand that the expropriation has been done with the
effects that GAMI stated. They say that this expropriation was illegal.
The fact that GAM actually moved away from the empower proceedings, and
GAMI also states that in its pleadings. This implies that GAM has
admitted the legality of the decree as least as regards those two mills.
I don't think there is any coincidence in connection with the
claim regarding the legality or illegality of the expropriation decree.
The position of GAMI and GAM in connection with the legal
effects and the factual effects of the expropriation do not match. GAMI
and GAM have different interests. This is the situation where GAMI finds
itself, and this derives from its capacity as a minority shareholder.
And GAMI does not have the capacity to make decisions in GAM. And this
is something that the Government of Mexico understands.
The legal interests of the shareholders and of the companies
where they have their shareholders and that are protected by NAFTA are
different interests and that they are protected under different rules.
Mexico understands that international law in general and in particular