COTERIN owns and operate a landfill located in the municipality of Guadalcazar in the State of San Luis Potosi Mexico since 1990 Due to some violations the federal ordered for its closure on September 1991 On the same year COTERIN applied to the Municipality for a permit to construct a hazardous waste landfill however the application was denied in 1992 when the newly elected municipal came into office In 1993 Metalclad purchase COTERIN with the condition that either a municipal permit was issued to COTERIN or COTERIN had received a definitive judgment from the Mexican courts that a municipal permit is not required for the construction of the landfill Metalclad completed its purchase of COTERIN however neither of the conditions was satisfied The Tribunal found that the Mexican federal officials gave an assurance to Metalclad that COTERIN had all the authorities to undertake the landfill project COTERIN began the construction site without the municipal construction permit Although after the construction began the federal authorities issued further construction permit in January 1995 authorizing the construction of the final aspects of the facility On October 26 1994 the Municipality issued a stop work order due to the absence of a municipal construction permit They applied for a municipal permit on November 15 1994 and continued the construction of the facility at the Site
