The major beneficiaries have been a group of US agricultural giants who complained that Mexico slapped a discriminatory tax on their crossborder investments in the high-fructose corn syrup sweetener market.

Three separate panels have now ruled that Mexico unfairly discriminated against US investors from 2002 to 2007, when it levied the tax so as to give its domestic sugar producers a boost.

The most recent arbitration ruling – and the most costly to date – came in mid-September when arbitrators ordered Mexico to pay Cargill Inc $77m. The ruling came on the heels of two earlier verdicts on behalf of Archer Daniels Midland (and its joint-venture partner Tate & Lyle) and Corn Products International.

Together the arbitration verdicts attest to the sizable impact of the foreign investment chapter of the North American Free Trade Agreement. NAFTA, which recently celebrated its 15-year anniversary, contains a full suite of protections for foreign investors, including prohibitions against discrimination, arbitrary treatment and expropriation without compensation.

As with the raft of bilateral investment treaties that are signed by governments, NAFTA’s investment protections provide an alternative to remedies available under local law and in the local courts.

However, the provisions have been controversial – not least because some foreign investors have brandished the protections in an effort to fend off stricter public health or environmental regulations. While those efforts have had mixed success – with investors losing several high-profile claims against the US government – the spotlight is now likely to shift to other types of disputes which can be raised under NAFTA. The recent discrimination claims against Mexico ensure that NAFTA’s investment chapter will be scrutinised more closely by nervous governments and curious investors alike.

In the Mexican cases, arbitrators had little difficulty determining that Mexico’s Congress passed an expressly discriminatory law designed to hurt US investors in the country’s sweetener market. Indeed, as the world’s second highest per capita consumer of soft drinks, the sweetener market is a highly lucrative one in Mexico.

While the Mexican government will need to write hefty cheques to US investors, do not be surprised if the government also lobbies for changes to NAFTA.

The Mexican government complains (with some justification) that its targeting of US investors was in retaliation for a failure by the US to provide greater access for imports of Mexican sugar. In fact, Mexico has tried to have its sugar grievance heard by a trade panel under NAFTA, but has been thwarted by NAFTA’s weak provisions on the resolution of trade disputes. (In contrast to the robust investment chapter which permits foreign investors to sue their host countries before arbitration panels, NAFTA makes it much more difficult for governments to sue each other when they accuse their trading partners of failing to live up to market access obligations.)

As Mexico has learned in recent months, foreign investors have it good – some would say too good – when it comes to being able to claim for losses suffered at the hands of their government hosts.

Luke Eric Peterson is editor of InvestmentArbitration Reporter.com, an online news service tracking and analysing crossborder investment lawsuits.