Canadian Pacific Kansas City files international arbitration against Mexico over tax dispute

Published: 2026-05-05 14:45:17 ET CP.TO

Published on 05/05/2026 at 02:45 pm EDT

Canadian rail giant Canadian Pacific Kansas City has filed an international arbitration claim against Mexico at the World Bank's International Centre for Settlement of Investment Disputes, escalating a tax dispute with Mexican tax authority SAT to international legal proceedings, El País reported.

The case was registered on April 27 and a tribunal is expected to be constituted. CPKC said the arbitration alleged violations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, of which Mexico and Canada are members. 'CPKC has filed a request for international arbitration against Mexico in relation to an ongoing dispute involving Mexico's tax authorities. This request considers preserving all of CPKC's rights. CPKC's operations in Mexico and its financial outlook are not affected by this filing,' the company said.

The dispute dates to 2022, when the SAT issued a tax credit demand of more than MXN5bn relating to 2014. CPKC challenged the resolution through multiple legal channels before escalating to international arbitration. The company is represented by law firm White & Case while Mexico is represented by the Economy Ministry's international trade legal advisory directorate.

The filing comes as the Mexican government pushes rail companies to share infrastructure with passenger train services under an initiative to reactivate 3,500 kilometres of rail lines connecting six major regions and 19 metropolitan areas.