Grupo Modelo and Anheuser-Busch see each other in court

The notice of arbitration stated that the transaction between Anheuser-Busch and InBev violated provisions of a 1993 agreement through which Anheuser-Busch took a major stake in Grupo Modelo.

In plain English, Grupo Modelo thinks that it should have had a say in whether Anheuser-Busch got taken over. The Mexican brewer now seeks damages of up to USD 2.5 billion, and also wants to bar Anheuser Busch from exercising certain governance and other contractual rights.

Observers have argued that by taking its case to New York City rather than to Mexico City, Grupo Modelo secretly admitted that it has no recourse to Mexican law and thus no definite say in choosing who its partner is.

It is far from certain that the Court of Arbitration will rule in Grupo Modelo’s favour. Even if Grupo Modelo will have its right to consent confirmed and will be awarded some sort of compensation, what will its board do next? Will it pretend it’s “business as usual” with AB-InBev’s new representatives?

Or will the Mexicans sell their stake in Grupo Modelo? Or will they try to buy out AB-InBev?

Wall Street analysts do not expect the arbitration proceedings to be completed before 2010.