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Today, Kansas City Southern and Grupo TMM S.A. announced TFM S.A. de C.V. received a favorable decision from a Mexican appellate court on a value-added tax (VAT) claim.

The court upheld TFM's claim that it's entitled to inflation and interest from a 1997 VAT refund received from the Mexican government. In January 2004, TFM received a VAT refund certificate in the original amount of its claim (about $184 million) without any accrued inflation or interest adjustments.

The court remanded the case to a federal fiscal court and instructed that court to enter a new order consistent with the appellate decision.

Meanwhile, the Mexican government is proceeding with a lawsuit against KCS, TMM, Grupo TFM S.A. de C.V. and TFM. The suit alleges the defendants have not complied with all the legal obligations they assumed during the privatization process of Ferrocarril del Noreste S.A. de C.V. (now TFM). The case has no merit because the companies have fully satisfied legal obligations, TMM and KCS officials believe.