Archive for April, 2013

Canada’s Federal System and Investment Treaty Arbitration: ICSID Ratification and Claims from Provincial and Territorial Measures [1]

Monday, April 22nd, 2013

This article originally appeared in the December 2012, Vol 21, No. 2, edition of the Canadian Arbitration and Mediation Journal.

Written by Barry Leon, Andrew McDougall & John Siwiec [2]

I.    Introduction     

The large majority of investor-state disputes arise within the context of Bilateral Investment Treaties (BITs) – known as Foreign Investment Promotion and Protection Agreements (FIPAs) in Canada. BITs provide standards of protection for investors of the contracting state and their investments in the host state.  They also provide procedural mechanisms for the settlement of disputes through arbitration directly between the investor and the host state.  Canada is currently a party to twenty-four FIPAs and four Free Trade Agreements (FTAs) [3]  that provide for investor-state arbitration, most notably Chapter Eleven of the North American Free Trade Agreement (NAFTA) [4]  between Canada, the United States and Mexico. For ease of reference, both FIPAs and FTAs that include investor-state arbitration will be referred to as Investment Treaty Agreements (ITAs).

This article addresses two issues of particular interest regarding Canada’s experience with investor-state arbitration as a federal state. The first issue relates to the fact that Canada has not ratified the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (the ICSID Convention or Washington Convention) [5] and is therefore not a member of the International Centre for Settlement of Investment Disputes (ICSID). The second issue concerns the debate about which level of government should ultimately be responsible to pay the financial compensation awarded through investor-state arbitration where the claim arises from measures taken by a province or territory. The debate arises out of Canada’s federal structure and the fact that the Canadian federal government has increasingly been called upon to pay compensation for measures taken by its provinces and territories. The article concludes that, Canada faces some prominent issues related to investment treaty arbitration because of its federal system which it needs to address.

II.      Canada and the ICSID Convention

ITAs contain the host state’s consent to arbitrate and provide the means by which a disputing investor can submit a claim. As investor-state arbitration has evolved, the ICSID Convention has established a widely accepted method for the adjudication of investor-state disputes. The ICSID Convention was formulated by the World Bank in the 1960s, and has risen to prominence as 148 states have ratified the Convention, while an additional 11 – including Canada – have signed but not yet ratified it.[6]

As is made clear in its preamble, the ICSID Convention focuses on “the need for international cooperation for economic development, and the role of private international investment” and “the possibility that from time to time disputes may arise in connection with such investment between” a foreign investor and the state in which the foreign investor has invested.[7]  The ICSID Convention provides a system for investor-state dispute settlement by offering standard clauses, detailed rules of procedure and institutional support, which extends to the selection of arbitrators and to the conduct of arbitration proceedings.  Article 25(1) of the ICSID Convention states that “[t]he jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre.”[8]

Perhaps the most distinguishing feature of ICSID is that it provides a binding agreement that Convention members will comply with an arbitral award rendered in a dispute.[9]  Each Contracting State to the ICSID Convention is required to recognize an ICSID award as binding and equivalent to a judgment of the highest court in their country.[10]  Moreover, ICSID awards are not open to appeal and are subject to limited review only by a second ICSID tribunal, known as an ICSID annulment committee, rather than by any country’s courts.[11]

ICSID also adopted Additional Facility Rules that authorize the ICSID Secretariat to administer certain categories of proceedings between states and nationals of other states that fall outside the scope of the ICSID Convention.[12] In particular, the Additional Facility Rules cover arbitration proceedings for investment disputes where only one of the parties is a Contracting State to the ICSID Convention or a national of a Contracting State. A glaring difference, and disadvantage in the eyes of foreign investors, between the ICSID Convention and the Additional Facility Rules is that an award rendered under the Additional Facility Rules can be subject to review by national courts at the place of enforcement whereas an ICSID tribunal award cannot.[13]

Given that the ICSID Convention has achieved such wide acceptance, one would expect that Canada – a G8 and G20 country with the desire to attract foreign investment and with so many businesses and individuals that invest internationally and engage in international projects – would be a party to it. ICSID membership would benefit Canada’s international investors and enhance Canada’s reputation as a foreign investor-friendly country by giving foreign investors in Canada access to the protections and benefits of ICSID arbitration.

Canada’s Investment Treaty Practice

Canada’s ITAs generally provide that an investor can submit a claim to arbitration under four sets of rules: (i) the ICSID Arbitration Rules; (ii) the ICSID Additional Facility Rules; (iii) the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules; or, (iv) another body of rules such as the London Court of International Arbitration (LCIA) Arbitration Rules.[14]

Although ICSID arbitration is specified in Canada’s ITAs as a potential dispute resolution mechanism, Canada has not ratified the ICSID Convention. As a result, both Canadian investors investing abroad and foreign investors in Canada cannot invoke the ICSID Convention to govern their arbitration. Canada’s reference to the ICSID Convention in its ITAs suggests that Canada intends to one day become a member. However, the fact remains that the ICSID Convention has been open for signature since 1965 and Canada has yet to ratify the treaty.

This is not to say that there has not been any movement by Canada. On December 15, 2006, Canada signed the ICSID Convention, and Canada’s federal government passed implementing legislation to ratify the Convention in March 2008.[15]  However, the Canadian federal government has yet to issue an order that would implement it. This delay can largely be attributed to the fact that only four of ten provinces (British Columbia, Newfoundland and Labrador, Ontario and Saskatchewan) and two of three territories (Nunavut and Northwest Territories) have passed legislation to implement the Convention.[16]

Of the provinces yet to adopt supporting legislation, Alberta and Quebec stand out. The benefits of ICSID membership to these provinces could be significant given the nature of their economies and the international involvement of their companies. Both provinces have vast natural resources including oil and gas, hydro-electric power and forestry. They also have companies in these sectors and in others, such as aerospace and engineering, which are active around the world. As discussed below, Alberta and Quebec have never indicated that they oppose the substance of the Convention, leading some to believe that they have been using their resistance to adopt supporting legislation as a means to seek concessions in other areas of federal-provincial relations.

Canada’s Federal Structure

Before ratifying the ICSID Convention, it appears that Canada would prefer to have the support of all of its provinces and territories. As in most federal states, powers are allocated by Canada’s constitution between its federal government and its ten provinces and three territories.

Canada’s constitution allocates treaty-making authority at the federal level.[17]  However, when the subject matter of a treaty is in a field in which Canada’s provinces and territories have authority, they have the power to implement the treaty.[18]

Whether constitutionally, by practice, or as a matter of political pragmatism, the federal government seeks provincial and territorial support when the subject matter of a treaty includes areas that fall within their jurisdiction. Because the ICSID Convention relates to areas of provincial and territorial jurisdiction, including “the administration of justice” and “property and civil rights”, provincial and territorial implementing legislation is needed or at least desirable before Canada’s ratification.[19]

This is not the first time Canada has been slow to ratify a treaty relating to international arbitration. Canada took almost 30 years to ratify the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).[20]  The New York Convention entered into force in June 1959 and provides common legislative and judicial standards for the recognition of arbitration agreements and the recognition and enforcement of foreign arbitral awards. However, unlike with the ICSID Convention, once Canada’s federal government decided to sign the New York Convention, it quickly received provincial and territorial support,[21]  and was ratified in August 1986.[22]

Given the apparent desire for consensus in ratifying the ICSID Convention, the possibility exists that some provinces are using the implementing legislation as a bargaining chip in federal-provincial negotiations with regard to other issues. It is also possible that since legislative agendas are crowded, seeking consensus to put forward ratification legislation for an international treaty is simply not a political priority. Unfortunately, Canadian corporations that invest internationally have done little to press for ratification. Moreover, it may be an unfortunate political reality that treaty ratification is not a “vote-getting” issue.

Regardless of the reasons for the delay, it has never been suggested that concerns about the merits of ICSID are any part of the problem. When Canada’s House of Commons considered ratification legislation, Members of Parliament from all parties and regions generally agreed that ratification is in Canada’s interest.[23] Indeed, in the many years since ICSID came into existence, irrespective of the governing political party at any point in time, Canada’s federal government has been trying to get the provincial and territorial governments to not only commit to act, but to actually act.[24]

Moving without full support?

There are signs indicating that Canada’s federal government might move to ratify the Convention despite the lack of all provinces and territories having passed implementing legislation. One indication came during parliamentary debates and hearings when Parliament was considering federal implementing legislation.[25]  Parliamentarians and officials stated that Canada could designate the provinces and territories that wish to be party to ICSID as “constituent subdivisions” in accordance with the Convention’s “federal clause.” Article 70 of the ICSID Convention would allow Canada to identify, by written notice, the provinces and territories to which the treaty would not apply. Using this approach, Canada could designate which provinces and territories the treaty would not apply to, and these provinces and territories could join subsequent to passing the proper implementing legislation.[26]

This “constituent subdivision” approach, however, is not without dissent. Some opposition members in the federal Parliament maintained that it would violate Canada’s constitutional division of powers and would constitute a “wrongful abrogation” of the federal government’s control over international relations.[27]  A definitive constitutional position on the part of the Federal government, if it has one, has not been made public.

Another argument is that moving forward with the ratification process without full provincial and territorial concurrency could be seen as a deviation from Canada’s ordinary treaty implementation practice, which could have political implications in Canada. Few would disagree that unanimous provincial and territorial ratification is preferable in Canada’s federal state environment. Moreover, partial applicability of ICSID in Canada could complicate investment transactions and distort economic relations among provinces and territories.

In the absence of unanimity after an unduly prolonged time and considerable effort, using the “constituent subdivision” approach to ratify the Convention may be the best achievable option and may “put feet to the fire” in the foot-dragging provinces and territories. Given the history described above, and the benefits that would likely flow from ICSID membership, proceeding by this approach would seem to many to be in the best interests of the Canadian economy and Canadian businesses that invest internationally.

Examples Where Access to ICSID Arbitration Might be Relevant

Four gold mining companies with operations in Venezuela represent apt examples of Canadian foreign investors that could benefit from Canada’s ratification of the ICSID Convention. Before President Hugo Chavez nationalized all gold mines in Venezuela in August 2011,[28]  three Canadian companies, Vanessa Ventures Ltd. (now Infinito Gold Ltd.), Gold Reserve Inc., and Crystallex International Corporation, had outstanding claims against the country.[29]  A fourth company, Rusoro Mining Ltd., launched a claim on July 17, 2012.[30]  Although Canada has a FIPA with Venezuela,[31]  all four cases are proceeding by way of the ICSID Additional Facility Rules. Under these rules, any award in favor of an investor that the investor attempts to enforce in Venezuela would be subject to review by Venezuelan courts.

Next Steps

Canadian international arbitration and trade law practitioners have long attempted to persuade senior Canadian federal and provincial government officials that it is in Canada’s interest to join ICSID. Canada’s ratification of the ICSID Convention is now regularly raised by Canadian international arbitration and trade law organizations, including through the Canadian Chamber of Commerce and the Canadian Bar Association.[32]  The availability of binding ICSID arbitration would increase investor confidence in Canada because it would reduce investor risk and make Canada an even more attractive location for foreign investment. Moreover, Canadians investing in foreign countries would similarly enjoy reduced risks and reduced costs in their foreign investment activities. The majority of countries in which Canadian companies invest most frequently and most heavily are ICSID members (excluding Mexico, India, and Brazil).

Until the necessary implementing legislation is brought into force throughout the country, or Canada’s federal government decides to proceed with ratification without all of the provinces and territories on board, the ICSID Convention does not protect Canadian international investors or foreign investors investing in Canada. Until such time, Canada is risking significant economic benefits. As one of the two G-8 countries[33] and one of the three OECD members[34]  that have not ratified the ICSID Convention, Canada seems long overdue to provide foreign investors and Canadians investing internationally with the full protections and benefits that come with ICSID membership.[35]

III.     ITAs and Canadian Federalism: Who’s Left Holding the Bill?

Another issue that arises due to Canada’s federal structure is who should be liable for the damages awarded against Canada in an ITA arbitration when the actions of a constituent subdivision (a sub-federal entity) amounted to the breach of the treaty obligation. This issue is illustrated by Canada’s recent settlement with AbitibiBowater.  In April 2009, AbitibiBowater, a forestry company incorporated in the United States, initiated NAFTA Chapter Eleven arbitration for CDN $500 million claiming that Canada had breached its obligations as a result of Newfoundland and Labrador’s Bill 75, entitled An Act to Return to the Crown Certain Rights Relating to Timber and Water use Vested in Abitibi-Consolidated and to Expropriate Assets and Lands Associated with the Generation of Electricity Enabled by Those Water Use Rights (Act).[36]  In effect, the Act expropriated most of AbitibiBowater’s investments in the province, including its timber and water rights. As with all ITAs, only a state party to NAFTA (Canada, United States, or Mexico) can be liable to compensate an investor from another NAFTA party for a breach of Chapter Eleven. One of the key investment protection provisions of Chapter Eleven is Article 1110 which prevents a NAFTA party from expropriating the investments of an investor from another NAFTA party without fair compensation.[37]

Canada settled the claim for CDN $130 million in August 2010, leading to a consent award in December 2010.[38]  The settlement was not without controversy as some commentators questioned whether Canada should have settled, and the amount for which it settled.[39]  The federal government could have continued the arbitration, covered all related costs, and ultimately tried to distance itself from an unfavorable award. Instead, the settlement demonstrates that the investment treaty protection system under NAFTA works and that Canada recognizes its importance and, in appropriate circumstances, the need to voluntarily honor its investor protection commitments.

The settlement highlights a particular challenge posed by ITAs, such as NAFTA, in federal states. The claim arose from the actions of a Canadian provincial government rather than those of the federal government. However, in accordance with NAFTA, the claim was brought against the federal state which had to defend and ultimately settle the claim, vividly demonstrating how a state can be financially responsible for its constituent subdivisions and left to pay for actions that it did not take but had no constitutional or practical authority to prevent.

Following the settlement, Canadian Prime Minister Stephen Harper stated that the federal government did not intend to seek reimbursement from Newfoundland and Labrador, but that in the future, “should provincial actions cause significant legal obligations for the government of Canada, the government of Canada will create a mechanism so that it can reclaim monies lost through international trade processes.”[40]  There has been no clarification of what that mechanism would be or whether it would be imposed unilaterally. Nonetheless, financial arrangements between the federal government and provinces and territories are most often established by cooperative negotiation.[41]

Whatever the arrangement, the federal government may have to move quickly because NAFTA Chapter Eleven complaints continue to be brought as a result of provincial and territorial actions.[42]  Many aspects of environmental, human health and property regulation fall under provincial and territorial constitutional jurisdiction and are likely to continue to be a source of future claims.

A recent NAFTA award has further demonstrated the urgency of this issue. In May 2012, a NAFTA panel ruled in favour of Mobil Investments Inc. and Murphy Oil Corp. against Canada based on measures taken by Newfoundland and Labrador. The panel found Canada responsible for breaching its performance obligations under Article 1106.[43]  The exact figure of the quantum of damages to be awarded has yet to be determined, but the outcome of the case is similar to AbitibiBowater in that the federal government will once again be responsible for paying damages as a result a provincial measure violating the NAFTA.

Recent NAFTA Cases Relating to Provincial Measures

Canada had two new NAFTA notices filed against it in 2011 arising from Ontario’s environment regulations and one new notice filed in 2012 based on regulations of the British Columbia government. First, St. Mary’s Cement, a United States corporation, filed a Notice of Intent on May 11, 2011 alleging that the denial of a quarry permit by the Ontario government was discriminatory and motivated by political concerns in breach of NAFTA Chapter Eleven’s fair and equitable treatment obligations.[44]  Second, Mesa Power served its Notice of Intent on July 6, 2011, complaining that Ontario’s Green Energy Act[45]  resulted in denials of access to the feed-in-tariff (FIT) program for a number of wind power projects in southwestern Ontario owned by the United States corporation.[46]  Mesa Power Group asserts that changes in regulations for granting access to the electricity grid and awarding wind power contracts led to a decline in the value of its projects under the FIT program and contravened Canada’s NAFTA obligations.[47]  Lastly, Mercer International Inc. filed a Notice of Intent on January 26, 2012 alleging that provincial energy regulations in British Columbia have discriminated against it and are unfairly restricting it from selling self-generated power.[48]

It appears that the issue of constituent subdivision responsibility for actions giving rise to ITA claims will need to be dealt with in Canada sooner rather than later. In response to Canada’s settlement with AbitibiBowater, one lead editorial in Canada’s principal mainstream newspaper has already called for a solution:

The federal government should not simply wait for the next problem of this kind to come up. It should diplomatically, but firmly, make clear to the provinces that it is thinking about specific options. The taxpayers of Canada need some concrete assurance that they will not have to pick up another such tab.[49]

Following the recent ruling in Mobil and Murphy Oil, the same editorial echoed similar sentiments once again:

The federal government cannot simply be a guarantor for the consequences of the provinces’ actions. A compromise is needed; it would be unfortunate if Ottawa had to threaten the provinces with making deductions from its payments to the provinces – from health and social transfers or equalization.[50]

Until the federal government establishes an arrangement with its provinces and territories respecting the costs of ITA claims based on the actions of a constituent subdivision, it is left in the position of defending these claims without any assurance that its sub-federal entities will cooperate and help cover the associated financial costs. Canada’s NAFTA partners, the United States and Mexico, both of which are federal states, may also need to consider developing comprehensive solutions to this issue.[51]

V.      Conclusion

Canada has been, and likely will continue to be a dynamic participant in international investment arbitration. While Canadian foreign investors are increasingly active internationally and Canada continues to be an attractive venue for foreign investment, Canada’s ratification of the ICSID Convention would only further complement both fronts. There are some encouraging signs as Canada’s business and legal communities are drawing greater attention to Canada’s failure to ratify the ICSID Convention.

Canada’s federal structure plays an important part in its situation respecting ICSID, just as it plays an important part in its inability to hold its constituent subdivisions accountable for their breaches of Canada’s ITA obligations. However, the knife cuts both ways. Critics argue that Canada’s federal government should not use its treaty-making power to impose broad foreign investor rights that constrain the ability of provincial and territorial governments to legislate and regulate on behalf of their citizens in areas of exclusive provincial and territorial jurisdiction.[52]  One commentator has gone so far as to say that “[w]e are witnessing a constitutional train wreck in slow motion.”[53]  Whether this train wreck will ever happen remains to be seen. In moving forward, Canada can remain confident that the dispute settlement mechanisms in its investment treaties can and do work. One thing is clear, however. Canada faces some prominent issues related to investment treaty arbitration because of its federal system that it needs to address.

[1] The original article, “Canada and Investment Treaty Arbitration: Three Prominent Issues – ICSID Ratification, Constituent Subdivisions, and Health and Environmental Regulation”, authored by Barry Leon, Andrew McDougall & John Siwiec appeared previously in the South Carolina Journal of International Law & Business, Vol. 8, Fall 2011.
[2] Barry Leon (bleon@perlaw.ca) is a Partner and Head of the International Arbitration Group, Andrew McDougall (amcdougall@perlaw.ca) is Special Counsel and John Siwiec (jsiwiec@perlaw.ca) is an Associate in the International Arbitration Group at Perley-Robertson, Hill & McDougall LLP/s.r.l., www.perlaw.ca.
[3] Listing of Canada’s FIPAs and FTAs, FOREIGN AFFAIRS AND INTERNATIONAL TRADE CANADA, available at http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/index.aspx?view=d  (last modified Sept. 26, 2011).
[4] North American Free Trade Agreement, Dec. 17, U.S.-Can-Mex., 1992, 32 I.L.M. 605, 639-49 (1993) [hereinafter NAFTA].
[5] Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, Mar. 18 1965, 17 U.S.T. 1270 [hereinafter ICSID], available at http://treaties.un.org/doc/Publication/UNTS/Volume%20575/volume-575-I-8359-English.pdf.
[6] ICSID, List of Contracting States and Other Signatories of the Convention, available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType=ICSIDDocRH&actionVal=ShowDocument&language=English.
[7] ICSID, supra note 5, preamble.
[8] ICSID, supra note 5, art. 25(1).
[9] ICSID, supra note 5, art. 53(1).
[10] Id.
[11] See ICSID, supra note 5, arts. 50-55.
[12] ICSID, Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for the Settlement of Investment Disputes, [hereinafter Additional Facility Rules], available at http://icsid.worldbank.org/ICSID/StaticFiles/facility/AFR_English-final.pdf.
[13]  Compare Additional Facility Rules, supra note 12, arts. 52-57, with ICSID, supra note 5, arts 50-55.
[14]  See NAFTA, supra note 4, art. 1137; Agreement for the Promotion and Protection of Investments, Can.-Thai., art. 13, Sept. 28, 1998, available at http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/THAILAND-E.PDF, Agreement for the Promotion and Protection of Investments. Can.-Jordan, art. 27, June 28 2009, http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fipa-apie/jordan-agreement-jordanie-accord.aspx?lang=eng&view=d.
[15] Settlement of International Investment Disputes Act, S.C. 2008, c. 8.
[16] See Settlement of International Investment Disputes Act, S.B.C. 2006, c. 16 (Can. B.C.); Settlement of International Investment Disputes Act, S.N.L. 2006, c S-13.3 (Can. N.L.); Settlement of International Disputes Act, S.O. 1999, c. 12, Schedule D (Can. Ont.); Settlement of International Investment Disputes Act, S.S. 2006, c. S-47.2 (Can. Sask.); Settlement of International Investment Disputes Act, S.Nu. 2006, c. 13 (Can. Nun.); Settlement of International Investment Disputes Act, S.N.W.T. 2009, c. 15 (Can. N.W.T.)
[17] The federal government’s treaty-making authority is not explicitly conferred under any constitutional provision though is a power that is recognized to have devolved upon it. This stems from Canada’s British tradition, where international relations are a prerogative of the Crown, which is exercised by the federal executive branch of the government as the Crown’s representative. See LAURA BARNETT, LEGAL LEGIS. AFFAIRS DIV., CANADA’S APPROACH TO THE TREATY MAKING PROCESS (2008), http://www.parl.gc.ca/Content/LOP/ResearchPublications/prb0845-e.htm.; see also Capital Cities Commc’ns Inc. v. Canadian Radio-Television Comm’n, [1978] 2 S.C.R. 141 (Can.).
[18] See Canada (Att’y Gen.) v. Ontario (Att’y Gen.), (1937) 1 D.L.R. 673 (Can.) (Labour Conventions Case); see also PETER W. HOGG, Q.C. CONSTITUTIONAL LAW OF CANADA, 11.5 (b), (Carswell, 5th ed. Supp. 2007).
[19] ICSID, supra note 5 (The ICSID Convention addresses issues of arbitral procedure and the recognition and enforcement of arbitral awards, both of which fall within provincial jurisdiction over the administration of justice (ss. 92(14) of the Constitution Act, 1867) and property and civil rights (ss. 92(13))).
[20] Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 U.N.T.S. 38, (1968) 7 I.L.M. 1046, available at http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention.html
[21] Edward C. Chiasson, Canada No Man’s Land No More, 3 J. INT’L ARB. 67 (1986).
[22] E.g. Edward C. Chiasson & Marc Lalonde, Recent Canadian Legislation on Arbitration 2 ARB. INT’L 370 (1986); Chiasson, supra note 20.
[23] Canada, Parliament, House of Commons, Debates, 39th Parliament, 1st Session, vol. 141, issue 154, May 15, 2007, available at http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=2945948&Language=E&Mode=1&Parl=39&Ses=1.
[24] Id.
[25] Id.
[26] Canada, Parliament, House of Commons, Standing Committee on Foreign Affairs and International Development, Evidence. (November 22, 2007), 39th Parliament, 2nd Session, available at http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=3133571&Mode=1&Parl=39&Ses=2&Language=E#Int-2214104.
[27] See generally comments of Mrs. Vivian Barbot, MP, supra note 22.
[28] Hugo Chavez Officially Nationalizes Venezuela’s Gold Industry, HUFFINGTON POST, Aug. 23, 2011, http://www.huffingtonpost.com/2011/08/24/venezuela-gold-industry-huge-chavez_n_934968.html.
[29] See ICSID, List of Pending Cases, supra note 49, (listing Vanessa Ventures Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/04/6, Filed (Oct. 28, 2004); Gold Reserve Inc. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/09/1, Filed (Nov. 9, 2009); Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Filed (Mar. 9, 2011)).
[30] Alison Ross, Rusoro in time to file ICSID claim against Venezuela, GLOBAL ARBITRATION REVIEW, (July 23, 2012), http://www.globalarbitrationreview.com/news/article/30710/rusoro-time-file-icsid-claim-against-venezuela/.
[31] Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments, Can.-Venez., Jul. 1, 1996, 2221 UNTS 7, available at http://treaties.un.org/doc/Publication/UNTS/Volume%202221/v2221.pdf.
[32] Andrew McDougall & Barry Leon, Upcoming G20 Meeting in Canada Presents an Opportunity for Canada to Join ICSID, N. AM. FREE TRADE & INV, REPORT, March 31, 2010, http://www.perlaw.ca/media/Lawyer_Articles_PDF/Published_BLeon_and_AMcDougall_Upcoming_G20_Meeting_in_Canada_Presents_an_Opportunity_for_Canada_to_Join_ICSID_Article_Only.pdf.
[33] Russia has yet to ratify the Convention though also signed the treaty in 1992.
[34] Mexico and Poland have not signed the Convention.
[35] See Barry Leon &Andrew de Lotbinière McDougall, Why has Canada Not Ratified the ICSID Convention?, KLUWER ARB. BLOG (August 24, 2010, 9:15 PM), http://kluwerarbitrationblog.com/blog/2010/08/24/why-has-canada-not-ratified-the-icsid-convention/.
[36] Abitibi-Consolidated Rights and Assets Act, R.S.N.L. 2008, c. A-1.01.
[37] Id. at art.1110(1).
[38] AbitibiBowater Inc. v. The Gov’t of Canada, (ICSID) Consent Award, Dec. 15, 2010, http://www.international.gc.ca/trade-agreements-accordscommerciaux/assets/pdfs/Abitibi_Consent_Award_Dec_15_2010.pdf.
[39] Scott Sinclair, $130Million NAFTA Payout Sets Troubling Precedent, CANADIAN Ctr. FOR POLICY ALT. (March 22, 2011), http://www.policyalternatives.ca/publications/commentary/130-million-nafta-payout-sets-troubling-precedent.
[40] Bertrand Marotte & John Ibbitson, Provinces on Hook for Future Trade Disputes: Harper, THE GLOBE & MAIL (August 26, 2010), http://www.theglobeandmail.com/report-on-business/abitibi-deal-best-available-harper/article1686431/?cmpid=rss1.
[41] See HOGG, supra note 17, at  ¶ 6.9.
[42] Clayton/Bilcon (U.S.) v.  Gov’t of Canada, Statement of the Claim (Jan. 30, 2009); St. Marys VCNA, LLC (U.S.) v. Gov’t of Canada, Notice of Intent (May 13, 2011); Mesa Power Group LLC  (U.S.) v. Gov’t of Canada, Notice of Intent (July 6, 2011), and Mercer International Inc. v. Gov’t of Canada, Notice of Intent (January 26, 2012). See Foreign Affairs and International Trade Canada, Cases Filed Against the Government of Canada, http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/gov.aspx?lang=en&view=d
[43] Jarrod Hepburn, Canada Loses NAFTA Claim; Provincial R&D Obligations Imposed on US Oil Companies Held to Constitute Prohibited Performance Requirements, INVESTMENT ARBITRATION REPORTER (June 1, 2012), http://www.iareporter.com/articles/20120601.
[44] See St. Marys VCNA, LLC v. Gov’t of Canada, Notice of Intent (filed May 13, 2011) available at http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/st_marys_vcna.aspx?lang=eng&view=d.
[45] Green Energy Act, S.O. 2009, c. 12, Sch. A (Can.).
[46] Mesa Power Group LLC v. Gov’t of Canada, Notice of Intent (filed July 6, 2011) available at http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/mesa.aspx?lang=eng&view=d.
[47] Id.
[48] Mercer International Inc. v. Gov’t of Canada, Notice of Intent (filed January 26, 2012) available at http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/mercer.aspx?view=d.
[49] Editorial, How Ottawa could avoid getting stuck with the provinces’ bills, GLOBE & MAIL, Aug. 29, 2010, http://www.theglobeandmail.com/news/opinions/editorials/how-ottawa-could-avoid-getting-stuck-with-the-provinces-bills/article1688337/.
[50] Editorial, Ottawa should not have to pay for provinces’ trade obligations, GLOBE & MAIL, June 10, 2012, http://www.theglobeandmail.com/commentary/editorials/ottawa-should-not-have-to-pay-for-provinces-trade-violations/article4246206/.
[51] See also Barry Leon & Andrew McDougall, Left Holding the Bill: Can the NAFTA Countries Recover from Their Constituent Territories?, N. AM. FREE TRADE & INV. REP., Vol. 21, No. 1, Jan. 1, 2011, available at http://www.perlaw.ca/en/newsroom/publications/2011/1/1/left-holding-the-bill-can-the-nafta-countries-recover.
[52] SINCLAIR, supra note 39.
[53] Id.

Seven Tips for In-house Counsel for Faster, More Cost-Effective Arbitration

Monday, April 22nd, 2013

Fairness: An Evolutionary Construct?

Wednesday, April 17th, 2013