NAFTA - Chapter 11 - Investment
Cases Filed against the Government of Canada
Mesa Power Group LLC v. Government of Canada
Claimant
Mesa Power Group LLC (“Mesa”), a U.S. corporation, claims that it owns and controls, through its Canadian subsidiary companies, four wind farms in southwestern Ontario.
Articles
- 1102 (National Treatment)
- 1103 (Most-Favoured Nation Treatment)
- 1105 (Minimum Standard of Treatment)
- 1106 (Performance Requirements)
- 1503(2) (State Enterprises)
Damages claimed
$657,683,000 CAD
Status
Won. Tribunal dismissed the claim and awarded $2.9 million CAD in costs to Canada. Canada is undertaking steps to enforce the Award.
Arbitration rules
UNCITRAL
Summary
Procedural history
On July 6, 2011, Mesa served the Government of Canada with a Notice of Intent to Submit a Claim to Arbitration (NOI) and on October 4, 2011, Mesa followed with a Notice of Arbitration (NOA). Canada filed an Outline of the Issues in dispute on July 31, 2012. The parties exchanged a Memorial, Counter-Memorial, Reply and Rejoinder and the Tribunal held a hearing on jurisdiction, merits, and damages in Toronto, Ontario from October 26 - 31, 2014.
Factual overview and nature of the claim
Mesa alleged that the Government of Ontario acted in an arbitrary and discriminatory manner with respect to the awarding of power purchase agreements under its Feed-in Tariff program (the “FIT Program”) for renewable energy. In particular, the Claimant asserted that Ontario’s FIT Program imposes impermissible domestic content requirements, and that irregularities in decision-making with respect to the evaluation and awarding of FIT and other renewable energy procurement contracts resulted in discrimination against Mesa. It also alleged that Ontario imposed sudden and discriminatory changes to the established scheme for renewable energy, which constituted arbitrary and unfair treatment, and ultimately prevented the Claimant from developing four wind power projects. The Claimant sought $657,683,000 CAD in damages.
Canada argued that Mesa’s claims were beyond the jurisdiction of the Tribunal and were wholly without merit as a matter of fact and law. In particular, Canada argued:
- that the Tribunal was without jurisdiction to consider Mesa’s allegations to the extent that they related to acts of the Ontario Power Authority, as such acts were not covered by the obligations in Chapter 11 of NAFTA.
- how the Claimant’s allegations with respect to a breach of Articles 1102, 1103 and 1106 were excluded because of Article 1108 which makes clear that such obligations do not apply with respect to procurement programs such as the FIT Program.
- that the Claimant’s allegations of a breach of Articles 1102, 1103 and 1105 were without merit.
- that Mesa was not accorded treatment, in like circumstances, that was less favourable than the treatment accorded to other Canadian and U.S. investors. The FIT Program was administered without discrimination based upon nationality.
- that the actions of Ontario and the OPA were neither arbitrary nor unfair.
The Award
On March 31, 2016 the Tribunal issued its Award. The majority of the tribunal (one arbitrator dissenting) dismissed Mesa’s claim and confirmed that Canada was in compliance with its NAFTA obligations. In its Award, the Tribunal also decided that the Claimant should bear all the costs of the arbitration, as well as a portion of the costs of Canada’s legal defence, for a total of $2,948,701 CAD. Canada is undertaking steps to enforce the Award.
Legal documents
This case is governed by the arbitral rules of the United Nations Commission on International Trade Law. Legal documents related to this case can be viewed at the website of the Permanent Court of Arbitration.
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