NAFTA - Chapter 11 - Investment

Settlement of Disputes between a Party and an Investor of Another Party

Transparency

Canada strives to make transparency in investor-state arbitration an indispensable part of any arbitration in which it is involved. In all of its practices, Canada seeks to achieve the greatest openness to the public possible, while recognizing the legitimate needs of the parties to protect certain types of information and to proceed to resolve disputes quickly and efficiently.

As such, in all of the cases in which it is a party, Canada strives to ensure (a) that the public is given notice of the existence of the arbitration; (b) that documents submitted to the tribunal or issued by it are publicly available; (c) that hearings are open to the public; and (d) that confidential or privileged information is adequately protected.

Open Hearings

Canada is committed to ensuring that any treaty-based investor-state arbitration is open to the public. As clearly expressed in its Statement on Open Hearings in NAFTA Chapter Eleven Arbitrations in October 2003, Canada makes all efforts to ensure “that hearings in Chapter Eleven disputes be open to the public, except to ensure the protection of confidential information, including business confidential information.”

Statement of Canada on Open Hearings in NAFTA Chapter Eleven Arbitrations

Having reviewed the operation of arbitration proceedings conducted under Chapter Eleven of the North American Free Trade Agreement, Canada affirms that it will consent, and will request the consent of disputing investors and, as applicable, tribunals, that hearings in Chapter Eleven disputes to which it is a party be open to the public, except to ensure the protection of confidential information, including business confidential information. Canada recommends that tribunals determine the appropriate logistical arrangements for open hearings in consultation with disputing parties. These arrangements may include, for example, use of closed-circuit television systems, Internet webcasting, or other forms of access.

Non-Disputing Party Submissions

In its Statement of October 7, 2003, the Free Trade Commission (FTC) has recommended that NAFTA Chapter 11 arbitral tribunals adopt certain procedures with respect to non-disputing party participation to the NAFTA Chapter 11 disputes. The following is a brief outline of these procedures:

Who can submit a non-disputing party submission?

Any person that is not a party to the dispute and that is a person of Canada, the United States or Mexico, or that has significant presence in the territory of Canada, the United States or Mexico (the “Applicant”) can apply to make a non-disputing party submission.

When can a non-disputing party apply to submit a non-disputing party submission to a NAFTA Chapter 11 arbitral tribunal?

There is no fixed time for seeking leave from an arbitral tribunal to file a non-disputing party submission. The non-disputing party should generally do so as early as possible after the arbitral tribunal is constituted to avoid disrupting the proceedings.

Which documents must be filed with the arbitral tribunal for a non-disputing party submission?

The Applicant must file an application for leave to make a non-disputing party submission. The Applicant must also attach its written submission to the application for leave. All information provided to the arbitral tribunal will be made in writing and in the language of the arbitration.

Based on the application for leave, the comments of the disputing parties and the criteria set out in the FTC Statement, the arbitral tribunal will determine whether it will review the written submission.

What information must be provided in the application for leave?

The application for leave to file a non-disputing party submission must:

• be made in writing, dated and signed by the person filing the application, and include the address and other contact details of the Applicant;
• be no longer than 5 typed pages;
• describe the Applicant, including, where relevant, its membership and legal status (e.g., company, trade association or other non-governmental organization), its general objectives, the nature of its activities, and any parent organization (including any organization that directly or indirectly controls the Applicant);
• disclose whether or not the Applicant has any affiliation, direct or indirect, with any disputing party;
• identify any government, person or organization that has provided any financial or other assistance in preparing the submission;
• specify the nature of the interest that the Applicant has in the arbitration;
• identify the specific issues of fact or law in the arbitration that the Applicant has addressed in its written submission;
• explain, by referencing to the factors taken into account by the arbitral tribunal (as described below), why the arbitral tribunal should accept the submission; and
• be made in a language of the arbitration.

What information must be provided in the written submission?

The submission filed by a non-disputing party will:

• be dated and signed by the person filing the submission;
• be concise, and in no case longer than 20 typed pages, including any appendices;
• set out a precise statement supporting the Applicant’s position, on the issues; and
• only address matters within the scope of the dispute.

Who must be provided with a copy of the application for leave and the submission?

All disputing parties and the arbitral tribunal must be served with a copy of the application for leave and the submission.

How much time do the disputing parties have to reply to the application for leave to file a non-disputing party submission?

The arbitral tribunal will set a procedural calendar for the hearing which provides the disputing parties an opportunity to comment on the application for leave.

What factors will the arbitral tribunal take into consideration in granting leave to file a non-disputing party submission?

In determining whether to grant leave to file a non-disputing party submission, the arbitral tribunal will consider, among other things, the extent to which:

• the non-disputing party submission would assist the arbitral tribunal in the determination of a factual or legal issue related to the arbitration by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties;
• the non-disputing party submission would address matters within the scope of the dispute;
• the non-disputing party has a significant interest in the arbitration; and
• there is a public interest in the subject-matter of the arbitration.

The arbitral tribunal will also ensure that the non-disputing party submission avoids disrupting the proceedings, and that neither party is unduly burdened or unfairly prejudiced by the submission.

What happens if the arbitral tribunal grants leave to file a non-disputing party submission?

If the arbitral tribunal renders a decision granting leave to file a non-disputing party submission, it will set an appropriate date by which the disputing parties may respond in writing to the submission. Non-disputing NAFTA Parties may also intervene pursuant to Article 1128 NAFTA by that date.

The granting of leave to file a non-disputing party submission does not obligate the arbitral tribunal to address that submission at any point in the arbitral process. Furthermore, the granting of a leave to file does not entitle the non-disputing party that filed the submission to make further submissions in the arbitration.

As a non-disputing party that is seeking or has been granted leave to make a submission, do I have special access to documentation in the arbitral proceedings?

No, non-disputing party access to documents is governed by the FTC’s Note of Interpretation of July 31, 2001.

Are the non-disputing party submissions available to the public?

The Government of Canada is committed to transparency in NAFTA Chapter 11 disputes and regularly updates its Department of Foreign Affairs and International Trade (DFAIT) website to include legal pleadings and related documentation. As such, public versions of the non-disputing party submissions will be made available on the website.

Where can I find non-disputing party submissions presented in other NAFTA Chapter 11 disputes?

Canada’s DFAIT website provides links to all NAFTA Chapter 11 disputes to which Canada is a party. By clicking on a link for a specific dispute, you will be able to determine whether a non-disputing party submission has been filed, and if so, gain access to the pertinent documents