NAFTA - Chapter 11 - Investment

Cases filed against the Government of Canada

Mobil Investments Inc. v. Government of Canada

Claimant

Mobil Investments Canada Inc. (“Mobil”) is a corporation incorporated in the United States of America with subsidiaries located in Canada. Mobil holds interests in two petroleum development projects in the Canada-Newfoundland and Labrador offshore, known as the Hibernia and Terra Nova offshore oil projects.

Articles

• 1105 (Minimum Standard of Treatment)
• 1106 (Performance Requirements)

Damages claimed

$20 million CAD

Status

Settled.

Arbitration rules

ICSID

Summary

Procedural history

On October 16, 2014, Mobil submitted a Notice of Intent to Submit a Claim to Arbitration, and on January 16, 2015, Mobil filed a new Notice of Arbitration against the Government of Canada. Mobil claimed over $20 million CAD in damages for 2012-2014 arising from the continued application of the Guidelines to Hibernia and Terra Nova, and later amended its claim seeking future damages until the life end of the two projects. On July 13, 2018, the Tribunal rejected Canada’s jurisdictional defences and ordered that Canada and Mobil proceed directly to arguments on damages. A Procedural Order issued on December 11, 2018 ruled that Mobil could update its claim to include damages for the period 2012–2018, as well as damages incurred in the future until the end of the projects, i.e., until 2047. On February 4, 2020, further to a settlement agreement reached between the disputing parties, the tribunal issued a Consent Award terminating the arbitration.

Factual overview and nature of the claim

In November 2004, the Canada-Newfoundland and Labrador Offshore Petroleum Board (“Board”) adopted the 2004 Guidelines on Research and Development Expenditures (“Guidelines”) which require operators of offshore petroleum projects to contribute a certain percentage of their revenue to research and development and education and training in the Province of Newfoundland and Labrador. The Board added a new condition to the production operations authorizations for the Hibernia and Terra Nova projects, requiring the operators of the oil fields to comply with the Guidelines as issued by the Board on November 5, 2004, and taking effect from April 1, 2004.

The same Guidelines were found by a previous tribunal to violate NAFTA Chapter 11.

Legal documents

This case was being administered under the arbitral rules of the International Centre for Settlement of Investment Disputes (ICSID). Documents related to this case can be viewed at the website of the International Centre for Settlement of Investment Disputes.

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