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Canada wins one NAFTA investor litigation case, pays $18M to settle another

April 4, 2016

An arbitral tribunal setup under the North American Free Trade Agreement (NAFTA) rendered its decision last week under a NAFTA Chapter 11 case filed by a Texas wind energy power company.

The tribunal dismissed the claim and confirmed that Canada was in compliance with its NAFTA obligations.

The company was claiming $657,683,000 over the awarding of power purchase agreements for renewable energy projects under the Government of Ontario's Feed-in Tariff Program. In its decision, 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.

In another NAFTA Chapter 11 case, the Federal Government announced that it made a total payment of $18,960,678 to two oil companies related to another arbitral tribunal decision, rendered in 2015, regarding the companies' Hibernia and Terra Nova offshore oil projects in Newfoundland and Labrador.

The tribunal found that the application of the 2004 Guidelines for Research and Development Expenditures by the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) breached Canada's NAFTA obligations. The companies' total claim was for $66 million.

NAFTA's Chapter 11 establishes a framework that gives investors from NAFTA countries the power to sue for compensation if they feel that a new law or regulation jeopardizes the value of their investments.

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