Bilcon of Delaware, Inc
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IN THE MATTER OF AN ARBITRATION UNDER CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE AGREEMENT AND THE UNCITRAL RULES OF 1976 (“UNCITRAL RULES”) - between - WILLIAM RALPH CLAYTON, WILLIAM RICHARD CLAYTON, DOUGLAS CLAYTON, DANIEL CLAYTON AND BILCON OF DELAWARE, INC. (the “Investors”) - and - GOVERNMENT OF CANADA (the “Respondent” and, together with the Investors, the “Parties”) AWARD ON JURISDICTION AND LIABILITY 17 MARCH 2015 ARBITRAL TRIBUNAL: Judge Bruno Simma (President) Professor Donald McRae Professor Bryan Schwartz SECRETARY: Dr. Dirk Pulkowski Permanent Court of Arbitration (PCA) Case No. 2009-04 PCA 122204 TABLE OF CONTENTS TABLE OF CONTENTS .............................................................................................................................. I GLOSSARY OF DEFINED TERMS ......................................................................................................... VII I. INTRODUCTION ....................................................................................................................... 1 A. THE PARTIES...................................................................................................................... 1 B. THE ESSENCE OF THE INVESTORS’ CASE ........................................................................ 2 C. THE ESSENCE OF THE RESPONDENT’S CASE ................................................................... 8 II. PROCEDURAL HISTORY ..................................................................................................... 11 A. COMMENCEMENT OF THE ARBITRATION ...................................................................... 11 B. DOCUMENT PRODUCTION ............................................................................................... 13 1. The Process for Document Requests and Objections .................................................. 13 2. Documents Not Produced for Reasons of Privilege .................................................... 14 4. Documents Post-dating 5 February 2008 .................................................................... 18 C. INTERROGATORIES .......................................................................................................... 19 D. WRITTEN PLEADINGS...................................................................................................... 20 E. HEARING ON JURISDICTION AND MERITS ..................................................................... 20 III. THE PARTIES’ REQUESTS .................................................................................................. 23 A. THE INVESTORS ............................................................................................................... 23 B. THE RESPONDENT ........................................................................................................... 23 IV. STATEMENT OF FACTS ....................................................................................................... 23 A. THE REQUEST FOR AN INDUSTRIAL APPROVAL TO OPERATE A 3.9 HA QUARRY ....... 25 1. Undisputed Facts ......................................................................................................... 25 2. Disputed Facts ............................................................................................................. 27 (a) Whether Digby Neck was an Industrialized Area .................................................. 27 i. The Investors’ Position ................................................................................... 27 ii. The Respondent’s Position ............................................................................. 28 (b) Whether the Investors were Encouraged to Invest in the Digby Neck Area .......... 28 i. The Investors’ Position ................................................................................... 28 ii. The Respondent’s Position ............................................................................. 29 (c) Whether the DFO had Authority to Issue Blasting Conditions .............................. 30 i. The Investors’ Position ................................................................................... 30 ii. The Respondent’s Position ............................................................................. 30 (d) Whether Nova Stone’s Blasting Plans were Inappropriately Disapproved ............ 32 i. The Investors’ Position ................................................................................... 32 ii. The Respondent’s Position ............................................................................. 33 PCA 122204 i B. DEVELOPMENT OF THE PROJECT LEADING TO THE ENVIRONMENTAL ASSESSMENT 35 1. Undisputed Facts ......................................................................................................... 35 2. Disputed Facts ............................................................................................................. 36 (a) Whether There Was Sufficient Basis to Refer the Project to a JRP ....................... 36 i. The Investors’ Position ................................................................................... 36 ii. The Respondent’s Position ............................................................................. 37 (b) Whether the Investors Were Misled About the Form the Assessment Would Take ........................................................................................................................ 38 i. The Investors’ Position ................................................................................... 39 ii. The Respondent’s Position ............................................................................. 40 (c) Whether the Scope of the EA Was Overly Broad .................................................. 43 i. The Investors’ Position ................................................................................... 43 ii. The Respondent’s Position ............................................................................. 44 C. THE ESTABLISHMENT AND WORK OF THE JRP ............................................................ 45 1. Undisputed Facts ......................................................................................................... 45 2. Disputed Facts ............................................................................................................. 47 (a) When the Investors Were Notified of the Referral to the JRP................................ 47 i. The Investors’ Position ................................................................................... 47 ii. The Respondent’s Position ............................................................................. 48 (b) Whether the Appointment of the JRP Members was Fair ...................................... 48 i. The Investors’ Position ................................................................................... 48 ii. The Respondent’s Position ............................................................................. 49 (c) Whether the JRP’s Work Conformed to Statutory Requirements and its TOR ...... 50 i. The Investors’ Position ................................................................................... 50 ii. The Respondent’s Position ............................................................................. 51 (d) Whether the Investors Delayed the Review Process .............................................. 53 i. The Investors’ Position ................................................................................... 53 ii. The Respondent’s Position ............................................................................. 53 (e) Whether the Hearing Held before the JRP was Conducted Fairly and Impartially 55 i. The Investors’ Position ................................................................................... 55 ii. The Respondent’s Position ............................................................................. 56 (f) Whether the JRP Unlawfully Recommended Rejection of the Project .................. 56 i. The Investors’ Position ................................................................................... 56 ii. The Respondent’s Position ............................................................................. 57 (g) Whether the Local Community Support for the Whites Point Project was Extensive ................................................................................................................ 58 PCA 122204 ii i. The Investors’ Position ................................................................................... 58 ii. The Respondent’s Position ............................................................................. 58 D. THE WHITES POINT EA GOVERNMENT DECISIONS ..................................................... 59 1. Undisputed Facts ......................................................................................................... 59 2. Disputed Facts ............................................................................................................. 59 (a) Whether the Governments’ Adoptions of the JRP’s Recommendations were Appropriately Reasoned ......................................................................................... 59 i. The Investors’ Position ................................................................................... 59 ii. The Respondent’s Position ............................................................................. 60 (b) Whether the Federal and Provincial Governments Considered the JRP’s Recommendations