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In the Matter of an Arbitration Under Chapter Eleven of the North American Free Trade Agreement and the Uncitral Arbitration Rules

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In the Matter of an Arbitration Under Chapter Eleven of the North American Free Trade Agreement and the Uncitral Arbitration Rules IN THE MATTER OF AN ARBITRATION UNDER CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE AGREEMENT AND THE UNCITRAL ARBITRATION RULES BETWEEN: DETROIT INTERNATIONAL BRIDGE COMPANY Claimant/Investor AND: GOVERNMENT OF CANADA Respondent/Party PCA Case No. 2012-25 GOVERNMENT OF CANADA MEMORIAL ON JURISDICTION AND ADMISSIBILITY ________________________________________________________________________ June 15, 2013 Departments of Justice and of Foreign Affairs and International Trade Trade Law Bureau Lester B. Pearson Building 125 Sussex Drive Ottawa, Ontario K1A 0G2 CANADA DIBC v. Government of Canada Canada’s Memorial on Jurisdiction and Admissibility June 15, 2013 I. PRELIMINARY STATEMENT .............................................................................1 II. FACTS.........................................................................................................................5 A. The Ambassador Bridge and Surrounding Area in Windsor and Detroit ................5 B. Traffic Issues in the Windsor-Detroit Gateway.........................................................8 1. Short/Medium Term Transportation Improvements..............................................9 a) Windsor Gateway Action Plan/Nine Point Plan .....................................9 b) Let’s Get Windsor Essex Moving Strategy...........................................11 2. Long Term Transportation Improvements: Detroit River International Crossing Environmental Assessments.................................................................................11 3. DIBC and CTC’s Legal Challenges to the DRIC Environmental Assessments in Canada and the United States...............................................................................18 a) CTC’s DRIC EA Challenge in Canada..................................................18 b) DIBC’s DRIC EA Challenge in the United States................................19 C. Canada and the United States Move Forward With the DRIC ...............................20 D. The International Bridges and Tunnels Act .............................................................22 E. Ambassador Bridge New Span .................................................................................23 1. CTC seeks approval for New Span in Canada.....................................................23 2. DIBC seeks approval for the New Span in the United States.............................24 F. DIBC’s Opposition to the DRIC Project..................................................................26 III. THE TRIBUNAL HAS NO JURISDICTION BECAUSE DIBC HAS FAILED TO COMPLY WITH NAFTA ARTICLE 1121.................................27 A. Summary of Canada’s Position.................................................................................27 B. Consent to Arbitration by a NAFTA Party is Conditioned on Compliance with the Waiver Requirement in Article 1121........................................................................29 C. The Ordinary Meaning of NAFTA Article 1121, Read in its Context and in Light of the Object and Purpose of the NAFTA................................................................31 1. The Ordinary Meaning of Article 1121(1)(b) and (2)(b)....................................32 2. The Terms of Article 1121 Must be Interpreted in Their Context and in Light of the Object and Purpose of the NAFTA ...............................................................36 i DIBC v. Government of Canada Canada’s Memorial on Jurisdiction and Admissibility June 15, 2013 D. DIBC and CTC have Failed to Comply with NAFTA Article 1121 Because They Initiated and Continued Domestic Proceedings in Canada and the United States With Respect to Measures Alleged to Breach the NAFTA ....................................38 1. DIBC’S Continuation of the Washington Litigation Contravenes NAFTA Article 1121...........................................................................................................39 a) DIBC Continued the Washington Litigation Beyond the Submission of its Claim to Arbitration...........................................................................39 b) DIBC and CTC Refused to “Waive their Right to Initiate or Continue” the Washington Litigation ......................................................................41 c) The Washington Litigation is a “Proceeding with Respect to the Measure” that is Alleged to Breach the NAFTA ..................................42 (1) Highway 401 Measures.................................................................43 (2) Franchise Measures .......................................................................46 (3) New Span Measures ......................................................................49 d) DIBC’s Document Requests in the Washington Litigation .................50 2. It Is Irrelevant Whether or Not DIBC is seeking the “Payment of Damages” in the Washington Litigation....................................................................................51 3. CTC’s Initiation and Continuation of the CTC v. Canada Litigation Contravenes NAFTA Article 1121......................................................................52 a) DIBC Initiated and Continued the CTC Litigation Beyond the Submission of its Claim to Arbitration..................................................52 b) The CTC v. Canada Litigation is a “Proceeding with Respect to the Measure” that is Alleged to be a Breach of the NAFTA......................53 (1) Highway 401 Measures.................................................................54 (2) Franchise Rights Measures ...........................................................55 (3) New Span Measures ......................................................................55 c) Amended Statement of Claim ................................................................56 d) The CTC Litigation is “Involving the Payment of Damages” .............57 4. DIBC Has Clarified That Measures by the City of Windsor With Respect to the New Span and Favouring the DRIC Bridge Are Not At Issue in this NAFTA Arbitration .............................................................................................................58 E. Conclusion..................................................................................................................62 IV. DIBC’S HIGHWAY 401 ROAD ACCESS CLAIMS AND IBTA CLAIM ARE TIME BARRED UNDER NAFTA ARTICLES 1116(2) AND 1117(2).62 A. Summary of Canada’s Position.................................................................................62 B. Articles 1116(2) and 1117(2) Set a Rigid Three-Year Time Limit for Submission of a Claim to Arbitration ...........................................................................................64 1. Consent to Arbitration by a NAFTA Party is Conditioned on Filing Timely Claims....................................................................................................................64 ii DIBC v. Government of Canada Canada’s Memorial on Jurisdiction and Admissibility June 15, 2013 2. Ordinary Meaning of Articles 1116(2) and 1117(2) ...........................................64 3. The Context, Object and Purpose of Articles 1116(2) and 1117(2)...................68 C. DIBC’s “Continuing Breach” Theory is Without Foundation in NAFTA Chapter Eleven .........................................................................................................................70 D. DIBC Failed to Submit Timely Claims Regarding the Highway 401 Measures...73 1. The Windsor Gateway Action Plan/Nine Point Plan Was Replaced on March 11, 2004 .................................................................................................................73 2. Highway 401 Connection to the Ambassador Bridge Through the DRIC Process Was Eliminated on November 14, 2005................................................78 3. DIBC Failed to Submit Timely Claims Regarding Huron Church Road...........83 4. DIBC’s Continuing Breach Theory is Spurious With Respect to its Highway 401 Claims.............................................................................................................85 E. DIBC Failed to Submit Timely Claims Regarding the International Bridges and Tunnels Act.................................................................................................................86 1. The IBTA Applied to the Ambassador Bridge, including the New Span, as of February 1, 2007 ...................................................................................................87 2. DIBC’s Continuing Breach Theory is Spurious With Respect to its IBTA Claim ................................................................................................................................93 F. Conclusion..................................................................................................................93 V. THE TRIBUNAL HAS NO JURISDICTION WITH RESPECT TO CLAIMS BASED ON THE BOUNDARY WATERS TREATY.........................94 A. Summary of Canada’s Position.................................................................................94 B. DIBC Misconstrues the Historical Record and Wrongly Asserts the Existence of a Boundary Waters Treaty Article XIII Special Agreement......................................96 C. The Tribunal has no Jurisdiction to Determine a Breach of the Boundary Waters Treaty and/or the Ambassador Bridge Treaty..........................................................99 D. Conclusion..............................................................................................................
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