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Notice of Intent to Submit a Claim to Arbitration Under Chapter

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Notice of Intent to Submit a Claim to Arbitration Under Chapter NOTICE OF INTENT TO SUBMIT A CLAIM TO ARBITRATION UNDER CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE AGREEMENT ABITIBIBOWATER INC., Investor, v. GOVERNMENT OF CANADA, Party. Pursuant to Articles 1116, 1117, and 1119 of the North American Free Trade Agreement ("NAFTA"), the disputing Investor, AbitibiBowater Inc. (hereinafter "AbitibiBowater" or "the Company"), hereby respectfully serves a Notice ofIntent to Submit a Claim to Arbitration for breach by the Government of Canada (hereinafter "Canada"), through the actions of the provincial Government of Newfoundland and Labrador, of its obligations under Chapter Eleven ofNAFTA. AbitibiBowater also hereby requests Canada and the Government of Newfoundland and Labrador to begin formal consultations and negotiations, as contemplated by NAFTA Article 1118, in an effort to amicabiy resoive this dispute. Such consultations would be in accordance with the Company's proactive outreach to form a joint working group to address and resolve all issues related to its assets and rights in the Province of Newfoundland and Labrador. I. TYPE OF CLAIM 1. AbitibiBowater submits this Notice of Intent both under NAFTA Article 1116 as an investor on its own behalf, and under NAFTA Article 1117 on behalf of three investment enterprises that it owns or controls directly or indirectly: Abitibi-Consolidated Company of Canada, Abitibi-Consolidated Inc. and AbitibiBowater Canada Inc. (hereinafter collectively the "AbitibiBowater Canadian Entities"). II. DISPUTING INVESTOR 2. The disputing investor, AbitibiBowater Inc., is incorporated in the State of Delaware, United States of America, and thus is an enterprise of a Party (the United States) pursuant to NAFTA Article 1139. Its registered address is as follows: 1209 Orange Street Wilmington, Delaware 19801 United States of America Phone: 302-658-7581 Fax: 302-655-2480 III. CLAIM BY AN INVESTOR OF A PARTY ON BEHALF OF AN ENTERPRISE 3. AbitibiBowater owns or controls, directly or indirectly, the following Canadian incorporated enterprises whose rights have been directly affected by acts for which Canada is internationally responsible: a. Abitibi-Consolidated Company of Canada b. Abitibi-Consolidated Inc. c. AbitibiBowater Canada Inc. Each of these AbitibiBowater Canadian entities has the following registered address: 1155 Metcalfe Street, Suite 800 Montreal, Quebec Canada, H3B 5H2 Phone: 514-394-2160 Fax: 515-394-3644 2 IV. TYPE OF INVESTMENT 4. This dispute involves the following types of investments, within the meaning of "investment" defined in NAFTA Article 1139: a. an enterprise; b. an equity security of an enterprise; c. an interest in an enterprise that entitles the owner to share in income or profits of the enterprise; d. an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution, other than a debt security or a loan; e. real estate or other property, tangible or intangible, acquired in the expectation or used for the purpose of economic benefit or other business purposes; and f. interests arising from the commitment of capital or other resources in the territory of a Party to economic activity in such territory, such as under (i) contracts involving the presence of an investor's property in the territory of the Party, including turnkey or construction contracts, or concessions, or (ii) contracts where remuneration depends substantially on the production, revenues or profits of an enterprise. V. LEGAL REPRESENTATIVES AND SERVICE OF DOCUMENTS 5. The following law firms are duly empowered to act on behalf of AbitibiBowater in this matter, and correspondence should be served upon them at the addresses listed below: a. ARNOLD & PORTER LLP 555 Twelfth St., N.W. Washington, D.C. 20004 United States of America Phone: 202-942-5000 Fax: 202-942-5999 Michael T. Shor [email protected] Jean E. Kalicki j ean.kali [email protected] Annie Khalid Hussain [email protected] 3 b. OGILVYRENAULTLLP 1981 McGill College Avenue, Suite 1100 Montreal, Quebec Canada H3A 3Cl Phone: 514-848-4747 Fax: 514-286-5474 Pierre Bienvenu [email protected] Martin J. Valasek [email protected] 45 O'Connor Street. Suite 1500 Ottawa, Ontario Canada KIP IA4 Phone: 613-780-8661 Fax: 613-230-5459 Paul D. Conlin [email protected] Alison G. Fitzgerald afitzgerald@ogilvyrenaultcom c. STEWART MCKELVEY Suite 1100 - Cabot Place 100 New Gower Street P.O. Box 5038 St. Johns NL A1C 5V3 Canada Phone: 709-722-4270 Fax: 709-722-4565 Colm St. Roch Seviour [email protected] Maureen E. Ryan [email protected] VI. PROVISIONS OF NAFTA CHAPTER ELEVEN BREACHED 6. Canada, through the actions of its constituent political subdivision the provincial Government of Newfoundland and Labrador (hereinafter "the Province"), for which it is internationally responsible, has breached its obligations under Section A of Chapter Eleven ofNAFTA, including but not limited to the following provisions: a. Article 1110 -- Expropriation and Compensation; b. Article 1105 -- Minimum Standard of Treatment; c. Article 1102 -- National Treatment; and 4 d. Article 1103 -- Most-Favored-Nation Treatment. 7. These provisions ofNAFTA state as follows: Article 1110: Expropriation and Compensation 1. No party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation"), except: (a) for a public purpose; (b) on a non-discriminatory basis; (c) in accordance with due process oflaw and Article 1105(1); and (d) on payment of compensation in accordance with paragraphs 2 through 6. 2. Compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place ("date of expropriation"), and shall not reflect any change in value occurring because the intended expropriation had become known earlier. Valuation criteria shall include going concern value, asset value including declared tax value of tangible property, and other criteria, as appropriate, to determine fair market value. 3. Compensation shall be paid without delay and be fully realizable. 4. If payment is made in a G7 currency, compensation shall include interest at a commercially reasonable rate for that currency from the date of expropriation until the date of actual payment. 5. If a Party elects to pay in a currency other than a G7 currency, the amount paid on the date of payment, if converted into a G7 currency at the market rate of exchange prevailing on that date, shall be no less than if the amount of compensation owed on the date of expropriation had been converted into that G7 currency at the market rate of exchange prevailing on that date, and interest had accrued at a commercially reasonable rate for that G7 currency from the date of expropriation until the date of payment. 6. On payment,compensation shall be freely transferable as provided in Article 1109. 7. This Article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights, or to the revocation, limitation or 5 creation of intellectual property rights, to the extent that such issuance, revocation, limitation or creation is consistent with Chapter Seventeen (Intellectual Property). 8. For purposes of this Article and for greater certainty, a non-discriminatory measure of general application shall not be considered a measure tantamount to an expropriation of a debt security or loan covered by this Chapter solely on the ground that the measure imposes costs on the debtor that cause it to default on the debt. Article 11 05: Minimum Standard of Treatment 1. Each Party shall accord to investments of investors of another Party treatment in accordance with intemationallaw, including fair and equitable treatment and full protection and security. 2. Without prejudice to paragraph 1 and notwithstanding Article 11 08 (7)(b ), each Party shall accord to investors of another Party, and to investments of investors of another Party, non-discriminatory treatment with respect to measures it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife. 3. Paragraph 2 does not apply to existing measures relating to subsidies or grants that would be inconsistent with Article 1102 but for Article 11 08(7)(b). Article 1102: National Treatment 1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments. 2. Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments. 3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that state or province to investors, and to investments of investors, of the Party of which it forms a part. 4. For greater certainty, no Party may: 6 (a) impose on an investor of another Party a requirement that a minimum level of equity in an enterprise in the telTitory of the Party be held by its nationals, other than nominal qualifying shares for directors or incorporators of corporations; or (b) require an investor of another Party, by reason of its nationality, to sell or otherwise dispose of an investment in the territory of the Party. Article 1103: Most-Favored-Nation Treatment 1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to investors of any other Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
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