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Notice of Arbitration

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Notice of Arbitration In tbe Arbitration under tbe Nortb American Free Trade Agreement and tbe UNCITRAL Arbitration Rules Between DETROIT INTERNATIONAL BRIDGE COMPANY, Claimant, and THE GOVERNMENT OF CANADA, Respondent. NOTICE OF ARBITRATION Donald Francis Donovan Carl Micarelli William H. Taft V DEBEVOISE & PUMPTON LLP 919 Third Avenue New York, NY 10022 United States of America Telephone + I 212 909 6000 Facsimile + I 212 909 6836 Counsel for Claimant April 29, 2011 I DEMAND FOR ARBITRATION I. Pursuant to Article 3 of the Arbitration Rules of the United Nations Commission on International Trade Law ("UNCITRAL Rules") and Articles 1116(1), II 17(1) and I I 20( I )(b) of the North American Free Trade Agreement ("NAFTA "), Claimant Detroit International Bridge Company ("OIBC" or "Claimant"), on its own behalf and on behalf of its enterprise The Canadian Transit Company ("CTC"), hereby demands and commences arbitration against respondent the Government of Canada ("Canada"). 2. This proceeding arises from a dispute between Claimant and Canada arising from Claimant's ongoing investment in the Ambassador Bridge, a privately owned international toll bridge that spans the U.S.-Canadian boundary between the cities of Detroit, Michigan and Windsor, Ontario. Since the Ambassador Bridge was opened for service on November II , 1929, Claimant has owned the bridge, including the associated toll-collection rights, in its entirety. I Claimant directly owns the relevant rights with respect to the U.S. side of the bridge, and OIBC's wholly owned subsidiary CTC owns the relevant rights with respect to the Canadian side of the bridge. 3. The Ambassador Bridge includes a bridge span, customs and toll plazas, approach roads, duty-free shops and other associated facilities on both sides of the The rights to construct. own and operate the United States half of the bridge were granted in 1921 to American Transit Company. which assigned those rights in 1927 to a company ca llt:d Detroit Internationa l Bridge Com pany. That company, in tum. was merged into the present-day Detroit International Bridge Company (the Claimant in this proceeding) in 1973. For the sake of simplicity. this Request for Arbitration refers to the Cl aimant and its predecessors-in-interest collectively as "Clai mant " or DIBC. border. The Ambassador Bridge is the busiest crossing between the United States and Canada, facilitating more than 27% of annual trade between the two countries. 4. The Ambassador Bridge was designed, constructed, maintained and operated entirely with private funds of DIBC and its subsidiary CTC. In return for constructing and agreeing to own and operate the Ambassador Bridge, DLBC and CTC were granted a perpetual right to maintain the bridge and collect tolls from vehicles using the bridge. The bridge first opened for traffic in 1929, and from that time to the present day, DIBC has invested hundreds of millions of dollars in operating, maintaining and improving the Ambassador Bridge in reliance on these rights. 5. Canada, however, has arbitrarily and discriminatorily planned its road projects in a manner designed to undennine Claimant's investment by steering traffic away from the Ambassador Bridge and toward a planned new bridge (the "DRIC Bridge") located in the same traffic corridor as the Ambassador Bridge. The DRlC Bridge would be partly owned by Canada or its political subdivisions and would be financed, in whole or in part, by the Canadian government or by a sale of bonds to investors, who may include Canadian and third-country nationals. 6. As further set forth below, Canada has reneged on its commitments to upgrade the road to the Ambassador Bridge. Instead, it has designed a new highway (the "Windsor-Essex Parkway") that will improve the road to within 3.4 kilometers (2.1 miles) of the foot of the Ambassador Bridge and then tum west to connect only to the new DRIC customs plaza and Bridge. Canada has taken deliberate steps to divert traffic from the Ambassador Bridge to the DRIC Bridge, all without any legitimate or nondiscriminatory justification. 2 7. Canada has taken these inequitable and discriminatory steps, designed to undennine the profitability ofDIBC's investment in the Ambassador Bridge, in whole or in part because (a) Canada or its political subdivisions would have a proprietary interest in the DRJC Bridge, unlike the Ambassador Bridge; (b) the DRIC Bridge, unlike the Ambassador Bridge, would not be wholl y owned by United States investors; and (e) Canada is intentionall y seeking to drive down the value of the Ambassador Bridge to facilitate a purchase of the bridge or in advance of an attempt to expropri ate the Canadian half of the bridge. 8. In so doing, Canada has breached its obligations under NAFTA , including its obligations (a) to treat DIBC and its investment in a manner no less favorable than the treatment afforded to Canadian and third-country investors, and (b) to treat DlBC and its investment in a manner consistent with intemationallaw, including fair and equitable treatment and full protection and security. 9. For these reasons, as furth er set fo rth below, DIBC seeks a detennination that Canada has breached its obligations under NAFTA and an award of damages and other appropriate relief. II THE PARTIES AND THE INVESTMENT 10. Cla im ant DIBC is a United States company, duly incorporated and existing under the laws of the state of Mi chigan. The principal place of business of DIBC is: 12225 Stephens Road Warren, Michigan 48089 United States of America 11 . The foll owin g are the agents, counsel and advocates for Claimant for purposes of this arbitration proceeding: 3 Donald Francis Donovan Carl Micarelli William H. Taft V Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 United States of America Tel.: + I 212 909 6000 Fax: +12129096836 The address of Claimant's counsel of record should be deemed Claimant's address for purposes of this proceeding, and all communications shall be served on Claimant through counsel. 12. DIBC owns and controls all of the stock ofCTC, a Canadian company established by a Special Act of Parliament. The principal place of business ofCTC is: 4285 Industrial Drive Windsor, Ontario N9C 3R9 Canada 13. Canada is a sovereign state and a state party to NAriA. 14. Under Article 1137(2) ofNAFTA, delivery of notices and documents to the Government of Canada should be made to the following address: Office of the Deputy Attorney General of Canada 284 Wellington Street Ottawa, Ontario KIA OH8 Canada 15. Article 105 ofNAFTA makes Canada responsible for the actions of its subnational governments, including provincial and municipal governments. The claim asserted herein involves actions taken by the federal government of Canada, the government of the Province of Ontario, the municipal government of the City of Windsor. Ontario, and numerous governmental agencies of each oflhem. Canada is responsible for governmental measu res taken by these entities. 4 m THE AGREEMENT TO ARBITRATE 16. The text of the agreement to refer this dispute to arbitration is set fo rth in NAFTA. In Chapter Eleven of that treaty, Canada made an offer to submit to arbitration claims for breaches of a substantive obligation of the chapter. The Claimants have accepted Canada's offer, thu s forming the agreement to arbitrate between the parties to the di spute. 18. Article I I 20( I) ofNAFT A states that: Except as provided in Annex 1120.1, and provided that six months have elapsed since the events giving ri se to a claim, a di sputing investor may submit the claim to arbitration under: (a) the ICSID Convention, prov ided that both the disputing Party and the Party of the in vestor are parties to the Conventi on; (b) the Additional Facility Rules of ICSID, provided that either the disputing Party or the Party of the investor, but not both, is a party to the ICSID Convention; or (c) the UNCITRAL Arbitration Rules. 17. NAFTA Article 11 22(1) provides that "each [state) Party [to NA FTA) consents to the submission of a claim to arbitrati on in accordance with the procedures set out in thi s Agreement." Further, NAFT A Article 1122(2) states that "the consent gi ven by paragraph I and the submission by a disputing investor of a claim to arbitration shall satisfy the requ irement of ... Article II of the New York Conventi on for an agreement in writing." 18. The parties have attempted, without success, to settle the dispute through consultation and negotiation. 5 19. Each of the requirements for arbitration under NAFTA is satisfied here: • First, NAFTA entered into force in 1994 and remains in force between the United States and Canada. • Second, more than six months has elapsed since the events giving rise to the claim, as set forth in this Request for Arbitration. • Third, on March 23, 2010, Claimant DlBC served Canada with a Notice of Intent to Submit a Claim to Arbitration Under Section B of Chapter II of the North American Free Trade Agreement (the "Notice of Intent") specifying the name and address of the claimants; the provisions of NAFTA that have been breached; the issues and factual basis of the claims set forth in thi s Notice of Arbitration; and also the relief sought and the approximate amount of damages claimed. More than ninety days have elapsed since the service of the Notice oflntent.2 • Fourth, Claimant DlBC is an enterprise organized under the laws of the State of Michigan in the United States of America, and therefore an investor of the United States under the definitions set out in Article 1139 of the NAFTA. • Fifth, Claimant DlBC and its enterprise CTC have provided the requisite consent to arbitration and waiver in the form contemplated by Article I 121.
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