Confidential Information - Unauthorized Disclosure Prohibited IN THE MATTER OF AN ARBITRATION UNDER CHAPTER ELEVEN OF THE NORTH AMERICAN FREE TRADE AGREEMENT AND THE UNCITRAL ARBITRATION RULES BETWEEN: TENNANT ENERGY, LLC Claimant AND GOVERNMENT OF CANADA Respondent GOVERNMENT OF CANADA MEMORIAL ON JURISDICTION September 21, 2020 Trade Law Bureau Government of Canada Lester B. Pearson Building 125 Sussex Drive Ottawa, Ontario K1A 0G2 CANADA Tennant Energy, LLC v. Government of Canada Canada’s Memorial on Jurisdiction September 21, 2020 Table of Contents I. INTRODUCTION ................................................................................................................1 II. FACTUAL BACKGROUND ..............................................................................................3 A. Ontario’s Feed-in-Tariff Program .................................................................................4 1. The Green Energy and Green Economy Act, 2009 .............................................4 2. FIT Program Rules and Procedures .....................................................................4 (a) Province-Wide Ranking for FIT Applications ...........................................5 (b) Connection Availability .............................................................................5 (c) Transmission Limitations and FIT Contract Allocation in the Bruce Region ........................................................................................................6 3. 2011 Auditor General’s Report ...........................................................................8 4. June 12, 2013 Ministerial Direction ....................................................................9 B. The Green Energy Investment Agreement ....................................................................9 C. Skyway 127 .................................................................................................................11 1. Skyway 127’s FIT Application..........................................................................11 2. Skyway 127’s Ownership ..................................................................................12 D. Domestic Reviews and Investigations Regarding Ontario’s Handling of Government Records...................................................................................................13 1. Documents and Evidence Relating to Ontario’s Decision to Cancel Two Gas Plants ..........................................................................................................13 2. Documents and Evidence Relating to Ontario’s Deferral on the Development of Off-Shore Wind Projects ........................................................16 E. Other International Proceedings ..................................................................................17 1. Mesa Power Group, LLC v. Canada .................................................................17 2. Windstream Energy, LLC v. Canada .................................................................20 F. The Claimant’s Submission of its Claim to Arbitration .............................................21 III. CANADA’S CONSENT TO ARBITRATION IS A QUESTION OF JURISDICTION, NOT ADMISSIBILITY ......................................................................22 IV. THE CLAIMANT BEARS THE BURDEN OF ESTABLISHING THAT THIS TRIBUNAL HAS JURISDICTION ..................................................................................24 V. THE TRIBUNAL HAS NO JURISDICTION RATIONE TEMPORIS UNDER ARTICLE 1116(1) BECAUSE THE CLAIMANT WAS NOT AN “INVESTOR OF A PARTY” WHEN THE ALLEGED NAFTA BREACH OCCURRED ...............26 i Tennant Energy, LLC v. Government of Canada Canada’s Memorial on Jurisdiction September 21, 2020 A. NAFTA’s Dispute Settlement Provisions Limit the Tribunal’s Temporal Jurisdiction to Claims from a Claimant Who Qualified as an “Investor of a Party” When the Alleged Breach Occurred ................................................................26 1. Article 1116(1) Requires a Claimant to be an “Investor of a Party” When the Alleged Breach Occurred ............................................................................26 2. International Investment Jurisprudence Confirms that a Claimant Must Be an “Investor of a Party” When the Alleged Breach Occurred ...........................28 3. The Claimant Must Submit Adequate Evidence to Discharge Its Burden to Prove that It Was an “Investor of a Party” When the Alleged Breach Occurred ............................................................................................................32 B. The Tribunal Has No Jurisdiction Ratione Temporis Because the Claimant Was Not an “Investor of a Party” When the Alleged Breach Occurred .............................34 1. All of the Challenged Measures, and therefore the Alleged Breach, Occurred Between 2008 to 2013 .......................................................................34 2. The Claimant Was Not an “Investor of a Party” When the Alleged Breach Occurred ............................................................................................................38 (a) The Claimant Did Not Own an Equity Interest in Skyway 127 When the Alleged Breach Occurred ...................................................................38 (b) The Claimant Did Not Control Skyway 127 When the Alleged Breach Occurred.......................................................................................42 VI. THE TRIBUNAL HAS NO JURISDICTION RATIONE TEMPORIS UNDER ARTICLE 1116(2) BECAUSE THE NOTICE OF ARBITRATION WAS NOT SUBMITTED WITHIN THE THREE-YEAR LIMITATION PERIOD .....................44 A. Canada’s Consent to Arbitration is Conditional on the Claimant Satisfying the Strict Requirement in Article 1116(2) ........................................................................44 1. Article 1116(2) Imposes a Strict Three-Year Limitation Period for a Claimant to Submit a Claim to Arbitration .......................................................44 2. The Limitation Period in Article 1116(2) Begins On the Date the Claimant First Acquires or Should Have First Acquired Knowledge of the Alleged Breach and That It Has Incurred Loss or Damage ............................................46 3. Either Actual or Constructive Knowledge is Sufficient to Start the Limitation Period in Article 1116(2) .................................................................49 4. Full or Precise Knowledge of the Loss or Damage Incurred is Not Required to Start the Limitation Period in Article 1116(2) ...............................51 B. The Tribunal Has No Jurisdiction Ratione Temporis Because the Notice of Arbitration Was Not Submitted Within the Limitation Period ...................................52 1. The Claimant Knew or Should Have Known of the Alleged Breach Prior to June 1, 2014 ...................................................................................................53 ii Tennant Energy, LLC v. Government of Canada Canada’s Memorial on Jurisdiction September 21, 2020 (a) The Alleged “Specific Information That Became Public After June 1, 2014” Reveals How Little Information Was “New”............................55 (i) Public Documents Demonstrate that the Claimant Knew or Should Have Known of the Alleged Breach Concerning the GEIA Prior to June 1, 2014 ............................................................58 (ii) Public Documents Demonstrate that the Claimant Knew or Should Have Known of the Alleged Breach Concerning the FIT Program Prior to June 1, 2014 .................................................67 (iii) Public Documents Demonstrate that the Claimant Knew or Should Have Known of the Alleged Breach Concerning the Handling of Documents Prior to June 1, 2014 ...............................75 2. The Claimant Knew or Should Have Known of the Alleged Loss or Damage Prior to June 1, 2014 ...........................................................................77 VII. CONCLUSION AND REQUEST FOR RELIEF ............................................................78 iii Tennant Energy, LLC v. Government of Canada Canada’s Memorial on Jurisdiction September 21, 2020 I. INTRODUCTION 1. Tennant Energy, LLC (“Tennant” or the “Claimant”) is seeking to arbitrate a claim against the Government of Canada under NAFTA Chapter Eleven for an alleged breach of Article 1105. However, in doing so, the Claimant has completely disregarded the conditions precedent to Canada’s consent to arbitration. The NAFTA Parties only offered their consent to arbitrate certain investment disputes. Their consent is neither universal nor unconditional. The NAFTA Parties conditioned their consent on a claimant following certain procedures and meeting the specific requirements set out in Articles 1116 to 1121 when submitting a claim to arbitration. These conditions precedent to each Party’s consent are a fundamental part of the agreement reached by the NAFTA Parties, and they cannot be ignored or simply set aside because they prove inconvenient to a potential claimant. 2. The Claimant has spent almost 250 pages laying out its claim, yet its claim is quite simple. The Claimant is asking this Tribunal to award it damages because it failed to receive a Feed-in Tariff contract (“FIT Contract”) in 2011. It bases its claim on three groups of measures that together result in an alleged breach of NAFTA Article 1105. First, measures arising out of the Green Energy Investment Agreement (“GEIA”) signed between the Government of Ontario (the “Government” or “Ontario”),