Case law
Procedural Order No. 8 (redacted)
2018-54
- Gericht
- Permanent Court of Arbitration
- Aktenzeichen
- 2018-54
- Datum
- 12.11.2020
- Dokumenttyp
- procedural_order
IN
THE
MATTER
OF
AN
ARBITRATION
UNDER
CHAPTER
ELEVEN
OF
THE
NORTH
AMERICAN
FREE
TRADE
AGREEMENT
AND
THE
UNCITRAL
ARBITRATION
RULES,
1976
- between -
TENNANT
ENERGY,
LLC
(the
“Claimant”)
- and -
GOVERNMENT
OF
CANADA
(the
“Respondent”,
and
together
with
the
Claimant,
the
“Parties” )
PROCEDURAL
ORDER
NO.
8
The
Arbitral
Tribunal
Mr.
Cavinder
Bull
SC
(Presiding
Arbitrator)
Mr.
R.
Doak
Bishop
Sir
Daniel
Bethlehem
QC
Registry
Permanent
Court
of
Arbitration
Tribunal
Secretary
Ms.
Christel
Y.
Tham
1 2
November
2020Public Version
PCA
Case
Nº
2018 - 54
Procedural
Order
No.
8
1 2
November
2020
Page
1
of
10
I.
R ELEVANT
P ROCEDURAL
H ISTORY
1.
By
Notice
of
Arbitration
dated
1
June
2017,
the
Claimant
commenced
this
arbitration
against
the
Respondent
pursuant
to
Articles
1116
and
1120
of
Chapter
11
of
the
North
American
Free
Trade
Agreement
(“ NAFTA ”),
and
the
Arbitration
Rules
of
the
United
Nations
Commission
on
International
Trade
Law,
1976
(“ UNCITRAL
Rules ”).
2.
On
24
June
2019,
the
Tribunal
issued
Procedural
Order
No.
1
(“ PO
1 ”)
establishing
the
procedural
calendar
for
an
initial
phase
up
to
th e
Tribunal’s
decision
on
bifurcation
and
preliminary
motions ,
and
two
alternative
timetables
for
a
subsequent
phase
applicable
(i)
should
the
proceedings
not
be
bifurcated;
and
(ii)
should
the
proceedings
be
bifurcated .
3.
On
2
July
2019 ,
the
Respondent
filed
its
Statement
of
Defence.
4.
On
23
September
2019 ,
the
Respondent
submitted
its
Request
for
Bifurcation ,
requesting
that
the
Tribunal
address
in
a
preliminary
procedure
the
Respondent’s
NAFTA
Article
1116(2)
time - bar
jurisdictional
objection .
5.
On
23
October
2019,
the
Claimant
submitted
its
Response
to
the
Request
for
Bifurcation.
6.
From
14
to
15
January
2020 ,
a
hearing
on
the
issues
of
bifurcation
and
preliminary
motions
took
place
in
Washington,
D.C.
7.
On
27
February
2020,
the
Tribunal
issued
Procedural
Order
No .
4
(“ PO
4 ”) ,
in
which
it
dismiss ed
the
Respondent’s
request
for
bifurcation
on
the
ground
that
it
was
premature .
The
Tribunal
held ,
in
relevant
part :
87.
In
the
exercise
of
its
discretion
to
bifurcate,
the
Tribunal
is
guided
by
three
relevant
considerations.
These
considerations
are
(i)
whether
the
jurisdictional
objection
is
frivolous;
(ii)
whether
the
objection,
if
successful,
would
materially
reduce
the
time
and
costs
of
the
proceeding;
and
(iii)
whether
the
objection
concerns
issues
intertw ined
with
the
merits
of
the
arbitration.
88.
Having
considered
the
Parties’
submissions
on
this
issue,
the
Tribunal
has
decided
to
dismiss
the
Respondent’s
request
for
bifurcation
on
the
ground
that
it
is
premature.
89.
The
Tribunal
has
been
directed
to
pa ragraph
91
of
the
Claimant’s
Notice
of
Arbitration
dated
1
June
2017
(“ NOA ”). 102
Paragraph
91
of
the
NOA
refers
to
“four
categories
of
wrongful
actions”
purportedly
committed
by
the
Respondent,
namely
(i)
the
unfair
manipulation
of
the
award
of
access
to
t he
electricity
transmission
grid;
(ii)
the
unfair
manipulation
of
the
dissemination
of
the
FIT
Program
information;
(iii)
the
unfair
manipulation
of
the
awarding
of
the
FIT
Program
Contracts;
and
(iv)
the
improper
destruction
of
necessary
and
material
evid ence
by
senior
officials
in
the
Government
of
Ontario.
However,
the
NOA
simply
does
not
contain
sufficient
particulars
of
each
category
of
wrongdoing
which
would
allow
the
Tribunal
to
take
a
view,
one
way
or
another,
on
whether
the
Tribunal
can
determine
t he
Respondent’s
jurisdictional
objection
without
entering
into
the
merits.
90.
The
Respondent
has
requested
that
the
Tribunal
bifurcate
the
proceedings
to
consider
the
Respondent’s
jurisdictional
objection
that
the
Claimant
allegedly
failed
to
meet
the
con ditions
precedent
for
submitting
a
claim
to
arbitration
pursuant
to
Article
1116(2)
of
the
NAFTA.
According
to
the
Respondent,
the
NOA
was
filed
more
than
three
years
after
the
Claimant
first
acquired,
or
should
have
acquired,
knowledge
of
the
alleged
brea ch
and
knowledge
that
it
incurred
loss
or
damage
as
a
result
of
that
breach
and
as
such,
the
claim
is
time - barred. Public Version
PCA
Case
Nº
2018 - 54
Procedural
Order
No.
8
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2020
Page
2
of
10
91.
Before
the
Tribunal
can
make
an
assessment
of
whether
to
bifurcate
the
proceedings,
the
Tribunal
will
need
to
know
what
evidence
it
will
likely
have
to
consider
in
determining
the
Respondent’s
jurisdictional
objection
and
whether
the
Tribunal
will
be
substantially
engaging
in
the
facts
of
the
dispute
when
considering
that
evidence.
However,
until
the
Tribunal
is
informed
of
the
specific
bre ach
in
question
which
the
Respondent
now
contends
is
time - barred,
the
Tribunal
does
not
know
what
evidence
will
likely
be
adduced
or
the
evidence
it
will
likely
have
to
consider
in
assessing
when
the
Claimant
acquired,
or
should
have
acquired,
knowledge
of
that
breach.
Consequently,
the
Tribunal
is
unable
to
decide
at
this
stage
whether
an
inquiry
into
the
Respondent’s
jurisdictional
objection
will
be
best
conducted
with
the
merits
phase
when
the
Tribunal
will
have
the
benefit
of
the
entire
record
or
whethe r
the
jurisdictional
objection
should
be
heard
as
a
preliminary
issue.
The
Tribunal
needs
to
see
the
Claimant’s
claims
in
more
detail
before
it
can
decide
whether
the
proceedings
can
be
bifurcated.
The
Tribunal
cannot
decide
whether
to
bifurcate
the
procee dings
or
not
if
there
is
no
specificity
to
the
claims.
For
these
reasons,
the
Respondent’s
request
for
bifurcation
is
premature. 1
8.
The
Tribunal
further
determined
that
the
proceedings
would
continue
in
accordance
with
the
procedural
timetable
set
out
in
P O
1
for
the
non - bifurcated
scenario,
with
certain
modifications
adopted
in
order
to
allow
the
Respondent
to
pursue
the
bifurcation
of
the
proceedings
after
havi ng
had
sight
of
the
Claimant’s
M emorial . 2
In
the
event
that
the
Respondent
decide d
to
renew
its
r equest
for
bifurcation,
the
Tribunal
held
that:
(d)
After
receiving
the
[Parties’]
submissions,
the
Tribunal
will
decide
on
the
papers
without
a
hearing
on
whether
the
proceedings
should
be
bifurcated.
In
this
regard,
the
Tribunal
notes
that
it
has
had
the
benefit
of
extensive
arguments
by
Parties
on
the
issue
of
bifurcation
and
the
oral
arguments
made
at
the
Hearing
in
particular
have
been
of
assistance
to
the
Tribunal.
In
the
interests
of
expediency
and
to
save
time
and
costs
for
all
Parties,
the
Tribunal
is
confident
that
it
can
address
a
second
bifurcation
request
without
a
further
hearing.
(e)
The
Tribunal
will
issue
the
relevant
procedural
directions
after
it
has
come
to
a
decision
on
the
Respondent’s
second
bifurcation
request,
including
any
adjustmen ts
to
the
procedural
timetable
where
necessary. 3
9.
On
26
June
2020,
the
Parties
advised
the
Tribunal
that
they
agreed
to
extend
certain
deadlines
set
out
in
P O
4.
On
4
July
2020,
the
Tribunal
confirmed
the
Parties’
agreement
to
amend
the
procedural
schedule.
10.
O n
7
August
2020 ,
t he
Claimant
submitted
its
Memorial
on
Jur i sdiction,
Merits
and
Quantum
(the
“ Memorial ”) ,
along
with
the
witness
statement
of
Mr.
John
C.
Pennie 4
and
the
expert
report
on
valuation
by
Richard
Taylor
and
Larry
Andrad e
of
Deloitte . 5
11.
On
21
September
2020,
the
Respondent
submitted
its
Memorial
on
Jurisdiction
(the
“ Memorial
on
Jurisdiction ”)
and,
in
a
separate
filing,
its
renewed
request
for
bifurcation
( the
“ Renewed
Request
for
Bifurcation ”) ,
along
with
the
witness
statement
of
Mr.
Luc as
McCall. 6
12.
On
13
October
2020,
the
Claimant
filed
its
response
to
the
Respondent’s
request
for
bifurcation
(“ Response
to
Renewed
Bifurcation
Request ”).
1
P O
4,
¶¶
87 - 91 ,
183(b).
2
P O
4,
¶¶
92 - 93 .
3
P O
4,
¶¶
93(d)
and
(e) .
4
First
Witness
Statement
of
John
C.
Pennie,
dated
7
August
2020
( CWS - 1 ).
5
Expert
Report
on
Valuation
by
Deloitte
LLP,
dated
7
August
2020
( CER - 1 ).
6
First
Witness
Statement
of
Luca
McCall,
dated
21
September
2020
( RWS - 1 ). Public Version
PCA
Case
Nº
2018 - 54
Procedural
Order
No.
8
1 2
November
2020
Page
3
of
10
13.
On
28
October
2020,
the
Respondent
sought
leave
(i)
to
submit
into
the
record
as
a
new
legal
authority
the
Westmoreland
Mining
Holdings
LLC
v.
Government
of
Canada ,
ICSID
Case
No.
UNCT/20/3,
Procedural
Order
No.
3,
Decision
on
Bifurcation,
dated
20
October
2020
(the
“ Westmoreland
Decision”);
and
(ii)
for
both
disputing
Parties
to
fil e
submissions
on
the
rel evance
of
the
Westmoreland
Decision
to
the
Renewed
Request
for
Bifurcation.
14.
On
30
October
2020,
at
the
Tribunal’s
invitation,
the
Claimant
provided
its
response,
stating
that
it
“opposes
[the
Respondent’s
request]
based
on
practicality,
delay,
and
cost.”
F urther,
should
the
Tribunal
decide
to
admit
the
Westmoreland
Decision
into
the
record,
the
Claimant
argued
that
a
specific
procedure
should
then
follow,
according
to
which
both
the
disputing
and
non - disputing
Parties
would
be
given
the
opportunity
to
file
submissions,
and
the
disputing
Parties
would
then
be
given
the
opportunity
to
respond
to
the
non - disputing
Parties’
submissions.
15.
On
10
November
2020,
the
Tribunal
informed
the
Parties
that,
prior
to
receipt
of
the
Respondent’s
request,
it
had
already
decid ed
on
the
course
to
be
followed
in
connection
with
the
Respondent’s
Renewed
Request
for
Bifurcation.
As
such,
it
saw
no
need
to
depart
from
that
decision
for
purposes
of
receiving
further
submissions
from
the
Parties
on
the
Westmoreland
Decision.
Taking
ac count
of
the
fact
that
the
Westmoreland
Decision
is
already
in
the
public
domain,
the
Tribunal
nevertheless
granted
the
Respondent
permission
to
submit
it
into
the
record,
w ithout
comm ent
from
the
Parties .
II.
S UMMARY
OF
T HE
P ARTIES ’
P OSITION S
A.
T he
Respondent’s
Position
16.
The
Respondent
requests
that
the
Tribunal
bifurcate
the
proceedings
and
consider
its
two
ratione
temporis
jurisdictional
objections
as
preliminary
questions. 7
17.
The
Respondent
first
advances
that
the
Claimant
has
failed
to
establish
that
it
was
a
protected
“investor
of
a
Party”
when
the
alleged
breach es
occurred,
and
that
therefore,
it
has
not
complied
with
the
requirements
of
Article
1116(1)
of
the
NAFTA . 8
Accord ing
to
the
Respondent,
the
exhibits
accompanying
the
Claimant’s
Memorial
show
that
the
Claimant
did
not
acquire
an
equity
interest
in
the
alleged
investment,
Skyway
127
Wind
Energy
Inc.
(“ Skyway
127 ”),
until
15
January
2015. 9
This
confirms,
the
Respondent
asserts ,
that
the
Claimant
was
not
a
protected
“investor
of
a
Party”
between
200 8
and
2013
when
the
alleged
breach
occurred. 10
In
light
of
the
former,
the
Respondent
concludes
that
it
has
not
consented
to
this
arbitration,
and
therefore,
the
Tribunal
lacks
jurisdiction
over
the
Claimant ’ s
claims.
18.
Second,
the
Respondent
submits
that
the
Claimant ’s
claims
are
time - barred
under
Article
1116(2)
of
the
NAFTA. 11
Article
1116(2)
requires
that
claims
be
filed
within
three
years
from
the
date
on
which
the
enterprise
first
acquired,
or
should
have
first
acquired,
knowledge
of
the
alleged
breach
and
knowledge
that
the
enterprise
has
incurred
loss
or
damage. 12
The
Respondent
submits ,
however,
that
the
Claimant
knew,
or
should
have
known,
about
the
7
Renewed
Request
for
Bifurcation,
¶
22.
8
Renewed
Request
for
Bifurcation,
¶¶
10 - 11.
See
also
Memorial
on
Jurisdiction,
Part
V.
9
Renewed
Request
for
Bifurcation,
¶
11,
referring
to
Shareholder’s
Ledger
Skyway
127,
15
January
2015
( C - 115 ).
10
Renewed
Request
for
Bifurcation,
¶
11 ,
referring
to
Memorial,
¶¶
771 - 774;
Memorial
on
Jurisdiction,
¶¶
80 - 96.
11
Renewed
Request
for
Bifurcation,
¶¶
15 - 16.
See
also
Memorial
on
Jurisdiction,
Part
VI.
12
Renewed
Request
for
Bifurcation,
¶
3. Public Version
PCA
Case
Nº
2018 - 54
Procedural
Order
No.
8
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2020
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10
alleged
breaches
more
than
three
years
before
it
submitted
its
claim
to
arbitration
( i.e. ,
before
1
June
2014). 13
This
is
because ,
the
Respondent
contends ,
most
of
the
information
on
which
the
Claimant
relies
to
substantiate
its
claims
were
available
before
the
critical
da te
of
1
June
2014,
and
the
information
that
became
available
after
that
date
was
not,
as
the
Claimant
alleges,
new. 14
19.
The
Respondent
considers
that
these
two
jurisdictional
objections ,
considered
either
jointly
or
separately,
warrant
the
bifurcation
of
the
proceedings. 15
In
this
regard,
the
Respondent
recalls
that
Article
21(4)
of
the
UNCITRAL
Rules
contains
a
presumption
in
favour
of
bifurcating
jurisdictional
questions
“which
is
intended
to
increase
the
fairness
and
efficie ncy
of
arbitration
proceedings.” 16
The
Respondent
further
recalls
that
in
parag raph
87
of
P O
4
the
Tribunal
relied
on
the
three - pronged
test
for
bifurcation
as
articulated
in
the
Glamis
Gold
case,
namely :
(i)
whether
the
jurisdiction al
objection
is
frivolous;
(ii)
whether
the
objection,
if
successful,
would
materially
reduce
the
time
and
cos ts
of
the
proceeding;
and
(iii)
whether
the
objection
concerns
issues
intertwined
with
the
merits
of
the
arbitration . 17
20.
The
Respondent
submits
that
all
of
the
relevant
criteria
support
bifurcation
in
the
i nstant
case. 18
First ,
the
Respondent
asserts
that
its
objections
are
not
frivolous
because
they
concern
the
Claimant’s
compliance
with
conditions
precedent
to
Canada’s
consent
to
arbitration
under
Articles
1116(1)
and
1116(2)
of
the
NAFTA ,
and
therefore
“go []
to
the
very
basis
of
the
Tribunal’s
authority
to
hear
this
claim . ” 19
T he
Respondent
also
contends
that
since
as
a
general
rule
under
international
law
treaties
do
not
apply
retroactively
absent
express
provisions
to
the
contrary,
its
objection
under
Article
1116(1)
“raises
a
fundamental
question
concerning
the
non - retroactive
application
of
the
substantive
obligations
in
NAFTA
Chap ter
Eleven” . 20
21.
Second ,
the
Respondent
maintains
that
either
of
its
objections,
if
granted,
would
materially
reduce
the
time
and
costs
of
proceeding s
because
it
would
dispose
of
the
totality
of
the
Claimant’s
claim s
and
bring
the
arbitration
to
a
close . 21
Moreover ,
the
Respondent
notes,
its
objections
may
properly
be
considered
by
the
Tribunal
without
the
need
for
documen t
produ ction
or
expert
reports. 22
22.
Third ,
the
Respondent
submits
that
its
objection s
do
not
concern
issues
intertwined
with
the
merits
of
the
arbitration. 23
The
Respondent
maintains
that
in
ord er
to
assess
its
objection
under
Article
1116(1)
of
the
NAFTA
the
Tribunal
only
needs
to
address
two
questions:
“(i)
when
did
the
alleged
breach
occur;
and
(ii)
when
did
the
Claimant
become
an
‘investor
of
a
Party’
with
an
investment
in
Skyway
127,”
none
o f
which
require
delving
into
the
merits
of
13
Renewed
Request
for
Bifurcation,
¶
16.
See
also
Memorial
on
Jur isdiction,
Part
VI.B.
14
See
Memorial
on
Jurisdiction,
Part
VI.B.
15
Renewed
Request
for
Bifurcation,
¶¶
8 - 9.
16
Renewed
Request
for
Bifurcation,
¶
5,
referring
to
Cairn
Energy
PLC
and
Cairn
UK
Holdings
Limited
(CUHL)
v.
Republic
of
India ,
UNCITRAL,
Procedural
Order
No.
4
-
Decision
on
the
Respondent
Application
for
Bifurcation,
19
April
2017,
¶
78
( RLA - 056 );
Glamis
Gold,
Ltd.
v.
The
United
States
of
America ,
UNCITRAL,
Procedural
Order
No.
2
(Revised),
31
May
2005,
¶
11
( RLA - 054 ).
17
Renewed
Request
f or
Bifurcation,
¶
7,
referring
to
P O
4,
¶
87.
18
Renewed
Request
for
Bifurcation,
¶¶
12 - 14,
17 - 20.
19
Renewed
Request
for
Bifurcation,
¶¶
12,
17 - 18 .
20
Renewed
Request
for
Bifurcation,
¶
12.
21
Renewed
Request
for
Bifurcation,
¶ ¶
13,
19 .
22
Renewed
Request
for
Bifurcation,
¶ ¶
13,
19 .
23
Renewed
Request
for
Bifurcation,
¶¶
14,
20. Public Version
PCA
Case
Nº
2018 - 54
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2020
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5
of
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the
Claimant’s
claims. 24
Similarly ,
the
Respondent
asserts
that
the
review
of
its
objection
under
Article
1116(2)
of
the
NAFTA
would
only
involve
identifying
the
measures
that
allegedly
breached
the
NAFTA
and
the
d ates
on
which
the
Claimant
first
acquired,
or
should
have
first
acquired,
knowledge
of
the
alleged
breach
and
resulting
loss
or
damage. 25
23.
As
for
the
two
other
jurisdictional
objections
raised
in
its
Statement
of
Defence
dated
2
July
201 9,
the
Respondent
states
that
these
objections,
although
not
frivolous,
may
be
more
closely
intertwined
with
the
merits
of
the
dispute.
Accordingly,
the
Renewed
Request
for
Bifurcation
only
addresses
the
Respondent’s
objections
to
the
jurisdiction
ratione
temporis
of
the
Tribunal,
and
is
without
prejudice
to
other
jurisdictional
objections
to
be
made
in
future
pleadings,
if
such
pleadings
are
necessary. 26
B.
The
Claimant’s
Position
24.
The
Claimant
maintains
that
the
Respondent’s
Renewed
Request
for
Bifurcation
“should
be
denied
in
its
entirety,
and
costs
should
be
assessed
against
it
on
a
full
indemnity
basis” . 27
25.
The
Claimant,
like
the
Tribunal
and
the
Respondent,
refers
to
the
three
criteria
under
the
Glamis
Gold
test
for
determining
whether
to
bifurcate
( see
paragrap h s
7
and
16
above). 28
In
addition,
the
Claimant
contends
that
other
case - dependent
considerations
shoul d
be
taken
into
account.
In
the
present
case,
this
includes
the
fact
that,
in
the
Claimant’s
view,
evidence
regarding
its
spoliation
of
eviden ce
claim
will
likely
arise
in
the
document
production
phase . 29
26.
The
Claimant
submits
that
not
only
h as
the
Respondent
failed
to
discharge
its
burden
of
proving
that
its
Renewed
Request
for
Bifurcation
satisfies
the
Glamis
Gold
test , 30
but
other
case - dependent
considerations
also
militate
against
bifurcation
in
this
case. 31
In
fact ,
the
Claimant
alleges ,
when
the
“obvious
defects”
in
the
Respondent’s
objections
are
weighted
against
the
harm,
cost,
and
delay
caused
by
bifurcation,
it
can
be
confirme d
that
bifurcation
is
not
warranted. 32
27.
First,
the
Claimant
advances
that
the
Respondent’s
objections
are
frivolous
as
these
are
“ inconsistent
with
the
facts
pleaded
in
the
arbitration . ” 33
The
Claimant
asserts
that
it
has
articulated
specific
claims
that
largely
rest
on
information
arising
from
the
publication
in
2015
of
materials
related
to
the
Hearing
in
Mesa
Power
v.
Canada ,
held
in
October
2014
(the
“ Mesa
Power
Hearing ”) . 34
According
to
the
Claimant,
during
the
Mesa
Power
H earing ,
government
officials
administrating
the
Ontario
Feed - In
Tariff
(“ FIT ” )
p rogram
made
24
Renewed
Request
for
Bifurcation,
¶
14.
25
Renewed
Request
for
Bifurcation,
¶
20.
26
Renewed
Request
for
Bifurcation,
¶
4.
27
Response
to
Renewed
Bifurcation
Request ,
¶
388.
28
Response
to
Renewed
Bifurcation
Request ,
¶
141,
referring
to
P O
4,
¶
87.
29
Response
to
Renewed
Bifurcation
Request,
¶¶
143 - 145,
referring
to
Jeffrey
Commission
and
Rahim
Moloo,
Procedural
Issues
in
International
Investment
Arbitration
at
¶¶
5.30 - 5.31
( CLA - 267 ) .
30
Response
to
Renewed
Bifurcation
Request ,
¶¶
376 - 378.
31
Response
to
Renewed
Bifurcation
Request,
¶¶
148 - 150.
32
Response
to
Renewed
Bifurcation
Request,
¶
381(b).
33
Response
to
Renewed
Bifurcation
Request ,
¶¶
193 - 197,
381(a).
34
Response
to
Renewed
Bifurcation
Request,
¶
63. Public Version
PCA
Case
Nº
2018 - 54
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2020
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6
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admission s
of
international ly
wrongful
conduct
which
form
“the
fundamental
basis”
of
the
Claimant’s
claim . 35
28.
Specifically,
the
Claimant
alleges
th at
the
post - hearing
briefs
and
the
transcript
of
the
Mesa
Power
Hearing
revealed
for
the
first
time
that:
(i)
government
officials
held
secret
meetings
to ,
inter
alia ,
take
steps
to
protect
the
business
prospects
of
a n
applicant
to
the
FIT
program
which
had
connections
with
the
Ontario
government; 36
( ii)
m et
with
another
company
that
applied
to
the
FIT
program ,
following
which
said
company
left
a
list
with
the
government
of
six
of
its
FIT
projects
that
needed
assistance ; 37
and
(iii)
Canada
was
provi ding
preferential
treatment
to
a
fo reign
investor
that
had
signed
an
agreement
with
the
Ontario
Government
titled
the
Green
Energy
Investment
Agreement
(the
“ GEIA ”),
which
exceeded
the
terms
of
that
agreement . 38
The
Claimant
underscores
that
it
could
have
not
accessed
any
of
this
this
information
prior
to
2015
because
the
Respondent
purposely
concealed
and
suppressed
this
wrongful
conduct. 39
29.
In
the
C laimant’s
view,
the
Respondent’s
objection
under
Article
1116(2 )
of
the
NAFTA
is
frivolous
because
it
is
predicated
on
the
suggestion
that
the
Claimant
must
have
known
of
the
above - mentioned
facts
before
these
were
made
public. 40
The
Claimant
asserts
that
the
three - year
period
under
Article
1116(2 )
of
the
NAFTA
is
initiated
only
when
there
is
actual
or
constructive
knowledge
of
both
the
b reach
and
the
loss
or
damage
that
has
been
incurred
by
the
investor
as
a
result. 41
In
this
respect,
the
Claimant
contends
that
the
Respondent
provides
no
evidence
that
the se
f acts
were
known
by
the
Claimant
three
years
before
the
filing
of
the
Notice
of
Arb itration
( i.e. ,
before
1
June
2014). 42
30.
The
Claimant
similarly
contends
that
the
Respondent’s
objection
under
Article
1116(1)
of
the
NAFTA
is
frivolous. 43
The
Claimant
submits
that
a
claim
does
not
arise
until
an
investor
is
aware
or
could
have
been
aware
of
the
alleged
breaches . 44
The
Claimant
alleges
it
did
not
have
knowledge
of
the
Respondent’s
wrongful
actions
before
15
August
2015,
the
date
of
the
publication
of
the
Mesa
Power
post - hearing
briefs. 45
At
that
time,
the
Claimant
avers,
Tennant
Energy
owned
45.6%
of
Skyway
127 ’s
shares
and
“had
been
exerting
actual
control
over
the
project
for
years” . 46
In
any
eve n t,
the
Claimant
submit s
that
the
NAFTA
defines
an
“investor”
as
someone
“who
makes,
is
making,
or
has
made
an
investment.” 47
Thu s,
the
Claimant
argues ,
even
if
the
Tribunal
finds
that
the
alleged
breach
arose
before
15
August
2015,
Tennant
Energy
would
still
qualify
as
an
investor
because
since
June
2011
it
has
held
35
Response
to
Renewed
Bifurcation
Request ,
¶ ¶
242 - 246.
36
Response
to
Renewed
Bifurcation
Request ,
¶ ¶
246 - 248 .
The
Claimant
specifies
that
this
fact
was
revealed
through
the
publication
of
the
post - hearing
briefs
in
the
Mesa
Power
arbitration
on
15
August
2015.
37
Response
to
Renewed
Bifurcation
Request ,
¶ ¶
246 ,
250 .
The
Claimant
specifies
that
this
fact
was
revealed
through
the
publication
of
the
post - hearing
briefs
in
the
Mesa
Power
arbitration
on
15
August
2015.
38
R esponse
to
Renewed
Bifurcation
Request ,
¶ ¶
246 ,
249 .
The
Claimant
specifies
that
this
fact
was
revealed
through
the
publication
of
the
hearing
transcript
and
post - hearing
briefs
in
the
Mesa
Power
arbitration
on
30
April
2015
and
15
August
2015 ,
respectivel y .
39
Response
to
Renewed
Bifurcation
Request ,
¶¶
243 - 245.
40
Response
to
Renewed
Bifurcation
Request ,
¶¶
258 - 260.
41
Response
to
Renewed
Bifurcation
Request ,
¶¶
14 - 16.
42
Response
to
Renewed
Bifurcation
Request ,
¶¶
318 - 320.
43
Response
to
Renewed
Bifurcation
Request ,
¶¶
263 - 278.
44
Response
to
Renewed
Bifurcation
Request ,
¶
154.
45
Response
to
Renewed
Bifurcation
Request ,
¶
153.
46
Response
to
Renewed
Bifurcation
Request ,
¶
176.
See
also
id. ,
¶¶
264 - 265,
referring
to
Memorial,
¶¶
772 - 773,
Witness
S tatement
of
John
C.
Pennie,
¶
48
( CWS - 1 ).
47
Response
to
Renewed
Bifurcation
Request ,
¶
271. Public Version
PCA
Case
Nº
2018 - 54
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of
10
a
beneficial
interest
in
Skyway
127
that
constituted
a
protected
i nvestment
in
the
form
of
intangible
property . 48
31.
With
respect
to
the
above
arguments,
t he
Claimant
caution s
that
ignoring
evidence
at
the
core
of
its
claims,
as
the
Respondent
is
doing
with
respect
to
the
admissions
made
during
the
Mesa
Power
Hearing ,
would
violate
due
process
guarantees
provided
for
in
Article
1115
of
the
NAFTA
and
Article
15
of
the
UNCITRAL
Rule s . 49
For
this
reason ,
t he
Claimant
emphasizes
that ,
absent
evidence
of
bad
faith,
the
Tribunal
must
consider
the
claim s
and
facts
as
pled
by
the
Claimant
when
considering
the
Respondent’s
bifurcation
request . 50
32.
With
respect
to
the
Respondent’s
claim
that
its
jurisdictional
objections
are
not
frivolous
because
they
pertain
to
the
scope
of
its
consent
to
arbitrate
under
the
NAFTA,
the
Claimant
dis agrees.
According
to
the
Claimant,
as
a
matter
of
law,
there
can
be
no
question
that
the
Respondent
consented
to
this
arbitration
because
Article
1122
of
the
NAFTA
“ represents
an
ongoing,
fully
valid
offer
to
arbitrate,
which
the
investor
has
accepted
in
b ringing
the
present
claim. ” 51
The
Claimant
argues
that
the
NAFTA
contracting
parties
cannot
unilaterally
withdraw
this
consent
to
arbitrate. 52
As
such,
the
Claimant
submits
that
any
condition
precedent
established
in
the
NAFTA,
such
as
that
under
Article
111 6(2),
does
not
constitute
a
condition
on
the
contracting
parties’
consent
to
arbitrate. 53
Rather,
in
the
Claimant’s
view,
these
are
procedural
issues
that
are
decided
upon
by
arbitral
tribunals. 54
33.
Second,
the
Claimant
argues
that
bifurcating
the
proceedings
would
be
inefficient
because
the
Tribunal
would
need
to
engage
in
a
substantial
consideration
of
the
merits
in
order
to
determine
the
Respondent’s
jurisdictional
objections . 55
34.
In
the
Claimant ’s
view,
the
Tribunal’s
determination
of
whether
15
August
2015
or
earlier
dates
constitute
the
date
of
breach
“w ill
be
determinative
of
the
jurisdictional
questions”, 56
because
it
would
dictate
when
the
three - year
time
limitation
started
running,
and
when
the
Claimant
would
have
had
to
qualify
as
an
“investor”
under
th e
NAFTA. 57
According
to
the
Claimant,
such
determination,
in
turn,
“ requires
a
full
consideration
of
all
the
evidence,
including
witnesses
and
experts ” ,
as
well
as
information
obtained
through
document
production. 58
This
is
because,
the
Claimant
contends,
th e
Tribunal
would
have
to
engage
in
a
review
of
(i)
when
the
Claimant
first
obtained
information
about
Ontario’s
internationally
wrongful
actions;
(ii)
the
decision
to
limit
transmission
access
in
Ontario;
(iii)
whether
the
measures
at
issue
in
the
Mesa
Pow er
arbitration
could
have
been
known
by
other
applicants
to
the
FIT
program ;
(iv)
whether
the
testimony
of
Mr.
John
C.
Pennie,
the
Claimant’s
representative,
should
be
considered
regarding
the
bare
trusteeship
of
Skyway
127
shares
held
by
Tennant
Energy
an d
the
control
exercised
by
Tennant
Energy
over
Skyway
127;
and
48
Response
to
Renewed
Bifurcation
Request ,
¶
266,
referring
to
Memorial,
¶¶
779 - 780.
See
also
Response
to
Renewed
Bifurcation
Request ,
¶¶
268 - 278.
49
Response
to
Renewed
Bifurcation
Request ,
¶¶
22 - 24.
50
Response
to
Renewed
Bifurcation
Request ,
¶ ¶
18 - 21,
25.
See
also
i d. ,
¶
377.
51
Response
to
Renewed
Bifurcation
Request,
¶
362.
52
Response
to
Renewed
Bifurcation
Request,
¶
360.
53
Response
to
Renewed
Bifurcation
Request,
¶¶
363,
368 - 370.
54
Response
to
Renewed
Bifurcation
Request,
¶¶
363,
368 - 370.
55
Response
to
Renewed
Bifurcation
Request ,
¶¶
322 - 340.
56
Response
to
Renewed
Bifurcation
Request,
¶
188.
57
Response
to
Renewed
Bifur cation
Request,
¶
336.
58
Response
to
Renewed
Bifurcation
Request ,
¶
339 . Public Version
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(v)
the
impact
of
the
composite
act
of
spoliation
and
the
alleged
secret
meetings
on
the
damages
suffered
by
the
Claimant. 59
35.
In
this
regard,
the
Claimant
urges
the
Tribunal
to
consider
the
examp le
of
the
Mesa
Power
arbitration
in
deciding
whether
to
bifurcate .
I n
Mesa
Power ,
the
Claimant
notes,
the
tribunal
initially
order ed
the
bifurcation
of
proceedings
in
order
to
address
as
a
preliminary
question
an
objection
regarding
a
temporal
issue . 60
A fte r
receiving
further
written
submissions,
however,
the
Mesa
Power
tribunal
decided
to
reverse
its
decision
on
bifurcation
on
the
basis
that
it
could
not
decide
on
the
objection
at
issue
without
substantially
engaging
in
the
facts
of
the
dispute . 61
36.
Third,
the
Claimant
contends
that
its
“ case
on
the
effects
of
spoliation
of
evidence
is
not
an
issue
that
Canada
seeks
to
bifurcate . ” 62
Accordingly ,
even
if
the
Respondent’s
objection s
are
successful
in
a
first
bifurcated
phase,
the
arbitration
would
need
t o
continue
to
the
merits
phase
for
the
determination
of
this
claim . 63
Moreover,
the
Claimant
maintains
that
“ given
Canada’s
ongoing
campaign
to
refuse
to
produce
documents,
the
extent
of
the
relevance
of
this
particular
breach
cannot
be
fully
assessed
until
document
production
has
been
completed .” 64
In
fact ,
t he
Claimant
considers
that
its
“entire
claim
concerning
the
harm
caused
to
it
arising
from
the
spoliation
of
evidence
relates
to
the
information
that
will
be
produced
from
this
document
production
phase. ” 65
Thus,
in
the
Claimant’s
view
“it
makes
no
sense
for
jurisdiction
to
be
bifurcated
until
that
production
happens.” 66
III.
T HE
T RIBUNAL ’ S
A NALYSIS
37.
The
Respondent
has
submitted
two
objections
to
the
Tribunal’s
jurisdiction
ratione
temporis
for
decision
on
a
preliminary
basis,
namely:
(i)
the
Claimant
was
not
a
protected
“investor
of
a
Party”
when
the
alleged
breach
occurred,
and
therefore
the
C laimant
has
not
met
the
requirements
of
Article
1116(1)
of
the
NAFTA
(“ First
Objection ”);
and
(ii)
the
claim
was
not
filed
prior
to
the
expiry
of
the
3 - year
limitation
period
articulated
in
Article
1116(2)
of
the
NAFTA
(“ Second
Objection ”) . 67
38.
As
stated
in
PO4,
the
Tribunal
is
guided
by
three
relevant
considerations
in
the
exercise
of
its
discretion
to
b ifurcate.
These
considerations
are
(i)
whether
the
jurisdictional
objection
is
frivolous;
(ii)
whether
the
objection,
if
successful,
would
materially
reduce
the
time
and
costs
of
the
proceeding;
and
(iii)
whether
the
objection
concerns
issues
intertwined
w ith
the
merits
of
the
arbitration. 68
39.
Having
carefully
considered
the
submissions
of
the
Parties,
the
Tribunal
concludes
that
these
considerations
favour
a
bifurcation
of
the
proceedings,
with
the
scope
of
the
bifurcated
jurisdictional
hearing
to
be
determin ed
after
the
Claimant’s
filing
of
its
Counter - Memorial
on
Jurisdiction .
59
Response
to
Renewed
Bifurcation
Request ,
¶
341.
60
Response
to
Renewed
Bifurcation
Request ,
¶
343.
61
Response
to
Renewed
Bifurcation
Request ,
¶¶
344 - 345,
referring
to
Mesa
Power
Group,
LLC
v.
Government
of
Canada ,
PCA
Case
No.
2012 - 17,
Procedural
Order
No.
3,
¶
73.
62
Response
to
Renewed
Bifurcation
Request ,
¶
146.
63
Response
to
Renewed
Bifurcation
Request ,
¶
349.
64
Response
to
Renewed
Bifurcation
Request ,
¶
251.
65
Response
to
Renewed
Bifurcation
Request ,
¶
3 48 .
66
Response
to
Renewed
Bifurcation
Request,
¶
251.
67
Renewed
Request
for
Bifurcation,
¶
8 .
68
Glamis
Gold
v.
United
States ,
¶
12(c)
( RLA - 054 ). Public Version
PCA
Case
Nº
2018 - 54
Procedural
Order
No.
8
1 2
November
2020
Page
9
of
10
40.
First,
in
the
Tribunal’s
view,
neither
the
Respondent’s
First
Objection
nor
the
Second
Objection
c ould
be
said
to
be
frivolous.
Without
deciding
the
merits
of
the
Respondent’s
two
juri sdictional
objections,
it
appear s
to
the
Tribunal
that
both
Parties
were
able
to
cite
authority
for
their
respective
positions ,
and
the
objections
are
not
one s
that
could
be
dismissed
out
of
hand.
41.
Secondly,
either
of
the
Respondent’s
two
objections ,
if
suc cessful,
could
potentially
dispose
of
the
totality,
and
if
not,
essential
parts
of
the
Claimant’s
claim.
There
is
a
fair
chance
that
bifurcation
will
allow
for
less
evidence
and
more
focused
legal
arguments
at
the
next
stage
of
the
proceedings.
42.
Thirdly ,
th e
Tribunal
considers
that
the
Respondent’s
First
Objection
can
be
examined
without
delving
into
the
merits
of
the
Claimant’s
claim .
The
Respondent’s
First
Objection
is
discrete
and
focuses
on:
(i)
when
the
alleged
breach
occurred ;
and
(ii)
when
did
the
Cla imant
become
an
“investor
of
a
Party”
with
an
investment
in
Skyway
127.
This
is
separate
from
the
question
of
whether
there
is
merit
to
the
Claimant’s
allegations
of
breach.
This
is
also
separate
from
the
question
of
whether
the
Claimant
knew
or
should
hav e
known
about
the
alleged
breach,
and/ or
the
loss
or
damage
arising
from
the
breach.
43.
With
regard
to
the
Respondent’s
Second
Objection
however,
it
is
not
yet
clear
to
the
Tribunal
whether
it
would
be
able
to
determine
this
objection
without
delving
into
the
merits
of
the
Claimant’s
claim.
At
the
heart
of
this
objection
is
the
question
of
whether
the
Claimant
knew
or
should
have
known
about
the
alleged
breaches,
as
well
as
the
loss
or
damage
arising
out
of
those
breaches,
more
than
three
years
prior
to
the
fi ling
of
its
Notice
of
Arbitration.
On
one
hand,
this
could
well
be
a
relatively
straightforward
issue
for
decision
on
a
preliminary
basis.
The
Respondent’s
case
is
simply
that
the
Claimant’s
allegations
should
have
been
known
to
the
Claimant
based
on
infor mation
that
was
publicly
available
prior
to
1
June
2014,
including
the
numerous
public
documents
used
in
the
Mesa
Power
arbitration
and
the
Mesa
Power
submissions.
On
the
other
hand,
depending
on
the
evidence
which
the
Claimant
intends
to
adduce,
the
Tribu nal
may
be
required
to
substantially
engage
in
the
facts
of
the
dispute,
and
to
establish
certain
facts
and
connections
between
these
facts .
This
may
also
involve
significant
testimony
from,
and
cross - examination
of,
witnesses.
In
that
case,
the
inquiry
wo uld
be
best
conducted
together
with
the
merits
phase
when
the
Tribunal
has
the
benefit
of
the
entire
record.
44.
In
the
premises ,
the
Tribunal
grants
the
Respondent’s
Renewed
Request
for
Bifurcation,
at
least
with
respect
to
the
First
Objection.
However,
with
respect
to
the
Second
Objection,
the
Tribunal
finds
that
it
would
be
able
to
better
assess
whether
this
objection
should
similarly
be
decided
on
a
preliminary
basis
after
it
has
had
sight
of
the
Claimant’s
Counter - Memorial
on
Jurisdiction.
The
Tribunal
sha ll
therefore
determine
the
scope
of
the
bifurcated
jurisdictional
hearing
after
the
Claimant’s
Counter - Memorial
on
Jurisdiction
is
filed.
45.
Having
allowed
the
Respondent’s
bifurcation
application,
and
having
taken
into
account
the
fact
that
the
time
for
the
Claimant
to
prepare
its
Counter - Memorial
on
Jurisdiction
overlaps
with
the
Christmas
and
New
Year
periods,
the
Tribunal
direct s
that
the
Claimant
files
its
Counter - Memorial
on
Jurisd iction
60
days
from
the
date
of
this
procedural
order.
Thereafter,
the
Tri bunal
will
issue
the
relevant
procedural
directions
after
it
has
come
to
a
decision
on
the
scope
of
the
bifurcated
jurisdictional
hearing.
IV.
T HE
T RIBUNAL ’ S
D ECISION
46.
For
the
foregoing
reasons,
the
Tribunal
determines
and
orders
as
follows:
a.
The
Respondent’s
Renewed
Request
for
Bifurcation
is
granted;
Public Version
PCA
Case
Nº
2018 - 54
Procedural
Order
No.
8
1 2
November
2020
Page
10
of
10
b.
The
scope
of
the
bifurcated
jurisdictional
hearing
shall
be
determined
after
the
Claimant’s
Counter - Memorial
on
Jurisdiction
is
filed;
and
c.
The
issue
of
the
costs
of
the
Respondent’s
Renewed
Request
for
Bifurcati on
is
reserved
to
a
further
order,
decision
or
award.
Dated : 1 2
November 2020
Place of Arbitration: Washington, D.C.
_____________________________
Mr.
Cavinder
Bull
SC
(Presiding
Arbitrator)
On
behalf
of
the
Tribunal Public Version