Apotex Holdings Inc. and Apotex Inc. v. United States of America

649Procedure — Amicus curiae — ICSID Arbitration (Additional Facility) Rules, Article 41(3) — Whether the non-disputing party’s submission provided assistance to the tribunal — Whether the non-disputing party’s submission addressed matters within the scope of the dispute — Whether the non-disputing party had a significant interest in the arbitration — Whether there was public interest in the subject matter of the arbitration — Whether the non-disputing party’s submission created disruption, burden or prejudice affecting the disputing parties — Whether the non-disputing party complied with disclosure requirementsProcedure — Seat of arbitration — Lex loci arbitri — Whether the tribunal was bound to select a seat of arbitration in the State of either party — Whether the tribunal should consider laws of the proposed seat of arbitration regarding arbitrator immunity or quorum requirements — Whether municipal law regarding deference to executive interpretation of treaty law in the event of judicial review of an arbitral award weighed against a proposed seat of arbitrationJurisdiction — Investment — Foreign investor — Meaning of “relating to” — NAFTA, Article 1101 — NAFTA, Article 1116 — NAFTA, Article 1117 — NAFTA, Article 1139 — Whether the challenged measure related to an investment or an investor — Whether “relating to” required a legally significant connection under municipal law or merely an effect in fact — Whether the claimants’ ability to sell other products was relevant to assessment of jurisdictionJurisdiction — Investment — Applicable law — Res judicata — NAFTA, Article 1139 — NAFTA, Article 1136(1) — Whether the concept of res judicata was applicable to NAFTA arbitrations — Whether the conditions were met for res judicata — Whether res judicata could create issue estoppel based on the reasoning of a prior award or only the operative parts of the prior award — Whether distinctions existed between the investment at issue in the prior award and the present arbitrationJurisdiction — Investment — NAFTA, Article 1139 — Intangible property — Whether a marketing authorisation was an investment made in the territory of the host StateEvidence — Burden of proof — Most-favoured-nation treatment — National treatment — Document production — Whether the evidential burden of proof can shift from the claimant to the respondent due to limited document productionNational treatment — NAFTA, Article 1102 — Whether the domestic comparators had been afforded more favourable treatment — Whether the domestic comparators were in like circumstances to the claimants650Most-favoured-nation treatment — NAFTA, Article 1103 — Whether foreign comparators had been afforded more favourable treatment — Whether foreign comparators were in like circumstances — Whether the claimants had been targeted by authorities for political reasons — Whether the conduct of the claimants distinguished their circumstances from foreign comparatorsMinimum standard of treatment — NAFTA, Article 1105 — Customary international law — Public health — Due process — Whether the minimum standard of treatment under customary international law required regulatory due process — Whether there was evidence of State practice in favour of regulatory due process forming part of the minimum standard of treatment — Whether an international tribunal should defer to regulatory bodies responsible for protecting public health — Whether regulatory conduct met the required threshold of severity and gravityMost-favoured-nation treatment — NAFTA, Article 1103 — Minimum standard of treatment — NAFTA, Article 1105 — Non-impairment — Effective means of protection — Whether importing standards of non-impairment and effective means of protection from a BIT would provide more favourable protection than the minimum standard of treatment — Whether a standard of non-impairment would have produced a different outcome for the claimants — Whether the standard of effective means of protection in judicial proceedings applied to a regulatory contextCosts — Loser pays — Whether the tribunal should apply the principle that the loser pays — Whether any party had increased costs by proposing or resisting bifurcation

Too Low a Threshold: Bilcon v Canada and the International Minimum Standard of Treatment

Treaty obligations to afford foreign investors a minimum standard of treatment (MST) and/or fair and equitable treatment (FET) are hallmarks of international investment law. However, the relationship between such treaty-based obligations and customary international law has been the subject of considerable debate. In the North American Free Trade Agreement (NAFTA) context, the majority tribunal decision and dissenting opinion in Clayton and Bilcon of Delaware Inc. v Government of Canada (Bilcon) reflect ongoing disagreement regarding the threshold for breach of the MST under NAFTA Article 1105. This article charts NAFTA investment tribunals’ decisions regarding FET claims under Article 1105 and the development of the customary international MST on which that provision is based, in particular, the prohibition on arbitrary treatment. It argues that the majority in Bilcon applied an inappropriately low threshold in finding a breach of Article 1105, which could represent a new and unwelcome direction in NAFTA Chapter 11 jurisprudence.

Bilcon et al. v. Canada

InBilcon et al.v.Canada, a NAFTA Chapter 11 dispute, the tribunal's majority held Canada liable for breaches of NAFTA Articles 1102 (National Treatment) and 1105 (Minimum Standard of Treatment). Pr. D. McRae – Canada's appointed arbitrator – dissented from both findings.

The Prohibition against Arbitrary Conduct and the Fair and Equitable Treatment Standard under NAFTA Article 1105

This article examines how NAFTA tribunals have interpreted and applied the prohibition against arbitrary conduct in the context of claims of breach of the fair and equitable treatment standard under Article 1105. Tribunals have come to the conclusion that this prohibition is a stand-alone element under this provision and that it should also be considered as part of the minimum standard of treatment under custom. This position is no longer denied by NAFTA Parties. NAFTA tribunals have also consistently applied a high threshold of severity requiring that conduct be manifestly arbitrary to conclude that the host State has breached Article 1105. Based on this high threshold, NAFTA tribunals have held that a State conduct in violation of its own municipal law (or a contract) does not breach Article 1105. Thus, “something more” than simple illegality is required to constitute a violation of this provision. This article explains what that “something more” is.