NAFTA - Chapter 11 - Investment

Cases Filed Against the Government of Canada

Detroit International Bridge Company. v. Government of Canada

Claimant

The Claimant is Detroit International Bridge Company (“DIBC”), a United States company incorporated and existing under the laws of the state of Michigan in the United States. It owns and controls all of the stock of Canadian Transit Company (“CTC”), a Canadian company established by a Special Act of Parliament. CTC owns and operates the Ambassador Bridge, an international toll bridge which spans the Detroit River between Windsor, Ontario and Detroit, Michigan. The Ambassador Bridge, which opened for traffic in 1929, is the busiest international crossing in North America.

Articles

  • 1102 (National Treatment)
  • 1103 (Most-Favoured Nation Treatment)
  • 1105 (Minimum Standard of Treatment)

Damages claimed

$3.5 billion USD.

Arbitration rules

UNCITRAL

Summary

Procedural History

Canada objected to DIBC’s claims under NAFTA Chapter Eleven from the outset because of DIBC and CTC’s failure to comply with the waiver requirements set out in NAFTA Article 1121 and its refusal to terminate the various lawsuits against Canada in U.S. and Canadian domestic courts. Article 1121 sets out conditions that a claimant must meet in order to submit a claim under NAFTA Chapter Eleven – failure to meet these conditions render the NAFTA Party’s consent to arbitrate without effect. Canada also argued that, if the Tribunal decided that DIBC was compliant with Article 1121, its claims were time barred under Articles 1116(2) and 1117(2).

DIBC served the Government of Canada with a Notice of Intent to Submit a Claim to Arbitration (NOI) first on January 25, 2010, followed by a new NOI that was submitted on March 23, 2010. Subsequently, DIBC filed its first Notice of Arbitration on April 29, 2011, and an amended Notice of Arbitration on January 15, 2013. DIBC alleged that Canada was in breach of its NAFTA obligations and claimed $3.5 billion USD in damages against Canada.

Simultaneously, DIBC and CTC initiated multiple lawsuits against Canada, Ontario and the City of Windsor in U.S. and Canadian courts in 2011 and 2012 making many of the same claims as in the NAFTA arbitration.

Factual Overview and Nature of the Claim

In 2001, Transport Canada, the Ontario Ministry of Transportation, the Michigan Department of Transportation and the United States Federal Highway Administration started a coordinated assessment in Canada and the United States (referred to as the “Detroit International River Crossing” or “DRIC” process) to consider the long-term transportation needs of the Detroit-Windsor corridor. After extensive study and consultation, the four levels of government jointly decided in late 2005 that it was necessary to construct a new bridge two kilometers southwest of the existing Ambassador Bridge along with new customs plazas and a direct highway connection to Ontario Highway 401. After further study as to optimal locations and design for the bridge, customs plaza and highway connections on both sides of the Canada-United States border, environmental approvals were issued in Canada and the United States in 2009 and 2010.

All necessary approvals to build the new bridge – officially named in 2015 as the Gordie Howe International Bridge – have been obtained and construction is expected to be complete in 2019/2020. A new highway connection from Ontario Highway 401 (Rt. Hon. Herb Gray Parkway) was completed in 2015 and will eventually serve as a direct link to the Gordie Howe International Bridge.

DIBC alleged that Canada had reneged on purported commitments to build a direct connection between Ontario Highway 401 and the Ambassador Bridge by designing a new highway to lead to the Gordie Howe International Bridge rather than the Ambassador Bridge, thereby diverting commercial and passenger traffic from the Ambassador Bridge and decreasing DIBC’s toll revenues. Canada was also accused of intentionally delaying approval of DIBC’s plan to build a new bridge next to the existing Ambassador Bridge and discriminating against DIBC by passing the International Bridges and Tunnels Act in 2007 and the Bridge to Strengthen Trade Act in 2012.

Award

On April 2, 2015, the NAFTA Tribunal issued its Award on Jurisdiction dismissing DIBC’s claim against Canada. The Tribunal majority (one arbitrator dissenting) determined that the ongoing lawsuit against Canada in the United States District Court for the District of Columbia (Washington, D.C.) was with respect to the same measures as those alleged to breach NAFTA and that none of the exceptions set out in Article 1121 were applicable. The Tribunal concluded that DIBC had failed to comply with the waiver requirements in Article 1121, which deprived it of jurisdiction over the entire dispute.

Having determined that it lacked jurisdiction entirely because of the litigation against Canada in U.S. federal court, the Tribunal decided it was unnecessary to rule on Canada’s other jurisdictional objections regarding the other ongoing domestic litigations against Canada or that DIBC’s claims were time barred.

On August 17, 2015, the Tribunal issued an Award on Costs which ordered DIBC to pay Canada the equivalent of $1,977,217.21 CAD to cover a portion of legal costs and expenses incurred by Canada during this arbitration.

Status

Dismissed.

Legal Documents (all documents are in pdf)

This case was governed by the arbitral rules of the United Nations Commission on International Trade Law.  Additional documents related to this case can be viewed at the website of the Permanent Court of Arbitration.

Copies of all legal documents posted have been prepared in a language of operation of the Tribunal or Court in question. The Government of Canada has not modified or changed them in any way. As such they have not been translated from the original. They are provided in Acrobat (pdf) files. To view or download pdf files you need Adobe® Acrobat® Reader™ a free software that you can download from the web.

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