NAFTA - Chapter 11 - Investment

Cases Filed Against the Government of Canada

Eli Lilly and Company v. Government of Canada

Claimant

Eli Lilly and Company Inc. (“Eli Lilly”), a U.S. corporation incorporated in Indiana, is a global pharmaceutical company. Eli Lilly wholly owns and controls Eli Lilly Canada, Inc.

Articles

  • 1105 (Minimum Standard of Treatment)
  • 1110 (Expropriation)

Damages claimed

$500 million CAD.

Arbitration Rules

UNCITRAL

Summary

Procedural history

The Claimant submitted a Notice of Intent to Submit a Claim to Arbitration on November 7, 2012, which was later withdrawn and replaced with a second Notice of Intent on June 13, 2013. On September 12, 2013, Eli Lilly then filed a Notice of Arbitration against the Government of Canada under the dispute settlement provisions of NAFTA Chapter 11. Canada filed its Statement of Defence on June 30, 2014. Eli Lilly filed its Memorial on September 30, 2014; Canada filed its Counter-Memorial on January 27, 2015; Eli Lilly filed its Reply on September 12, 2015 and Canada filed its Rejoinder on December 8, 2015. The hearing on jurisdiction and the merits took place from May 30 to June 8, 2016. Parties filed post-hearing submissions, including on costs between July 25 and August 22, 2016.

Factual overview and nature of the claim

Eli Lilly alleges that it held, directly and indirectly, Canadian patents with respect to several pharmaceutical compounds. It further alleges that the interpretation of the term “useful” in Canada’s Patent Act by the Canadian courts, including the Supreme Court of Canada, between 2002 and 2008, violates Canada’s obligations under NAFTA. In particular, Eli Lilly alleges that the interpretation given to this term by the Canadian courts violates Canada’s obligations under NAFTA Article 1105 (Minimum Standard of Treatment) on the basis that it is arbitrary and discriminatory. Eli Lilly also alleges that this interpretation and the application of it to Eli Lilly with respect to its patents concerning atomoxetine and olanzapine violates Canada’s obligations under Article 1110. It bases its claim of a violation of Article 1110 on the allegation that this interpretation violates Canada’s obligations under Chapter Seventeen of NAFTA and the Patent Cooperation Treaty.

Canada has argued that Eli Lilly’s claims are beyond the jurisdiction of the Tribunal and are wholly without merit as a matter of both fact and law. In particular, Canada has argued:

  • that Eli Lilly’s allegations with respect to the interpretation by the Canadian courts of Canada’s Patent Act are beyond the jurisdiction of a NAFTA Chapter 11 tribunal because Eli Lilly failed to submit its claims in compliance with the limitations time-period established in Articles 1116(2) and 1117(2).
  • that Eli Lilly’s allegations of a breach of Canada’s obligations under NAFTA are without merit.
  • that the interpretations of its domestic laws by its domestic courts are only subject to investor-State arbitration if those interpretations amount to a denial of justice. Both Eli Lilly and Canada agree that Eli Lilly was not denied justice by the Canadian courts.
  • that the interpretations of its domestic laws by its domestic courts are neither arbitrary nor discriminatory, and that such interpretations are fully consistent with Canada’s obligations under both Chapter Seventeen of NAFTA and the Patent Cooperation Treaty.

Canada has requested that the claim be dismissed and that Eli Lilly be ordered to bear all of Canada’s costs in the arbitration.

Status

Hearing pending.

Legal Documents (all documents are in pdf)

This case is 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 International Centre for Settlement of Investment Disputes.

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.

The Government of Canada is not responsible for the accuracy, reliability or currency of the information supplied by external sources. Users wishing to rely upon this information should consult directly with the source of the information. Content provided by external sources is not subject to official languages, privacy and accessibility requirements.

  • Notice of Intent - Withdrawn by Claimant and replaced by the June 13, 2013 Notice of Intent (PDF Document - 4.39 MB) - November 7, 2012
  • Second Notice of Intent (PDF Document - 6.87 MB) - June 13, 2013

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