North America Free Trade Agreement

Chapter 11 - Investment

Detroit International Bridge Company. v. Government of Canada

In the Matter of an Arbitration Under Chapter Eleven of the North American Free Trade Agreement and the UNCITRAL Arbitration Rules

Between:

Detroit International Bridge Company
Claimant/Investor

And:

Government of Canada
Respondent/Party

PCA Case No. 2012-25

Government of Canada
Reply Memorial on Jurisdiction and Admissibility

Departments of Justice and of
Foreign Affairs
and International Trade
Trade Law Bureau
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
CANADA

December 6, 2013

Preliminary Statement
Facts
International Legal Principles for Establishing the Tribunal's Jurisdiction
DIBC has Failed to Establish that it has Complied with NAFTA Article 1121
DIBC has Failed to Prove that its Highway 401-Ambassabor Bridge Road Acess Claim and IBTA Claim are Timely
Whether a Boundary Waters Treaty "Special Agreement" Exissts as An International Treaty and has been violiated by Canada goes to the Tribunal's Jurisdiction
Conclusion

Table of Abbreviations

BSTA: Bridge to Strengthen Trade Act
CAFTA: Dominican Republic-Central America Free Trade Agreement
CEAA: Canadian Environmental Assessment Act
CTC: Canadian Transit Company
DIBC: Detroit International Bridge Company
DRIC: Detroit River International Crossing
FCC: Federal Court of Canada
FHWA: Federal Highway Administration
IBTA: International Bridges and Tunnels Act
IJC: International JointCommission
LGWEM: Let's Get Windsor-Essex Moving Strategy
MDOT: Michigan Department of Transportation
MTO: Ontario Ministry of Transportation
NAFTA: North American Free Trade Agreement
NEPA: National Environmental Policy Act
ONSC: Ontario Superior Court
P/NF Study: Planning, Need and Feasibility Study
TC: Transport Canada
VCLT: Vienna Convention on the Law of Treaties

I. Preliminary Statement

1. Canada respectfully submits this Reply Memorial on Jurisdiction and Admissibility and the witness statement of Helena Borges, Associate Deputy Minister of Transport, Infrastructure and Communities at Transport Canada in response to the Counter-Memorial on Jurisdiction and Admissibility filed by the Detroit International Bridge Company ("DIBC" or "Claimant") on August 23, 2013.

2. Canada, the United States, Ontario and Michigan have worked together for more than a decade to determine the best means of securing the long-term prosperity of the millions of Canadian and American citizens who rely on the Windsor-Detroit border for international trade and commerce. Together, they decided that a new bridge with a new highway and customs plaza was in the national interest of both countries. But DIBC and its enterprise Canadian Transit Company ("CTC") are intent on stopping this from happening. DIBC and CTC have launched multiple proceedings against Canada in Canadian and American courts seeking billions of dollars in compensation for breach of alleged rights they do not have and for alleged unfair and discriminatory treatment which they have not suffered. All of DIBC’s allegations are without merit.

3. However, DIBC is not even entitled to have the merits of its claim heard in this NAFTA proceeding. Canada’s consent to arbitrate under NAFTA Chapter Eleven is not unconditional – a claimant must fulfill certain conditions before an arbitration agreement is formed. DIBC has ignored these conditions and has demonstrated its continued willingness to flout them in order to bring yet another vexatious lawsuit in yet another fora.

4. Canada’s Memorial on Jurisdiction and Admissibility raised three arguments with respect to this Tribunal’s jurisdiction. First, DIBC failed to comply with NAFTA Article 1121 as of the date it commenced this NAFTA arbitration (April 29, 2011) because it failed to submit a valid waiver nor refrain from pursuing domestic proceedings with respect to measures it alleges violate the NAFTA. Second, in the event the Tribunal decides that DIBC has complied with Article 1121, the Tribunal is nonetheless without jurisdiction rationae temporis over DIBC’s claims regarding a Highway 401-Ambassador Bridge highway connection and the International Bridges and Tunnels Act ("IBTA"). Third, this Tribunal’s jurisdiction does not extend to determining the existence of, or breach of an alleged "international treaty" relating to the Ambassador Bridge purported to exist as a "special agreement" under Article XIII the Canada-U.S. Boundary Waters Treaty.

5. DIBC failed to establish in its Counter-Memorial on Jurisdiction and Admissibility, as is DIBC’s burden to do, that it met the preconditions to Canada’s consent to arbitrate under the NAFTA and that the Tribunal therefore has jurisdiction to hear its claims. Instead, DIBC constructed flawed legal theories, ignored and misconstrued the evidence and reversed course on its previous positions.

6. Both Canada and DIBC agree that compliance with the waiver provision in Article 1121 is a "prerequisite to arbitration."^{Footnote 1} But DIBC’s Counter-Memorial offers an interpretation of that provision which is completely at odds with its plain meaning, context and the object and purpose of the NAFTA.

7. DIBC argues that Article 1121 requires nothing more from a claimant than to submit a written waiver with its notice of arbitration but that content and compliance therewith is irrelevant. DIBC also argues that Article 1121 allows it and CTC to simultaneously pursue injunctive and declaratory relief in U.S. courts for Canadian measures that it alleges breach the NAFTA. DIBC proffers these flawed interpretations to justify its continued pursuit of three ongoing domestic court proceedings before the United States District Court for the District of Colombia and the Ontario Superior Court of Justice (the "Washington Litigation," "CTC Litigation," and "Windsor Litigation"). Each of these proceedings are plainly with respect to measures alleged to breach the NAFTA and do not fall within the limited exceptions permitted under Article 1121. A good faith interpretation of Article 1121 does not countenance DIBC’s litigation strategy.

8. In its Counter-Memorial, DIBC ignores the rule under the NAFTA and general international law that jurisdiction must be established on the date a claim is submitted to arbitration. DIBC started this NAFTA arbitration by filing a NAFTA Notice of Arbitration on April 29, 2011 ("First NAFTA NOA"). Thus, as of that date, DIBC and CTC were required to file a written waiver consistent with Articles 1121(1)(b) and 2(b) and to refrain from initiating or continuing domestic proceedings involving the payment of damages with respect to measures alleged to breach NAFTA. DIBC and CTC did neither. First, the waiver they filed is inconsistent with Articles 1121(1)(b) and (2)(b) as it only applies to a narrow set of measures and expressly carves-out the Washington Litigation. Second, DIBC and CTC continued the Washington Litigation past the date DIBC commenced this NAFTA arbitration.^{Footnote 2} Since the Washington Litigation was a proceeding for damages with respect to measures alleged to breach the NAFTA, DIBC and CTC were in violation of NAFTA Article 1121 ab initio. The consequence of DIBC and CTC’s actions is decisive under NAFTA Chapter Eleven and international law: there is no consent to arbitrate and this Tribunal is without jurisdiction over DIBC’s claims.

9. DIBC’s Counter-Memorial continues to argue that none of the ongoing litigations before the domestic courts in Washington D.C., Toronto and Windsor are "with respect to" any measures alleged to breach the NAFTA. This is demonstrably false. The measures that DIBC alleges breach the NAFTA are the following:^{Footnote 3}

(i) Nine Point Plan/Let’s Get Windsor Essex Moving Strategy.^{Footnote 4} DIBC alleges Canada reneged on a 2003 promise to spend $300 million on a direct Highway 401-Ambassador Bridge highway connection.^{Footnote 5}
ii) Detroit River International Crossing Environmental Assessment.^{Footnote 6} DIBC alleges the DRIC EA is discriminatory because it steers the Parkway towards the DRIC Bridge but not to the Ambassador Bridge, violates DIBC’s "exclusive franchise rights" by approving the location of a new bridge and that it "unlawfully eliminated" DIBC’s proposal to build a new span next to the Ambassador Bridge ("New Span").^{Footnote 7}
(iii) Huron Church Road "traffic measures." DIBC alleges that Windsor has impeded access to the Ambassador Bridge in favour of the Windsor-Detroit Tunnel and the DRIC Bridge.^{Footnote 8}
(iv) International Bridges and Tunnels Act^{Footnote 9}. DIBC alleges the IBTA was enacted to interfere with its franchise rights and its right to build a new bridge, to violate its 1990/1992 settlement agreement with Canada and to damage the value of the Ambassador Bridge.^{Footnote 10}
(v) Ambassador Bridge New Span Environmental Assessment. ^{Footnote 11} DIBC alleges that Canada has wrongfully delayed regulatory approval of its plan to build a New Span next to the Ambassador Bridge.^{Footnote 12}
(vi) Bridge to Strengthen Trade Act^{Footnote 13}. DIBC alleges the BSTA is discriminatory because it accelerates approval for the DRIC Bridge but not for the New Span.^{Footnote 14}

10. There is no doubt that the Washington, CTC and Windsor Litigations were and continue to be "proceedings with respect to" all or some of these measures within the meaning of Articles 1121(1)(b) and (2)(b). ^{Footnote 15} For example, DIBC’s allegations regarding Canada’s actions in connection with the DRIC EA were and continue to be virtually identical in this NAFTA arbitration and in the Washington and CTC Litigations.^{Footnote 16} The DRIC EA approved the location of the new bridge ("DRIC Bridge") and its Highway 401 connection (Windsor-Essex, now Rt. Hon. Herb Grey Parkway ("Parkway")), as well as a new customs plaza. The DRIC Bridge and the Parkway (and customs plaza) are not separate and distinct but were conceived and endorsed as a single decision within the confines of the DRIC EA as Canada’s plan for a comprehensive "end-to-end" solution to connect Ontario Highway 401 to the interstate highways in Michigan at the Windsor-Detroit border. This is confirmed on the very first page of the DRIC EA:

After evaluating the practical alternatives for the access road, Canadian inspection plaza, and the international bridge crossing, the Technically and Environmentally Preferred Alternative (TEPA) was selected. The TEPA includes the Windsor-Essex Parkway, Plaza B1 and Crossing X-10B.^{Footnote 17}

11. When DIBC commenced this NAFTA arbitration on April 29, 2011 it sought to evade NAFTA Article 1121 by artificially segregating the DRIC Bridge and Parkway components of the DRIC EA. In its First NAFTA NOA, DIBC alleges "in excess of U.S. $3.5 billion" in damages as a result of the DRIC EA’s chosen location of the Parkway while simultaneously suing Canada for damages in the Washington Litigation as a result of the DRIC EA’s chosen location of the DRIC Bridge.^{Footnote 18} To sustain these parallel proceedings, DIBC carved-out the Washington Litigation from the waiver it submitted with its NAFTA Notice of Arbitration. DIBC’s actions are precisely what the NAFTA Parties intended to prevent under Article 1121. Accordingly, DIBC and CTC’s failure to comply with NAFTA Article 1121 as of April 29, 2011 deprives the Tribunal of jurisdiction entirely.

12. DIBC’s Amended NAFTA Notice of Arbitration of January 15, 2013 ("Amended NAFTA NOA") and Second NAFTA Waiver are therefore not relevant because DIBC cannot amend a claim over which the Tribunal had no jurisdiction in the first place. But even if the Amended NAFTA NOA were considered, DIBC only aggravated its failure to comply with the requirements set out in Articles 1121(1)(b) and (2)(b) by filing another defective waiver and continuing its ongoing domestic proceedings against Canada with respect to measures alleged to breach the NAFTA. DIBC tries to characterize its allegations against these measures in the Washington Litigation as mere "context" necessary to "corroborate Canada’s discriminatory intent," but there is no question that the Washington Litigation is still a "proceeding with respect to" measures that DIBC alleges breach the NAFTA within the meaning of Articles 1121(1)(b) and (2)(b).^{Footnote 19}

13. DIBC also misrepresents the nature of the ongoing CTC and Windsor Litigations against Canada in the Ontario Superior Court of Justice. DIBC attempts to characterize the CTC Litigation as not seeking damages "with respect to" measures alleged to breach the NAFTA.^{Footnote 20} Reading its complaints in that proceeding leads to precisely the opposite conclusion because, among other measures, the DRIC EA was and remains as central to the CTC Litigation as it is to this NAFTA arbitration. DIBC has no credible explanation of how CTC Litigation can possibly be construed as being consistent with the limited exception permitted by Articles 1121(1)(b) and 2(b).

14. DIBC is even more evasive with respect to the Windsor Litigation.^{Footnote 21} CTC’s still-pending February 2010 complaint for damages against Windsor was continued past DIBC’s commencement of this NAFTA arbitration and makes sweeping allegations with respect to Windsor’s alleged support for a new bridge and highway and opposition to the Ambassador Bridge New Span.^{Footnote 22} DIBC simply refuses to identify what "other measures, not challenged in the Windsor Litigation, which evidence Canada’s consistent discrimination against Claimant" form the basis of its NAFTA claim.^{Footnote 23} DIBC’s refusal to clarify the basis of its NAFTA claim with respect to Windsor must result either in a finding that DIBC has failed to comply with Article 1121 by continuing the Windsor Litigation or a finding that DIBC is barred from including any measure from the Windsor Litigation in its NAFTA claim.

15. In the event that the Tribunal does find that DIBC has complied with NAFTA Article 1121, it would still be without jurisdiction to hear the merits of DIBC’s Highway 401 and IBTA claims because each are untimely under Articles 1116(2) and 1117(2).

16. With respect to its Highway 401 claims, DIBC abandons its previous concession that it first learned Canada would not construct a direct Highway 401-Ambassador Bridge connection on October 3, 2007 as this admission would render the claim untimely.^{Footnote 24} DIBC now identifies May 1, 2008 – the day the route of the Parkway was announced – as the date when the limitations period started, purportedly saving its claim from being untimely by two days. However, DIBC ignores all of the evidence between March 11, 2004 (the day the Nine Point Plan was replaced by the Let’s Get Windsor Essex Moving Strategy), November 14, 2005 (the day the twin Ambassador Bridge option X12 was dropped from the DRIC EA) and May 1, 2008 which confirm that DIBC "first acquired knowledge" of the alleged NAFTA breach and loss more than three years prior to its First NAFTA NOA. Further, DIBC’s attempts at devising "preparatory" and "composite" act legal theories in the hopes of evading the NAFTA’s three-year limitations period are not supported by the text of Articles 1116(2) and 1117(2) or by the facts.

17. To respond to DIBC’s new arguments in its Counter-Memorial, Canada submits the witness statement of Helena Borges, Associate Deputy Minister of Transport, Infrastructure and Communities at Transport Canada. Combined with the documentary evidence, Ms. Borges’ witness statement establishes that DIBC was well-aware of Canada’s position with respect to a Highway 401-Ambassador Bridge connection before May 1, 2008. DIBC’s characterizations of the facts are simply not credible.

18. In its Counter-Memorial, DIBC takes a similar approach of ignoring evidence regarding its IBTA claim in order to evade the NAFTA’s three-year limitations period. DIBC now alleges that October 10, 2010 (the date Canada issued CTC an order to stop unauthorized construction of the New Span without IBTA approval) was the date it "first acquired knowledge" of the alleged NAFTA breach and loss. But this new allegation is untenable: DIBC had in January 2010 already alleged that the IBTA breached the NAFTA and alleged "not less than U.S. $1.5 billion" in damages because of the IBTA.^{Footnote 25} DIBC also ignores all of the evidence that establishes beyond doubt that, as of the day of its enactment in February 2007, the IBTA applied to the Ambassador Bridge and its New Span in a manner that DIBC has already alleged breached NAFTA and caused it damage. DIBC simply ignores the evidence showing that Canada made it absolutely clear on multiple occasions after the IBTA was enacted that it applied to the Ambassador Bridge and its New Span. DIBC’s attempts to characterize the evidence otherwise is not credible and its legal theories designed to evade the limitations period are inconsistent with the ordinary meaning of NAFTA Articles 1116(2) and 1117(2). The Tribunal lacks jurisdiction rationae temporis with respect to the IBTA.

19. Finally, instead of abandoning its unsupported contention that there is an "international treaty" between Canada and the United States relating to the Ambassador Bridge, DIBC’s Counter-Memorial simply asks the Tribunal to leave this issue for the merits. But this is not an issue for the merits. Not only is there a lack of prima facie evidence to show that an international treaty between Canada and the United States even exists, international law places limitations on the jurisdiction of international tribunals to make determinations relating to the rights and obligations of an absent third party (in this case, the United States).

20. Canada respectfully submits that the Tribunal find that it has no jurisdiction over any of DIBC’s claims in this arbitration and requests an order that DIBC pay all of Canada’s costs.

21. This Reply Memorial is organized as follows. Part II is a review of the facts and the standard of review relevant for the jurisdictional phase. Part III describes the international legal rules for determining the jurisdiction of this Tribunal. Part IV sets out Canada’s objections with respect to NAFTA Article 1121 and establishes that DIBC and CTC have been, as of the date NAFTA arbitration commenced and continuing today, in violation of that provision. Part V sets out Canada’s objections that DIBC’s Highway 401 and IBTA claims are time barred under NAFTA Articles 1116 and 1117. Part VI argues that it is beyond this Tribunal’s jurisdiction to determine the existence of or violation of the alleged "international treaty" between Canada and the United States under Article XIII of the Boundary Waters Treaty. Finally, Part VII provides a summary conclusion and request for relief.

II. Facts

22. At the jurisdictional phase of an arbitration, the Tribunal "cannot take all the facts as alleged by [a] claimant as granted facts."^{Footnote 26} Instead, a tribunal must "look at the role these facts play either at the jurisdictional level or at the merits level."^{Footnote 27} As the tribunal noted in Phoenix Action:

If the alleged facts are facts that, if proven, would constitute a violation of the relevant BIT, they have indeed to be accepted as such at the jurisdictional stage, until their existence is ascertained or not at the merits level. On the contrary, if jurisdiction rests on the existence of certain facts, they have to be proven at the jurisdictional stage.^{Footnote 28}

23. In assessing those facts, which, if proven, would amount to a violation of the NAFTA, the Tribunal may apply a prima facie standard at the jurisdictional stage.^{Footnote 29} However, facts on which the jurisdiction of this Tribunal depends cannot simply be accepted as they are pled by DIBC.^{Footnote 30} With this principle in mind, Canada will not engage in a point-by-point refutation of the many distortions of fact perpetuated by DIBC in its Counter-Memorial. However, factual issues that are directly relevant for the Tribunal’s determination of jurisdiction are addressed below.

A. DIBC Fails to Show the Existence of an "International Treaty Binding in International Law" Relating to the Ambassador Bridge

24. DIBC alleges that a source of its alleged exclusive franchise rights stem from a Boundary Waters Treaty Article XIII "special agreement" (or, as DIBC called it in its First NAFTA NOI, the Ambassador Bridge Treaty, ^{Footnote 31}) between Canada and the United States binding in international law as an international treaty.^{Footnote 32} But DIBC’s Counter-Memorial provides no evidence that either Canada or the United States considered there to be an international treaty relating to the Ambassador Bridge. DIBC had no answer to the evidence presented in Canada’s Memorial on Jurisdiction which discredited the entire premise of DIBC’s argument.^{Footnote 33} DIBC merely says the existence of the alleged international treaty is a question for the merits phase.^{Footnote 34} As described in Part IV below, DIBC is wrong. The question touches on core principles of international law affecting the jurisdiction of any international tribunal.^{Footnote 35}

B. DIBC Fails to Show the Existence of a Commitment by Canada to Build a Highway 401-Ambassador Bridge Connection

25. DIBC’s Counter-Memorial continues to allege that the May 27, 2003 press release by Canada and Ontario constituted a $300 million "commitment" to build a direct Highway 401-Ambassador Bridge connection.^{Footnote 36} DIBC says it relied on the Nine Point Plan’s "promise" when it decided to spend "hundreds of millions" on the Gateway Project in Detroit.^{Footnote 37}

26. DIBC has failed to provide any prima facie evidence supporting its allegation that the Nine Point Plan committed Canada to spend $300 million on a highway to the Ambassador Bridge. Other than the press release itself, which on its face plainly makes no such commitment or promise, DIBC has not provided any other corroborating documentation that would meet the prima facie standard required at the jurisdictional phase.^{Footnote 38}

27. DIBC’s credibility deficit is compounded because the only "evidence" presented in its Counter-Memorial is actually an amalgamation of two unrelated, non-consecutive and incomplete documents. DIBC’s Counter-Memorial represents Exhibit C-34 as the "March 12, 2004 report of the Canadian government’s Business Transportation Task Force" and says the document evidences Canada’s commitment to build a highway to the Ambassador Bridge.^{Footnote 39} In reality, the "Business Transportation Task Force Situational Analysis" (i.e., the first page of DIBC’s Exhibit C-34) was written by the Windsor Chamber of Commerce, not the Canadian government, in September 2002, eight months before the Nine Point Plan even existed.^{Footnote 40} The document has been available on the Windsor Chamber of Commerce website for more than a decade and merely summarizes the views of CTC and other interested parties on options for improvements to the Windsor-Detroit border. The remaining two pages of DIBC’s Exhibit C-34 is clearly from a completely different document that was apparently written almost two years later (March 12, 2004) and states that Windsor’s opposition to the Nine Point Plan "had the effect of killing it" and it was replaced by the LGWEM Strategy.^{Footnote 41} DIBC’s reliance on Exhibit C-34 is indicative of the absence of any so-called "commitment" by Canada.

28. DIBC’s assertion that Canada’s alleged 2003 "commitment" somehow induced it to invest "hundreds of millions of dollars" in the Gateway Project on the Detroit-side of the Ambassador Bridge is also untenable.^{Footnote 42} DIBC and the Michigan Department of Transportation ("MDOT") entered into a Memorandum of Understanding for the Gateway Project in July 1996, almost seven years before the Nine Point Plan.^{Footnote 43} The United States Congress authorized and appropriated monies for the Gateway Project starting in 1998, long before the Nine Point Plan was ever conceived.^{Footnote 44} MDOT itself has discredited DIBC’s assertion by noting "no one from Transport Canada, nor the Ontario Ministry of Transportation, nor the City of Windsor were involved" in the Gateway Project.^{Footnote 45} The Gateway Project sought to alleviate Detroit’s own long-standing problem with the interstate highway system being located less than a half a kilometer away but accessible from the Ambassador Bridge only by traversing local streets.^{Footnote 46}

29. In contrast, the Windsor-side of the Ambassador Bridge had a more difficult problem to resolve: Highway 401 is approximately 14 kilometers away and the stretch of Huron Church Road north of E.C. Row Expressway to the Ambassador Bridge is densely populated and highly urbanized. This is why as Canada explained in its Memorial and explains further below, the DRIC EA concluded in November 2005 that a highway to the Ambassador Bridge would have a "high" negative impact on Windsor neighbourhoods. DIBC continues to assert in its Counter-Memorial that "with relatively minor modifications" it would be possible to continue the Parkway all the way to the Ambassador Bridge.^{Footnote 47} This statement is not only unrealistic but disregards all the other significant factors involved in making such a decision, including the legitimate concerns of thousands of Windsor residents whose homes, schools, community centers, stores and other services surround the Ambassador Bridge and abut Huron Church Road.

30. Even assuming DIBC’s allegation to be true, the so-called "promise" arising out of the Nine Point Plan was publically revoked less than ten months later. The March 11, 2004 Memorandum of Understanding between Canada, Ontario and Windsor ("2004 MOU") and LGWEM Strategy expressly replaced the Nine Point Plan as the new plan for spending the $300 million that had been set aside to improve traffic infrastructure at the Windsor-Detroit border.^{Footnote 48} The money was spent on various traffic projects announced in two phases (March 11, 2004 and April 21, 2005).^{Footnote 49} None of these projects included building a highway to the Ambassador Bridge.

31. DIBC’s Counter-Memorial argues for the first time that Canada "renamed" its alleged $300 million commitment in 2004 and that the LGWEM Strategy was merely a "reformulation" of the 2002 MOU and Nine Point Plan which "still committed" Canada to building a highway to the Ambassador Bridge.^{Footnote 50} This is simply not credible. The 2004 MOU stated explicitly that it "replaces" – not "renames" or "reformulates" – the Nine Point Plan.^{Footnote 51} The LGWEM Strategy was described as a "new solution" for the Windsor Gateway, not a "renamed" or "reformulated" solution.^{Footnote 52} The Nine Point Plan was described as "done" and "kill[ed]" – not "renamed" or "reformulated."^{Footnote 53} DIBC’s Counter-Memorial says the mention of "consideration of…improvements to Huron Church Road" in the LGWEM Strategy equals a $300 million commitment to build a highway to the Ambassador Bridge but this is concocted and, as with the DIBC’s allegation respecting the Nine Point Plan, completely unsupported.^{Footnote 54}

32. In summary, DIBC’s failure to adduce even a prima facie level of evidence to support its allegation that Canada made a commitment in the Nine Point Plan or at any other time to build a highway to the Ambassador Bridge means the allegation should not even be accepted pro tempore in this jurisdictional phase. But even if it were assumed to be true for jurisdictional purposes, as discussed below, it is too late to allege that this measure is a breach of the NAFTA.

C. DIBC Fails to Show the Existence of Any Huron Church Road "Traffic Measures" Which Divert Traffic to the Windsor-Detroit Tunnel and/or Other Crossings

33. DIBC’s NAFTA claim includes, among other things, the allegation that the City of Windsor has interfered with traffic on Huron Church Road to divert traffic away from the Ambassador Bridge to the Windsor-Detroit Tunnel and, ultimately, to the DRIC Bridge.^{Footnote 55} However, DIBC has never identified the nature of such measures and how they favour the Windsor-Detroit Tunnel or the DRIC Bridge other than complaining generally that there are stoplights, driveway entrances and "curb cuts" on Huron Church Road.

34. DIBC’s Counter-Memorial does nothing to clarify its claim. It does not even mention the Windsor-Detroit Tunnel, let alone how it is being favoured by Windsor.^{Footnote 56}

35. DIBC’s failure to identify any Huron Church Road "traffic measure" favouring the Windsor-Detroit Tunnel or DRIC Bridge means, first, it has failed to make out even a prima facie claim. Second, in light of DIBC’s failure to comply with Article 20(4) of the UNCITRAL Arbitration Rules, DIBC’s Huron Church Road claim should be declared inadmissible. Canada asked the Tribunal in its Memorial to consider this claim withdrawn.^{Footnote 57} DIBC made no protest to this request in its Counter-Memorial, which should be taken as acquiescence. It is too late for DIBC to revive this claim in any event since Canada no longer has the opportunity to respond.^{Footnote 58}

D. DIBC’s Factual Description of the DRIC EA and Measures Alleged to Block or Delay the Ambassador Bridge New Span Supports Canada’s Waiver and Time Bar Objections

1. DRIC Environmental Assessment

36. As Canada described in its Memorial, the DRIC EA was a comprehensive review of an "end-to-end" solution to transportation issues in the Windsor-Detroit corridor. The assessment required the consideration of a bridge, customs plaza and Highway 401 road access on the Canadian and American sides of the border in unison.^{Footnote 59}

37. DIBC’s recitation of the facts relating to the DRIC EA in its Counter-Memorial, while inaccurate or misleading on certain points, serves to confirm Canada’s position by highlighting how central this measure is for determining the jurisdiction of this Tribunal.

38. DIBC is correct that at the Illustrative Alternatives stage (June 2005 - November 2005), the DRIC EA examined the option of building a highway from Highway 401 to a twinned Ambassador Bridge (option X12).^{Footnote 60} As already documented in Canada’s Memorial, the feasibility of option X12 depended not only upon the crossing itself, but also on customs plaza and Highway 401 road access options. Option X12 was not, and could not be, examined in a vacuum given the "end-to-end" purpose of the DRIC EA. All reasonably possible road access routes from Highway 401 to option X12, i.e., the Ambassador Bridge, were evaluated: turning the entire length of Huron Church Road into a dedicated highway, building a "ring road" through Sandwich Towne or by converting the Essex Terminal Railway line into a dedicated truck route.^{Footnote 61} Each of these road access options had high negative environmental and community impacts on the Windsor neighbourhoods surrounding the Ambassador Bridge.

39. For these and other reasons explained in the DRIC EA, option X12 was dropped from the environmental assessment in November 2005.^{Footnote 62} The Federal Court of Canada reviewed this decision and found that the elimination of option X12 from the DRIC EA was reasonable, unbiased and based on rational criteria.^{Footnote 63}

40. DIBC’s Counter-Memorial concedes that the DRIC EA’s November 14, 2005 area of continued analysis "limited the area in which a crossing and its highway connection would be considered."^{Footnote 64} There could be no other conclusion: in addition to the area of continued analysis map itself,^{Footnote 65} the November 2005 Generation and Assessment of Illustrative Alternatives report shows the precise Highway 401 route connections still under consideration as of that time and none of them were going to the Ambassador Bridge.^{Footnote 66}

41. DIBC’s Counter-Memorial pays virtually no attention to the period between November 2005 and May 2008 because after November 14, 2005, there was no further consideration of a highway to the Ambassador Bridge and DIBC knew it.^{Footnote 67} Instead, DIBC skips forward to the announcement of the Parkway on May 1, 2008 and suggests that it was surprised that the Parkway was not connected to the Ambassador Bridge.^{Footnote 68} DIBC says that "even then…it was not clear that the Parkway would run only to the NITC/DRIC."^{Footnote 69} As described below, this is simply not credible. Wherever the Parkway was going to end up going by virtue of the DRIC EA, as of November 2005, it was undoubtedly not going to the Ambassador Bridge. It is too late under NAFTA Articles 1116(2) and 1117(2) to allege that Canada’s actions regarding the Parkway violate the NAFTA.

42. Under the heading "Canada unlawfully eliminated the New Span location from Consideration in the NITC/DRIC Partnership Process,"^{Footnote 70} DIBC’s Counter-Memorial repeats all the same allegations and relies on the same documents regarding the elimination of option X12 as it did when CTC sought judicial review of the DRIC EA before the Federal Court of Canada. Justice Kelen has already declared CTC’s allegations to be "without any merit."^{Footnote 71} Having lost its appeal to the Federal Court of Appeal,^{Footnote 72} DIBC is apparently looking to this Tribunal to act as yet another court of appeal. DIBC and CTC also make the same allegations and rely on the same documents in the Washington Litigation.^{Footnote 73} Canada need not present a further response to DIBC’s allegations at this stage other than to say the Federal Court of Canada has already heard them all and rejected them.

2. IBTA, New Span Environmental Assessment and BSTA

43. In addition to its allegations regarding the elimination of option X12, DIBC’s Counter-Memorial describes three other measures which it alleges are intended to block or delay its New Span: the IBTA, alleged delay of environmental approval of the New Span and the BSTA.

44. It is undisputed that the IBTA was enacted on February 1, 2007 and it is self-evident from its schedule that it applied to the Ambassador Bridge.^{Footnote 74} DIBC’s Counter-Memorial alleges that the IBTA was "driven by the desire to promote the NITC/DRIC and to oppose the New Span" and that its application to the Ambassador Bridge violated DIBC’s 1990 settlement agreement with Canada.^{Footnote 75} DIBC also complains about the IBTA’s purported authority to limit tolls and set approval requirements for the alterations and repairs and says the IBTA harms the value of the Ambassador Bridge.^{Footnote 76}

45. DIBC has completely mischaracterized Canada’s motivations behind the IBTA. Nevertheless, what is notable for the purposes of jurisdiction is that DIBC’s Counter-Memorial completely ignores the correspondence between Canada and DIBC between July and November 2007. In this correspondence Canada specifically told DIBC that the IBTA applied to the Ambassador Bridge and that its New Span required IBTA approval before any construction could begin.^{Footnote 77} DIBC also fails to mention any of the meetings it had with Transport Canada where DIBC was told in no uncertain terms that the IBTA applied to the Ambassador Bridge and its New Span project.^{Footnote 78} DIBC also fails to mention that the reason why Canada issued CTC with an order in October 2010 requiring it to stop work on the New Span until it applied for and received IBTA approval (DIBC’s new alleged date of “first acquired knowledge”) was because, despite Canada’s notifications to DIBC/CTC in 2007 that it could not do so without authorization, DIBC/CTC went ahead and built the approach ramps for the New Span anyway.^{Footnote 79} DIBC’s avoidance of all of these facts further proves that its IBTA claim is time-barred.

46. DIBC’s Counter-Memorial also alleges that Canada has intentionally delayed approval of its New Span, for which it first sought formal environmental approval in December 2007.^{Footnote 80} While Canada need not present the full weight of argument and evidence against this meritless accusation in this jurisdictional phase, Canada’s Memorial already noted that it is CTC that bears the responsibility for any delay because it refused to undertake the required environmental studies for more than three years.^{Footnote 81} It was actually Canada’s own good faith efforts to assist CTC to complete the required studies that actually allowed the New Span EA to go forward.

47. As for the BSTA, DIBC’s Counter-Memorial adds nothing further to the baseless allegations it has made in its previous submissions. At this juncture, Canada need only draw to the Tribunal’s attention that, like the alleged delay to the New Span EA, DIBC and CTC make the same allegations in the Washington Litigation as DIBC does here.^{Footnote 82}

III. International Legal Principles for Establishing the Tribunal's Jurisdiction

48. The jurisdiction of any international arbitral tribunal rests on the consent of the parties before it to arbitrate. The following section will discuss the general legal principles for establishing the Tribunal’s jurisdiction and will demonstrate, first, that it is DIBC’s burden to prove that the pre-conditions to Canada’s consent to arbitrate under NAFTA Chapter Eleven have been met; second, jurisdiction must be determined as of the date that a NAFTA notice of arbitration is filed; and third, jurisdiction cannot be ex post facto created nor can a claim be amended in a manner to fall outside the jurisdiction of the Tribunal.

A. The Claimant Bears the Burden of Proof to Show that it has Met the Jurisdictional Requirements of the NAFTA

49. The NAFTA Parties only consent to arbitrate under NAFTA Chapter Eleven “in accordance with the procedures set out in this Agreement.”^{Footnote 83} Canada’s consent is therefore contingent on certain requirements being met, including that the claimant and its enterprise waive their right to pursue and actually refrain from domestic proceedings for damages with respect to the measure(s) alleged to breach the NAFTA (Article 1121) and the claim must be timely (Article 1116(2) and 1117(2)).^{Footnote 84} Failure to comply with these requirements means there is no arbitration agreement and, thus, no jurisdiction for the tribunal.^{Footnote 85}

50. DIBC argues in its Counter-Memorial that it is Canada’s burden to prove that DIBC has not fulfilled the conditions necessary to establish Canada’s consent to arbitrate.^{Footnote 86} This is not correct. An investor bringing a claim under NAFTA Chapter Eleven bears the burden of proving that it has satisfied the conditions necessary to commence arbitration and that the tribunal has jurisdiction over the dispute.

51. NAFTA tribunals have consistently upheld this principle. For example, the tribunal in the most recent NAFTA Chapter Eleven arbitration – Apotex v. United States – stated: “Apotex (as Claimant) bears the burden of proof with respect to the factual elements necessary to establish the Tribunal’s jurisdiction in this regard.”^{Footnote 87} Other NAFTA tribunals, including Methanex, Bayview and Grand River, also affirmed that it is for the claimant to establish that its claims fall within NAFTA Chapter Eleven and within the tribunal’s jurisdiction.^{Footnote 88}

52. Other international tribunals have also confirmed that the onus is on the claimant to establish that an arbitral tribunal has jurisdiction over the dispute. For example, the tribunal in Tulip Real Estate recently held: “[a]s a party bears the burden of proving the facts it asserts, it is for the Claimant to satisfy the burden of proof required at the jurisdictional phase.”^{Footnote 89} This same was confirmed by the tribunal in ICS Inspection:

[A] State’s consent to arbitration shall not be presumed in the face of ambiguity. Consent to the jurisdiction of a judicial or quasi-judicial body under international law is either proven or not according to the general rules of international law governing the interpretation of treaties. The burden of proof for the issue of consent falls squarely on a given claimant who invokes it against a given respondent. Where a claimant fails to prove consent with sufficient certainty, jurisdiction will be declined.^{Footnote 90}

53. It is axiomatic that an arbitral tribunal must determine whether it has jurisdiction over the dispute.^{Footnote 91} NAFTA and other international tribunals have confirmed that a “[t]ribunal must satisfy itself of the existence and extent of its jurisdiction.”^{Footnote 92} Thus, in the context of this dispute, the Tribunal must assess whether the Claimant has fulfilled all of the pre-conditions to arbitration, including Articles 1121 and 1116(2) and 1117(2).^{Footnote 93} If the Tribunal is not satisfied that the Claimant has met its burden, then jurisdiction must be denied.

B. Jurisdiction is Determined on the Date that the Notice of Arbitration is Filed

54. In its Counter-Memorial, DIBC assumes that the Tribunal’s jurisdiction can be established after the date DIBC submitted its claim to arbitration, that is, April 29, 2011. For example, in the context of Article 1121, DIBC assumes that the jurisdiction of the Tribunal is determined by reference to its most recent domestic legal pleadings as amended.^{Footnote 94}

55. DIBC’s assumption is incorrect at law. Under NAFTA Chapter Eleven the jurisdiction of a tribunal is determined on the date the claim is submitted to arbitration, not after.^{Footnote 95} For example, Article 1121 stipulates that a claim may be submitted to arbitration “only if” an investor and its enterprise file a valid waiver and comply with that waiver as of the date the notice of arbitration is submitted.^{Footnote 96} Also, NAFTA Articles 1116(2) and 1117(2) measures the timeliness of an investor’s claim from the date on which it filed the notice of arbitration.

56. This general rule of international law has been confirmed by NAFTA and other international courts and tribunals.^{Footnote 97} For example the Waste Management I tribunal stated that, as of the date of filing the NAFTA notice of arbitration, the claimant must prove that it has fully complied with Article 1121 otherwise the tribunal is without jurisdiction.^{Footnote 98} Similarly, the tribunal in Commerce Group also found that compliance with a waiver provision must be examined as of the date the claim to arbitration was filed, not later.^{Footnote 99}

57. DIBC submitted its claim to arbitration against Canada on April 29, 2011 and the Tribunal must use this date to determine whether it has jurisdiction over this dispute.^{Footnote 100} DIBC cannot ex post facto create jurisdiction after it has submitted its NAFTA claim to arbitration without the express consent of Canada,^{Footnote 101} which Canada has not and will not provide.^{Footnote 102}

C. The Claimant Cannot Amend its Claim to Include Claims over which the Tribunal has no Jurisdiction

58. If the Tribunal did not have jurisdiction as of the date of DIBC’s First NAFTA NOA (April 29, 2011) due to DIBC’s failure to comply with Article 1121, then the Tribunal cannot have jurisdiction over the claims in DIBC’s amended submission. Under the NAFTA the Tribunal cannot have jurisdiction over an amended claim that was not validly submitted to arbitration in the first place. In any event, an amended claim could only be valid to the extent that it is not “amended or supplemented in such a manner that the amended or supplemented claim or defense falls outside the jurisdiction of the arbitral tribunal.”^{Footnote 103} UNCITRAL Rule Article 22 establishes “an overall and absolute prohibition against introducing amendments which go beyond the scope of the arbitration clause.”^{Footnote 104}

59. As described below, in addition to filing a waiver even more defective than the first, DIBC’s Amended NAFTA NOA is an amendment of its original claim in a manner that falls outside the Tribunal’s jurisdiction. For example, DIBC’s amended claim is with respect to measures at issue in domestic proceedings which DIBC and CTC initiated and continued in contravention of Article 1121. DIBC’s Amended NAFTA NOA also includes a new claim against the IBTA that was, even as of April 29, 2011, already time-barred under Article 1116(2) and 1117(2).

IV. DIBC has Failed to Establish that it has Complied with NAFTA Article 1121

A. Summary of Canada’s Position

60. It cannot be disputed that the conditions set out in Article 1121 must be fulfilled in order to perfect the consent of a NAFTA Party offered by Article 1122(1). Even DIBC agrees that compliance with Article 1121 is a prerequisite to arbitration.^{Footnote 105} It is also beyond debate that failure to comply with Article 1121 deprives a NAFTA tribunal of jurisdiction. These have been the consistent conclusions of NAFTA tribunals and the consistent position of the NAFTA Parties.^{Footnote 106}

61. DIBC’s Counter-Memorial offers evasive explanations of its inadequate waivers and of the claims DIBC and CTC are pursuing in the ongoing domestic litigations. The gravamen of this NAFTA arbitration and each of the domestic litigations are the same: DIBC alleges that it has an “exclusive franchise” on toll bridges across the Detroit River and argues that Canada has, through various measures, violated this right and reneged on promises made to DIBC. The measures include an alleged promise to build a direct link between Highway 401 and the Ambassador Bridge, approving a new bridge with a highway leading thereto but not the Ambassador Bridge, enacting the IBTA, delaying approval of the Ambassador Bridge New Span and enacting the BSTA, as well as various actions by Canada to give effect to these measures. Each proceeding involves overlapping facts, documents, witnesses, allegations and questions of law which put these measures at issue. That the domestic litigations in question are with respect to measures alleged to breach the NAFTA is the inevitable conclusion arising from a plain reading of DIBC and CTC’s pleadings, vast portions of which are entirely duplicative.

62. In the following section, Canada will demonstrate that DIBC’s interpretation of Article 1121 has no basis in the ordinary meaning of the text in its context in light of the object and purpose of the NAFTA. Further, Canada will demonstrate that DIBC did not file a valid waiver on the date the claim was submitted to NAFTA arbitration and that; in any event, DIBC has not acted consistently with the requirements of Article 1121. As such, this Tribunal is without jurisdiction over DIBC’s claim.

B. DIBC’s Interpretation of NAFTA Article 1121(1)(b) and 2(b) is Contrary to its Ordinary Meaning and Object and Purpose

1. Compliance with Article 1121 is DIBC’s Responsibility to Establish, Not that of Canada or the Tribunal

63. As explained above and in Canada’s Memorial, a NAFTA Party does not consent to arbitrate under Chapter Eleven until the claimant has submitted a valid waiver that conforms to the ordinary meaning and object and purpose of Article 1121 and refrains from initiating or continuing any domestic litigation proceedings with respect to measures alleged to breach the NAFTA, unless those proceedings fall within the limited exception allowed in Articles 1121(1)(b) and (2)(b). The decision of NAFTA tribunals, other international tribunals, and the positions of the other NAFTA Parties, all support Canada’s view.^{Footnote 107}

64. In its Counter-Memorial, DIBC proffers a theory of Article 1121 that is unsupported by the provision’s ordinary meaning and the object and purpose of the NAFTA. First, DIBC argues that Article 1121 only requires that a waiver be in writing and delivered with the submission of a claim to arbitration.^{Footnote 108} DIBC argues that a waiver under Article 1121 is not required to take a particular form or substance. This is incorrect. While Article 1121(3) says that “a consent and waiver required by this Article [1121] shall be in writing, shall be delivered to [Canada] and shall be included in the submission of a claim to arbitration” (emphasis added), a waiver “required by” Article 1121 is one that is consistent with the wording of Articles 1121(1)(b) and 2(b) without deviation or manipulation, as it must genuinely waive a claimant’s right to initiate or continue “any proceedings” with respect to any measures alleged to breach the NAFTA. As the Tribunal in Commerce Group stated, “[a] waiver must be more than just words; it must accomplish its intended effect.”^{Footnote 109} If DIBC’s interpretation were accepted, then any claimant could file a waiver that is completely at odds with the requirements of Article 1121(1)(b) and 2(b).

65. Second, DIBC argues that under Article 1121 a claimant has no affirmative obligation to discontinue its domestic proceedings with respect to the measures alleged to breach the NAFTA.^{Footnote 110} This is also incorrect. The responsibility to materially comply with a waiver lies with the claimant. As the tribunal in Commerce Group stated, “logic tells us that it is up to the Claimants to make the waiver of their legal rights effective, not Respondent.”^{Footnote 111} Contrary to DIBC’s assertion,^{Footnote 112} the tribunal in Waste Management I also affirmed Canada’s position that a claimant is “obliged, in accordance with the waiver tendered, to abstain from initiating or continuing any proceedings before other courts or tribunals with respect to those measures pleaded as constituting a breach of the provisions of the NAFTA.”^{Footnote 113} It was precisely the claimant’s failure to do so that led the majority of the Waste Management I tribunal to conclude that it had no jurisdiction.

66. DIBC argues that if it were required to refrain from initiating or continuing parallel proceedings as of the date it submitted its claim to arbitration, it would be required to abandon its domestic proceedings before its NAFTA case “has been fully developed.”^{Footnote 114} This is simply not the case. Investors have three years since first acquiring knowledge of an alleged breach before a NAFTA arbitration needs to be commenced with respect to an impugned measure.^{Footnote 115} Investors are free to pursue domestic claims for damages for that entire period, which is efficient for both the investor and NAFTA Party because doing so will not impair the investor’s future ability to pursue arbitration, nor will it force the respondent government to deal with parallel proceedings.^{Footnote 116} It is true that domestic proceedings for damages cannot continue once the investor decides to choose NAFTA arbitration, but injunctive and declaratory relief can still be pursued against the respondent NAFTA Party in its own courts and still be fully consistent with Article 1121. The NAFTA Parties chose to adopt this procedure because it was a fair compromise to promote efficiency. That the procedure does not suit DIBC and CTC’s vexatious litigation strategy is irrelevant for the purposes of interpreting the ordinary meaning and purpose of NAFTA Article 1121.

67. Third, DIBC misconstrues Canada’s position to mean that the Tribunal must “police whether the Claimant’s other domestic litigation claims are consistent with the NAFTA waiver”^{Footnote 117} and that the NAFTA Tribunal has authority to order the cessation of other litigation.^{Footnote 118} Based on its own misinterpretation of Canada’s position, DIBC argues that Article 1121 does not authorize the Tribunal to police domestic lawsuits and as such, the Tribunal’s authority relates only “to the matters before it.”^{Footnote 119}

68. DIBC’s argument is misguided and does not reflect Canada’s position. Article 1121 does not require the Tribunal to “police” DIBC’s multiple domestic lawsuits against Canada. Instead, what the Tribunal must do is “police” its own jurisdiction. Unless DIBC has actually done what is required by Article 1121, including having terminated domestic proceedings with respect to measures alleged to breach NAFTA, it is the NAFTA arbitration that must be terminated for lack of jurisdiction. This is precisely the “matter” before the Tribunal and clearly within its authority. This principle was confirmed by the Tribunal in Waste Management I and Commerce Group.^{Footnote 120}

69. DIBC relies on Vanessa Ventures to support their proposition, but that case does not help DIBC either.^{Footnote 121} In Vanessa Ventures, the claimant had withdrawn domestic proceedings with respect to measures alleged to violate the Canada-Venezuela investment treaty. Venezuela raised the question of whether it made a difference under Venezuelan law that withdrawal had to be with or without prejudice to ensure the claimant could not pursue domestic claims in the future once the treaty arbitration was completed. The tribunal decided that it need not resolve that domestic law question in light of the definitive statement in a ruling by the Supreme Court of Venezuela that the claimant had “undoubtedly” waived its right to pursue domestic proceedings in favour of arbitration under the investment treaty.^{Footnote 122} This resolved the waiver question conclusively for the tribunal. Vanessa Ventures supports Canada’s position that a claimant must terminate domestic damages proceedings before the respondent State’s national courts if it wants to pursue treaty arbitration and that the waiver must be genuinely enforceable in domestic courts.^{Footnote 123}

70. Fourth, DIBC argues that it is the respondent State who should take the waiver delivered by the claimant to domestic courts for enforcement.^{Footnote 124} This is incorrect. Canada is under no obligation to do so. As the tribunal in Commerce Group stated, “the Tribunal has been provided with no reason to conclude that the formal and material requirements of the waiver provision should be divided between the Parties. In any event, logic tells us that it is up to the Claimants to make the waiver of their legal rights effective, not Respondent." ^{Footnote 125} Even if Canada were to choose such course of action, the waiver required by Article 1121 must be legally enforceable now and in perpetuity so that a claimant cannot later pursue domestic proceedings for damages with respect to measures alleged to breach NAFTA even after the NAFTA arbitration is over. This is consistent with the ordinary meaning of the provision, which requires that a claimant make a clear choice between pursuing its claims under NAFTA or in domestic court - it cannot do both.^{Footnote 126} What DIBC fails to recognize, however, is that a claimant cannot even commence NAFTA arbitration without also delivering a waiver that complies with the requirements of Article 1121 and refraining from pursuing parallel domestic proceedings. Unless these requirements are met, the question of future enforcement of a waiver in domestic courts is moot.

71. Fifth, DIBC says that “Canada is free to attempt to enforce Claimant’s Article 1121 waiver in the domestic cases themselves.”^{Footnote 127} This invitation is disingenuous: even without the defective language in both of DIBC’s waivers (discussed below), and even if the onus was on Canada to do this (it is not), it would be futile for Canada to even attempt to enforce DIBC’s waivers in the Washington Litigation and CTC Litigation given that DIBC expressly carved-out those proceedings from its waivers.^{Footnote 128}

72. Article 1121 requires more than simply providing a written document to the respondent NAFTA Party. The waiver must be consistent with the ordinary meaning of Article 1121 and its object and purpose and a claimant must act in accordance with the waiver by refraining from initiating or continuing any domestic proceedings other than those expressly permitted by Article 1121. Otherwise, the objective of that provision to provide legal certainty and avoid situations where respondent States are faced with multiple overlapping proceedings with respect to the measures cannot be achieved.

2. The Term “Proceedings With Respect to a Measure” Cannot Be Interpreted As Proposed By DIBC

73. In its Memorial on Jurisdiction, Canada explained that the term “proceedings with respect to” a measure in Article 1121(1)(b) and 2(b) means a domestic proceeding that is in regards to a measure that might directly affect the disposition of the NAFTA arbitration, for example, if the domestic proceeding requires for its disposition making determinations of certain facts or of legal rights, or that might award compensation, in regards to or with reference to a measure alleged to breach NAFTA.^{Footnote 129}

74. In its Counter-Memorial, DIBC advocates a very narrow interpretation of proceedings “with respect to” that would require a waiver of claims only if the exact measure is specifically challenged and identified as the specific basis of its claim in domestic proceedings. DIBC argues that “for claims to overlap” they must be seeking relief for “the same government action.”^{Footnote 130}

75. DIBC’s interpretation is incorrect (and unhelpful to its case in any event). The ordinary meaning of the words “with respect to” is “as regards; with reference to,”^{Footnote 131} not “identical” or “same as.” The NAFTA Parties could have chosen more restrictive language such as “proceedings challenging the same measure of the disputing Party…” if that had been their intention. Instead, the NAFTA uses the more encompassing concept of proceedings, which are “with respect to” the measure alleged to breach the NAFTA. Article 1121 is focused on the underlying actions of the respondent Party at issue, not the cause of action and “not on the claims to which such a measure may give rise.”^{Footnote 132}

76. Moreover, DIBC’s interpretation would erode the purpose of Article 1121 by allowing significant overlap between parallel proceedings. The Consolidated Lumber tribunal stated that “the words ‘with respect to’ are to be interpreted broadly” because of Article 1121’s goal of preventing concurrent and overlapping proceedings.^{Footnote 133} A narrow construction of the term “with respect to” is inconsistent with the intention of the NAFTA Parties because, as the Thunderbird tribunal stated, the “specific purpose” of Article 1121 is “to prevent a party from pursuing concurrent domestic and international remedies, which could either give rise to conflicting outcomes (and thus legal uncertainty) or lead to double redress for the same conduct or measure.”^{Footnote 134} A proper interpretation of “with respect to” must safeguard the goal of Article 1121 to prevent a respondent State from expending considerable resources defending itself in multiple fora and prevent the “imminent risk that the Claimant may obtain the double benefit in its claim for damages.”^{Footnote 135} As noted by the tribunal in Waste Management I, such situations are “precisely what NAFTA Article 1121 seeks to avoid.”^{Footnote 136} In other words, the ordinary meaning and object and purpose of Article 1121 is to “preclude the pursuit of all other claims arising out of the act of the host State which is complained of, even if such claims are founded upon municipal law.”^{Footnote 137}

77. In Commerce Group, the claimant attempted to characterize certain actions by El Salvador as separate and distinct measures. The tribunal had already decided that the Claimant’s parallel proceedings with respect to the revocation of a mining permit violated the waiver provision of the CAFTA. The claimant, however, argued that the tribunal still had jurisdiction over an aspect of the CAFTA case dealing with a de facto mining ban policy which was not part of domestic proceedings. The tribunal disagreed with the claimant’s characterizations and found that the permit revocation and the mining policy were both “part and parcel of their claim” and not “separate and distinct,” meaning the domestic proceedings were with respect to the measure alleged to breach the CAFTA.^{Footnote 138}

78. Thus, interpreting Articles 1121(1)(b) and 2(b) in accordance with the Vienna Convention of the Law of Treaties and with regard to the findings of other tribunals, a determination as to whether domestic proceedings are “with respect to” a measure alleged to breach the NAFTA involves considering whether the measures in question play more than just an incidental or insignificant role in the both proceedings. Any domestic proceeding in which the measure, its application, or its implications on a claimant’s rights are put into question or are relevant to the determination of the proceeding is “with respect to” the measure under Article 1121.

79. DIBC refers to Waste Management, Feldman and Genin to buttress its vague assertions that “cases may co-exist which do not challenge the same measures,”^{Footnote 139} “related measures could coexist in domestic cases and NAFTA arbitrations,”^{Footnote 140} and that “factual overlap alone [is] not enough to preclude jurisdiction.”^{Footnote 141} But those cases are unhelpful to DIBC’s arguments or are irrelevant.

80. DIBC relies on an extract from Waste Management I: “proceedings instituted in a national forum may exist which do not relate to those measures alleged to be in violation of the NAFTA by a member state of the NAFTA, in which case it would be feasible that such proceedings could coexist simultaneously with an arbitration proceeding under the NAFTA.” (emphasis added)^{Footnote 142} Canada agrees: domestic proceedings “which do not relate” to the measure alleged to breach NAFTA can proceed in parallel because they would not be “with respect to” that measure. However, this Tribunal has no jurisdiction for precisely this reason: DIBC and CTC’s domestic proceedings do relate to the measures alleged to breach the NAFTA which is why they cannot coexist.^{Footnote 143}

81. DIBC also relies on Feldman v. Mexico,^{Footnote 144} but that case is also unhelpful to its cause. The reason why the Feldman tribunal “did not object to the investor’s concurrent proceedings”^{Footnote 145} was because the Mexican domestic proceedings were for declaratory relief only, so there was no conflict with Article 1121.^{Footnote 146} Feldman serves to undermine DIBC’s own position.

82. Finally, DIBC relies on the decision of Genin for the proposition that “factual overlap alone [is] not enough to preclude jurisdiction.”^{Footnote 147} However the Genin decision is irrelevant for interpreting NAFTA Article 1121. In Genin, the tribunal was interpreting a “fork-in-the-road” provision in Article VI of the 1994 Estonia-United States BIT, which uses different language that NAFTA Article 1121 and is a legally distinct provision from the waiver provision used in the NAFTA.^{Footnote 148}

83. DIBC’s narrow interpretation of “with respect to” under NAFTA Article 1121 has no basis in the ordinary meaning of those terms. As described below, DIBC’s domestic proceedings are undoubtedly with respect to the measures alleged to breach the NAFTA.

3. “Not Involving the Payment of Damages” Includes Damages as an Alternative Means of Relief

84. Articles 1121(1)(b) and 2(b) allow proceedings to continue in the domestic courts of the respondent NAFTA Party simultaneously with the NAFTA arbitration as long as the domestic proceedings are for injunctive, declaratory or other extraordinary relief and “not involving the payment of damages.”^{Footnote 149} As Canada explained in its Counter-Memorial, the ordinary meaning of the text precludes proceedings which include a request for monetary compensation, whether directly or indirectly.

85. In its Counter-Memorial, DIBC argues that Article 1121 allows it to seek damages in the domestic courts of the respondent NAFTA Party as long as the damages sought are “in the alternative” to other equitable relief or as long as the damages are not being sought for the “same” measures alleged to breach NAFTA.^{Footnote 150}

86. DIBC’s interpretation does not find any support in the plain language of Article 1121, which explicitly states that “proceedings” for injunctive or declaratory relief in the respondent State must not “involv[e] the payment of damages.” That a request for damages is made in the alternative, or posited on some future event, or are not being sought for the “same” measures alleged to breach the NAFTA does not mean that the proceedings are “not involving the payment of damages” as articulated in Article 1121. DIBC’s interpretation would create an exception under Article 1121 that does not exist on a good faith reading of the text.

4. DIBC’s Interpretation of “proceedings...before an administrative tribunal or court under the law of the disputing Party” is Wrong

87. As Canada explained in its Memorial, “proceedings for injunctive, declaratory or other extraordinary relief” may co-exist with a NAFTA proceeding only when such proceedings are within the jurisdiction of the respondent State.^{Footnote 151} This is consistent with the plain language of Article and its object and purpose.

88. In its Counter-Memorial, DIBC agrees that the reference to “disputing Party” refers to Canada.^{Footnote 152} However, DIBC argues that it may seek declaratory or injunctive relief before U.S. courts against Canada with respect to measures alleged to breach the NAFTA so long as they are brought “under Canadian law.”^{Footnote 153} DIBC’s position is illogical. Any injunctive or declaratory relief available in United States courts are under the laws of the United States, not Canada. Relief granted pursuant to U.S. law, even based on an alleged violation of Canadian law is not relief “under the law of” Canada as permitted by Article 1121(1)(b) and (2)(b).

89. DIBC also argues that domestic proceedings for injunctive or declaratory relief against Canada are permitted before U.S. courts to protect “rights which arise pursuant to Canadian law.”^{Footnote 154}

90. DIBC’s interpretation is not, however, supported by the plain language of Article 1121. The phrases “before an administrative tribunal or court” and “under the law of the disputing Party” are not disjunctive, but are part of the same sentence: “before an administrative tribunal or court under the law of the disputing Party.” The phrase “before an administrative tribunal or court” is modified by “under the law of the disputing Party,” meaning that claims for declaratory or injunctive relief are only permissible if brought “before an administrative tribunal or court” that owes its existence to or operates “under the law of” the respondent State.

91. The Feldman tribunal confirmed this interpretation, indicating that injunctive and declaratory relief was available only before the local courts of the disputing Party.^{Footnote 155} This was also precisely the interpretation given by Mexico in the Loewen dispute in which Mexico indicated in its submission pursuant to NAFTA Article 1128 that while bringing a claim against the United States, a Canadian claimant “could not initiate or continue proceedings for injunctive, declaratory or other extraordinary relief not involving the payment of damages before an administrative tribunal or court other than the administrative tribunals and domestic courts of the United States.”^{Footnote 156}

92. DIBC argues that the draft texts of NAFTA Chapter Eleven demonstrate “that there was debate over whether the waiver exception for claims seeking declaratory or injunctive relief should apply to claims brought under the law of the disputing Party, or claims brought in the domestic courts of the disputing Party.”^{Footnote 157} DIBC argues that the NAFTA Parties made a “conscious decision” to allow domestic proceedings for injunctive or declaratory relief against a respondent State in the courts of a jurisdiction other than the respondent State.^{Footnote 158} In other words, DIBC argues that, for example, the United States made a “conscious decision” to allow itself to be sued for injunctive and declaratory relief in Canadian or Mexican courts alleging breaches of U.S. law with respect to the measures at issue in a NAFTA arbitration.

93. DIBC misreads the NAFTA drafts.^{Footnote 159} The choice was not between either “injunctive or declaratory claims before an administrative tribunal or court of the disputing Party” or “injunctive or declaratory claims under the domestic law of the disputing Party”. The choice between referring to “administrative tribunal or court” and “under the domestic law” was a choice of how to describe the “proceedings” referred to in the clause; that is, either as “proceedings before an administrative tribunal or court of the disputing Party,” or “proceedings under the domestic law of the disputing Party.” Under neither option did the NAFTA Parties contemplate non-disputing Party proceedings or proceedings under non-disputing Party law. Moreover, the choice adopted in the final text was to use both phrases in order to make clear that proceedings for declaratory or injunctive relief can only be brought “before an administrative tribunal or court under the law of the disputing Party.” In any event, it defies logic that the NAFTA Parties would subject themselves to injunctive, declaratory or other extraordinary relief in a foreign court without express language to that effect.

94. For all of the foregoing reasons, DIBC’s interpretation is wrong. Proceedings for “injunctive, declaratory or other extraordinary relief” may co-exist with a NAFTA proceeding only when such proceedings are before the courts of the respondent NAFTA Party.

C. DIBC and CTC Failed to Comply with the Conditions Precedent to Arbitration under NAFTA Article 1121

95. DIBC submitted its claim to arbitration under the NAFTA on April 29, 2011. Pursuant to Article 1121, on that date DIBC was required to submit a valid waiver that conforms to the ordinary meaning and object and purpose of Article 1121. DIBC was also required to act consistently with that waiver by refraining from initiating and continuing all domestic litigation proceedings with respect to measures alleged to breach the NAFTA unless those proceedings fall within the limited exception allowed in Article 1121(1)(b) and 2(b).

96. DIBC did neither. The waiver DIBC filed with the submission of its claim deviates significantly from what is required by Article 1121 and DIBC and CTC initiated and continued domestic proceedings for damages against Canada after April 29, 2011 with respect to measures alleged to breach NAFTA. Despite Canada’s multiple letters notifying DIBC that it has not complied with Article 1121 and that Canada does not consent to arbitrate^{Footnote 160}, Canada was and continues to be forced to defend itself at significant cost in multiple domestic proceedings.

97. On January 15, 2013, DIBC amended its NAFTA claim and filed a second waiver pursuant to Article 1121. This Tribunal does not have jurisdiction over DIBC’s amended claim because DIBC failed to fulfill the “conditions precedent” under Article 1121 as of April 29, 2011. Nonetheless, DIBC’s amended claim is also outside the jurisdiction of the Tribunal because its Second NAFTA Waiver is inconsistent with Article 1121 and DIBC and CTC continued domestic proceedings against Canada with respect to measures alleged to breach the NAFTA.

98. As explained below, this Tribunal does not have jurisdiction to hear any of DIBC’s NAFTA claims because of non-compliance with Article 1121. First, Canada will explain how DIBC’s First and Second NAFTA Waivers contravene Article 1121 because they are inconsistent with the ordinary meaning and object and purpose of that provision. Second, Canada will explain how DIBC has failed to comply with Article 1121 by initiating and continuing domestic proceedings for damages after the date it submitted its claim to arbitration – namely, the Washington Litigation, the CTC Litigation, and the Windsor Litigation – which are all proceedings with respect to the measures that DIBC alleges breach the NAFTA.

1. DIBC’s Waivers Contravene Article 1121

99. A waiver filed pursuant to NAFTA Article 1121 must be consistent with the requirements set out in that provision. If it does not, the waiver is invalid and there is no consent to arbitration. Because jurisdiction is determined on the date DIBC submitted its claim to arbitration, it is DIBC’s First NAFTA Waiver that is decisive. However, even if DIBC’s Second NAFTA Waiver were considered, it is also inconsistent with the requirements of Article 1121.

100. DIBC’s First NAFTA Waiver is inconsistent with Article 1121 for two reasons, each of which is fatal to the establishment of the Tribunal’s jurisdiction.

101. First, DIBC expressly carved-out the Washington Litigation from its First NAFTA Waiver making it inapplicable to that domestic proceeding. DIBC thus granted itself a carte blanche to pursue the Washington Litigation with impunity, depriving Canada of the ability to seek a dismissal if it were to attempt to do so. This contravenes Article 1121, which requires DIBC to file a waiver that covers “any proceeding.”

102. In its Counter-Memorial, DIBC argued that it was not required to waive its right to continue the Washington Litigation because that proceeding does not seek relief from Canada for the “same” measures that are at issue in the NAFTA arbitration.^{Footnote 161} This argument is inherently contradictive. If the Washington Litigation were truly not a proceeding with respect to the measures alleged to breach the NAFTA, then DIBC would have had no need to exclude it from its waiver. Nor would DIBC have gone to such great lengths to subsequently amend its Washington pleadings and drop its claim for damages to purportedly focus on Canada’s “actions in the United States”^{Footnote 162} and argue that Article 1121 allows it to seek injunctive and declaratory relief against Canada in U.S. courts.^{Footnote 163} DIBC had no bona fide reason to carve-out the Washington Litigation from its NAFTA waiver other than to ensure its continuance in parallel with the NAFTA arbitration. DIBC’s actions are exactly what Article 1121 is intended to prevent.

103. Second, DIBC’s First NAFTA Waiver is also inconsistent with Article 1121 because it only waives DIBC’s right to pursue certain specified measures in domestic proceedings, and thereby grants DIBC the ability to pursue claims that may be with respect to measures at issue in the NAFTA arbitration. As shown below, the measures that DIBC includes in its First NAFTA Waiver are narrower than the measures alleged to breach the NAFTA in its First NAFTA NOA:

**First NAFTA NOA vs First NAFTA Waiver**
FIRST NAFTA NOA – MEASURES ADDRESSED^{Footnote 164}	FIRST NAFTA WAIVER – MEASURES ADDRESSED^{Footnote 165}
“(a) to locate the Windsor-Essex Parkway so as to bypass the Ambassador Bridge and steer traffic to the planned DRIC Bridge”;	“to locate the Windsor-Essex Parkway so as to bypass the Ambassador Bridge and steer traffic to the planned Detroit River International Crossing (“DRIC”) Bridge;” and
“(b) to fail to provide comparable improvements in road access to the Ambassador Bridge, because of its ownership by a United States investor;” and
“to take traffic measures with respect to Huron Church Road to divert traffic away from the Ambassador Bridge and toward the Detroit-Windsor Tunnel and the planned DRIC Bridge.”	“to take traffic measures with respect to Huron Church Road to divert traffic away from the Ambassador Bridge and toward the Detroit-Windsor Tunnel and the planned DRIC Bridge.”

104. DIBC’s First NAFTA Waiver does not cover Canada’s alleged failure “to provide comparable improvements in road access to the Ambassador Bridge, because of its ownership by a United States investor” and is thus on its face narrower than the measures it alleges breach the NAFTA.^{Footnote 166} DIBC’s First NAFTA Waiver is thus inconsistent with Article 1121, which required DIBC to waive its right to initiate or continue proceedings with respect to the measures alleged to breach the NAFTA.

105. DIBC’s Second NAFTA Waiver which accompanied its Amended NAFTA NOA aggravates the above defects. First, DIBC carved-out the Washington Litigation again, but in addition, also carved-out the CTC Litigation. This allows DIBC to continue those proceedings in parallel with the NAFTA claim and deprives Canada of the ability to seek dismissal even if it were to attempt to do so. The explicit carve-out of domestic proceedings from the scope of a NAFTA waiver is inconsistent with Article 1121.

106. Second, DIBC’s Second NAFTA Waiver failed to include the following phrase from Article 1121(1)(b) and 2(b): “before an administrative tribunal or court under the law of the Disputing Party.” Canada pointed out this omission in its Memorial on Jurisdiction, noting that DIBC was obviously aware of the phrase given that it did not fail to include it in its First NAFTA Waiver.^{Footnote 167} In its Counter-Memorial, DIBC argues that “the omission does not and was not intended to deviate from the requirements of Article 1121.”^{Footnote 168} Whether or not DIBC “intended” to omit the language is irrelevant. By leaving it out, DIBC gives itself the right to pursue “injunctive, declaratory or other extraordinary relief” against Canada in the United States, which it has in fact been doing in the Washington Litigation. DIBC cannot give itself this right, as it contradicts Article 1121.

107. Finally, as with its First NAFTA Waiver, DIBC’s Second NAFTA Waiver is inconsistent with Article 1121 in that DIBC only made the waiver applicable to certain measures at issue in the NAFTA arbitration. DIBC again impermissibly gives itself the right to pursue other measures in domestic proceedings with respect to the measures it alleges breach the NAFTA. Moreover, like the First NAFTA Waiver, the measures that DIBC lists in its Second NAFTA Waiver are narrower than the measures it alleges breach the NAFTA:

**Amended NAFTA NOA vs Second NAFTA Waiver**
AMENDED NAFTA NOA – MEASURES ADDRESSED^{Footnote 169}	SECOND NAFTA WAIVER – MEASURES ADDRESSED^{Footnote 170}
“(1) to discriminate against DIBC, violating Claimant’s exclusive franchise rights to operate a bridge between Detroit and Windsor, and also violating Claimant’s franchise rights by precluding the construction of the New Span;
(2) to prevent or delay DIBC’s ability to obtain Canadian approval to build the New Span;	“to block and delay the approval and construction of the Ambassador Bridge New Span,”
(3) to locate the Windsor-Essex Parkway so as to bypass the Ambassador Bridge and steer traffic to the planned Canadian-owned NITC/DRIC Bridge, in breach of prior commitments and agreements to improve the connections to the Ambassador Bridge through the Ambassador Bridge Gateway Project;	“to locate the Windsor-Essex Parkway so as to bypass the Ambassador Bridge and steer traffic to the planned Canadian NITC/DRIC Bridge;”
(4) to fail to provide comparable improvements in road access to the Ambassador Bridge as was previously provided to the Blue Water Bridge and is currently being provided to the nonexistent NITC/DRIC Bridge, because the Ambassador Bridge is owned by a United States investor; and
(5) to take traffic measures with respect to Huron Church Road to divert traffic away from the Ambassador Bridge and toward the Detroit-Windsor Tunnel and other crossings not owned by a U.S. investor.”	“to take traffic measures with respect to Huron Church Road to divert traffic away from the Ambassador Bridge and toward the Detroit-Windsor Tunnel and the planned NITC/DRIC Bridge.”

108. DIBC, again, expressly fails to waive its right to pursue claims against Canada in domestic proceedings with respect to “(4)”, which is Canada’s alleged failure “to provide comparable improvements in road access to the Ambassador Bridge as was previously provided to the Blue Water Bridge and is currently being provided to the nonexistent NITC/DRIC Bridge.” The Second NAFTA Waiver would also not cover DIBC’s allegations against the BSTA, which it alleges has unlawfully “accelerated” the construction of the DRIC Bridge.^{Footnote 171} DIBC’s Second NAFTA Waiver is on its face, narrower than the measures it alleges breach the NAFTA, in clear violation of Article 1121.^{Footnote 172}

109. While it is only DIBC’s First NAFTA Waiver that is decisive, the above analysis demonstrates that both DIBC’s First and Second NAFTA Waivers fail to meet the requirements set out in Article 1121.

2. DIBC and CTC’s Continuation of the Washington Litigation Past April 29, 2011 Contravenes Article 1121 and Deprives the Tribunal of Jurisdiction

110. DIBC’s continuation of the Washington Litigation against Canada after it commenced NAFTA arbitration contravenes Article 1121 because it was both a proceeding with respect to the measures it alleges breach the NAFTA and was a proceeding for damages.

111. The table below highlights the relevant procedural history of the Washington Litigation and NAFTA arbitration showing the extent to which DIBC has pursued both lawsuits in tandem against Canada:^{Footnote 173}

**Washington Litigation vs NAFTA Arbitration**
WASHINGTON LITIGATION	NAFTA ARBITRATION
March 22, 2010 - DIBC files its Washington Complaint against Canada. (Exhibit R-17)
	March 23, 2010 - DIBC files its Second Notice of Intent to Arbitrate under the NAFTA.
	April 29, 2011 - DIBC initiates arbitration against Canada under the NAFTA by filing a Notice of Arbitration.
June 6, 2011 - DIBC files its First Amended Complaint against Canada in the Washington Litigation. (Exhibit R-18)
November 29, 2011 - DIBC withdraws Washington First Amended Complaint against Canada without prejudice and reserves its right to file again. (Exhibit R-24)
November 9, 2012 - DIBC files the Washington Second Amended Complaint and a Motion to re-join Canada to the Washington Litigation. (Exhibit R-19)
	January 15, 2013 - DIBC amends its Notice of Arbitration against Canada under the NAFTA.
May 29, 2013 - DIBC files its Third Amended Complaint against Canada in the Washington Litigation. (Exhibit C-141)

112. As of April 29, 2011, when DIBC filed its Notice of Arbitration, it was required to withdraw its Washington complaint against Canada because it was (and continues to be) a proceeding with respect to the measures alleged to breach the NAFTA. DIBC failed to do so. Instead, DIBC continued the Washington Litigation by filing its First Amended Complaint on June 6, 2011, further elaborating its allegations against Canada.

a) The Washington Litigation is a Proceeding with Respect to the Measures Alleged to Breach the NAFTA in DIBC’s Notice of Arbitration

113. The gravamen of the First NAFTA NOA and DIBC’s Original and First Amended Complaint in the Washington Litigation was the same: Canada’s decision to locate the DRIC Bridge, corresponding Parkway and customs plaza in proximity to the Ambassador Bridge. As explained above and in Canada’s Memorial,^{Footnote 174} the measure which approved the location of the DRIC Bridge and the Parkway is one in the same: the DRIC EA.^{Footnote 175} DIBC’s First NAFTA NOA was focused primarily on the DRIC EA, alleging that “Canada’s focus in developing the Central Corridor crossing infrastructure was to develop a publicly owned bridge to take traffic from the Ambassador Bridge, drive down the value of the Ambassador Bridge, and facilitate a future acquisition of the Ambassador Bridge by Canada.”^{Footnote 176} In DIBC’s Original and First Amended Complaint in the Washington Litigation it also alleged that Canada “created a new opportunity to attempt to force the transfer of the Ambassador Bridge to ownership and control by Canada, this time by proposing to build a new bridge (the “DRIC bridge”) between Detroit and Windsor, designed to take nearly all the traffic revenue from the Ambassador Bridge.”^{Footnote 177}

114. The timing of DIBC’s NAFTA arbitration and Washington Litigation is also telling. The DRIC EA was approved by Ontario and Canada in August and December 2009, respectively, after which CTC initiated a judicial review of the DRIC EA in the Federal Court of Canada on December 31, 2009.^{Footnote 178} DIBC and CTC then launched the Washington Complaint against Canada on March 22, 2010, and filed a notice of intent under the NAFTA on March 23, 2010. Clearly, the DRIC EA was the impetus for all three lawsuits.

115. DIBC argues that overlapping allegations in the Washington proceedings are to be construed as “context” and are there only to “corroborate Canada’s discriminatory intent in the Washington Litigation.”^{Footnote 179} This is not true. The Original Complaint and First Amended Complaint show that the allegations made and the relief requested by DIBC for Canada’s decision on the location of the DRIC Bridge and Parkway overlap with the measures alleged to breach the NAFTA. The conclusion is obvious from a plain reading of the submissions, but the following table highlights some of that overlap:

First NAFTA NOA vs Washington Complaint/1st Amended Complaint
First NAFTA NOA	Washington Complaint/1st Amended Complaint
Allegations with respect to the DRIC EA	Allegations with respect to the DRIC EA
“The location selected for the DRIC Bridge, in the area known as the Central Corridor, was intentionally chosen to divert traffic away from the Ambassador Bridge. The planned DRIC Bridge will have a direct connection to Highway 401 like the connection Canada promised but never built for the Ambassador Bridge. The new connection from Highway 401 to the DRIC Bridge, known as the Windsor-Essex Parkway, is designed to divert as must as 75% of the Ambassador Bridge’s commercial truck traffic and 39% of its passenger traffic, in order to ensure that the DRIC Bridge succeeds at the Ambassador Bridge’s expense.”^{Footnote 180} “This arbitration arises from the decisions by Canada, the Province of Ontario, and the City of Windsor (a) to locate the Windsor-Essex Parkway so as to bypass the Ambassador Bridge and steer traffic to the planned DRIC Bridge, (b) to fail to provide comparable improvements in road access to the Ambassador Bridge, because of its ownership by a United States investor.”^{Footnote 181}	“[T]o ensure that the DRIC Bridge succeeds at the expense of the Ambassador Bridge, Canada and FHWA have manipulated regulatory and other processes to speed the construction of the DRIC Bridge, delay or prevent the construction of the Ambassador Bridge New Span, and impede the flow of traffic to the Ambassador Bridge. By the DRIC Proponents’ own estimate, the objective of the DRIC Bridge is to divert from the Ambassador Bridge to the DRIC Bridge up to 75% of the Ambassador Bridge’s truck traffic and up to 39% of its passenger traffic.”^{Footnote 182} “Canada has taken a number of steps to undermine [DIBC/CTC’s] ability to compete with the proposed DRIC Bridge, including by insisting on placing the proposed DRIC Bridge in a location that would prevent Ambassador Bridge traffic from using any new road improvements to be constructed for the Canadian side of the DRIC Bridge … [T]he planned site for the DRIC Bridge is less than two miles from the Ambassador Bridge, but – as Canada intended when it rejected X12 – the planned highway connection bypasses the Ambassador Bridge and instead steers traffic to the site of the proposed DRIC Bridge.”^{Footnote 183}
Relief Requested
“As a result of the measures taken by the Government of Canada described above, the Claimant respectfully requests an award…Directing Canada to pay damages in an amount to be proved at the hearing by which the Claimant presently estimates to be in excess of US$3.5 billion.”^{Footnote 184}	Based on these allegations,^{Footnote 185} DIBC “respectfully request[s] judgment against [Canada] for the following relief: (1) A declaratory judgement against…Canada under 28 U.S.C. 2201-2202 that the construction and operation of the planned DRIC Bridge across the Detroit River would violate the obligations of Canada and the United States to DIBC and CTC;… (8) An injunction against…Canada prohibiting…[it] from taking any steps to construct, prepare for construction of, or arrange for construction of the planned DRIC Bridge or any other bridge across the Detroit River between Canada and the United States; (9) Damages against Canada in an amount to be determined at trial.”^{Footnote 186}

116. Both DIBC’s First NAFTA NOA and the Washington Litigation were also with respect to the Nine Point Plan. At paragraphs 115-120 of the First Amended Complaint, DIBC argues that that it spent “hundreds of millions of dollars” in reliance on Canada’s alleged $300 million commitment in 2002 to build a highway to the Ambassador Bridge.^{Footnote 187} DIBC explicitly relies on the 2002 MOU and the supposed “March 12, 2004 report of the Canadian government’s Business Transportation Task Force,” which, as described above, is the same defective and misrepresented document DIBC relies on in its Statement of Claim and Counter-Memorial,^{Footnote 188} and also relies on the Nine Point Plan for its allegation that Canada “reneged on its commitment to support the Ambassador Bridge Gateway Project.”^{Footnote 189} DIBC made the same allegations regarding the Nine Point Plan in its First NAFTA NOA.^{Footnote 190}

117. DIBC argues that its allegations against the Nine Point Plan in the Washington Litigation are merely “facts” that provide “background and context” to “corroborate Canada’s intent with respect to the measures that are at issue in the Washington Litigation.”^{Footnote 191} Allegations of discriminatory behavior are not, however, “facts” or “background.” The moment DIBC alleged in the Washington Litigation that Canada unlawfully “reneged” on the alleged $300 million promise in the Nine Point Plan/LGWEM Strategy, the proceedings became “with respect to” those measures alleged by DIBC in its First NAFTA NOA to violate NAFTA. Canada denies that any such promise was ever made and denies that Canada reneged on anything. DIBC cannot expect that this so-called evidence of “discriminatory intent” would go unchallenged. Canada would have made the same arguments in the Washington Litigation as in this NAFTA arbitration to establish that there was never such a commitment and that Canada “reneged” on nothing. As such, these proceedings become “with respect to” those measures.

118. DIBC’s Counter-Memorial questions Canada’s reliance on the document requests filed against Canada in the Washington Litigation in July 2010 as evidence of what measures are truly at issue in the Washington Litigation.^{Footnote 192} As Canada noted in its Memorial,^{Footnote 193} the DRIC EA was central to those document requests, which were filed several months after DIBC initiated the Washington Litigation and filed its Second NAFTA NOI (March 22, 2010, the text of which was duplicated when DIBC filed its First NAFTA NOA on April 29, 2011). DIBC’s argument that it subsequently filed “far more limited” requests that did not include the DRIC Bridge or Parkway is untrue. All of DIBC’s reformulated requests targeted documents connected to the “DRIC Project,” which DIBC specifically defined as “the DRIC Bridge, the DRIC Parkway and any undertaking related to the planning or realization of the DRIC Bridge or DRIC Parkway.”^{Footnote 194}

119. In its Counter-Memorial DIBC wrongly assumes that the NAFTA and international law allows it to create jurisdiction at any time after commencing arbitration, and it totally ignores the consequence of having been in non-compliance with Article 1121 from the outset. This Tribunal need not look further than the First NAFTA NOA and the Washington Original Complaint and First Amended Complaint. The domestic proceedings were with respect to the measures alleged to breach the NAFTA and this Tribunal has no jurisdiction.

b) Even if DIBC’s Amended NAFTA NOA Were Relevant to the Tribunal’s Jurisdiction, the Washington Litigation is Still a Proceeding With Respect to Measures Alleged to Breach the NAFTA

120. On January 15, 2013, DIBC amended its claims against Canada in the NAFTA arbitration. The Tribunal does not have jurisdiction over these claims because DIBC failed to comply with Article 1121 as of April 29, 2011. But even if the Tribunal were to look into the Amended NAFTA NOA, it would find that the amended claim is itself outside of the jurisdiction of the Tribunal because DIBC was continuing the Washington Litigation against Canada as of January 15, 2013.

121. The “operative complaint” in the Washington Litigation at the time DIBC amended the submission of its claim to arbitrate was the Washington Second Amended Complaint. As Canada’s explained in its Memorial on Jurisdiction,^{Footnote 195} DIBC’s allegations in the Second Amended Complaint make the Washington Litigation a proceeding with respect to the measures alleged to breach the NAFTA. For example, the Second Amended Complaint continues and elaborates upon DIBC’s allegations against the Nine-Point-Plan and DRIC EA described above.^{Footnote 196} DIBC also makes new allegations in its amended claim against Canada with respect to the IBTA, the delay of approval of the New Span, and the BSTA. As the following tables show, each of these new allegations overlaps with the Washington Second Amended Complaint. For example, DIBC makes duplicative allegations in both proceedings with respect to the IBTA:

Amended NAFTA NOA - IBTA	2nd Amended Complaint - IBTA
“Canada has enacted the IBTA to give Canada the purported authority to interfere with the Ambassador Bridge’s expansion plans including the Ambassador Bridge New Span, to interfere with Claimant’s rights to operate the bridge under the Special Agreement, and to promote Canada’s long-term goal of limiting the value of Claimant’s rights in order to coerce DIBC and CTC to transfer their rights in the Ambassador Bridge only to Canada on Canada’s terms.”^{Footnote 197}	“Canada has enacted the IBTA to interfere with the Ambassador Bridge’s expansion plans including the Ambassador Bridge New Span, to interfere with plaintiffs’ rights to operate the bridge under the Special Agreement, and to promote Canada’s long-term goal of limiting the value of plaintiffs’ rights in order to coerce plaintiffs to transfer their rights in the Ambassador Bridge only to Canada on Canada’s terms.”^{Footnote 198}

Amended NAFTA NOA - IBTA

2nd Amended Complaint - IBTA

“Canada has enacted the IBTA to give Canada the purported authority to interfere with the Ambassador Bridge’s expansion plans including the Ambassador Bridge New Span, to interfere with Claimant’s rights to operate the bridge under the Special Agreement, and to promote Canada’s long-term goal of limiting the value of Claimant’s rights in order to coerce DIBC and CTC to transfer their rights in the Ambassador Bridge only to Canada on Canada’s terms.”^{Footnote 197}

“Canada has enacted the IBTA to interfere with the Ambassador Bridge’s expansion plans including the Ambassador Bridge New Span, to interfere with plaintiffs’ rights to operate the bridge under the Special Agreement, and to promote Canada’s long-term goal of limiting the value of plaintiffs’ rights in order to coerce plaintiffs to transfer their rights in the Ambassador Bridge only to Canada on Canada’s terms.”^{Footnote 198}

122. It also makes duplicative allegations with respect to the alleged delay of the New Span:

Amended NAFTA NOA – Delay to the new span	2nd Amended Complaint - Delay to the new span
“Canada has delayed and obstructed the construction of the New Span by, for example, delaying approval under the Canadian Environmental Assessment Act for the New Span. Claimant submitted an environmental impact statement to Transport Canada for the Ambassador Bridge New Span on December 4, 2007. Because the Ambassador Bridge New Span will be constructed directly alongside the existing span and will connect to the existing Ambassador Bridge plaza, any environmental impact will be insignificant or nonexistent. However, no decision has been received to this date, over five years later.”^{Footnote 199}	“[Canada has] delayed and obstructed the construction of the New Span by delaying approval under the Canadian Environmental Assessment Act…Plaintiffs submitted an environmental impact statement to Transport Canada for the Ambassador Bridge New Span on December 4, 2007. Because the Ambassador Bridge New Span will be constructed directly alongside the existing span and will connect to the existing Ambassador Bridge plaza, any environmental impact will be insignificant or nonexistent. However, no decision has been received to this date, over four years later.”^{Footnote 200}

Amended NAFTA NOA – Delay to the new span

2nd Amended Complaint - Delay to the new span

“Canada has delayed and obstructed the construction of the New Span by, for example, delaying approval under the Canadian Environmental Assessment Act for the New Span. Claimant submitted an environmental impact statement to Transport Canada for the Ambassador Bridge New Span on December 4, 2007. Because the Ambassador Bridge New Span will be constructed directly alongside the existing span and will connect to the existing Ambassador Bridge plaza, any environmental impact will be insignificant or nonexistent. However, no decision has been received to this date, over five years later.”^{Footnote 199}

“[Canada has] delayed and obstructed the construction of the New Span by delaying approval under the Canadian Environmental Assessment Act…Plaintiffs submitted an environmental impact statement to Transport Canada for the Ambassador Bridge New Span on December 4, 2007. Because the Ambassador Bridge New Span will be constructed directly alongside the existing span and will connect to the existing Ambassador Bridge plaza, any environmental impact will be insignificant or nonexistent. However, no decision has been received to this date, over four years later.”^{Footnote 200}

123. And makes duplicative allegations against the BSTA:

Amended NAFTA NOA - BSTA	2ND Amended Compliant- BSTA
“Canada has recently taken additional steps in its effort to discriminate against the New Span and in favor of the NITC/DRIC. In October 2012…legislation was proposed in the Canadian Parliament called the “Bridge to Strengthen Trade Act” to exempt the NITC/DRIC from a number of Canadian regulatory approval requirements, either by granting the NITC/DRIC automatic approval or by explicitly exempting the NITC/DRIC from the requirement. This legislation was passed in December 2012 … The Bridge to Strengthen Trade Act does not exempt the Ambassador Bridge New Span from any requirements of Canadian law … Thus, this recent legislation is additional evidence of the effort Canada is making to prevent DIBC and CTC from exercising their right to build the New Span and to ensure that the Canadian-owned NITC/DRIC Bridge is built before the U.S.-owned New Span can be built.”^{Footnote 201}	“Canada has recently taken additional steps in its effort to discriminate against the New Span and in favor of the NITC/DRIC. In October 2012, legislation was proposed in the Canadian Parliament, called the “Bridge to Strengthen Trade Act,” that would exempt the NITC/DRIC from a number of Canadian regulatory approval requirements, either by granting the NITC/DIBC automatic approval or by explicitly exempting the NITC/DRIC from the requirement … The proposed Bridge to Strengthen Trade Act does not exempt the Ambassador Bridge New Span from any requirements of Canadian law … Thus, the recent proposed legislation is additional evidence of the effort Canada is making to prevent the plaintiffs from exercising their right to build the New Span, and to ensure that the NITC/DRIC is built before the New Span can be built.”^{Footnote 202}

Amended NAFTA NOA - BSTA

2ND Amended Compliant- BSTA

“Canada has recently taken additional steps in its effort to discriminate against the New Span and in favor of the NITC/DRIC. In October 2012…legislation was proposed in the Canadian Parliament called the “Bridge to Strengthen Trade Act” to exempt the NITC/DRIC from a number of Canadian regulatory approval requirements, either by granting the NITC/DRIC automatic approval or by explicitly exempting the NITC/DRIC from the requirement. This legislation was passed in December 2012 … The Bridge to Strengthen Trade Act does not exempt the Ambassador Bridge New Span from any requirements of Canadian law … Thus, this recent legislation is additional evidence of the effort Canada is making to prevent DIBC and CTC from exercising their right to build the New Span and to ensure that the Canadian-owned NITC/DRIC Bridge is built before the U.S.-owned New Span can be built.”^{Footnote 201}

“Canada has recently taken additional steps in its effort to discriminate against the New Span and in favor of the NITC/DRIC. In October 2012, legislation was proposed in the Canadian Parliament, called the “Bridge to Strengthen Trade Act,” that would exempt the NITC/DRIC from a number of Canadian regulatory approval requirements, either by granting the NITC/DIBC automatic approval or by explicitly exempting the NITC/DRIC from the requirement … The proposed Bridge to Strengthen Trade Act does not exempt the Ambassador Bridge New Span from any requirements of Canadian law … Thus, the recent proposed legislation is additional evidence of the effort Canada is making to prevent the plaintiffs from exercising their right to build the New Span, and to ensure that the NITC/DRIC is built before the New Span can be built.”^{Footnote 202}

124. Finally, DIBC requests relief in both the NAFTA arbitration and Washington Litigation for each of the above mentioned allegations

Amended NAFTA NOA – Relief Requested	2nd Amended Complaint – Relief Requested
“As a result of the measures taken by the Government of Canada described above, the Claimant respectfully requests an award … (b) Directing Canada to pay damages in an amount to be proved at the hearing.”^{Footnote 203}	Based on these allegations,^{Footnote 204} DIBC “respectfully request[s] judgment against [Canada] as follows: (e) A declaratory judgement against [Canada] declaring that plaintiffs own a statutory and contractual franchise right to build the New Span, and that any conduct by any defendant that seeks to prevent plaintiffs from building the New Span is a violation of those rights, including in particular any conduct that seeks to accelerate the regulatory approvals of the NITC/DRIC and/or delay the regulatory approvals of the New Span;… (j) A declaratory judgment that [Canada’s] actions in supporting the construction of the NITC/DRIC, and in preventing plaintiffs from exercising their right to build the New Span, constitute a taking of plaintiffs’ private property rights without payment of just compensation, in violation of…international law. (l) Any such other and further relief as may be just and proper.”^{Footnote 205}

Amended NAFTA NOA – Relief Requested

2nd Amended Complaint – Relief Requested

“As a result of the measures taken by the Government of Canada described above, the Claimant respectfully requests an award … (b) Directing Canada to pay damages in an amount to be proved at the hearing.”^{Footnote 203}

Based on these allegations,^{Footnote 204} DIBC “respectfully request[s] judgment against [Canada] as follows:

(e) A declaratory judgement against [Canada] declaring that plaintiffs own a statutory and contractual franchise right to build the New Span, and that any conduct by any defendant that seeks to prevent plaintiffs from building the New Span is a violation of those rights, including in particular any conduct that seeks to accelerate the regulatory approvals of the NITC/DRIC and/or delay the regulatory approvals of the New Span;…
(j) A declaratory judgment that [Canada’s] actions in supporting the construction of the NITC/DRIC, and in preventing plaintiffs from exercising their right to build the New Span, constitute a taking of plaintiffs’ private property rights without payment of just compensation, in violation of…international law.
(l) Any such other and further relief as may be just and proper.”^{Footnote 205}

125. DIBC argues that the Washington Litigation only “mentions” certain overlapping “facts” “in order to corroborate Canada’s discriminatory intent in the Washington Litigation.”^{Footnote 206} As shown in the above table, however, this is false. Even if DIBC were somehow correct, using measures at issue in the NAFTA arbitration to “corroborate Canada’s discriminatory intent in the Washington Litigation” is sufficient to make the Washington Litigation a proceeding with respect to the measures at issue in the NAFTA arbitration.

126. DIBC also argues that the Second Amended Complaint is nonetheless consistent with Article 1121 because that complaint does not “involve the payment of damages” and “seeks only declaratory and injunctive relief against Canada” “under Canadian law.”^{Footnote 207} As Canada explained in its Memorial,^{Footnote 208} however, DIBC sought a declaration in its Second Amended Complaint that Canada’s actions constitute a taking (i.e., expropriation) without compensation under international law, which necessarily begs the question of how such a declaration does not “involve the payment of damages.”

127. In any event, even if the Second Amended Complaint “seeks only declaratory and injunctive relief against Canada,” DIBC is not seeking that relief “under Canadian law.” Injunctive and declaratory relief available in Unites States’ courts, even if based on an alleged violation of Canadian law, is under the laws of the United States, not Canada. Contrary to DIBC’s assertion, its Second Amended Complaint explicitly states that declaratory relief is being sought against Canada pursuant to 28 U.S.C. §§ 2201-2202, which is a reference to the U.S. Declaratory Judgment Act.^{Footnote 209} DIBC is thus seeking relief against Canada under U.S. law, and not “under Canadian law.” DIBC’s efforts to evade its obligations under Article 1121 in this respect are without merit.

128. For all of the foregoing reasons, the allegations made in the Second Amended Complaint make it a “proceeding with respect to” the measures alleged to breach NAFTA. DIBC has continued the Washington Litigation contrary to Article 1121 and this Tribunal has no jurisdiction over its amended claim.

c) The Washington Litigation Third Amended Complaint is Irrelevant But Inconsistent with Article 1121 Nevertheless

129. On May 29, 2013, DIBC amended its claims against Canada in the Washington Litigation for a third time. In its Counter-Memorial DIBC assumes that its Third Amended Complaint is the “operative complaint”^{Footnote 210} for the purposes of determining whether the Washington Litigation is a proceeding “with respect to” measures alleged to breach the NAFTA under Article 1121. The Third Amended Complaint is not the “operative complaint” as DIBC was required to comply with Article 1121 as of April 29, 2011. Nevertheless, the Third Amended Complaint does not rectify DIBC’s previous non-compliance with Article 1121 but only further demonstrates DIBC’s continued willingness to flout the conditions precedent under that provision.

130. The Third Amended Complaint shows that the Washington Litigation is a proceeding with respect to measures alleged to breach the NAFTA as understood by Article 1121 it still makes allegations with respect to the Nine Point Plan,^{Footnote 211} the DRIC EA^{Footnote 212}, the IBTA^{Footnote 213}, the alleged delay to the New Span EA,^{Footnote 214} and the BSTA.^{Footnote 215}

131. DIBC argues that the measures at issue in the Washington Third Amended Complaint are different than the measures at issue in the NAFTA arbitration because “the NAFTA arbitration challenges Canada’s measures that discriminate against Claimant in Canada, whereas the Washington Litigation challenges Canada’s unlawful actions within the United States.”^{Footnote 216} This is incorrect. The Third Amended Complaint explicitly states that it includes allegations against “Canada’s acts within Canada, in connection with the commercial activity in Canada of constructing and operating or preparing to construct and operate the NITC/DRIC.”^{Footnote 217} DIBC’s characterization of the Washington Litigation as applying only to “Canada’s actions within the United States” is therefore false.

132. Second, DIBC argues that the only measures at issue in the Washington Litigation are those that are listed at paragraph 43 of its Third Amended Complaint. This is also not true. For example, paragraph 44 of the Third Amended Complaint also lists a series of measures against Canada. The Third Amended Complaint also contains an additional approximate 373 paragraphs of allegations and seeks a declaration that “Canada may not discriminate in favor of the NITC/DRIC over the New Span, and may not accelerate the regulatory approvals for the NITC/DRIC and/or delay the regulatory approvals for the New Span.” In light of the foregoing, the measures at issue in the Third Amended Complaint are not limited to those listed in paragraph 43.^{Footnote 218}

133. Thus, even if the Third Amended Complaint were somehow the “operative complaint” for the purposes of Article 1121, which it is not, that pleading is evidence of nothing more than DIBC’s continued willingness to ignore the conditions precedent under Article 1121.

3. The CTC Litigation is Inconsistent with Article 1121

134. The relevant procedural history of the NAFTA arbitration and CTC Litigation is highlighted in the table below and shows that CTC has continued both proceedings in tandem:

**CTC Litigation vs NAFTA Arbitration**
CTC Litigation	NAFTA Arbitration
	April 29, 2011 - DIBC initiates arbitration against Canada under the NAFTA by filing a Notice of Arbitration.
February 15, 2012 - DIBC files its Statement of Claim in the CTC Litigation. (Exhibit R-20)
	January 15, 2013 - DIBC amends its Notice of Arbitration against Canada under the NAFTA.
February 19, 2013 - DIBC amends its claim in the CTC Litigation. (Exhibit C-119)

135. As explained in Canada’s Brief Statement and Memorial,^{Footnote 219} the CTC Litigation is a proceeding with respect to the measures alleged to breach the NAFTA as it seeks to impugn the Nine Point Plan,^{Footnote 220} the DRIC EA,^{Footnote 221} the IBTA^{Footnote 222} and the delay purportedly caused with respect to the New Span EA.^{Footnote 223} It is also a proceeding “involving the payment of damages.” For these two reasons DIBC contravened Article 1121 when it initiated and continued the lawsuit against Canada.

136. DIBC does not dispute that the CTC Litigation is a proceeding with respect to the measures that it alleges breach the NAFTA.^{Footnote 224} Nor does it even dispute that the CTC Litigation is a proceeding “involving the payment of damages.”^{Footnote 225} Instead, DIBC argues that it was allowed to initiate and continue the CTC Litigation under Article 1121 because its damages claim in that proceeding is not for the “same” measures at issue in the NAFTA arbitration.^{Footnote 226} In particular, DIBC states that the CTC Litigation “seeks damages only with respect to a potential, future expropriation that would be caused by the actual construction of the DRIC Bridge, and because that measure is not being challenged in this NAFTA arbitration, the CTC Litigation is consistent with Article 1121.”^{Footnote 227}

137. DIBC’s understanding of Article 1121 is wrong. Article 1121 bars “any proceedings with respect to” measures alleged to breach the NAFTA. The “proceedings” in question – the CTC Litigation – is a proceeding with respect to measures alleged to breach the NAFTA and is “involving the payment of damages.” The analysis need not proceed any further. DIBC misunderstands Article 1121 when it writes: “[A]n investor should [not] be required to waive its right to claim damages with respect to different measures that are not being challenged in the NAFTA arbitration.”^{Footnote 228} A claimant is required to waive proceedings with respect to measures, not the measures themselves. Because the CTC Litigation is a “proceeding…involving the payment of damages,” DIBC’s initiation and continuation of that proceeding against Canada contravenes Article 1121.

138. Moreover, DIBC’s argument that the “actual construction” of the DRIC Bridge is a “measure” separate and distinct from the measures at issue in the NAFTA arbitration is untenable. For example, the approved location of the DRIC Bridge through the DRIC EA is not a measure that is separate and distinct from the actual construction of the DRIC Bridge for the purposes of NAFTA Article 1121. Both of DIBC’s allegations have their roots in the same underlying complaint: that a new international crossing in proximity to the Ambassador Bridge violates DIBC’s “exclusive franchise rights” and the NAFTA. Even DIBC acknowledges in the CTC Litigation that Canada, through the DRIC EA, “unlawfully commenced construction of a new, government-owned international crossing to be built less than two miles from the Ambassador Bridge.”^{Footnote 229} DIBC also relies on the traffic projections of the DRIC EA to support its claim for damages.^{Footnote 230} DIBC cannot, therefore, legitimately argue that the “actual construction” of the DRIC Bridge is a measure “separate and distinct” from measures at issue in the NAFTA arbitration for the purposes of Article 1121.^{Footnote 231}

139. DIBC’s argument that the CTC Litigation and NAFTA arbitration cannot overlap because it would be “premature” for DIBC to seek damages for the “actual construction” of the DRIC Bridge is also without merit. DIBC neglects that it has already sued Canada for damages in the Washington Litigation in March 2010 for “proceeding toward the construction of the DRIC Bridge.”^{Footnote 232} Through its own pleadings DIBC therefore demonstrates its own understanding that such a claim is not “premature.” Moreover, DIBC seeks “in excess of US$3.5 billion” in damages against Canada in this NAFTA arbitration. It is difficult to imagine how this quantum would not overlap with DIBC’s claim for de facto expropriation in the CTC Litigation.

140. By initiating and continuing the CTC Litigation, and by refusing to waive its right to continue the CTC Litigation in its Second NAFTA Waiver, DIBC has failed to meet the conditions precedent to arbitration under NAFTA Article 1121.

4. DIBC Refuses to Confirm What Windsor Measures are Alleged to Breach the NAFTA

141. The relevant procedural history of the Windsor Litigation and NAFTA arbitration is set out in the table below, which shows that CTC was pursuing both lawsuits against Canada in tandem:

Windsor Litigation	NAFTA Arbitration
February 24, 2010 - CTC files a Statement of Claim in the Windsor Litigation. (Exhibit R-29)
June 22, 2010 - CTC files second Statement of Claim in the Windsor Litigation. (Exhibit R-30)
September 21, 2010 - CTC joined to Windsor by-law litigation initiated by other plaintiffs; Court stays CTC’s February and June 2010 complaints pending outcome of by-law challenge. (Exhibit R-87
	April 29, 2011 - DIBC initiates arbitration against Canada under the NAFTA by filing a Notice of Arbitration.
September 6, 2011 - CTC’s by-law challenge dismissed by Court. (Exhibit R-31)
August 13, 2012 - CTC abandons appeal, but February and June 2010 complaints still pending. (Exhibit R-33)
September 6, 2012 - CTC ordered to pay Windsor’s legal costs. (Exhibit R-32)
	January 15, 2013 - DIBC amends its Notice of Arbitration against Canada under the NAFTA.

142. In its NAFTA claim, DIBC alleges that the City of Windsor took measures “to discriminate against DIBC, violating Claimant’s exclusive franchise rights to operate a bridge between Detroit and Windsor, and also violating Claimant’s franchise rights by precluding the construction of the New Span.”^{Footnote 233}

143. In the Windsor Litigation, CTC alleges that the City of Windsor “engaged in unlawful and deliberate conduct for the purpose of delaying, obstructing, hindering and preventing CTC from engaging in its commercial activities to effectively operate and improve the Ambassador Bridge crossing.”^{Footnote 234} Specifically, CTC alleges that the following City of Windsor actions were unlawful and caused CTC damages:

The Schwartz Report and Greenlink proposal;
Purchase of property in the DRIC Bridge area;
City Council Resolutions and submissions in the public consultation process opposing the construction of the New Span;
Planning studies relating to the Olde Sandwich Towne;
Installation of traffic lights and “unlimited driveway connections” along Huron Church Road; and
By-laws and City Council resolutions to prevent the demolition of houses in Olde Sandwich Towne.^{Footnote 235}

144. In its Response to Canada’s Brief Statement on Jurisdiction and Admissibility, DIBC defended the continuation of the Windsor Litigation by arguing that, with the exception of Windsor’s “traffic measures” along Huron Church Road, none of the other “specific actions by Windsor…are at issue in this arbitration.”^{Footnote 236} In reliance on this statement, Canada accepted in its Memorial on Jurisdiction that DIBC had provided “written confirmation that Windsor’s measures relating to the DRIC Bridge and New Span are not part of the NAFTA arbitration.”^{Footnote 237} However, in its Counter-Memorial DIBC retracted in its previous statement and advanced a number of arguments to support CTC’s purported ability to pursue its allegations against the City of Windsor in both the Windsor Litigation and NAFTA arbitration simultaneously. None of DIBC’s arguments have any merit.

145. First, DIBC attempts to re-characterize the Windsor Litigation as challenging only municipal By-Laws enacted by the City of Windsor and not any other measures. This is false. CTC’s February 24, 2010 Statement of Claim in the Windsor Litigation, contains 93 paragraphs and 24 sections of allegations against the City of Windsor. Of those, only nine paragraphs and two sections relate specifically to the Windsor By-Laws.^{Footnote 238} The vast majority of CTC’s complaint focuses on a pattern of alleged discriminatory conduct by the City to favour the DRIC Bridge and prevent the Ambassador Bridge New Span. DIBC’s characterization of the Windsor Litigation as pertaining only to the City’s By-Laws is therefore inaccurate.^{Footnote 239}

146. Second, DIBC argues that it believed the Windsor Litigation had been “effectively terminated” and also appears to undertake to withdraw its proceedings.^{Footnote 240} DIBC cannot possibly have believed that the Windsor Litigation was somehow “effectively terminated” because the City of Windsor has been asking CTC to withdraw its proceedings since September 2012, most recently in July 2013, a mere one month before DIBC filed its Counter-Memorial.^{Footnote 241} As of the date of this Reply Memorial, DIBC has still not withdrawn the Windsor Litigation.

147. Third, DIBC argues that CTC’s allegations against the City of Windsor in the Windsor Litigation “may be relevant background to this arbitration.” However, as Canada explained in its Memorial, the allegations of discrimination in the Windsor Litigation cannot be construed as “background” if DIBC advances the same allegations of discrimination in this NAFTA arbitration.

148. In its Counter-Memorial, DIBC simply refuses to identify which City of Windsor measures “discriminate against DIBC” and “preclud[e] the construction of the New Span.” If any of those measures include those at issue in the Windsor Litigation, then DIBC has failed to meet the conditions precedent to arbitration under Article 1121.

V. DIBC has Failed to Prove that its Highway 401-Ambassador Bridge Access Claim and IBTA Claim are Timely

A. Summary of Canada’s Position

149. If the Tribunal decides that DIBC has complied with Article 1121, it nonetheless lacks jurisdiction rationae temporis over DIBC’s Highway 401 and IBTA claims because of the three-year time limitation set out in NAFTA Articles 1116(2) and 1117(2).

150. DIBC’s Counter-Memorial continues to rely on a theory of “continuing breach” to evade Articles 1116(2) and 1117(2). DIBC’s interpretation is inconsistent with the ordinary meaning and object and purpose of those provisions, which refers to when the claimant first acquired actual or constructive knowledge of the alleged NAFTA breach and loss and not on whether the measure is continuing or has ended. DIBC’s theory was rejected in the recent NAFTA Chapter Eleven award Apotex Inc. v. United States and is inconsistent with the views of all three NAFTA Parties.

151. DIBC’s Counter-Memorial also attempts to use principles from the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts (“ILC Articles”) to characterize the measures in a way that evades the NAFTA’s three-year time limitations period.^{Footnote 242} DIBC describes Canada’s actions regarding the Highway 401-Ambassador Bridge connection and the IBTA as “preparatory” or “composite” depending on which characterization it believes best assists it to avoid the requirements of Articles 1116(2) and 1117(2). However, DIBC’s theories ignore or misconstrue uncontroverted evidence and none of these characterizations of the measures can displace the clear text of the NAFTA which must be applied as written and as it was intended to operate. DIBC has failed to establish that its Highway 401 or IBTA claims are timely. As such, this Tribunal is without jurisdiction over those claims.

152. The following section will first rebut DIBC’s incorrect interpretation of Articles 1116(2) and 1117(2). In particular, Canada will demonstrate that a continuing measure does not toll the three-year time limitations period and that DIBC’s arguments with respect to composite acts, knowledge of loss or damage, and the relevance of related domestic litigation are all misguided. Second, Canada will demonstrate that DIBC’s characterization of the Highway 401 measures (i.e., Nine Point Plan/LGWEM Strategy and the DRIC EA) are not only contradictory and confused but are designed to mislead as to when DIBC first acquired knowledge of the alleged breach. The witness statement of Ms. Helena Borges, Associate Deputy Minister at Transport Canada, responds to various mischaracterizations in DIBC’s Counter-Memorial and demonstrates, along with the totality of the other documentary evidence, that DIBC’s Highway 401 claims are untimely. Third, Canada will demonstrate that DIBC’s newest argument as to when it first acquired knowledge of the alleged NAFTA breach and damage relating to its IBTA claim (October 18, 2010) is disingenuous and inconsistent with the evidence and its own prior positions.

B. DIBC Ignores the Ordinary Meaning and Object and Purpose of Articles 1116(2) and 1117(2)

1. DIBC’s “Continuing Measures” and “Composite Act” Theories Are Wrong

153. Canada’s Memorial explained that the plain language of Articles 1116(2) and 1117(2) bar a claimant from submitting a claim to arbitration if more than three years have passed from the “date on which” (i.e., a particular date) it or its enterprise “first acquired knowledge,” either actual or constructive, of the alleged breach and that the investor or its enterprise “has incurred loss or damage.”^{Footnote 243} Untimely claims are outside the tribunal’s jurisdiction rationae temporis.^{Footnote 244} In its Counter-Memorial, DIBC provides a flawed interpretation of Articles 1116(2) and 1117(2) in an attempt to evade the fact that it filed untimely claims.

154. DIBC argues that wrongful measures that “have their origins before the time-bar” but continue past the three-year time limitations period can nevertheless be submitted for arbitration under NAFTA Chapter Eleven.^{Footnote 245} DIBC argues that that Article 1116(2) and Article 1117(2) do not “abrogate the continuing acts principle.”^{Footnote 246}

155. However, interpreting Articles 1116(2) and 1117(2) in accordance with Article 31(1) of the Vienna Convention on the Law of Treaties makes it clear that they were drafted to ensure that, regardless of whether a measure is continuing or not, a NAFTA claim must be brought within three years of the claimant having first acquired knowledge of breach and loss. A NAFTA claim filed later is untimely, regardless of whether the impugned measure is still in place.

156. Canada’s Memorial on Jurisdiction explained that Article 1116(2) and 1117(2) deliberately use the term “first acquired knowledge” to place a marker on when the three-year limitations period for commencing arbitration must begin.^{Footnote 247} Canada explained that DIBC’s interpretation defies the ordinary meaning of the text and defeats its purpose. What is critical for the analysis is the actual or constructive knowledge held by the claimant or its enterprise and when this knowledge was first acquired.^{Footnote 248}

157. DIBC relies on the ILC Articles to justify its continuing breach theory.^{Footnote 249} But as NAFTA tribunals have observed, the ILC Articles cannot displace the specific wording of the NAFTA.^{Footnote 250} Articles 1116 and 1117 constitute lex specialis and Article 55 (Lex specialis) of the ILC Articles states:

These articles do not apply where and to the extent that the conditions for the existence of an internationally wrongful act or the content or implementation of the internal responsibility of a State are governed by special rules of international law.^{Footnote 251}

158. Since filing its Memorial, Canada’s position received additional support from the NAFTA tribunal’s decision in Apotex Inc. v. United States, which DIBC’s Counter-Memorial ignored. The Apotex tribunal reaffirmed that the NAFTA limitations period is a “clear and rigid limitation defense, which is not subject to any suspension, prolongation or other qualification” and found that a continuing act or breach theories are not relevant.^{Footnote 252} The Apotex tribunal confirmed the views of other NAFTA tribunals which also concluded that a continuing course of conduct does not toll the NAFTA’s three-year time limitation period.^{Footnote 253} The Apotex tribunal’s award also reflects the consistent views of all three NAFTA Parties expressed in various fora over a number of years.^{Footnote 254}

159. In its Counter-Memorial, DIBC disputes the status of the concordant views of the NAFTA Parties on the interpretation of Article 1116(2) and 1117(2).^{Footnote 255} Under the misleading heading “Canada falsely alleges the NAFTA has been amended by a Subsequent Agreement,” DIBC denies that the common view of the NAFTA Parties on the interpretation of Article 1116(2) and 1117(2) has any weight under the Vienna Convention on the Law of Treaties.^{Footnote 256}

160. DIBC mischaracterizes Canada’s position. Canada never suggested that the NAFTA has been amended by a subsequent agreement. The issue is not one of an amendment to the NAFTA,^{Footnote 257} but rather how Articles 1116(2) and 1117(2) are to be interpreted in accordance with the customary international law rules of treaty interpretation set out in Vienna Convention of the Law of Treaties Article 31.^{Footnote 258} Article 31(1) sets out the primary rule of treaty interpretation and Article 31(2) describes what comprises the context of the terms of the treaty. Article 31(3) describes other elements which “shall be taken into account, together with the context” and includes “(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions” (emphasis added).^{Footnote 259} The use of the word “shall” indicates the mandatory nature of this part of the general rule of treaty interpretation.^{Footnote 260} In other words, subsequent agreements and practice of the treaty parties regarding the interpretation of their obligations must be taken into consideration by the Tribunal.^{Footnote 261}

161. Thus, if all three NAFTA Parties have expressed their agreement on the interpretation of Article 1116(2) and 1117(2), this is a “subsequent agreement” for the purposes of Vienna Convention of the Law of Treaties Article 31(3)(a) which “shall be taken into account” when interpreting the treaty.^{Footnote 262} All three NAFTA Parties agree that a continuing measure does not toll the limitations period under Article 1116(2) and 1117(2).

162. DIBC relies on several arbitral awards in its Counter-Memorial to support its reliance on the continuing act theory.

163. First, DIBC points to UPS v. Canada in support of its position.^{Footnote 263} As Canada’s Memorial explained, the UPS decision on the question of continuing breach was incorrect and should not be followed by this Tribunal.^{Footnote 264} Every other NAFTA tribunal, including the most recent Apotex v. United States, has taken a different view, as have the NAFTA Parties themselves. Interpreted in accordance with Article 31(1) of the Vienna Convention on the Law of Treaties, there is no reason for this Tribunal to come to a different conclusion.

164. Finally, DIBC relies on the Feldman and Pac Rim decisions in support of its continuing breach arguments.^{Footnote 265} However, neither case is relevant. In the Feldman decision, the time bar issues considered by the tribunal did not address the “first acquired” language under Article 1116(2) in connection with a continuing course of conduct. Rather, the tribunal considered whether state action short of “formal and authorized recognition” of a claim could “either bring about interruption of the running of limitation or estop the respondent State from presenting a regular limitation defense.”^{Footnote 266} Similarly, the Pac Rim tribunal only engaged in a discussion of continuing acts in the context of abuse of process^{Footnote 267} and not in its rationae temporis analysis.^{Footnote 268} A correct reading of Pac Rim demonstrates that the relevant issue for time bar under the NAFTA is when claimant first acquired knowledge of the alleged breach and damage and not whether a measure is a continuing act. Neither Feldman nor Pac Rim is of any assistance to DIBC.

165. DIBC’s Counter-Memorial also attempts to use the notion of “composite acts” to avoid the NAFTA limitations period by characterizing the measures relating to its Highway 401 claim (Nine Point Plan, LGWEM Strategy and DRIC EA) and the IBTA as composite acts so as to avoid having its claim found untimely.^{Footnote 269}

166. DIBC’s legal characterizations are inapposite to the facts of this dispute. As described more fully below, the alleged breach of the $300 million “promise” in the Nine Point Plan is not “composite” because it was “reneged” in the LGWEM Strategy on March 11, 2004. The elimination of option X12 from the DRIC EA on November 14, 2005 was described by DIBC the very next day as having “effected delay and damage” to the Ambassador Bridge.^{Footnote 270} DIBC itself has already identified October 3, 2007 as a specific date on which Canada’s alleged commitment regarding a Highway 401-Ambassador Bridge connection was breached.^{Footnote 271} None of these fit DIBC’s “composite” label. Finally, DIBC’s attempt to bootstrap the IBTA on to legislation which was enacted almost six years later (BSTA) and call it a “composite” act is also inappropriate. In light of the NAFTA’s clear requirement that a claimant is required to bring its claim within three years of first acquiring actual or constructive knowledge of the breach of the NAFTA and that loss or damage was incurred, DIBC’s label simply does not fit the facts which gave rise to this dispute. DIBC is unable to evade the time limitations period in this manner.

2. Knowledge of the Extent of Loss or Damage is Not Required for the Limitations Period to Commence

167. In its Counter-Memorial, DIBC argues that under Article 1116(2) and 1117(2) an investor must have actually been harmed and have specific knowledge of that harm for the limitations period to run.”^{Footnote 272} This is incorrect. Concrete knowledge of the actual amount of loss or damage is not a pre-requisite to the running of the limitation period under 1116(2) or 1117(2). Nor can a claimant sit on its hands while it incurs additional losses. Both NAFTA tribunals in Mondev and Grand River found that “damage or injury may be incurred even though the amount or extent may not become known until some future time.” The tribunal in Apotex concurred with this determination,^{Footnote 273} as have all three NAFTA Parties.^{Footnote 274}

3. Litigation with Respect to Measures Alleged to Breach NAFTA Do Not Extend the Limitations Period

168. DIBC takes the position in its Counter-Memorial that ongoing litigation can toll the NAFTA limitations period. DIBC argues that both the application brought by Canada seeking a declaration that the IBTA was not barred by the Settlement Agreement and the judicial review sought by DIBC/CTC of the Ministerial Order demonstrate that DIBC could only have learned of any damages as of the date of the Ministerial Order “at the earliest.”^{Footnote 275} DIBC goes on to argue that “because the Ministerial Order was (and is) subject to litigation, it is far from clear that the application of the IBTA to Claimant is legally certain enough to commence the litigation period.”^{Footnote 276}

169. DIBC’s position is wrong. The text of Articles 1116(2) and 1117(2) makes no allowance for the limitations period to be tolled by ongoing litigation with respect to the impugned measure. Doing so would defeat the purpose of the provisions, which is to provide a clearly defined period within which a claim to arbitration must be filed. After a review of relevant NAFTA awards, the Apotex tribunal concluded as follows:

The position, therefore, is that any challenge to the FDA decision itself had to be brought within three years, and could not be delayed by resort to court action. Any conclusion otherwise would provide a very easy means to evade the clear rule in NAFTA Article 1116(2) in most cases (i.e. by filing any court action, however hopeless).^{Footnote 277}

170. Similarly, NAFTA tribunals have found that the limitations period is not tolled by the pending outcome of subsequent litigation that stands to quantify the extent of loss for the investor.^{Footnote 278} DIBC’s argument cannot stand as it would lead to the absurd result that by disagreeing with a measure and challenging it in domestic proceedings, even if frivolous, a claimant could evade a limitations period. As such, none of the ongoing litigation referenced by DIBC serves to toll the limitation period in NAFTA Articles 1116(2) and 1117(2).

C. The Evidence Shows that DIBC First Acquired Actual or Constructive Knowledge of the Alleged Breach and Loss Arising from its Highway 401 Claim before May 1, 2008

1. DIBC’s Position on the Date It “First Acquired Knowledge” Has Changed Multiple Times

171. DIBC has taken conflicting positions in this arbitration with regard to the timeliness of its claim relating to a direct highway connection between Highway 401 and the Ambassador Bridge. In its Second NAFTA NOI and First NAFTA NOA, DIBC alleged as follows:

Canada has failed to observe the clear commitments that it made with respect to extending Highway 401 to the Ambassador Bridge. On November 12, 2008, Canada admitted in writing that rather than being a temporary delay, this failure reflected a decision by Canada to renege on its commitments with respect to improving the management of traffic to the Ambassador Bridge.^{Footnote 279}

172. The alleged November 12, 2008 “admission” to which DIBC was referring was the DRIC EA, which was released for public comment on that day.^{Footnote 280} As described above, the DRIC EA selected the location for the new DRIC Bridge, Parkway and customs plaza.

173. In DIBC’s Statement of Claim, DIBC reproduced the same text and allegation but removed the November 12, 2008 reference and moved back the alleged date of Canada’s “reneging” on previous commitments to October 3, 2007, when Minister Cannon wrote to DIBC to confirm Canada’s position regarding the Nine Point Plan/LGWEM Strategy and to confirm that Canada was committed to the DRIC EA’s plan for a new highway to a new bridge without a direct connection to the Ambassador Bridge.^{Footnote 281} DIBC’s Response to Canada’s Brief Statement maintained October 3, 2007 as its date of first acquired knowledge but argued that the claim was timely nevertheless because it was a “continuing breach.”^{Footnote 282}

174. In its Counter-Memorial, DIBC again reversed course stating that May 1, 2008 is the earliest possible date of the NAFTA breach and damage because that was when the exact route of the Parkway was publically announced.^{Footnote 283} DIBC says it met NAFTA’s three-year time limitation because it filed its First NAFTA NOA on April 29, 2011, i.e. within three years (less two days) of the May 1, 2008 Parkway announcement. But DIBC’s Counter-Memorial still does not fully concede the May 1, 2008 date and pushes the relevant date for triggering the limitations period even further into the future than what it originally alleged in its First NAFTA NOA.^{Footnote 284}

175. DIBC’s vacillations as to when it did or should have first acquired knowledge of the alleged NAFTA breach and loss speak to the conflict between DIBC’s arguments, the proper interpretation of Articles 1116(2) and 1117(2) and the evidence.

2. All the Relevant Events Relating to DIBC’s Highway 401 Claims Happened Before May 1, 2008

a) Nine Point Plan/LGWEM Strategy

176. DIBC’s allegation that Canada reneged on a commitment to spend $300 million on a direct highway connection to the Ambassador Bridge in the Nine Point Plan is central to its NAFTA claim.^{Footnote 285} DIBC alleges that it relied on this promise when it decided to spend “hundreds of millions” on the Gateway Project in Detroit.^{Footnote 286} DIBC alleges that it has already lost toll revenue to the Blue Water Bridge because of Canada’s refusal to build a highway to the Ambassador Bridge.^{Footnote 287}

177. Canada denies that there ever was such a commitment and DIBC has provided no evidence to make out even a prima facie case. DIBC also conflates the Nine Point Plan and LGWEM Strategy with the DRIC EA process. This is a mischaracterization. These measures are separate and distinct. The Nine Point Plan and LGWEM Strategy was focused on short and medium-term traffic improvement projects with a defined $300 million budget.^{Footnote 288} In contrast, the DRIC EA was focused on addressing the long-term transportation needs of the Windsor-Detroit border by evaluating the need for a new crossing, customs plaza and highway connection between Highway 401 in Ontario and the interstate highways in Michigan.^{Footnote 289}

178. But in any event, even if Canada had promised $300 million towards an Ambassador Bridge highway connection in the Nine Point Plan, by March 2004 DIBC knew that it would not be receiving the money. DIBC has no response to this except to say the LGWEM Strategy was a “renaming” or “reformulation” of the Nine Point Plan.^{Footnote 290} This is simply incorrect.^{Footnote 291} DIBC knew, or should have known, of the NAFTA alleged breach and loss relating to Canada’s promise to spend $300 million on a highway to the Ambassador Bridge as of March 11, 2004. As such, any claim based on a breach of this alleged promise is time barred pursuant to Articles 116(2) and 1117(2).

b) DRIC Environmental Assessment

179. In its Counter-Memorial, DIBC argues that it that could not have known before May 1, 2008, the day the exact route of the Parkway was publically announced, that Canada would not build a direct highway connection between Highway 401 and the Ambassador Bridge.^{Footnote 292}

180. This is untenable. Canada’s Memorial presented voluminous evidence to show that DIBC knew or should have known that as of November 15, 2005, there would be no highway built between Highway 401 and the Ambassador Bridge. This evidence came in the form of correspondence and statements by DIBC’s own officials,^{Footnote 293} public information sessions regarding the DRIC EA^{Footnote 294} and correspondence and statements by Canadian officials.^{Footnote 295}

181. After November 2005, Canada was clear as to what Highway 401 access options remained under consideration. For example, the November 2005 Generation and Assessment of Illustrative Alternatives report shows a map of the Highway 401 route connections still under consideration and none of them went to the Ambassador Bridge.^{Footnote 296} Every one of the DRIC EA public information open houses in 2006 and 2007 discussed and showed maps of, specific routes and options to connect Highway 401 to a new bridge in one of three locations in southwest Windsor; none of those options included a highway connection to the Ambassador Bridge.^{Footnote 297}

182. Even DIBC’s own New Span environmental assessment confirmed that there would be no direct connection between Highway 401 and the Ambassador Bridge. In April 2006, DIBC explicitly confirmed that its New Span proposal did not contemplate the construction of a “ring road” through Sandwich Towne or the conversion of Huron Church Road into a dedicated highway to the Ambassador Bridge from Highway 401.^{Footnote 298} Both of those specific road access options had been considered and rejected in the DRIC EA in November 2005 because of their negative impacts on Windsor neighborhoods.^{Footnote 299} When DIBC formally filed its New Span EA in December 2007, it did not include any improved highway connection from Highway 401 and assumed Huron Church Road would remain as it existed.^{Footnote 300} Had DIBC been expecting a direct highway connection to the Ambassador Bridge, its proposal for the New Span would have included that key assumption.

183. On May 24, 2007, in response to DIBC’s allegation in the media regarding the “promised” $300 million highway, the Ontario Ministry of Transportation said “it has no plans to provide a direct connection to the Ambassador [Bridge]” and that that “the section between the [EC Row] expressway and the Ambassador Bridge will remain much as it is today but under the city’s control.”^{Footnote 301}

184. DIBC’s Counter-Memorial ignores all of this evidence because it contradicts DIBC’s argument that it was uncertain as to what Canada’s plans were regarding a Highway 401-Ambassador Bridge connection until May 1, 2008. Instead, DIBC’s Counter-Memorial suggests that DIBC officials were oblivious to events between March 2004 and May 1, 2008.^{Footnote 302} The witness statement of Associate Deputy Minister of Transport Canada Helena Borges confirms that DIBC was told numerous times at meetings and in correspondence between April and October 2007 that Canada would not support the construction of a Highway 401-Ambassador Bridge connection.

185. In her witness statement, Ms. Borges testifies about various meetings she and other Canadian government officials, including the Minister of Transport, Infrastructure and Communities Lawrence Cannon, had with DIBC regarding the Ambassador Bridge-Highway 401 issue in April, July and October 2007.^{Footnote 303} At those meetings and in related correspondence, DIBC repeatedly alleged that Canada had made a commitment to build a direct Highway 401-Ambassador Bridge connection, that Canada in fact had a legal obligation to do so and that it would be discriminatory to construct a highway to the DRIC Bridge but not the Ambassador Bridge. DIBC went so far as to threaten legal action against Canada if a highway connection to the Ambassador Bridge was not built.^{Footnote 304}

186. Ms. Borges testifies that Canada’s position was made clear to DIBC: Canada never made a commitment in 2002 or at any other time to build a Highway 401-Ambassador Bridge connection and that it would not do so through the DRIC EA.^{Footnote 305} Ms. Borges testifies that she explained to DIBC’s officials during their July 4, 2007 meeting that all feasible road access options between Highway 401 and the Ambassador Bridge had been examined as part of the DRIC EA but it was decided in November 2005 that the community and environmental impacts of building a direct Highway 401-Ambassador Bridge connection were too serious to consider any further.^{Footnote 306}

187. Despite Canada’s clear position on this issue, DIBC persisted with its demands and threats of legal action, including arbitration under the NAFTA.^{Footnote 307} DIBC wrote directly to Canadian Prime Minister Stephen Harper on August 9, 2007 alleging Canada failed to spend $300 million to build a highway to the Ambassador Bridge.^{Footnote 308} Despite Minister Cannon’s clear position on the subject in his October 3, 2007 letter,^{Footnote 309} DIBC made the same allegations again during a meeting with Minister Cannon and other government officials on October 25, 2007, but Canada’s position with respect to building a highway to the Ambassador Bridge remained unchanged.^{Footnote 310} DIBC persisted in its demands, alleging again on November 6, 2007 that Canada had the legal obligation to build a highway to the Ambassador Bridge.^{Footnote 311} On November 26, 2007, Canada and the United States signed a memorandum of understanding confirming the dedication of both countries to the DRIC EA in support of a new bridge and highway connections and on November 27, 2007, Minister Cannon reiterated Canada’s commitment to a “new highway that will link the 401 to the new crossing.”^{Footnote 312} As Ms. Borges testifies, thereafter Canada had nothing further to say to DIBC regarding the construction of a highway connection from Highway 401 to the Ambassador Bridge.^{Footnote 313}

188. In light of the evidence presented above, DIBC cannot credibly claim that it did not know that the new highway was going to be connected to the new DRIC bridge and not to the Ambassador Bridge until May 1, 2008.

189. DIBC’s attempts to push the date it first acquired knowledge of the alleged NAFTA breach and damage past May 1, 2008 are also not credible. DIBC suggests that various post-May 2008 activities related to the Parkway (e.g., permitting, tendering, expropriation, demolition and construction) demonstrate that it could have only learned of the breach and damage “long after” the operative time bar date of April 29, 2008.^{Footnote 314} But no post-May 2008 Parkway activities are at all relevant to the Ambassador Bridge because DIBC knew that the Parkway would not be going to the Ambassador Bridge as of November 2005. DIBC first acquired all pertinent knowledge regarding the construction of a highway to a different location long before these subsequent acts occurred.

3. DIBC’s “Preparatory” and “Composite” Act Characterizations of the Nine Point Plan and DRIC EA Do Not Accord With the Evidence

190. DIBC suggests that the elimination of option X12 from the DRIC EA was merely a preparatory act and that Canada’s unlawful conduct only occurred much later when the exact route of the Parkway was announced on May 1, 2008.^{Footnote 315} With respect to the application of its composite act theory, DIBC advances a similar argument and alleges that “the final act which consummated the composite act” could not have occurred before the Parkway announcement.^{Footnote 316} In light of the evidence described above, DIBC’s “legal” characterizations of Canada’s actions as “preparatory” or “composite” do not withstand scrutiny. May 1, 2008 is not the date on which DIBC first acquired knowledge of any alleged NAFTA breach and resulting damage.

191. DIBC says in its Counter-Memorial (in contrast to what it said in its Statement of Claim^{Footnote 317}) that “the earliest possible date Canada could be said to have adopted a formal measure with respect to the Roads Claim is when it announced its commitment to the [Parkway], which did not happen until May 1, 2008.”^{Footnote 318} DIBC says that prior to that date, “no measure had been adopted, meaning there could be no breach.”^{Footnote 319}

192. DIBC’s reasoning is flawed. First, it ignores the replacement of the Nine Point Plan with the LGWEM Strategy in March 2004, which definitively ended any possibility that the $300 million DIBC alleges was earmarked for a Highway 401-Ambassador Bridge connection would be spent in that manner. This was not a “preparatory” act or part of a “composite” act, it was complete: DIBC alleges a $300 million promise was made to it in the Nine Point Plan, but that alleged “promise” was “reneged” March 11, 2004. All the money was earmarked by April 2005.^{Footnote 320} DIBC presents no evidence that would support a different interpretation.

193. Second, it ignores the November 14, 2005 decision to eliminate the twin Ambassador Bridge option X12 from the DRIC EA the relevant date for the purposes of Articles 1116(2) and 1117(2). Much of DIBC’s Statement of Claim and Counter-Memorial is dedicated to attacking this decision and Canada’s motivations for doing so.^{Footnote 321} For example, DIBC alleges “the decision to reject location X12 was designed solely to block the Ambassador Bridge New Span.”^{Footnote 322} It also alleges the decision was intended to ensure a highway connection to the Ambassador Bridge would not be built,^{Footnote 323} that “Canada chose its assumptions regarding the impacts of X12 location to manufacture a pretext for insisting that the other (United States) members of the DRIC Partnership accepted its rejection of the X12 location”^{Footnote 324} and that Canada “unlawfully” eliminated “the New Span location” from the DRIC EA in November 2005.^{Footnote 325} All of this evidence points to DIBC having knowledge of an alleged breach in November 2005.

194. DIBC tries to argue that the November 14, 2005 elimination of option X12 was merely “preparatory,”^{Footnote 326} but has already alleged that this decision was “unlawful” and even DIBC’s own President believed otherwise when he wrote the next day that the decision had “effected delay and damage” to the Ambassador Bridge and was by DIBC’s own characterization, a complete act.^{Footnote 327} DIBC does not explain how the November 14, 2005 “decision” was any less of a “formal measure” than Minister Cannon’s October 1, 2007 letter “decision to renege”^{Footnote 328} or the May 1, 2008 press release which announced something that DIBC already knew, namely, the Parkway would be connected to the DRIC Bridge but not the Ambassador Bridge. All the evidence presented by Canada, including the witness statement of Helena Borges, proves that DIBC’s “preparatory” characterization of the elimination of option X12 is designed to avoid the consequences of the NAFTA time bar.

195. DIBC’s Counter-Memorial also seeks to get around Article 1116(2) and 1117(2) by alleging that Canada’s actions relating to the Highway 401-Ambassador Bridge connection were a “composite act” which consummated, at the earliest, with the announcement of the Parkway.

196. Again, all of the evidence establishes that it became “finally known” to DIBC that Canada would not build a Highway 401-Ambassador Bridge connection before May 1, 2008. DIBC itself has alleged that Canada made it “finally known” on October 3, 2007 that a “decision by Canada to renege on its commitments” to build a Highway 401-Ambassador Bridge connection had been made.^{Footnote 329} This “decision” merely confirmed that Canada had never committed to building a Highway 401-Ambassador Bridge connection in the first place. In other words, the announcement of the exact route of the Parkway on May 1, 2008 is irrelevant because there had not been a possibility that it would have included a connection to the Ambassador Bridge since November 2005. DIBC’s “composite act” theory is redundant in light of uncontroverted evidence.

D. DIBC’s New Arguments Regarding the IBTA Do Not Render its Claim Timely

1. DIBC’s Position As to the Date it “First Acquired Knowledge” of the NAFTA Alleged Breach and Loss Has Changed Multiple Times

197. In contrast to its original position,^{Footnote 330} DIBC now argues that it did not incur the loss or damage required by NAFTA Articles 1116(2) and 1117(2) when the IBTA came into force on February 1, 2007.^{Footnote 331} However, DIBC does not proffer an alternative date and instead adopts multiple positions intended to render its claim timely.

198. For example, DIBC argues that it incurred loss on February 18, 2009 when the IBTA Regulations were promulgated,^{Footnote 332} but then backtracks and says that this loss did not trigger the NAFTA time limitations period because “it was not a loss that Claimant has ever raised in this NAFTA arbitration.”^{Footnote 333} DIBC then concedes that loss or damage occurred on November 18, 2009 when Canada brought an application in the Ontario Superior Court of Justice to secure a declaration that the Ambassador Bridge was not exempt from the IBTA by virtue of the Settlement Agreements,^{Footnote 334} but backtracks again to say that this event did not trigger the three-year limitation period because the proceedings are still pending.^{Footnote 335} DIBC appears to settle on October 18, 2010 as the date it first acquired knowledge of loss because that was when Canada issued a Ministerial Order to refrain from further work on the New Span until approval under the IBTA was received.^{Footnote 336} Yet DIBC then pushes that date even further into the future by saying the IBTA did not become discriminatory until the BSTA was passed on December 14, 2012.^{Footnote 337} However, even this 2012 date is, in DIBC’s view, insufficient to trigger the NAFTA time limitations period because DIBC alleges that the IBTA is a continuing act which causes new damage every day it remains in place.^{Footnote 338}

199. DIBC’s changing position as to when it did acquire or should have first acquired knowledge of the alleged NAFTA breach and loss relating to the IBTA speaks to the conflict between DIBC’s arguments, the proper interpretation of Articles 1116(2) and 1117(2) and the evidence.

2. The Evidence and DIBC’s Own Pleadings Confirm that the IBTA Claim is Untimely

200. In its Counter-Memorial, DIBC advances various flawed arguments and fails to establish that its IBTA claim is timely.^{Footnote 339} First, DIBC takes the position for the first time in its Counter-Memorial that it was not until the Ministerial Order of October 18, 2010, at the earliest, that it first acquired knowledge of both NAFTA breach and damage arising from the IBTA.^{Footnote 340}

201. This argument is untenable. On January 25, 2010, 10 months before the Ministerial Order was issued, DIBC filed a notice of intent to arbitrate under the NAFTA alleging that the IBTA breached the NAFTA and caused it damages of “not less than US$1.5 billion.”^{Footnote 341} DIBC chose not to pursue this claim in its First NAFTA NOA but opted to do so in its Amended NAFTA NOA. Moreover, on March 22, 2010, DIBC and CTC sued Canada in United States federal court in Washington D.C. for damages caused by the IBTA:

Canada has violated DIBC’s and CTC’s rights…by enacting and seeking to apply the IBTA so as to limit rights that DIBC and CTC enjoy by the terms of the Special Agreement, including (1) the right to set and collect tolls on the Ambassador Bridge, (2) the right to transfer their property or change their corporate ownership, and (3) the right to perform necessary and appropriate maintenance on the Ambassador Bridge. Plaintiffs are entitled to damages…^{Footnote 342}

202. DIBC’s claims for damages with respect to the IBTA under the NAFTA and the Washington Litigation months before the October 10, 2010 Minister order prove this newly-concocted allegation is not credible.

203. Indeed, DIBC has long alleged that the enactment of the IBTA was a breach of the NAFTA because of its alleged abrogation of pre-existing treaty/statutory/contractual rights under the Special Agreement/Ambassador Bridge Treaty, CTC Act and Settlement Agreements to charge tolls, freely transfer ownership and to build the New Span.^{Footnote 343} Mr. Matthew Moroun (CenTra Inc., owner of the Ambassador Bridge) himself alleged that the IBTA’s requirement to seek government approval before selling the Ambassador Bridge damaged its value.^{Footnote 344} DIBC has alleged that the enactment of the IBTA impairs its ownership rights on the U.S. side of the Ambassador Bridge.^{Footnote 345} DIBC also alleges that the IBTA was specifically “enacted” with the intention of preventing its New Span as well as taking away its pre-existing rights.^{Footnote 346} DIBC argues that the IBTA’s application to the Ambassador Bridge violated the Settlement Agreements between DIBC and Canada and limits the value of the Ambassador Bridge.^{Footnote 347} All of these allegations are sufficient to trigger the NAFTA three-year time limitation because knowledge of general loss or damage is sufficient for the purposes of Articles 1116(2) and 1117(2).^{Footnote 348}

204. Second, contrary to its previous pleadings in this arbitration and in domestic proceedings, DIBC says in its Counter-Memorial that “when it was enacted in 2007, the IBTA did not require Claimant to do anything and did not cause any immediate harm to Claimant.”^{Footnote 349} DIBC goes on to say that “in 2007, Claimant had not yet received the environmental approvals needed for its New Span, and hence was not yet in a position to build its New Span, and therefore was not yet in a position” to seek IBTA approval.^{Footnote 350} DIBC concludes by saying that since it took the position the IBTA did not apply to the Ambassador Bridge, it did not need to comply with the IBTA and still does not need to do so until a court orders it to do so, which in turn tolls the NAFTA time limitation for filing a claim.^{Footnote 351}

205. DIBC’s arguments ignore reality. The fact that DIBC held the view that the IBTA did not apply to the Ambassador Bridge does not change the irrefutable fact that it did and that DIBC was clearly told that it did. DIBC knew that the IBTA would apply to it and for this reason opposed the legislation when it was being debated by the Parliament of Canada in 2006.^{Footnote 352} DIBC cannot toll the NAFTA’s time limitations period by unilaterally declaring itself unbound by a lawfully enacted statute.

206. After the IBTA became law, Canada explicitly informed DIBC during meetings and in writing in 2007 that the IBTA applied to the Ambassador Bridge.^{Footnote 353} As described in Canada’s Memorial,^{Footnote 354} when CTC’s Executive Director revealed to the media in August 2007 that the construction on the approach ramps for the Ambassador Bridge New Span had commenced,^{Footnote 355} Canada wrote to DIBC on October 30, 2007 to remind it that such construction required IBTA approval.^{Footnote 356} CTC has characterized this letter as an enforcement of the IBTA against the Ambassador Bridge.^{Footnote 357} Canada told DIBC again on November 23, 2007 that IBTA approval was required for its New Span.^{Footnote 358} DIBC only admitted to having already undertaken construction on its New Span on March 22, 2010 in its Washington Litigation Complaint.^{Footnote 359} It was this admission which gave rise to the Ministerial Order of 2010.^{Footnote 360}

207. Despite all of the above evidence, DIBC still maintains that “in 2007, the IBTA did not require the Claimant to do anything.”^{Footnote 361} This is clearly not true and is belied by the evidence described above which proves DIBC’s IBTA claim is time-barred under Articles 1116(2) and 1117(2).

208. Finally, DIBC’s Counter-Memorial argues that the IBTA, the October 2010 Ministerial Order and the BSTA are all components of a composite act that was only consummated with the passage of the BSTA in 2012.^{Footnote 362} This argument is illogical. As explained above, DIBC’s own allegations and pleadings stress that the passage of the IBTA breached its rights and caused it damage, which started the NAFTA limitations period.^{Footnote 363} DIBC’s attempt to bootstrap the IBTA on to the BSTA and call it a “composite act” is meritless. The BSTA did not even exist until almost six years after the IBTA was enacted. By the time the BSTA was enacted, almost three years had elapsed since DIBC alleged in its First NAFTA NOI that it had suffered “in excess of U.S. $1.5 billion” in damages arising out of the IBTA. DIBC’s “composite act” theory is a thinly veiled attempt to cover up the untimeliness of its claim.

VI. Whether a Boundary Waters Treaty "Special Agreement" Exists as an International Treaty and has been Violated by Canada goes to the Tribunal's Jurisdiction

209. Canada argued in its Memorial on Jurisdiction that it is outside this Tribunal’s jurisdiction to determine the existence and violation of an international treaty other than the NAFTA.^{Footnote 364} Canada also submitted evidence which undermined DIBC’s entire premise that a Boundary Waters Treaty “special agreement” relating to the Ambassador Bridge exists as an international treaty and binding in international law (the so-called Ambassador Bridge Treaty).^{Footnote 365}

210. DIBC’s Counter-Memorial had no credible response to either submission. Despite its previous allegations that Canada is “depriving,”^{Footnote 366} “abrogating,”^{Footnote 367} and “breaching”^{Footnote 368} its rights under the alleged Boundary Waters Treaty Article XIII “special agreement”/international treaty, including its “right” to build the New Span and an exemption from the IBTA,^{Footnote 369} DIBC’s Counter-Memorial now passes this off as mere “background” or “potentially relevant information.”^{Footnote 370} Yet DIBC still continues to assert, without legal authority or evidence, that Canada’s legislation governing the Ambassador Bridge was “passed in Canada pursuant to the Boundary Waters Treaty” even though there is no mention of the Boundary Waters Treaty or any other international legal instrument in that legislation.^{Footnote 371}

211. First, DIBC’s assertion in its Counter-Memorial that the issue relating to the alleged “special agreement” under the Boundary Waters Treaty is a merits question is wrong at law. International judicial bodies do not have jurisdiction to hear a dispute where the rights and obligations of a non-consenting third-party State would also have to be adjudicated.^{Footnote 372} An international tribunal cannot invoke the rights or obligations of an absent third-party State without its consent, nor can it have jurisdiction over a legal issue if the third-party State’s legal rights or obligations would be the subject of adjudication. As the International Court of Justice established in the Monetary Gold case, a tribunal cannot have jurisdiction over a subject matter if a third-party’s “legal interests would not only be affected by a decision, but would form the very subject-matter of the decision.”^{Footnote 373}

212. There are only two parties to the Boundary Waters Treaty: Canada and the United States. DIBC and CTC have no rights thereunder.^{Footnote 374} Special agreements arising out of Article XIII speak to rights and obligations of each treaty party vis-à-vis the other with respect to the use, obstruction or diversion of boundary waters and speak to the jurisdiction of the International Joint Commission (“IJC”).^{Footnote 375} Declaring the existence of a special agreement as an international treaty would affect the rights and obligations of the United States, an absent third party from this dispute. As Canada’s Memorial argued, whether a Boundary Waters Treaty Article XIII “special agreement” exists, what are the international rights and obligations derived therefrom, whether the “treaty” has been amended or breached by either Canada or the United States are all questions that necessarily require a determination of the provisions of the Boundary Waters Treaty (which is within the jurisdiction of the IJC) and invokes the rights and obligations of the United States. This NAFTA Chapter Eleven Tribunal has no jurisdiction to make such an inquiry and determination.

213. Second, DIBC has misread the findings and reasoning of the Grand River, Methanex and Bayview cases, which DIBC’S Counter-Memorial attempts to distinguish from the issue before this Tribunal.^{Footnote 376} It is unnecessary to describe the flaws in DIBC’s explanation of those cases in light of the singular difference with this case that renders DIBC’s arguments redundant: in Bayview, Methanex and Grand River, there was no dispute as to whether the treaty in question (U.S.-Mexico Utilization of the Waters of the Colorado and Tijuana Rivers and of the Rio Grande, General Agreement on Tariffs and Trade and Jay Treaty, respectively) actually existed. In the current dispute, Canada denies the very existence of the international treaty that DIBC has invoked. Whether the United States agrees or not, and whether the United States believes Canada has violated that treaty, is solely for the United States to assert, not DIBC.

VII. Conclusion

214. For the foregoing reasons and those in Canada’s Memorial on Jurisdiction, Canada respectfully requests that this Tribunal dismiss the Claimant’s claims in their entirety and with prejudice on the grounds of lack of jurisdiction and/or admissibility and, in accordance with Article 42 of the UNCITRAL Arbitration Rules, order the Claimant to pay all of costs arising from this arbitration, including Canada’s legal costs and disbursements.

Respectfully submitted on behalf of
the Government of Canada
this 6TH day of December, 2013

Sylvie Tabet
Mark A. Luz
Adam Douglas
Heather Squires
Reuben East
Andrew Mason
Counsel for the Respondent
Trade Law Bureau (JLTB)
Departments of Justice and of
Foreign Affairs, Trade and Development

Footnotes

Footnote 1

DIBC Counter-Memorial on Jurisdiction, ¶ 135.

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Footnote 2

DIBC et al. v. Canada et al., (D.D.C. File No. 10-CV-00476-RMC), Complaint, March 22, 2010 (hereinafter “Washington Complaint”), Exhibit R-17; DIBC et al. v. Canada et al., (D.D.C. File No. 10-CV-00476-RMC), First Amended Complaint, June 6, 2011 (hereinafter “Washington First Amended Complaint”), Exhibit R-18; DIBC et al. v. Canada et al., (D.D.C. File No. Docket 1:10-CV-00476-RMC).

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Footnote 3

Canada’s Memorial used the labels “Franchise Measures,” “New Span Measures,” and “Highway 401 Measures” for convenience given the suBSTAntial overlap of DIBC’s allegations with respect to each measure. See Canada’s Memorial on Jurisdiction, ¶ 5, n. 3. For example, DIBC alleges that Canada’s failure to build a highway to the Ambassador Bridge is by itself a breach of the NAFTA and is also a measure intended to prevent the construction of the New Span (NAFTA Statement of Claim, ¶¶ 133, 201).

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Footnote 4

News Release, “Canada and Ontario Announce Next Steps at Windsor Gateway,” May 27, 2003 (“Nine Point Plan”), Exhibit C-32; “A New Solution for the Windsor Gateway Announced By All Three Levels of Government,” News Release, March 11, 2004 (“LGWEM Strategy”), Exhibit R-34.

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Footnote 5

First NAFTA NOA, ¶¶ 30-32; Amended NAFTA NOA, ¶¶ 92; NAFTA Statement of Claim, ¶ 158; DIBC Counter-Memorial on Jurisdiction, ¶¶ 46-48.

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Footnote 6

Detroit International River Crossing Environmental Assessment Report (Ontario) (December 2008) (hereinafter “DRIC EA Report”), Exhibit R-47; Detroit River International Crossing Study CEAA Screening Report (Federal) (November 2009) (hereinafter “CEAA Screening Report”), Exhibit C-92 (collectively, the “DRIC EA”).

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Footnote 7

First NAFTA NOA, ¶¶ 5, 33-42; Amended NAFTA NOA, ¶¶ 64-96; NAFTA Statement of Claim, ¶¶ 103-167; DIBC Counter-Memorial on Jurisdiction, ¶¶ 84-102.

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Footnote 8

First NAFTA NOA, ¶¶ 43-47; Amended NAFTA NOA, ¶¶ 125-129; NAFTA Statement of Claim, ¶¶ 215, 205-209; DIBC Counter-Memorial on Jurisdiction, ¶¶ 30, 175, 280.

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Footnote 9

International Bridges and Tunnels Act, S.C. 2007, c.1 (in force April 25, 2007) (hereinafter “IBTA”), Exhibit C-94.

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Footnote 10

NAFTA Statement of Claim, ¶¶ 179-180; Amended NAFTA NOA, ¶¶ 104-108; NAFTA Statement of Claim, ¶¶ 173-181; DIBC Counter-Memorial on Jurisdiction, ¶¶ 17, 104-115.

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Footnote 11

Ambassador Bridge Enhancement Project Environmental Impact Statement (hereinafter “New Span EA”), Exhibit C-89.

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Footnote 12

NAFTA Statement of Claim, ¶ 168-172; DIBC Counter-Memorial on Jurisdiction, ¶¶ 122-125.

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Footnote 13

Malouf Commission Report, Ch. 7, p.26) ,. (Exhibit CDA-02) . Also, see, generally, The Ice Hunters. Bridge To Strengthen Trade Act, S.C. 2012, c.31, s. 179 (in force December 14, 2012) (hereinafter “BSTA”), Exhibit C-1.

note 13 referrer

Footnote 14

NAFTA Statement of Claim, ¶ 182; Amended NAFTA NOA, ¶¶ 109-110; DIBC Counter-Memorial on Jurisdiction, ¶¶ 116-118.

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Footnote 15

DIBC makes numerous other allegations about Canada’s subsequent activities arising from the DRIC process which either not measures in and of themselves or are inextricably intertwined with the measures alleged to breach the NAFTA. For example, DIBC alleges the Canada-Michigan Crossing Agreement dated June 15, 2012 (Exhibit C-64) is the “culmination” of Canada’s discriminatory actions against DIBC. See DIBC Counter-Memorial on Jurisdiction, ¶ 119.

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Footnote 16

The DRIC EA is also an integral part of the Windsor Litigation, but DIBC refuses to clarify the nature of its NAFTA claims in this regard. See Part II-C below.

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Footnote 17

DRIC EA Report, Executive Summary at (i), Exhibit R-47. Crossing X-10B is the location of the DRIC Bridge. See also DRIC EA Report, Chapter 9, Exhibit R-47 which describes the recommended plan for the Parkway, the DRIC Bridge and the customs plaza. See also CEAA Screening Report at 7, Exhibit C-92 (“The scope of the project for Transport Canada and the Windsor Port Authority includes the construction, operation, modification and any decommissioning work in relation to the project, including the Windsor-Essex Parkway between Highway 401 and the proposed border services plaza, the proposed border services plaza and the Canadian portion of a new six-lane international bridge crossing over the Detroit River.”) (emphasis added).

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Footnote 18

See Part IV-C-2 below.

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Footnote 19

Second Amended Complaint, November 9, 2012 (hereinafter “Washington Second Amended Complaint”), Exhibit R-19; DIBC et al. v. Canada et al., (D.D.C. File No. 1:10-CV-00476-RMC), Third Amended Complaint, May 29, 2013 (hereinafter “Washington Third Amended Complaint”), Exhibit C-141.

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Footnote 20

The Canadian Transit Company v. Attorney General of Canada (Ontario Superior Court of Justice Court File No. CV-12-446428), Statement of Claim, February 15, 2012 (hereinafter “CTC Litigation Statement of Claim”), Exhibit R-20; Canadian Transit Co. v Attorney General of Canada, Ontario Superior Court of Justice No. CV-12-446428, Amended Statement of Claim, February 19, 2013 (hereinafter “CTC Litigation Amended Statement of Claim”), Exhibit C-119.

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Footnote 21

Canadian Transit Company v. Corp. of the City of Windsor, Edgar Francis, Dave Brister, Drew Dilkens, Ron Jones, Caroline Postma, Alan Halberstadt, Fulvio Valentinis, Ken Lewenza, JR., Biago Marra, Jo-Anne Gignac and Percy Hatfield, Ontario Superior Court of Justice (Court File No. CV -10-395654), Statement of Claim, February 24, 2010 (“CTC v. Windsor Statement of Claim, February 2010”), Exhibit R-29; Canadian Transit Company v. Corp. of the City of Windsor, Ontario Superior Court of Justice (Court File No. CV -10-405347), Statement of Claim, June 22, 2010 (Ont. Sup. Ct.) (“CTC v. Windsor Statement of Claim, June 2010”), Exhibit R-30.

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Footnote 22

See Canada Memorial on Jurisdiction, ¶¶ 176-177 and sources cited therein.

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Footnote 23

DIBC Counter-Memorial on Jurisdiction, ¶ 215. DIBC has effectively abandoned its claim against Windsor’s so-called Huron Church Road “traffic measures” alleged to favour the Windsor-Detroit Tunnel. See Part II-C below.

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Footnote 24

NAFTA Statement of Claim, ¶ 190, ref. Letter from Minister Lawrence Cannon to Dan Stamper, October 3, 2007, Exhibit C-110. See also DIBC Response to Canada’s Brief Statement on Jurisdiction, ¶¶ 22-23.

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Footnote 25

First NAFTA NOI, ¶ 44, Exhibit R-44. DIBC also alleged that it had suffered damages arising from the IBTA when it initiated the Washington Litigation on March 22, 2010. Washington Complaint, ¶¶ 173-179, Exhibit R-17.

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Footnote 26

Phoenix Action, Ltd. v. Czech Republic (ICSID Case No. ARB/06/5) Award, April 15, 2009 (hereinafter “Phoenix Action, Award”), ¶ 60, RLA-32.

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Footnote 27

Phoenix Action, Award, ¶ 60, RLA-32.

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Footnote 28

Phoenix Action, Award, ¶ 61, RLA-32.

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Footnote 29

Phoenix Action, Award, ¶ 62, RLA-32.

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Footnote 30

Phoenix Action, Award, ¶ 63, n. 42, RLA-32 (quoting Sir Franklin Berman QC in his dissenting opinion Industria Nacional de Alimentos: “Factual matters can or should be provisionally accepted at the preliminary phase, because there will be a full opportunity to put them to the test definitively later on. But if particular facts are a critical element in the establishment of jurisdiction itself, so that the decision to accept or to deny jurisdiction disposes of them once and for all for this purpose, how can it be seriously claimed that those facts should be assumed rather than proved?”, Industria Nacional de Alimentos, S.A. and Indalsa Perú, S.A. v. The Republic of Peru (ICSID Case No. ARB/03/4) Decision on Annulment, Dissenting Opinion of Franklin Berman QC, September 5, 2007, § 17).

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Footnote 31

DIBC says its First NAFTA NOI is “inoperative” because DIBC “never pursued a NAFTA arbitration on the basis” thereof and only the Second NAFTA NOI is relevant (DIBC Counter-Memorial on Jurisdiction, ¶ 322). This is not true: DIBC wrote to Canada on April 8, 2010 to confirm that the Second NAFTA NOI “is in addition to, and does not replace” the First NAFTA NOI and that DIBC’s new lawyers “represents DIBC with respect to both notices of intent.” See Letter from DIBC to Canada dated April 8, 2010, Exhibit R-43 (emphasis added). In other words, DIBC itself expressly kept the First NAFTA NOI “operative.” In any event, DIBC has never renounced the contents of its First NAFTA NOI and cannot do so now since all of its allegations regarding the IBTA are replicated in its Amended NAFTA NOA and Statement of Claim.

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Footnote 32

First NAFTA NOI, ¶ 26, Exhibit R-44; Amended NAFTA NOA, ¶¶ 33, 35; NAFTA Statement of Claim, ¶ 39; DIBC Response to Canada’s Brief Statement, ¶ 29.

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Footnote 33

Canada’s Memorial on Jurisdiction, ¶¶ 276-285 and exhibits cited therein.

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Footnote 34

DIBC Counter-Memorial on Jurisdiction, ¶ 323.

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Footnote 35

The question of whether DIBC and CTC enjoy “exclusive franchise rights” to all toll bridges across the Detroit River under Canadian law is currently pending before the Ontario Superior Court and before the United States Federal District Court in Washington D.C. See CTC Litigation Amended Statement of Claim, ¶ 1, Exhibit C-119; Washington Third Amended Complaint, ¶ 2, 7, 65, 74, 139, Exhibit C-141. As such, Canada need not provide a rebuttal to DIBC’s allegations at this time other than to say they are completely unfounded.

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Footnote 36

DIBC Counter-Memorial on Jurisdiction, ¶¶ 43-44. See News Release, Canada and Ontario Announce Next Steps at Windsor Gateway, May 27, 2003, Exhibit C-32. See also Government of Canada and Government of Ontario, Memorandum of Understanding, “Windsor Gateway Short and Medium Term Improvements”, September 25, 2002 (“2002 MOU”), Exhibit R-4 and C-126. DIBC refers to the Nine Point Plan as the “2003 Canada-Ontario Action Plan” in its Counter-Memorial.

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Footnote 37

DIBC Counter-Memorial on Jurisdiction, ¶ 48.

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Footnote 38

One of the many reasons for why DIBC’s allegation is so implausible is that it is unrealistic to imagine building a 14 kilometer highway through a major metropolitan area with capacity for the more than 10,000 vehicles that cross the Ambassador Bridge daily for only $300 million. The Rt. Hon. Herb Gray Parkway, which will be approximately the same distance is expected to cost at least $1.6 billion. See “News Release Communiqué: The Detroit River International Crossing Study Team Announces Preferred Access Road”, May 1, 2008, Exhibit C-125.

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Footnote 39

DIBC Counter-Memorial on Jurisdiction ¶ 45; Business Transportation Task Force Situational Analysis, March 12, 2004, Exhibit C-34.

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Footnote 40

Windsor & District Chamber of Commerce Business Transportation Task Force, September 2002, available at www.wincom.net/whidsorchamber/bttf.htm, Exhibit R-138.

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Footnote 41

The first page of Exhibit C-34 corresponds to the first page of the September 2002 Windsor Chamber of Commerce Situational Analysis, Exhibit R-138. The second and third pages of DIBC’s Exhibit C-34 appear to be excerpts from an unidentified document apparently dated March 12, 2004.

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Footnote 42

DIBC Counter-Memorial on Jurisdiction, ¶ 48.

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Footnote 43

Ambassador Bridge Gateway Project Memorandum of Understanding (DIBC and MDOT), July 26, 1996, Exhibit C-19.

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Footnote 44

See NAFTA Statement of Claim, ¶ 92.

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Footnote 45

See Letter from Kirk Steudle (MDOT) to Dan Stamper (DIBC/CTC) dated February 27, 2008, Exhibit R-49.

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Footnote 46

As noted in Canada’s Memorial, the courts in Michigan enforcing MDOT’s Gateway Project contract against DIBC had to resort to civil contempt fines and incarceration of DIBC’s owner and President in 2011 and 2012 to compel compliance with orders to, among other things, tear down the unauthorized approach ramps DIBC had built for its Ambassador Bridge New Span. See Canada Memorial on Jurisdiction, ¶ 69 and exhibits cited therein.

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Footnote 47

DIBC Counter-Memorial on Jurisdiction, ¶ 16. See also NAFTA Statement of Claim, ¶ 5.

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Footnote 48

Press Release: A new Solution for the Windsor Gateway Endorsed by all Three Levels of Government, March 11, 2004 (“2004 MOU”), Exhibit R-8.

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Footnote 49

News Release: A New Solution for the Windsor Gateway Endorsed by all Three Levels of Government, March 11, 2004 (“2004 MOU”), Exhibit R-8; “Canada and Ontario Announce Major Steps to Improve the Windsor-Detroit Gateway,” Ontario News Release, April 21, 2005, Exhibit R-91. See also Canada Memorial on Jurisdiction n. 301 and exhibits cited therein.

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Footnote 50

DIBC Counter-Memorial on Jurisdiction, ¶¶ 46-47.

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Footnote 51

Press Release: A New Solution for the Windsor Gateway Endorsed by all Three Levels of Government, March 11, 2004 (“2004 MOU”) at 2, Exhibit R-8 (“This new approach replaces the nine-point Windsor Gateway Action Plan.”).

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Footnote 52

Press Release: A New Solution for the Windsor Gateway Endorsed by all Three Levels of Government, March 11, 2004 (“2004 MOU”), Exhibit R-8.

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Footnote 53

“Border Fix Launch Gets Green light: $82M for five projects of $300M program,” Windsor Star, March 12, 2004, Exhibit R-89; Unidentified document dated March 12, 2004, Exhibit C-34 (referring to the 2002 MOU: “[F]earing that it would increase the amount of truck traffic going through the city, the Windsor City Council strongly opposed most of the action plan, which had the effect of killing it.” (emphasis added)).

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Footnote 54

In fact, several improvements to Huron Church Road were undertaken as part of LGWEM Strategy and which benefitted the Ambassador Bridge, including a pedestrian bridge, intersection improvements and installation of traffic monitoring cameras. See Project No. 1, Project No. 3 and Project No. 4b, Ontario Ministry of Transportation Website, Exhibit R-92; “Canada and Ontario Improving Safety at Windsor Border,” Transport Canada News Release No. H118/05, May 27, 2005, Exhibit R-99.

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Footnote 55

First NAFTA NOA, ¶¶ 43-48; Amended NAFTA NOA, ¶¶ 125-129, 135; NAFTA Statement of Claim, ¶¶ 205-209, 215.

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Footnote 56

As described at Part IV-C-4 below, DIBC refuses to clarify the nature of any of its allegations against the City of Windsor.

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Footnote 57

Canada Memorial on Jurisdiction, ¶¶ 240-241. UNCITRAL Arbitration Rules Article 20(4) states: “The statement of claim should, as far as possible, be accompanied by all documents and other evidence relied upon by the claimant, or contain references to them.” None of DIBC’s submissions cite to a single document, event or circumstance of favouritism to the Windsor-Detroit Tunnel or DRIC Bridge by virtue of “traffic measures” on Huron Church Road. As noted in Canada’s Memorial (¶ 241), the last stoplight installed on Huron Church Road was in 1991.

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Footnote 58

Allowing DIBC to pursue this claim any further would deprive Canada of the reasonable opportunity to present its case per Article 17(1) of the UNCITRAL Rules. By failing to identify the nature of its claim, Canada cannot respond or know whether it has jurisdictional or other objections that could be raised.

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Footnote 59

Canada Memorial on Jurisdiction, ¶¶ 28-46. See Detroit International River Crossing Environmental Assessment Report (Ontario) (December 2008), Exhibit R-47; Detroit River International Crossing Study CEAA Screening Report (Ontario) (November 2009), Exhibit C-92.

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Footnote 60

DIBC Counter-Memorial on Jurisdiction, ¶¶ 51-52. See DRIC EA Report, Executive Summary at (vii) and Chapter 6 at 6-1, 6-34 to 6-36, Exhibit R-47; Generation and Assessment of Illustrative Alternatives Report (November 2005) at 102-113, Exhibit R-52. As Canada noted in its Memorial (n. 50), the DRIC EA’s consideration of option X12 was separate and distinct from DIBC’s pending application to build the New Span.

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Footnote 61

Canada Memorial on Jurisdiction, ¶¶ 34-39. DRIC EA Report, Chapter 6 at 6-1, 6-34 to 6-36, Exhibit R-47. See also Generation and Assessment of Illustrative Alternatives Report (November 2005) at 102-113, Exhibit R-52.

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Footnote 62

News Release: Border Transportation Partnership Identifies Central Area of Analysis for a New Detroit-Windsor Border Crossing, November 14, 2005, Exhibit R-13; DRIC EA Report, Chapter 6 at 6-34-6-42, 6-46-6-49, Exhibit R-47; Generation and Assessment of Illustrative Alternatives Report (November 2005) at 102-115, Exhibit R-52. Second Public Information Open House DRIC Video Presentation (November/December 2005), Exhibit R-53(a).

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Footnote 63

Canadian Transit Co. v. Canada (Minister of Transport), (2011) 59 C.E.L.R. (3d) 127, 2011 FC 515, Reasons for Order and Order, May 4, 2011 (hereinafter “EA JR (Can.)”), ¶ 108, Exhibit R-9.

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Footnote 64

DIBC Counter-Memorial on Jurisdiction, ¶ 53. MTO confirmed this to DIBC in its letter dated January 31, 2006. See Letter from Roger Ward (MTO) to Dan Stamper (DIBC/CTC) dated January 31, 2006, Exhibit R-113.

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Footnote 65

Detroit River International Crossing Study, Area of Continued Analysis, Exhibit R-13.1.

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Footnote 66

Generation and Assessment of Illustrative Alternatives (November 2005), Exhibit 3.19 “Recommended Area of Continued Study, Canadian Side” at 121, Exhibit R-52.

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Footnote 67

See Witness Statement of Helena Borges (Transport Canada) dated December 6, 2013 (“Borges Statement”).

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Footnote 68

DIBC Counter-Memorial on Jurisdiction, ¶¶ 57-78.

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Footnote 69

DIBC Counter-Memorial on Jurisdiction, ¶ 270.

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Footnote 70

DIBC Counter-Memorial on Jurisdiction, ¶¶ 84-102.

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Footnote 71

EA JR (Can.), ¶ 3, Exhibit R-9. See also Canada Memorial on Jurisdiction, ¶¶ 50-51 (Justice Kelen explaining his rejection of CTC’s allegations for the elimination of option X12).

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Footnote 72

The Canadian Transit Company v. Minister of Transport, et al., 2012 FCA 70, Reasons for Judgment, March 1, 2012 (hereinafter “EA JR (Can.) Appeal”), Exhibit R-15.

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Footnote 73

Washington Third Amended Complaint, ¶¶ 192-206, Exhibit C-141; DIBC et al. v. Canada et al., (D.D.C. File No. 10-CV-00476-RMC), Plaintiffs’ Memorandum of Points and Authorities in Opposition to the Motions to Dismiss and in Support of Plaintiffs’ Cross-motion for Partial Summary Judgment on Counts 1, 3, 6 and 7, November 8, 2013 (hereinafter “Washington Litigation Motion for Summary Judgment November 2013”), Exhibit R-139.

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Footnote 74

International Bridges and Tunnels Act, S.C. 2007, c. 1 (Schedule), Exhibit C-94 (including the CTC Act). See DIBC Counter-Memorial on Jurisdiction, ¶ 104.

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Footnote 75

DIBC Counter-Memorial on Jurisdiction, ¶¶ 103, 106.

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Footnote 76

DIBC Counter-Memorial on Jurisdiction, ¶¶ 107-108, 115.

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Footnote 77

See Canada Memorial on Jurisdiction, ¶¶ 257-262 and exhibits cited therein. See also Borges Witness Statement, ¶ 10, n. 4. DIBC also fails to mention that it participated in the drafting of the IBTA Regulations knowing full well that the IBTA applied to the Ambassador Bridge. Letter from Dan Stamper (DIBC/CTC) to Jay Rieger (Transport Canada), dated January 18, 2008, Exhibit R-141; Letter from Brian Hicks (Transport Canada) to Dan Stamper (DIBC/CTC), dated May 5, 2008, Exhibit R-140.

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Footnote 78

Borges Statement, ¶ 10, n. 4 (“During the July 4, 2007 meeting [with DIBC], Transport Canada’s legal counsel also confirmed that Canada disagreed with DIBC’s interpretation of the settlement agreement with Canada and confirmed the IBTA applied to the Ambassador Bridge in accordance with its terms”).

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Footnote 79

See Canada Memorial on Jurisdiction, ¶¶ 263-265.

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Footnote 80

DIBC Counter-Memorial on Jurisdiction, ¶¶ 122-125. Ambassador Bridge Enhancement Project Environmental Impact Statement (hereinafter “New Span EA”), Exhibit C-89.

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Footnote 81

Canada Memorial on Jurisdiction, ¶¶ 64-66. See Email/Letter from Kaarina Stiff (Transport Canada) to Dan Stamper (DIBC/CTC) dated January 18, 2008, Exhibit R-63; Letter from Bryce Conrad (Transport Canada) to Dan Stamper (DIBC/CTC) dated February 8, 2008, Exhibit R-64.

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Footnote 82

See Part IV-C-2 below.

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Footnote 83

NAFTA Article 1122(1). An investor and its enterprise must also consent to arbitrate in accordance with the procedures in NAFTA before it is permitted to submit a claim to arbitration. See NAFTA Articles 1121(1)(a) and (2)(a).

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Footnote 84

Methanex Corporation v. United States of America, (UNCITRAL) Preliminary Award on Jurisdiction, 7 August 2002, (hereinafter “Methanex, Partial Award”), ¶ 120, RLA-3.

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Footnote 85

See Canada’s Memorial on Jurisdiction, ¶ 84 and citations in n.125-126.

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Footnote 86

DIBC Counter-Memorial on Jurisdiction, ¶ 133 (“Canada has failed to satisfy its burden of proof with respect to its waiver defense.”).

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Footnote 87

Apotex Inc. v. United States (UNCITRAL) Award on Jurisdiction and Admissibility, June 14, 2013 (hereinafter “Apotex, Jurisdictional Award”), ¶ 150, RLA-33 (citing Phoenix Action, Ltd. v. Czech Republic (ICSID Case No. ARB/06/5) Award, April 15, 2009, ¶¶ 58-64, RLA-32 (summarizing previous decisions and concluding (“if jurisdiction rests on the existence of certain facts, they have to be proven [rather than merely established prima facie] at the jurisdictional phase.”)).

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Footnote 88

Methanex Corporation v. United States of America, (UNCITRAL) Preliminary Award on Jurisdiction, August 7, 2002 (hereinafter “Methanex, Partial Award”), ¶¶ 120-121, RLA-3 (finding that a claimant must establish that the requirements of NAFTA Articles 1116-1121 have been met); Bayview Irrigation District et al. v. United Mexican States (ICSID Case No. ARB(AF)/0501) Award, June 19, 2007 (hereinafter “Bayview, Award”), ¶¶ 63, 122, RLA-24 (finding that “Claimants have not demonstrated that their claims fall within the scope and coverage of NAFTA Chapter Eleven” and rejecting claimant’s submission that “Respondent bears the burden of demonstrating that the Tribunal should not hear the claim…”); Grand River Enterprises Six Nations, Ltd, et al. v. United States of America (UNCITRAL) Award, January 12, 2011 (hereinafter “Grand River, Award”), ¶ 122, RLA-22 (“Claimants must…establish an investment that falls within one or more of the categories established by that Article [1139]”).

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Footnote 89

Tulip Real Estate Investment and Development Netherlands B.V. v. Republic of Turkey (ICSID Case No. ARB/11/28) Decision on Bifurcated Jurisdictional Issue, 5 March 2013, ¶ 48, RLA-34. See also Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29) Decision on Jurisdiction, 14 November 2005, ¶ 192, RLA-35 (“[Claimant] has the burden of demonstrating that its claims fall within the Tribunal’s jurisdiction.”); Impregilo S.p.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3) Decision on Jurisdiction, 22 April 2005, ¶ 79, RLA-36 (“Claimant acknowledged it had the burden of proving jurisdiction”).

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Footnote 90

ICS Inspection and Control Services Limited (U.K.) v. The Argentine Republic (UNCITRAL) Award on Jurisdiction, 10 February 2012, ¶ 280, RLA-37 (emphasis added). This principle has been long established at the International Court of Justice. See Case concerning Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v. France) Judgment, I.C.J Reports, 4 June 2008, ¶ 62, RLA-38 (“The consent allowing for the Court to assume jurisdiction must be certain…whatever the basis of consent, the attitude of the respondent State must ‘be capable of being regarded as ‘an unequivocal indication’ of the desire of that State to accept the Court’s jurisdiction in a ‘voluntary and indisputable manner’” (internal citations omitted)).

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Footnote 91

UNCITRAL Rules (2010), Article 23(1) (“The arbitral tribunal shall have the power to rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.”).

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Footnote 92

Achmea B.V. v. The Slovak Republic (formerly Eureko B.V. v. The Slovak Republic) (UNCITRAL) Award on Jurisdiction, Arbitrability and Suspension, 26 October 2010, ¶ 219, RLA-39; Methanex Corporation v. United States of America, (UNCITRAL) Preliminary Award on Jurisdiction, 7 August 2002 (hereinafter “Methanex, Partial Award”), ¶¶ 107, RLA-3. (“Tribunal has the express power to rule on objections that it has no jurisdiction.”).

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Footnote 93

Canada Memorial on Jurisdiction, ¶ 81 and cases cited therein. DIBC agrees that Article 1121 is a prerequisite to arbitration. See DIBC Counter-Memorial on Jurisdiction, ¶ 135.

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Footnote 94

DIBC Counter-Memorial on Jurisdiction, ¶ 178.

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Footnote 95

Canada Memorial on Jurisdiction, ¶ 88.

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Footnote 96

Waste Management Inc. v. United Mexican States (UNCITRAL) Award, 2 June 2000 (hereinafter “Waste Management I, Award”), ¶¶ 19, 24, RLA-4.

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Footnote 97

See e.g., Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic, (formerly Compañía de Aguas del Aconquija, S.A. and Compagnie Générale des Eaux v. Argentine Republic) (ICSID Case No. ARB/97/3) Decision on Jurisdiction, November 14, 2005 (hereinafter “Vivendi III, Jurisdictional Award”), ¶¶ 60-63, RLA-40, (“[i]t is generally recognized that the determination of whether a party has standing in an international judicial forum, for the purposes of jurisdiction to institute proceedings, is made by reference to the date on which such proceedings are deemed to have been instituted. ICSID Tribunals have consistently applied this rule.”); Case Concerning the Arrest Warrant of 11 April 2000 (Democratic Republic of the Congo v. Belgium) Judgment, February 14, 2002, ¶ 26, RLA-41 (“[t]he Court recalls that, according to its settled jurisprudence, its jurisdiction must be determined at the time that the act instituting proceedings was filed.”); See also Christoph H. Schreuer, The ICSID Convention: A Commentary (Cambridge: Cambridge University Press, 2009) at 92, RLA-42 (“[a]part from specific rules about critical dates, the date of the commencement of the proceedings is decisive. It is an accepted principle of international adjudication that jurisdiction will be determined by reference to the date on which judicial proceedings are instituted. This means that on that date all jurisdictional requirements must be met.”).

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Footnote 98

Waste Management I, Award, ¶¶ 19, 24, RLA-4 (“[I]t is evident that submission of the waiver must take place in conjunction with that of the notice mandated by Article 2 of the Additional Facility Arbitration Rules, and from this date it will come into full force and effect with regard to the commitment acquired by the waiving party to comply with all the terms thereof […] such an abdication of rights ought to have been made effective as from the date of the submission of the waiver…”)

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Footnote 99

Commerce Group Corp et al. v. The Republic of El Salvador (ICSID Case No. ARB/09/17) Award, March 14, 2011 (hereinafter “Commerce Group, Award”), ¶¶ 96-97, RLA-6 (rejecting the claimant’s argument that the date the Tribunal was constituted (a year after the NOA was filed) is the date to determine compliance with the waiver provision).

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Footnote 100

Canada has objected to the jurisdiction of the Tribunal continuously since that time. See Canada’s letter to the Tribunal dated November 2, 2012 attaching Canada’s letters to DIBC dated June 6, 2011 (Exhibit R-22), October 3, 2011 (Exhibit R-21), December 28, 2011 (Exhibit R-25) and March 15, 2012 (Exhibit R-23). Canada’s objections were made explicitly with respect to DIBC’s non-compliance with Article 1121. Canada also reserved its right to raise other jurisdictional objections, which Canada has done with respect to NAFTA Articles 1116(2) and 1117(2).

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Footnote 101

See Railroad Development Corporation v. Republic of Guatemala (ICSID Case No. ARB/07/23) Decision on Objection to Jurisdiction CAFTA Article 10.20.5, November 17, 2008, ¶ 61, RLA-7. (“The Tribunal has no jurisdiction without the agreement of the parties to grant the Claimant an opportunity to remedy its defective waiver. It is for the Respondent and not the Tribunal to waive a deficiency under Article 10.18 or to allow a defective waiver to be remedied…”). See Methanex Corporation v. United States of America, (UNCITRAL) Preliminary Award on Jurisdiction, August 7, 2002, ¶ 93 (hereinafter “Methanex, Partial Award”), RLA-3 (where the challenge to the defective waiver submitted by the Claimant was amicably settled by the disputing parties.).

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Footnote 102

See Canada Memorial on Jurisdiction, ¶ 2, n. 1.

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Footnote 103

UNCITRAL Arbitration Rules (2010), Article 22.

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Footnote 104

Merrill & Ring Forestry L.P. v. Canada (UNCITRAL) Decision on Motion to Add a New Party, January 31, 2008 (hereinafter “Merrill & Ring, Decision to Add a New Party”), ¶ 18, RLA-43. See also Methanex v. The United States of America (UNCITRAL) Award, August 3, 2005 (hereinafter “Methanex, Award”), Part II, Chapter F, ¶¶ 21-25, RLA-23 (rejecting claimants attempt to amend its claim without having provided a waiver under NAFTA Article 1121). See generally David Caron, Lee M. Caplan & Matti Pellonpää, The UNCITRAL Arbitration Rules, A Commentary, (Oxford: Oxford University Press, 2006) at 468, RLA-44.

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Footnote 105

DIBC Counter-Memorial on Jurisdiction, ¶ 135.

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North America Free Trade Agreement

Chapter 11 - Investment

Detroit International Bridge Company. v. Government of Canada

In the Matter of an Arbitration Under Chapter Eleven of the North American Free Trade Agreement and the UNCITRAL Arbitration Rules

Table of Contents

Table of Abbreviations

I. Preliminary Statement

II. Facts

A. DIBC Fails to Show the Existence of an "International Treaty Binding in International Law" Relating to the Ambassador Bridge

B. DIBC Fails to Show the Existence of a Commitment by Canada to Build a Highway 401-Ambassador Bridge Connection

C. DIBC Fails to Show the Existence of Any Huron Church Road "Traffic Measures" Which Divert Traffic to the Windsor-Detroit Tunnel and/or Other Crossings

D. DIBC’s Factual Description of the DRIC EA and Measures Alleged to Block or Delay the Ambassador Bridge New Span Supports Canada’s Waiver and Time Bar Objections

1. DRIC Environmental Assessment

2. IBTA, New Span Environmental Assessment and BSTA

III. International Legal Principles for Establishing the Tribunal's Jurisdiction

A. The Claimant Bears the Burden of Proof to Show that it has Met the Jurisdictional Requirements of the NAFTA

B. Jurisdiction is Determined on the Date that the Notice of Arbitration is Filed

C. The Claimant Cannot Amend its Claim to Include Claims over which the Tribunal has no Jurisdiction

IV. DIBC has Failed to Establish that it has Complied with NAFTA Article 1121

A. Summary of Canada’s Position

B. DIBC’s Interpretation of NAFTA Article 1121(1)(b) and 2(b) is Contrary to its Ordinary Meaning and Object and Purpose

1. Compliance with Article 1121 is DIBC’s Responsibility to Establish, Not that of Canada or the Tribunal

2. The Term “Proceedings With Respect to a Measure” Cannot Be Interpreted As Proposed By DIBC

3. “Not Involving the Payment of Damages” Includes Damages as an Alternative Means of Relief

4. DIBC’s Interpretation of “proceedings...before an administrative tribunal or court under the law of the disputing Party” is Wrong

C. DIBC and CTC Failed to Comply with the Conditions Precedent to Arbitration under NAFTA Article 1121

1. DIBC’s Waivers Contravene Article 1121

2. DIBC and CTC’s Continuation of the Washington Litigation Past April 29, 2011 Contravenes Article 1121 and Deprives the Tribunal of Jurisdiction

a) The Washington Litigation is a Proceeding with Respect to the Measures Alleged to Breach the NAFTA in DIBC’s Notice of Arbitration

b) Even if DIBC’s Amended NAFTA NOA Were Relevant to the Tribunal’s Jurisdiction, the Washington Litigation is Still a Proceeding With Respect to Measures Alleged to Breach the NAFTA

c) The Washington Litigation Third Amended Complaint is Irrelevant But Inconsistent with Article 1121 Nevertheless

3. The CTC Litigation is Inconsistent with Article 1121

4. DIBC Refuses to Confirm What Windsor Measures are Alleged to Breach the NAFTA

V. DIBC has Failed to Prove that its Highway 401-Ambassador Bridge Access Claim and IBTA Claim are Timely

A. Summary of Canada’s Position

B. DIBC Ignores the Ordinary Meaning and Object and Purpose of Articles 1116(2) and 1117(2)

1. DIBC’s “Continuing Measures” and “Composite Act” Theories Are Wrong

2. Knowledge of the Extent of Loss or Damage is Not Required for the Limitations Period to Commence

3. Litigation with Respect to Measures Alleged to Breach NAFTA Do Not Extend the Limitations Period

C. The Evidence Shows that DIBC First Acquired Actual or Constructive Knowledge of the Alleged Breach and Loss Arising from its Highway 401 Claim before May 1, 2008

1. DIBC’s Position on the Date It “First Acquired Knowledge” Has Changed Multiple Times

2. All the Relevant Events Relating to DIBC’s Highway 401 Claims Happened Before May 1, 2008

a) Nine Point Plan/LGWEM Strategy

b) DRIC Environmental Assessment

3. DIBC’s “Preparatory” and “Composite” Act Characterizations of the Nine Point Plan and DRIC EA Do Not Accord With the Evidence

D. DIBC’s New Arguments Regarding the IBTA Do Not Render its Claim Timely

1. DIBC’s Position As to the Date it “First Acquired Knowledge” of the NAFTA Alleged Breach and Loss Has Changed Multiple Times

2. The Evidence and DIBC’s Own Pleadings Confirm that the IBTA Claim is Untimely

VI. Whether a Boundary Waters Treaty "Special Agreement" Exists as an International Treaty and has been Violated by Canada goes to the Tribunal's Jurisdiction

VII. Conclusion

Footnotes