NAFTA - Chapter 11 - Investment
Cases filed against the Government of Canada
St. Marys VCNA, LLC v. Government of Canada
The claimant is St. Marys VCNA LLC (“St. Marys”). St. Marys is a company incorporated in the State of Delaware in the United States. It allegedly owns and controls St. Marys Cement Inc. (Canada) (“SMC”), a company incorporated in Ontario, Canada. St. Marys is ultimately owned and controlled by the Votorantim Group, a Brazilian entity.
- 1102 (National Treatment)
- 1103 (Most-Favoured Nation Treatment)
- 1105 (Minimum Standard of Treatment)
- 1110 (Expropriation)
$275 million USD
Withdrawn by the claimant with a formal acknowledgement that it lacked and had always lacked standing to bring a claim under NAFTA.
The Claimant filed its Notice of Intent to Submit a Claim to Arbitration (NOI) on May 13, 2011 and its Notice of Arbitration (NOA) on September 14, 2011. On March 1, 2012 Canada invoked NAFTA Article 1113(2) to deny the benefits of the treaty to the Claimant and its alleged investment, SMC. The tribunal ordered the bifurcation of the proceedings so that Canada’s jurisdictional objection could be addressed on a preliminary basis. After the exchange of documents pertaining to Canada’s jurisdictional objection, the Claimant decided to withdraw its NOA and the disputing parties jointly agreed to terminate the proceedings. The tribunal issued a consent award further to the disputing parties’ agreement on March 29, 2013.
Factual overview and nature of the claim
The claimant alleged that SMC’s attempt to obtain a quarry operation license for lands it owns near Hamilton, Ontario, was frustrated by improper political interference in the relevant approval processes, in violation of its rights under Chapter 11. SMC's land (the “Site”) was zoned 'agricultural' at the time SMC acquired it, in 2006. A quarry licensing process and associated requests for zoning modifications to the Site had already been launched by SMC’s predecessor-in-title in 2004. SMC alleged that despite initial progress in its application to obtain approval for use of the Site as a quarry, a local citizen's group with close ties to the governing provincial party, aided by local politicians, improperly prompted the government of Ontario to issue a Ministerial Zoning Order (“MZO”) in April 2010. The MZO had the effect of freezing the Site’s zoning as 'agricultural'. The Claimant alleged that when it sought review of the MZO at the Ontario Municipal Board (“OMB”), the government of Ontario further improperly intervened by issuing a Declaration of Provincial Interest (“DPI”), in April 2011, a measure which would have caused loss or damage to the Claimant. The Claimant also complained of the “arbitrary, unfair and vexatious” refusal of the Ontario Ministry of Environment to issue a Permit to Take Water (“PTTW”) to allow SMC to commence the second phase of pumping tests, a necessary step in obtaining approval of use of the Site as a quarry. The Claimant further complained of the “arbitrary” refusals of the City of Hamilton, as well as the refusal of municipalities, and other government agencies, to review its zoning change applications, in light of the MZO.
The consent award
The consent award incorporated the settlement agreement reached by the disputing parties. In it, the Claimant acknowledged that it lacks and has always lacked standing to bring a claim under NAFTA Chapter Eleven in respect of the claims brought forth in its NOA. It also acknowledged that no payment had been made to it by the Government of Canada in respect of the claims or the settlement agreement. For its part, the Government of Canada agreed not to pursue any claim against the Claimant for its costs incurred as a result of the arbitration.
Legal documents (all documents are in pdf)
This case is governed by the arbitral rules of the United Nations Commission on International Trade Law. Additional documents related to this case can be viewed at the website of the Permanent Court of Arbitration.
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- ARCHIVED - Consent Award (PDF Document - 9.56 MB) - March 29, 2013
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