Canadian government ordered to pay more than US$7m in ISDS case

August 22, 2019: The Canadian government has been ordered to pay US$7 million plus compound interest from 2007 to US concrete company Bilcon, which sued the government using ISDS in the North American Free Trade Agreement (NAFTA).

Bilcon initiated an ISDS case after a proposed quarry in an environmentally sensitive area in Nova Scotia was rejected on the basis of a recommendation by a joint federal-provincial government environmental assessment panel.

Bilcon won the case in 2016, with two of the three-person tribunal finding that Canada violated its own federal and provincial environmental assessment laws and did not accord procedural fairness to Bilcon. The then Canadian Conservative government asked Federal Court to set aside the tribunal’s decision, arguing that the tribunal made its decision on matters about Canadian environmental law beyond the scope of the original Bilcon claim and is in conflict with the public policy of Canada. However, the Court concluded that it could not set aside the ISDS decision because the ability of courts to review arbitration awards is remarkably constrained under federal arbitration law.

The compensation amount, announced in February this year, is significantly below the US $443 million that Bilcon was claiming, with the tribunal dismissing Bilcon’s claim for lost profits for the 50-year lifespan of the quarry. Nonetheless, environmental activists argue that the project was rejected fairly under environmental assessment laws and that the company should not receive any compensation.

The Canadian government appears to agree, with Global Affairs Canada stating that "In the new NAFTA, we worked hard to remove the investor state dispute resolution system that companies like Bilcon have used to sue Canada. By removing this, we have strengthened the Canadian government's right to regulate in the public interest."             

See AFTINET’s 2018 post about the Bilcon case here -