I. INTRODUCTION

A. Preliminary Statement

1. This submission addresses outstanding procedural issues in anticipation of the Arbitral Tribunal’s first meeting with the disputing parties. In order to provide some context at this early stage of the proceedings, Canada provides some preliminary comments on the nature of this arbitration.

2. Claimant, Eli Lilly and Company, is seeking through this arbitration to appeal Canadian domestic court decisions, and to second-guess these courts’ determinations that it failed to fulfill all statutory conditions for the grant of two separate patents for pharmaceutical compounds.

3. The decisions in question by the Federal Court of Canada accorded Claimant extensive due process and were based on vast amounts of expert and fact evidence, and on principled application of the relevant law.

4. Claimant was granted review of each decision by the Federal Court of Appeal, and the opportunity to seek leave to appeal to the Supreme Court of Canada.

5. Such “measures” cannot result in any breach of NAFTA Chapter Eleven obligations.

6. Claimant and its counsel now ask this Arbitral Tribunal to misapply Articles 1105 and 1110 of NAFTA, step in as an international court of appeal on the domestic application of substantive patent law, and condemn Canada to compensate Claimant for domestic court rulings.

7. An international investment tribunal constituted under NAFTA Chapter Eleven has no jurisdiction to substitute its views for the considered, principled and procedurally fair decisions of domestic courts, either in their appreciation of the facts, or in their interpretation of the relevant law.