ORDER OF CANADA’S FEDERAL COURT ON 13 JANUARY 2004 IN THE ATTORNEY GENERAL OF CANADA V S.D.MYERS, INC. (USA). DOCKET T-225-01, T-81-03
(1) Scope of judicial review of a NAFTA arbitral award.
(2) Whether a US party is an “investor” under Chapter 11 of NAFTA and whether a Canadian company owned, not by the US party, but by the shareholders of the US party, is an “investment of the investor”.
(3) Whether the company’s activities are properly characterized as crossborder trade in services and therefore not arbitrable since governed by Chapter 12 of NAFTA, not Chapter 11.
(1) Article 34 of Canada’s Commercial Arbitration Code does not allow for judicial review if the decision is based on an error of law or an erroneous finding of fact if the decision is within the jurisdiction of the arbitral tribunal. The principle of non-judicial intervention in an arbitral award within the jurisdiction of the tribunal has been ofted repeated by Canadian courts.
(2) The NAFTA definition of “investment of an investor of a party” means an investment owned or controlled directly or indirectly by such an investor. In the present case, whether the US company indirectly controlled the Canadian company was a question of fact. The broad nature of “investor” and “investment of an investor” reasonably support the arbitral tribunal’s findings that the US company was an investor and the Canadian company an investment of an investor.
(3) The different chapters of NAFTA overlap and NAFTA rights are cumulative, unles there is a direct conflict.The US company had an investment in Canada and is entitled to the protection under Chapter 11 with respect to its investment as well as by Chapter 12 with respect to its trade in services. The rights and obligations under Chapter 12 are not mutually exclusive or inconsistent with the rights and obligations under Chapter 11.