Investment Dispute Settlement

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Investment Dispute Settlement

Investment Dispute Settlement Under Chapter 11 of the North American Free Trade Agreement Involving the United States in 2013

United States views on international law [1] in relation to Investment Dispute Settlement Under Chapter 11 of the North American Free Trade Agreement Involving the United States: Apotex, Inc. v. United States of America

Some Aspects of Investment Dispute Settlement Under Chapter 11 of the North American Free Trade Agreement Involving the United States

On June 14, 2013, the Tribunal constituted to hear the dispute brought against the United States by Apotex Inc. issued its Award on Jurisdiction and Admissibility. Apotex Inc., a Canadian pharmaceuticals corporation, alleged that U.S. courts committed errors in interpreting federal law, and that those errors violated NAFTA Article 1102 (national treatment) and Article 1105 (minimum standard of treatment). Apotex also alleged that the challenged U.S. court decisions expropriated Apotex's investments under NAFTA Article 1110. The June 14 Award dismisses all claims and orders Apotex to pay the United States' legal fees and arbitral expenses. The Tribunal considered and discussed objections to jurisdiction based on the lack of an “investment” or “investor;” the lack of judicial finality; and the time bar. The Award and other documents in the matter are available at (Secretary of State website) state.gov/s/l/c27648.htm. Excerpts follow from the Tribunal's Award (with footnotes omitted).

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(B) NO “INVESTMENT” OR “INVESTOR”

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243. Apotex has failed to establish that it made or sought to make an “investment” in the United States. It therefore does not qualify as an “investor” under NAFTA Article 1116.

244. Apotex's activities with respect to the contemplated sales of its sertraline and pravastatin products in the United States are those of an exporter, not an investor. As such, the position is analogous to that in Grand River Enterprises, Inc. v. United States, where the tribunal found that: “claimants activities centered on the manufacture of cigarettes at Grand River's manufacturing plant in Canada for export to the United States,” and, as a result, determined that: “such activities and investments by investors in the territory of one NAFTA party do not satisfy the jurisdictional requirements for a claim against another NAFTA party.”

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245. Apotex, like any company that intends to export generic drug products to the United States for sale in the U.S. market, sought regulatory approval from the FDA through the submission of [Abbreviated New Drug Applications or] ANDAs. But this process cannot change the nature of the underlying activity, or constitute an “investment” in and of itself, within the meaning and scope of NAFTA Article 1139.

246. It follows that the Tribunal lacks jurisdiction over Apotex's claims, which must be dismissed in their entirety.

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247. This is a complete answer to all of Apotex's claims in both cases before this Arbitral Tribunal, such that, strictly, there is no need for the Arbitral Tribunal to consider the Respondent's two remaining objections. However, since each of the remaining objections was the subject of detailed written and oral argument, the Arbitral Tribunal considers it appropriate to address them.

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Notes

  1. Investment Dispute Settlement Under Chapter 11 of the North American Free Trade Agreement Involving the United States in the Digest of United States Practice in International Law

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