Investment Dispute Settlements under the Nafta

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

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: (C) JUDICIAL FINALITY WITH RESPECT TO THE PRAVASTATIN CLAIM

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260. In line with both Parties' approach, the Tribunal proceeds on the basis that this objection concerns the Tribunal's jurisdiction ratione materiae. In the alternative, the Tribunal has also considered the matter in terms of the admissibility of claims.

261. Relevant Chronology: It is clear, as a matter of fact, that two further avenues of recourse within the U.S. judicial system were available to Apotex, and that Apotex elected not to pursue them.

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262. First, Apotex never sought review in the U.S. Supreme Court of the pravastatinrelated decisions by the U.S. Court of Appeals. In fact, none of the pravastatin-related judicial acts now relied upon by Apotex as breaching U.S. obligations under the NAFTA was finally reviewed within the U.S. judicial system.

263. Second, Apotex voluntarily agreed to the dismissal of its entire pravastatin claim in the U.S. courts, most of which was dismissed with prejudice, instead of proceeding at the District Court level.

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267. Stated thus, the judicial acts now challenged by Apotex in its Pravastatin Claim do not appear as “final” manifestations of justice within the U.S. judicial system such as to allow for international law claims—because Apotex still had other options to pursue.

268. The key issue is therefore the basis upon which Apotex elected not to exhaust all available remedies, and whether such remedies were (according to the Parties' common test) “obviously futile”.

269. Application to the U.S. Supreme Court: Apotex explains that after the FDA issued its letter decision on 11 April 2006 (refusing to treat the BMS – Apotex dismissal as a triggering court decision), Apotex promptly sought injunctive relief from the District Court. After the D.C. District Court denied Apotex's motion, the FDA then approved Teva's ANDA on 24 April 2006. Teva immediately launched its respective ANDA products, thereby triggering the 180-day exclusivity period, which would expire on 23 October 2006. Apotex immediately appealed the District Court's decision and Teva moved for summary affirmance.

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270. As already noted, on 6 June 2006, the D.C. Circuit summarily affirmed the District Court's decision on Apotex's motion for a preliminary injunction. Apotex petitioned for rehearing of that decision, which the D.C. Circuit denied on 17 August 2006. At that point, the case returned to the D.C. District Court for further proceedings on the merits, on a non-expedited basis.

271. The core point, as far as Apotex is concerned, is that once its petition for rehearing en banc was denied, only 67 days remained of Teva's 180-day exclusivity period. After this period expired (i.e., on 23 October 2006), Apotex would then be eligible for final approval of its pravastatin ANDA—regardless of the outcome of its case.

272. Moreover, even if Apotex had eventually succeeded on the merits on or after that date, Apotex would not have been entitled to damages from the FDA, or any other party for that matter. Thus, once the 180-day exclusivity period had expired, Apotex would no longer be able to obtain any meaningful or effective relief from either the FDA or the Courts.

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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