Lack of Jurisdiction

Apotex Holdings Inc. and Apotex Inc. v. United States of America in 2013

United States views on international law [1] in relation to Apotex Holdings Inc. and Apotex Inc. v. United States of America: The United States filed its Counter-Memorial and Objections to Jurisdiction, including a request for bifurcation, in the arbitration initiated by Apotex and Apotex Holdings in 2012 alleging injuries arising out of “Import Alerts” issued by the FDA concerning two of Apotex's Canadian manufacturing facilities. On January 25, 2013, the tribunal in the case issued its order denying the request for bifurcation and directing that jurisdictional and liability issues (but not damages) be presented at an oral hearing in November. Claimants replied to the U.S. CounterMemorial on May 24, 2013. The United States submitted a rejoinder on the merits and a reply on jurisdiction on September 27, 2013. Excerpts below from the rejoinder (with most footnotes omitted) address the issue of res judicata. The rejoinder is available at (Secretary of State website) state.gov/documents/organization/217858.pdf. The hearing on jurisdiction and the merits took place in November 2013. Transcripts of the hearing and other relevant documents are available at (Secretary of State website) state.gov/s/l/c50826.htm.

Some Aspects of Apotex Holdings Inc. and Apotex Inc. v. United States of America

Consistent with the principle of res judicata, this Tribunal should give effect to the decision of the Apotex I-II tribunal and dismiss Apotex Inc.'s claim for lack of jurisdiction. Res judicata, which includes the principle of issue estoppel, precludes relitigation of an issue of fact or law decided between two parties.

Developments

100. Res judicata—which applies to these proceedings pursuant to NAFTA's governing law provision—is a well-established general principle of international law. As early as 1905, the French-Venezuelan Mixed Claims Commission recognized:

The general principle announced in numerous cases is that a right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction as a ground of recovery, cannot be disputed.225

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101. Over the ensuing century, international courts and tribunals repeatedly have applied this general principle in order to promote the twin goals of efficiency and finality. These include the Permanent Court of International Justice (e.g., in Chorzów Factory), the International Court of Justice (e.g., in Land and Maritime Boundary Between Cameroon and Nigeria), interstate arbitral tribunals (e.g., in UK-French Continental Shelf), and investor-State arbitral tribunals (e.g., in Amco Asia v. Indonesia).

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102. The International Law Association (ILA) more recently confirmed the crucial role res judicata plays in promoting efficiency and finality in international commercial arbitration. The ILA's “Recommendations on Res Judicata and Arbitration” recognize that an arbitral award is conclusive and preclusive where it (1) has become final and binding; (2) has disposed of a claim for relief sought or reargued in further arbitral proceedings; (3) is based upon the same cause of action in subsequent proceedings or forms the basis for subsequent proceedings; and (4) has been rendered between the same parties. The ILA further recommended that arbitral awards have conclusive and preclusive effects in subsequent arbitral proceedings as to:

4.1 determinations and relief contained in its dispositive part as well as in all reasoning necessary thereto; and

4.2 issues of fact or law which have actually been arbitrated and determined by it, provided any such determination was essential or fundamental to the dispositive part of the arbitral award.

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103. Recommendation 4.1 endorses the more extensive notion “followed in public international law, under which res judicata not only is to be read from the dispositive part of an award but also from its underlying reasoning.” Recommendation 4.2 “endorses common law concepts of issue estoppel, which for reasons of procedural efficiency and finality, seem to be acceptable on a worldwide basis, notwithstanding the fact that they are yet unknown in civil law jurisdictions.” The ILA Final Report confirmed that issue estoppel applies not only to the same claim, but also to “different claims in further arbitral proceedings.”

104. Issue estoppel also is widely recognized in domestic law. In the United States and Canada, for instance, a party is precluded from relitigating the same issue between the same parties in a different suit involving a different cause of action if a court has finally decided that issue.

Apotex Holdings Inc. and Apotex Inc. v. United States of America in 2013 (Continuation)

United States views on international law [1] in relation to Apotex Holdings Inc. and Apotex Inc. v. United States of America: 105. Here, Apotex Inc.'s claims fall squarely within the ILA's Recommendations on Res Judicata and Arbitration. First, the parties are the same. In both cases, Apotex Inc. is a claimant, and the United States is the respondent.

106. Second, the issue in both arbitrations is the same, notwithstanding the different claims raised on the merits. In both cases, Apotex Inc. contends that it qualifies as an “investor” whose ANDAs constitute “investments” in the United States for purposes of NAFTA Articles 1116 and 1139.

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107. Third, the issue of whether Apotex Inc. is a qualifying “investor” with covered “investments” was fully arbitrated and determined in the Apotex I-II claims. The tribunal in that case rendered a lengthy, reasoned decision after two rounds of briefing and an oral hearing.

108. Fourth, the Apotex I-II tribunal decided the issue in a final and binding award. The tribunal's unanimous decision addressed the issue in its operative part as well as in the associated reasoning and was essential to its dispositif.

109. Although Apotex has presented additional argument in this case to try to bolster its jurisdictional claim, issue estoppel precludes relitigation of the entire issue, not simply arguments raised in connection with that issue in the prior case. Were it otherwise, any party could evade the preclusive effect of issue estoppel simply by devising new legal arguments for repeated cases that raise the same issues.

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110. In sum, in accordance with the well-established principle of res judicata, which includes issue estoppel, Apotex should be barred “from contradicting an issue of fact or law that has already been distinctly and finally decided in earlier proceedings between the same parties.”

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225 Company General of the Orinoco Case, Award (July 31, 1905), 10 UNRIAA 184, 276 (emphasis altered) (citing Southern Pacific Railroad Co. v. United States, 168 SCR 1) [RLA-267].

Resources

Notes

1. Apotex Holdings Inc. and Apotex Inc. v. United States of America in the Digest of United States Practice in International Law

Resources

Notes

1. Apotex Holdings Inc. and Apotex Inc. v. United States of America in the Digest of United States Practice in International Law