¹ North American Free Trade Agreement, in force January 1, 1994 (1993) 32 I.L.M. 612 [hereinafter NAFTA].

² Convention for the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, DC, March 18, 1965; entry into force October 14, 1966; reprinted in 575 U.N.T.S. 159 [hereinafter ICSID Convention] . It is known more colloquially as the ICSID Convention because this acronym is also used for the World Bank’s International Centre for the Settlement of Investment Disputes. Canada’s ability to accede to the convention is complicated by the absence of a federal state clause in the treaty. The federal government has declined to accede to the convention until it is assured that the provinces are willing to be bound by its provisions.

³ The Calvo clause essentially stipulates that in the event that a foreign investor seeks the diplomatic protection of its home state, any property that it may have in the host state is forfeited to the host state. The reasoning underlying the clause was the belief that states were not justified in intervening by force or otherwise to secure the settlement of claims of their citizens against other states.

⁴ However, after the Canada-United States Free Trade Agreement, 2 January 1988; in force January 1, 1989, (1989) 27 I.L.M. 281 [hereinafter FTA], was concluded, Canada entered into bilateral investment protection treaties with the former Union of Soviet Socialist Republics and the Republic of Argentina. See Canada Treaty Series 1991/31 and 1993/11, respectively. Both treaties included investor-state arbitration.

⁵ FTA, supra note 4 at Chapter 16.

⁶ Ibid. at Article 1608.

⁷ Ibid. at Article 1608(2).

⁸ Award on Jurisdiction in the NAFTA/UNCITRAL Case between Ethyl Corporation and the Government of Canada, June 24, 1998, 38I.L.M. 708 (1999) [hereinafter Ethyl Corporation].

⁹ Loewen Group and Raymond L. Loewen v. United Slates of America, ICSID Case No. ARB (AF)/98/3. There has not been an award on the merits yet.

¹⁰ NAFTA, supra note ι at Article 1124 (4), states that the Parties shall establish on the date of entry into force of NAFTA, a roster of forty-five presiding arbitrators meeting the qualifications of the ICSID Convention and rules referred to in Article 1120 and experienced in international law and investment matters. The Parties took considerable time to agree on a more limited roster of fifteen people.

¹¹ General Agreement on Tariffs and Trade, opened for signature October 30, 1947. 55 U.N.T.S. 194,T.I.A.S.No. 1700 [hereinafter GATT].

¹² McRae, D. M. observed in his lectures to the Hague Academy, “The Contribution of International Trade Law to the Development of International Law” (1996) 260 Receuil des Cours 103 at 111Google Scholar: “[W] hy has international trade law had so little influence on the development of international law? Or, to put the question another way, why has the field of international trade law traditionally been regarded as outside the mainstream of international law?”

¹³ See, for example, Articles 301,309, and 2101 of the GATT, supra note 11, which deal with national treatment, import and export restrictions, and general exceptions, respectively.

¹⁴ The first Chapter 20 panel examined the interaction between Canada’s Uruguay Round commitments and NAFTA’s tariff reduction obligations. See In the Matter of Tariffs Applied by Canada to Certain U.S.-Origin Agricultural Products, December 2, 1996 (CDA-g5-2008-oi) 1 T.T.R. (2d) 975.

¹⁵ The Basel Convention on the Control of Transboundary Movement of Hazardous Wastes and Their Disposal, done at Basel, March 22, 1989, 28 I.L.M. 657 (1989). See NAFTA, supra note 1 atArticle 104, which establishes a hierarchy of obligations in the event of any inconsistency between NAFTA and the specific trade obligations set out in such international treaties as the Basel Convention.

¹⁶ See, for example, the annexes to Chapters 3, 6, and 11 of NAFTA, supra note 1.

¹⁷ NAFTA Article 1213 makes it clear that the cross-border provision of a service does not include the provision of a service in the territory of a Party by an investment, as defined in Article 1139, in that territory.

¹⁸ See NAFTA, supra note 1 at Article 1101.1. Chapter 11 differs from the NAFTA’s general dispute settlement chapter in an important way. Chapter 11 deals with actual measures (that is, “adopted or maintained,” whereas Chapter 20 (Article 2006) deals with “any actual or proposed” measure). In other words, the latter permits dispute settlement proceedings in respect of a measure that has not yet taken effect, while the former does not.

¹⁹ The author’s view has been shared by a recent NAFTA tribunal, which decided that the phrase “tantamount to nationalization or expropriation” meant equivalent to nationalization or expropriation and did not create a new, broader lex specialis for expropriation. See the Pope & Talbot Award, Pope & Talbot v. Canada, Interim Award, dated June 26, 2000, at para. 104.

²⁰ See NAFTA, supra note 1 at Article 1105.1

²¹ Neither remedy precludes the use of the other. Thus, a measure could simultaneously give rise to investor-state and Party-to-Party claims.

²² ICSID Convention, supra note 2 at Article 25, defines the centre’s jurisdiction.

²³ Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran 1 g January 1981, reprinted in (1982) 7 Y.B.C.A. 255, 257, 1 Iran-U.S. C.T.R. g [hereinafter the Claims Setdement Declaration] [emphasis added].

²⁴ Eastman Kodak Company, et al. ν. Government of Iran, et al., November 11, 1987, 17 Iran-U.S. C.T.R. 153 and July 1, 1991, 27 Iran-U.S. C.T.R. 3.

²⁵ Foremost Tehran Inc. et al. v. Government of the Islamic Republic of Iran, April 11, 1986, 10 Iran-U.S. C.T.R. 229, 240 [hereinafter Foremost].

²⁶ In Foremost, supra note 25 at 251, the tribunal found that it was open to find that the acts of governmental shareholders against Foremost’s right to receive dividends constituted interference “attributable to the Iranian Government or other State organs of Iran, while not amounting to an expropriation, gives rise to a right to compensation for the loss of enjoyment of the property in question.”

²⁷ Ibid. at 240.

²⁸ Seismograph Service Corporation v. Government of the Islamic Republic of Iran, March 31, 1989, 22 Iran-U.S. C.T.R. 3.

²⁹ Sornarajah, M., The International Law on Foreign Investment (Cambridge: Cambridge University Press 1994) at 282–83.Google Scholar

³⁰ This point was accepted by a NAFTA tribunal hearing a claim against Canada. In Pope & Talbot Inc. v. Government of Canada, the tribunal agreed with Canada that the Iran-U.S. Claims Tribunal’s jurisdiction was broader than that of a NAFTA tribunal when considering an expropriation claim.

³¹ Note that Annexes I-IV deal with reservations and exceptions to the investment and services obligations. The parties did not cross-reference the reservations or exceptions to the trade in goods obligations to the investment chapter. This feature of the NAFTA’s architecture is relevant to construing the scope and coverage of Chapter 11.

³² See NAFTA, supra note 1 at Article 1120.

³³ Robert Azinian and Others v. United Mexican States, ICSID Case No. ARB/(AF)/ 97/2, November 1999. Messrs. Jan Paulsson (president), B.R. Civiletti, and C. von W. Hoepfner comprised the tribunal [hereinafter Robert Azinian].

³⁴ See NAFTA, supra note 1 at Article 1136, which states that an award may not be enforced until three months have elapsed from the date of the award and no disputing party has commenced a proceeding to revise, set aside, or annul the award, or a court has dismissed or allowed an application to revise, set aside, or annul the award and there is no further appeal.

³⁵ See ibid. at Article 1117.1 and Article 1139.

³⁶ Vacuum Salt Products Limited v. Government of the Republic of Ghana, (1994) 4 ICSID Reporti 329 [hereinafter Vacuum Salt Products]. The arbitral tribunal was chaired by Sir Robert Jennings (the former president of the International Court of Justice) joined by Charles N. Brower and Dr. Kamal Hossain.

³⁷ There is no published negotiating history of NAFTA. Each Party retains its own records of the various draft proposals and composite texts. There are published statements by the United States Executive (Statement of Administrative Action) and by the Canadian government (Statement on Implementation), which explain what each government thought the agreement would do (and would not do). Mexico did not publish such a statement because NAFTA was self-executing under Mexican law.

³⁸ The lease agreement referred to ICSID arbitration at paragraph 36(a) of the agreement.

³⁹ Vacuum Salt Products, supra note 36 at para 37.

⁴⁰ Ibid. at para. 54, quoting Dr.Broches, Aron, the principal architect of the ICSID Convention, “The Convention on the Settlement of Investment Disputes between States and Nationals of Other States” (1972) 136 Receuil des Cours 331 at 360-61.Google Scholar

⁴¹ Redfern, and Hunter, , Law and Practice of International Commercial Arbitration, 3rd edition (London, Sweet and Maxwell 1999) at 3–6 Google Scholar.

⁴² The 1965 Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States is reproduced at 1 ICSID Reports 23 [hereinafter Report of the Executive Directors].

⁴³ See NAFTA, supra note 1 at Article 1122. See also Parra, Antonio R., “Provisions on the Settlement of Investment Disputes in Modern Investment Laws, Bilateral Investment Treaties and Multilateral Instruments on Investment” (1997) 12 ICSID Review — Foreign Investment Law Journal 287.CrossRefGoogle Scholar

⁴⁴ “Consent of the parties must exist at the time when the Centre is seized … but the Convention does not otherwise specify the time at which consent should be given … Thus, a host State might in its investment promotion legislation offer to submit disputes arising out of certain classes of investments to the jurisdiction of the Centre, and the investor might give his consent by accepting the offer in writing.” Report of the Executive Directors, supra note 42 at para. 24.

⁴⁵ Paulsson, Jan, “Arbitration without Privity” (1995) 10 ICSID Review — Foreign Investment Law Journal 232.CrossRefGoogle Scholar

⁴⁶ NAFTA, supra note 1 at Artide 1117 [emphasis added], which sets out the requirements for the submission of a claim by an investor of a Party on behalf of an enterprise, is virtually the same.

⁴⁷ Ethyl Corporation, supra note 8. Dr. Karl-Heinz Böckstiegel (president) and Messrs. Charles N. Brower and Marc Lalonde comprised the tribunal.

⁴⁸ Ibid. at para. 91.

⁴⁹ The tribunal noted that it “has not gained any insight into the reasons for the formalities prescribed by Ardele 1121, which on their face seem designed to memorialize expressis verbis what is normally the case in any event, namely, that the initiation of arbitration constitutes consent to arbitration by the initiator, whereby access to any court or other dispute settlement mechanism is precluded (except as allowed ancillary to or in support of the arbitration).” Ibid. at para. 90.

⁵⁰ The tribunal referred to the ICSID tribunal’s decision on the issue of jurisdiction in Amco Asia Corporation v Republic of Indonesia, 1 ICSID Reports 389, in this regard. In that case, in response to an objection to the tribunal’s jurisdiction filed by the respondent, the tribunal commented that “a convention to arbitrate is not to be construed restrictively, nor, as a matter of fact, broadly or liberally. It is to be construed in a way which leads to find out and to respect the common will of the parties: such a method of interpretation is but the application of the fundamental principle pacta sunt servanda, a principle common, indeed, to all systems of internal law and to international law” (at 394) [emphasis in original]. The government of Mexico supported Canada’s submission on the importance of full compliance with NAFTA Article 1121. The United States did not make submissions.

⁵¹ “The Tribunal is likewise uninformed as to any reasons for Ethyl’s not having provided the required documentation with the Notice of Arbitration, and equally is unaware of any resulting prejudice to Canada. ” Ethyl Corporation, supra note 8 at para. 90.

⁵² In discussing the timing for the filing of the waiver, the tribunal spoke of the “dramatically preclusive effect” for which Canada argued. Ibid. at para, 91.

⁵³ The Statement of Administrative Action was submitted by President Clinton to the Congress on November 3, 1993, in order to explain NAFTA as part of the procedure for seeking Congressional approval of the agreement. See 103d Cong., 1^st Sess.,H. Doc. 103-159, Vol. 1 at 596.

⁵⁴ Department of External Affairs, Canadian Statement of Implementation, Canada Gazette, Part I (Jan. 1, 1994) at 154 [emphasis added].

⁵⁵ Southern Pacific Properties (Middle East) Limited v. Arab Republic of Egypt, 3 ICSID Reports 131 [hereinafter Southern Pacific Properties]. The tribunal was a distinguished one, chaired by Dr. Jimenez de Arechaga, Mr. Robert F. Pietrowski, and Dr. Mohamed Amin El Mahdi.

⁵⁶ Report of the Executive Directors, supra note 42.

⁵⁷ Southern Pacific Properties, supra note 55 at 143 [emphasis added].

⁵⁸ Waste Management, Inc. v. United Mexican States, ICSID Case No. ARB(AF)/98/2, Award dated June 2, 2000. Messrs. Bernardo M. Cremades (president), the late Keith Highet and Eduardo Siqueiros T. comprised the tribunal [hereinafter Waste Management]. The text of the award is also available through the ICSID website at: <www.worldbank.org/icsid/cases/awards.htm>.

⁵⁹ ICSID Arbitration (Additional Facility) Rules at Article 36, Document ICSID/ 11, June 1979. The Rules are also accessible through the ICSID website at <www.worldbank.org/icsid/facility/facility.htm>.

⁶⁰ Ibid. at Article 38(3).

⁶¹ Ibid.

⁶² Ibid.

⁶³ The Case Concerning Elettronica Sicula S.P.A. (ELSI) (United States v. Italy), ( 198g) I.C.J. Rep. 15, which was an investment dispute, is a good example.

⁶⁴ ICSID Arbitration (Additional Facility) Rules, supra note 59 at Ardeles 22-26.

⁶⁵ Ibid. at Article 59.

⁶⁶ Holiday Inns v. Morocco, ICSID Case No. ARB/72/1 (1972). The claim was eventually settled and no award was rendered. However, a history of the proceeding was published by Pierre Lalive (the claimant’s counsel), “The First ’World Bank’ Arbitration (Holiday Inns v. Morocco) — Some Legal Problems” 1 ICSID Reports at 645.

⁶⁷ ICSID Convention, supra note 2 at Article 26.

⁶⁸ Lalive, supra note 66 at 657.

⁶⁹ Ibid. at 658.

⁷⁰ Ibid. at 658-59.

⁷¹ Ibid at 658.

⁷² Amco Asia Corporation and Others v. Republic of Indonesia, 1 ICSID Reports 377.

⁷³ Ibid at 410.

⁷⁴ Ibid.

⁷⁵ Ibid. at 411.

⁷⁶ Ibid.

⁷⁷ Ibid.

⁷⁸ Vacuum Salt Products, supra note 36.

⁷⁹ Ibid. at 327.

⁸⁰ Ibid. at 327-28.

⁸¹ “UPS Sues Ottawa in Subsidy Dispute,” Globe and Mail Report on Business, February 18, 2000, at B-1.

⁸² See, for example, Canada — Measures Affecting Exports of Unprocessed Herring and Salmon, adopted on March 22, 1988, L/6268, GATT (35) B.I.S.D. (1989) 98 at paras. 4.4-4.7 [hereinafter Herring and Salmon]; United States — Standards for Reformulated and Conventional Gasoline, WTO Doc. DSS/AB/R (May 20, 1996), reprinted in ( 1996) 35 I.L.M. 603; and United States — Prohibition of Shrimps and Certain Shrimp Products, WTO Doc. WT/DS58/AB/R (October 12, 1998) at paras. 136-37. Both of the latter decisions can be found on the WTO’s website: <http://www.wto.org>. There is a discussion of the term “relating to” in the Guide to GATT Law and Practice, 6^th edition (1994) at 539-41.

⁸³ Italian Discrimination against Imported Agricultural Machinery, adopted on October 23, 1958, L/6268, GATT (7) B.I.S.D. (1959) 64 at para. 12 [emphasis in original].

⁸⁴ Herring and Salmon, supra note 82 at para. 4.6 [emphasis added].

⁸⁵ NAFTA also incorporates GATT Article XX (the text that was interpreted by the Herring and Salmon panel, supra note 82). Thus, the parties’ understanding of the GATT terminology flows through to NAFTA. This fact indicates to the author that the meaning given to “relating to” in the GATT is the same in NAFTA. This phrase “relating to” is also used in NAFTA Article 602 (Scope and Coverage of the Energy Chapter), Article 701 (Scope and Coverage of the Agriculture and Sanitary and Phytosanitary Measures), Article toot (Scope and Coverage of the Government Procurement Chapter), Article 1201 (Scope and Coverage of the Cross-Border Trade in Services Chapter), Article 1301 (Scope and Coverage of the Telecommunications Chapter), and Article 1401 (Scope and Coverage of the Financial Services Chapter).

⁸⁶ A claimant can also complain of a breach of Artide 1502(3)(3) and 1503(2) of NAFTA. These provisions deal with the actions of state enterprises.

⁸⁷ Liberian Eastern Timber (LETCO) v. Government of the Republic of Liberia, 2 ICSID Reports 343 at 350.

⁸⁸ Sapphire International Petroleums Ltd. v. National Iranian Oil Company, (1967) 35 I.L.R. 136.

⁸⁹ Ibid. at 171.

⁹⁰ Ibid. at 172.

⁹¹ The arbitrator commented: “It is necessary therefore to regard the rules set out above as rules of positive law generally recognized by civilized nadons. ” Ibid. at 183.

⁹² Ibid. at 185.

⁹³ Robert Azinian, supra note 33.

⁹⁴ Ibid. at para. 79.

⁹⁵ Ibid. at para. 82 [emphasis added].

⁹⁶ Ibid. at paras. 83-84 [emphasis in original with the exception of the last sentence of para. 83].

⁹⁷ Ibid. at para. 87 [emphasis in original].

⁹⁸ Ibid. at paras. 88-91.

⁹⁹ Ibid. at para. 124.

¹⁰⁰ NAFTA does not expressly require exhaustion of local remedies and the degree to which the local remedies rule has been modified by NAFTA remains to be fleshed out by tribunal determinations. That aside, any proceedings undertaken by a claimant in the courts of the host state will become relevant facts in the consideration of a subsequent claim alleging a breach of international law.

¹⁰¹ Robert Azinian, supra note 33 at para. 97 [emphasis in original].

¹⁰² Ibid. at para. 99.

¹⁰³ Ibid. [emphasis in original].