Summary

Claim by the Investors of Geophysical Service Inc. ("GSI") under the North American Free Trade Agreement ("NAFTA")



A. DEMAND THAT THE DISPUTE BE REFERRED TO ARBITRATION

1. Pursuant to Article 3 of the Arbitration Rules of the United Nations Commission on International Trade Law (the "UNCITRAL Arbitration Rules") and Articles 1116, 1117 and 1120 of the North American Free Trade Agreement ("NAFTA"), the Claimants THEODORE DAVID EINARSSON, HAROLD PAUL EINARSSON and RUSSELL JOHN EINARSSON, on their own behalf and on behalf of the enterprise, GEOPHYSICAL SERVICE INCORPORATED ("GSI"), hereby demand and initiate arbitration against the Respondent, the Government of Canada ("Canada").

2. Pursuant to Article 1119 of the NAFTA, the Claimants delivered a Notice of Intent to Submit a Claim to Arbitration to Canada on October 15, 2018, more than ninety days prior to the submission of this claim.

3. Pursuant to Article 1121 of the NAFTA, the Claimants and GSI consent to arbitration in accordance with the procedures set out in the NAFTA. The Claimants and GSI hereby waive their rights to initiate or continue before any administrative tribunal or any court, or any other dispute settlement procedures, any proceedings with respect to the measures outlined herein, except for proceedings for injunctive, declaratory or other extraordinary relief, not involving payment of damages, before an administrative tribunal or court under the laws of Canada. The executed consents and waivers of the Claimants and GSI are attached to this Notice of Arbitration.

...

E. GENERAL NATURE OF THE CLAIM AND AMOUNT INVOLVED

8. This claim arises out of Canada's breaches of its international legal obligations with respect to its handling of proprietary marine seismic data (the "Seismic Date) owned by GSI. The Seismic Data had been created and otherwise acquired by GSI over many years. By its unlawful conduct, Canada confiscated the intellectual property rights in the Seismic Data and effectively destroyed GSI's business.

9. GSI is a company organized under the Canada Business Corporations Act, with its registered office in Calgary, Alberta. It is owned solely by Theodore David Einarsson and Harold Paul Einarsson.

10. For approximately 50 years, GSI and its predecessor companies created, licensed, stored, processed and reprocessed the Seismic Data, principally for use in oil and gas exploration in the Canadian offshore. For much of its existence, GSI's business was highly lucrative and employed over 250 employees over the course of its operations.

11. Creating marine seismic data is a capital-intensive and time-consuming process. It requires significant investment in order to produce final works, which are, in turn, extremely valuable. Seismic surveys cost millions of dollars to create and are closely guarded trade secrets governed by strict licensing agreements relating to the confidentiality and reproduction of the data. In this instance, the estimated costs expended to create the Seismic Data are approximately USD$781,000,000, with estimated outstanding returns from existing license agreements with third parties for the Seismic Data worth approximately USD$2,529,000,000.

12. The Seismic Data is, and was, entitled to protections under Canadian and international law as copyright works and trade secrets.

13. GSI and its predecessors were required for many years to submit to the Canadian Government the Seismic Data and related confidential, commercial information, pursuant to various regulations, including:

a. the Canada Oil and Gas Land Regulations, SOR 61-253, under the Territorial Lands Act, RSC 1952, c 263, as amended;

b. the Canada Oil and Gas Geophysical Operations Regulation, SOR/96-117, under the Canada Oil and Gas Operations Act, RSC 1985, c 0-7;

c. the Newfoundland Offshore Area Petroleum Geophysical Operations Regulations, SOR 95-334, under the Canada--Newfoundland and Labrador Atlantic Accord Implementation Act, SC 1987, c 3, as amended, and mirror legislation; and

d. the Nova Scotia Offshore Petroleum Geophysical Operations Regulations, NS Reg 191/95, under the Canada-Nova Scotia Offshore Atlantic Accord Implementation Act, SC 1988, c 28, as amended, and mirror legislation (collectively, the "Submission Legislation").

14. The Seismic Data submitted was routinely in the form of "final reports", authored by employees of GSI and its predecessors to include each data set created. GSI has expended extensive efforts and expense to create and otherwise acquire those final reports. But for the Submission Legislation and various representations made to the Claimants by Canada, GSI and its predecessors would not have provided the Seismic Data to Canada.

15. GSI and its licensees have reprocessed the Seismic Data multiple times since it was created and obtained. These reprocessed versions of the Seismic Data and derivatives of the Seismic Data have also been submitted to Canada by GSI's licensees without compensation to GSI.

16. There are a number of statutory provisions governing the privilege afforded to offshore seismic data in Canada, including provisions pursuant to:

...

Geophysical Service Incorporated (GSI) v Canada - Notice of Intent to Submit a Claim to Arbitration Under NAFTA Chapter Eleven - 15 October 2018

• OGEL: Geophysical Service Incorporated (GSI) v Canada - Notice of Intent to Submit a Claim to Arbitration Under NAFTA Chapter Eleven - 15 October 2018
• TDM: Geophysical Service Incorporated (GSI) v Canada - Notice of Intent to Submit a Claim to Arbitration Under NAFTA Chapter Eleven - 15 October 2018

Claim by the Investors of Geophysical Service Inc. ("GSI") under the North American Free Trade Agreement ("NAFTA")

• OGEL: Geophysical Service Incorporated (GSI) v Canada - NAFTA - Notice of Arbitration - 3 April 2019
• TDM: Geophysical Service Incorporated (GSI) v Canada - NAFTA - Notice of Arbitration - 3 April 2019