Investor's Response to Canada's Third Bifurcation Request - October 13, 2020
TABLE OF CONTENTS
- The time issue
- Mesa Power Hearing Admissions are essential to determining Canada's NAFTA Breach
- The Notice of Intent
- Notice of Arbitration
- DisCLosure of secret meetings between Nextera and the
- Eventual Disclosure about the Actions of the "B"Club to benefit International Power Canada
- Conclusions about NAFTA Hearing Evidence in the Notice of Arbitration
- The Investor's Memorial
- Disclosure of PreferentIal treatment given to International power canada
- The Investor's Motion on interim measures
- The Test for Bifurcation
- Why The Tribunal has jurisdiction to rule on these claims
- The determination of the date of breach must be considered in the Merits
- Canada's artificial dates are irrelevant
- Caselaw on the Test for Jurisdiction
- Other due process considerations against bifurcation
- The date of Breach issue
- Setting the Date is essential
- Time and Standing
- How can the Tribunal determine when the Claim arose?
- Canada's Request is Frivolous
- The Meaning of Temporal Restrictions in the NAFTA Article 1116
- Pleadings only need to disclose a Prima Facie Claim
- The Facts establish the date of breach was not earlier than August 15, 2015
- The Breakfast Club" and IPC
- GEIA Non-Conforming Measures
- secret Meeting with NextEra
- Spoliation of Documents
- Canada's argument that Tennant Energy is not an investor is frivolous and false
- Canada's Jurisdictional Memorial blows Smoke - but no Fire
- BEFORE the Mesa Hearing, there was no public information on the High-level meeting between and Nextera
- April meeting with NextEra and the IESO in April 2011
- The January 2011 Meeting
- The February 25, 2011 OPA meeting
- The April IESO meeting
- The GEIA
- You can put lipstick on a pig, but it is still a pig
- Bifurcation is inefficient
- This Bifurcation requires considering the Merits
- other issues must be joined to the Merits
- Canada has consented to this arbitration
1) Time and time again, Canada sings the same song. Unconvincingly, Canada says Tennant Energy LLC is attempting to repeat the exact same claims made by Mesa Power Group in its NAFTA claim. Tennant Energy LLC is not Mesa Power Group, and Tennant nor this Tribunal is limited to the facts presented in that case or its outcome. This Tribunal should realize that Canada's song does not ring true.
2) Canada's Third Bifurcation Request and its ongoing jurisdictional challenges thus require Canada to prove that Tennant Energy's claims are based on the exact same factual assertions made by the Mesa Power case and known to the public prior to June 1, 2014. Canada's attempt for a separate jurisdictional phase hinges on Canada's ability to establish that there were no facts that became available to the public after June 1, 2014, that could support Tennant's legal claims.
This assertion simply is untrue.
3) This Third Bifurcation Response reviews the evidence Canada relies upon to support its position that this Tribunal lacks jurisdiction. These arguments appear in Canada's Jurisdictional Memorial. Canada's position is all smoke and mirrors - but there is no content. The evidence Canada raises avoids the arguments Tennant Energy raises.
a) Canada has no answer to the issues raised by the International Power Canada claim and the "Breakfast Club."
b) Canada ignores the issues Tennant Energy raises by about the secrecy surrounding the failure of the Korean Consortium to meet their responsibilities under the Green Energy Investment Agreement, and Ontario's decision to continue to provide the benefits of the agreement without the payment of the costs.
c) Canada ignores the relevant meeting between the and Vice President of NextEra and the ensuing high-level actions taken to facilitate new contracts for NextEra projects that had failed in other transmissions zones earlier in the FIT Progress; and
d) Canada completely has ignored the role of the above issues and how the understanding of these issues in 2015 from the Mesa Power NAFTA Claim of the involvement of high-level officials from the Premier's Office in the FIT Program makes the criminal and willful destruction of Ontario energy policy documents relevant to Tennant Energy.
4) Canada's Jurisdictional Memorial completely ignores the fact that Canada cannot establish a case, and it is precisely why Canada is desperately trying to avoid the merits of Tennant Energy's claim.
5) With the cloak of darkness on the Mesa Power Hearing admissions of wrongdoing now removed, Canada is aware of its precariously weak position on the merits of this claim. Thus, Canada attempts legal gymnastics by arguing that there was a tremendous amount of evidence known to the public before June 1, 2014, that Canada acted notoriously in profligate non-conformity with its NAFTA Chapter Eleven Section A obligations. Thus, Canada asserts that Tennant Energy should have brought its claim earlier. This assertion is absurd. It completely ignores the facts of the claim Tennant Energy pled, and substitutes Tennant Energy's claim with a flimsy and fictitious claim of Canada's construction.
6) Tennant Energy is entitled to argue its claim based on those measures that it finds material and relevant. As set out in detail in this Response, Tennant Energy has articulated specific claims that largely rest on information arising from the public revelation of the October 2014 Mesa Power NAFTA Hearing. That is the basic claim Tennant Energy asserts - and the one that Canada should have addressed in its Third Bifurcation Request.
7) Astonishingly, Canada never addresses the fundamental point of how Tennant Energy's claim arises from knowledge derived from materials that became public knowledge during the Mesa Power NAFTA hearing, as the basis for this arbitration. The failure to address this fundamental point, after reviewing Tennant Energy's Memorial, is telling. Of course, Canada has no answer because prima facie jurisdiction exists. As a result, Canada's Third Bifurcation Request adds nothing to its first failed request and constitutes nothing but an expensive and needless waste of time and resources.
8) The claims in this arbitration arise from previously secret information that first came to light in August 2015. The admissions involve the existence of improper actions to favor political friends and favorites of Ontario's government taken by senior Canadian government officials. These companies - owned by political cronies and supporters - were favored to the detriment of investments American investors owned who followed the general guidelines of the FIT Program. The NAFTA prohibits such unfair practices, which disrupt commercial certainty and cross-border investment.
9) As discussed below, the NAFTA drafters - and the decisions from NAFTA and other international tribunals - had come to a common conclusion: it is impossible to consider the breach of an obligation without consideration of the measures and when it was known to be an internationally wrongful measure. Thus, the time of a breach must consider when an investor actually knew, or reasonably ought to have known, of the specific breach at issue.
10) Essential to evaluating the timing question is the pervasive secrecy in energy policy decision making in Ontario. Not only was the administration of Ontario's energy policy opaque from the public, but there was the added factor of the criminal destruction of tens of thousands of documents relating to Ontario Energy policies. Evidence before this Tribunal also confirms that secret bodies of the most senior Ontario government and political officials congregated to plan ways to circumvent the existing FIT Rules to assist local friends and supporters of the government. Those meetings did not come public until August 2015.
11) Tennant Energy did not have the knowledge, and could not have known, of these wrongful measures at the time that the internationally unlawful measures occurred. Tennant Energy's claims arise from information unknown to the public on Canada's artificial substitute dates of June 12, 2013 (or July 4, 2011). Similarly, Tennant Energy did not know or could not have known this information when Mesa Power raised its NAFTA claim in 2011.
12) Astonishingly, Canada persists in its failed attempts to conflate the claim here with the earlier Mesa Power claim. In bringing its Third Bifurcation Request, Canada wholly ignores the actual claim Tennant Energy articulates. Canada also ignores the requirement that the Investor has actual or constructive knowledge of the NAFTA breach for the "time clock" to start to run.
13) At no time does Canada establish that Tennant had actual or constructive knowledge of:
a) the special treatment granted to International Power Canada, which resulted in the harm caused to Skyway 127.
b) the existence of the "Breakfast Club" of senior political and government officials who have unfairly manipulated the FIT Program and other government rules in Ontario to the detriment of the FIT proponents such as Skyway 127. Ontario blocked the public from having knowledge of these extraordinary practices.
14) There cannot be a breach raised under NAFTA Article 1116 without the Investor having such actual or constructive knowledge.
15) Article 1116 (2) is very clear:
An investor may not make a claim if more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage.
16) The three-year period is initiated when all the following elements have been met:
a) there is actual or constructive knowledge of both;
b) knowledge of a breach; and
c) knowledge of loss or damage that has been incurred as a result.
17) Until all those elements are met, the three-year period has not begun. The knowledge requirement applies both to the breach and to the suffering of damage. Knowledge of one, without the other, is insufficient to trigger the commencement of the three years.
18) The three-year provision is not designed for the Tribunal to determine before the merits hearing whether a claim existed at a particular point in time or the scope of that claim. These are issues for the Tribunal to consider on the merits. To determine whether "sufficient" events arose three years before filing the Notice of Arbitration, the Tribunal must begin from the Investor's good- faith understanding of its claim; it must consider the internationally wrongful conduct the Investor alleges as the basis of the claim; and, it must ask, based upon the Investor's theory of law, are there "sufficient" acts and omissions three years before filing the Notice of Arbitration that, if proven, would establish internationally wrongful conduct that would allow the Investor to succeed with the claim as filed?
19) NAFTA Article 1116 is about good faith conduct concerning the host state. It must not be used as an indirect avenue for challenging the Investor's claim as the Investor defines or understands it, or the Investor's view of the law and the facts. It does not matter that, on a different theory of the law or different facts than those the Investor alleges, there might have been "sufficient" acts and omissions three years before filing its claim for some other case not brought. The relevant perspective is the Investor's good faith understanding of the law and facts as they appeared when it filed its Notice of Arbitration and concerning the claim actually as stated.
20) Absent evidence of bad faith, a Tribunal should defer to the Investor's judgment about when its claim arose when assessing whether it complied with such a requirement. As long as the Investor has acted in good faith and reasonably in coming to the conclusion that it had a claim at a particular point in time, and waited six months from that point (as required by NAFTA Article 1120), then the three-year period should not be a bar for the Investor to prove its claim on the merits as it has pled.
21) It is abundantly clear that, in this arbitration, the Investor has acted in good faith and has been reasonable in arriving at the conclusion that it filed its claim within three years of learning of the facts and acts of Canada's wrongful conduct before bringing its Notice of Arbitration. Canada has not shown otherwise. The Notice of Arbitration conforms to the requirements of the NAFTA, as it was filed well within three years from the date of when the Investor became aware of Canada's breach through the release of documents commenting on testimony at the October 2014 Mesa Power NAFTA claim.
376) The burden of this bifurcation request falls upon Canada as the moving party, as will the burden in a jurisdictional challenge. Canada must prove, through the law, the terms of the NAFTA and the applicable facts, that Tennant Energy failed to make a timely claim. All the issues relate back to that one matter.
377) To consider this request for bifurcation, and for the purposes of jurisdiction, this Tribunal must take the claim and facts argued by Tennant Energy. The Investor is entitled to have this case heard, including the damning evidence arising from Canada's own senior officials.
378) Canada has failed to carry its burden. The facts are that Tennant Energy did not know of the essential wrongful acts which support its claim until after June 1, 2014.
379) As noted herein, evidence from the Mesa Power NAFTA hearing unknown to the public addressed Canada's internationally wrongful actions and omissions. This was the information upon which Tennant Energy brings its NAFTA claim. The range and amount of information hidden by Ontario and Canada are astonishing, and it goes to all areas of Tennant Energy's claims, including:
a) Special meetings held by the most senior corporate officials of NextEra with the
b) The Korean Consortium and how the obligations under the Green Energy Investment were being manipulated.
c) The secret committee of political and senior government officials "fixing" issues in the FIT Program for local friends and favorites.
d) And the special business opportunities and contracts awarded to International Power Canada to address its previous failure in obtaining FIT Contracts in the West of London transmission region at the cost of the FIT Contract that should have been awarded to Skyway 127.
380) NAFTA's plain language makes these facts determinative. The three-year period in Article 1116(2) runs from the time an Investor knows or should have known that the breach occurred and that the loss or damage has been incurred arising from that breach.
381) NAFTA requires that the Investor knows of the breach. Canada's request simply does not comply with the requirements for a successful bifurcation as:
a) The request is frivolous. On its face, it demonstrates that it is inconsistent with the facts pleaded in the arbitration.
b) The request is inefficient. On its face, the delay and cost caused by the bifurcation would be significant. The benefits would be negligible as the jurisdictional challenge does not apply to all the matters raised in the claim. Further, the obvious defects in the claim demonstrate that it has a slim likelihood of success. On balance, the harm, cost, and delay caused by the bifurcation would greatly outweigh any benefit served by it.
c) The bifurcation request requires the Tribunal to take a deep dive into the merits. The issue of determining the date of the breach is not simple and requires the production of more evidence from Canada to address the continuing course of action of suppression of information and the spoliation of evidence.
382) An investor is not required to make a claim under NAFTA Article 1116 until such time as an Investor knows or ought to know of the breach of the NAFTA. The record is clear that the first date of the public release of the admissions of Assistant Ontario Deputy Energy Minister Susan Lo regarding unlawful preferential treatment to International Power Canada first occurred on August 15, 2015.
383) It is patently obvious that Canada's allegations about the date of the NAFTA breach are fictions. The date of the NAFTA breach was not earlier than August 15, 2015.
384) By August 15, 2015 - Canada admits that Tennant Energy owned shares in Skyway 127, and thus there could be no possible issue raised concerning its investment.222 A claim arising on August 15, 2015, would also not cause any issue for Tennant Energy's June 1, 2017, NAFTA filing under the three-year time limitation imposed by NAFTA Article 1116(2).
385) As a result of these facts alleged in the claim and supported by evidence of the date of release of the admissions of Assistant Deputy Energy Minister Susan Lo in August 2015, any bifurcation based on the date of breach would be entirely frivolous.
386) Canada itself has acknowledged that the consideration of two of Canada's jurisdictional defenses would, in any event, require a hearing. In this context, bifurcation would not promote or provide significant cost savings. It would be the exact opposite.
387) There can be no question in these circumstances that this motion should never have been brought by Canada as there is a slim prospect for success. It is a clear example where costs should be awarded against Canada to bring this vexatious motion designed as part of an overall campaign to drawn down on the Investor's limited financial capabilities.
388) For all the foregoing reasons, Canada's motion should be denied in its entirety, and costs should be assessed against it on a full indemnity basis for the costs of this vexatious and needless motion.
ALL OF WHICH IS RESPECTFULLY SUBMITTED
Appleton & Associates International Lawyers LP
Reed Smith LLP