Ruby River Capital LLC v Canada - ICSID Case No. ARB/23/5 - Request for Arbitration - 17 February 2023
Country
Year
2023
Summary
Source: icsid.worldbank.org
I. INTRODUCTION
II. THE PARTIES
A. The Claimant and the enterprise on whose behalf the Request is submitted
B. The Respondent
III. CONSENT TO THE JURISDICTION OF THE CENTRE
A. The Claimant's consent
B. The Respondent's consent
C. The Claimant has fulfilled the NAFTA's procedural requirements
IV. THE FACTUAL BASIS FOR THE CLAIM
A. The GNLQ and Gazoduq Projects were amongst the largest private industrial projects in Québec's history
B. Symbio invested no less than US$ 120 million in the GNLQ and Gazoduq Projects
C. The highly favourable prospects of the GNLQ Project
D. The Québec Government repeatedly encouraged Symbio to proceed with the GNLQ Project through specific commitments and supportive statements
1. The Québec Government made specific commitments supportive of the GNLQ Project
2. The Québec Government made multiple public statements supportive of the GNLQ Project
E. The Québec Government suddenly changed its conditions for supporting the GNLQ Project financially and ultimately backtracked on its funding overtures
F. The Québec Government acted with manifest arbitrariness and exhibited gross procedural unfairness toward the GNLQ Project
1. GNLQ spared no effort in ensuring the environmental approval of the GNLQ Project
2. GNLQ fully addressed the MELCC's questions over GHG emissions and belugas that the Québec Government communicated to GNLQ between December 2015 and March 2021
3. The BAPE commission conducted biased hearings which led to an equally biased Report, which nonetheless did not reject the GNLQ Project
4. The Québec Government unexpectedly and arbitrarily moved the goalposts at the end of the environmental review and approval process in March 2021
G. The Québec Government also acted with manifest arbitrariness and exhibited gross procedural unfairness toward the Gazoduq Project
H. The Federal Government of Canada also acted with manifest arbitrariness and exhibited gross procedural unfairness toward the GNLQ Project
I. The Government of Québec and the Government of Canada have applied double standards to the GNLQ Project and other industrial projects in like circumstances
1. Double standards over the impact of investment projects in like circumstances with regard to GHG emissions
2. Double standards over the impact of investment projects in like circumstances with regard to their potential impact on beluga whales
J. Subsequent discussions with Québec and Canadian Government officials confirmed that the Projects' refusal was entirely unrelated to genuine environmental considerations
V. CANADA HAS BREACHED ITS OBLIGATIONS UNDER NAFTA CHAPTER ELEVEN
A. Canada has breached NAFTA Article 1105(1)
B. Canada has breached NAFTA Articles 1102 and 1103
C. Canada has breached NAFTA Article 1110
VI. THE CLAIMANT HAS SUFFERED DAMAGES AS A RESULT OF THE RESPONDENT'S VIOLATIONS OF NAFTA CHAPTER ELEVEN
A. The Claimant has suffered damages in connection with its investment as a result of acts in breach of the treaty standards that are attributable to Canada under international law
B. Approximate damages suffered
VII. THERE IS A LEGAL DISPUTE ARISING DIRECTLY OUT OF AN INVESTMENT
VIII. REQUESTED RELIEF IX. OTHER INFORMATION
A. Authorization of the Request
B. Appointment of Counsel
C. Fee for lodging the Request
D. Constitution of the Tribunal
E. Language of the arbitration
F. Third-party funding
G. Supporting documentation
X. SUBMISSION
1. Pursuant to Article 36 of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (the Convention or ICSID Convention), Rules 1 and 2 of the Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (the Institution Rules), Annex 14-C of the United States-Mexico-Canada Agreement (USMCA), and Articles 1117(1) and 1120(1)(a) of the North American Free Trade Agreement (NAFTA), Ruby River Capital LLC (Ruby River or Claimant) hereby respectfully requests, on behalf of Symbio Infrastructure Partnership Limited (Symbio), that the Secretary-General of the International Centre for the Settlement of Investment Disputes (ICSID or the Centre) register this arbitration against the Respondent, the Government of Canada (Canada or the Respondent) concerning the claims stated herein.
I. INTRODUCTION
2. This claim arises out of the Government of Québec's and the Government of Canada's fundamentally arbitrary, procedurally grossly unjust, expropriatory, and discriminatory treatment of Symbio in connection with the proposed construction of a state-of-the-art, carbon-neutral liquefied natural gas (LNG) facility in Saguenay, Québec (the GNLQ Project) and parallel project to construct a natural gas pipeline connecting existing natural gas transmission infrastructure in Northern Ontario to the GNLQ Project facility in the Saguenay (the Gazoduq Project) (collectively, the Projects).
3. Between 2014 and 2022, acting on the basis of the repeated and specific commitments and public encouragements made by the highest levels of the Québec Government, and of the continued encouragement and support by senior officials of the Government of Canada, Symbio expended no less than US$ 120 million and considerable time and resources to obtain from the Québec and Canadian Governments the permits and approvals necessary to proceed with the Projects.
4. The GNLQ Project alone would have been one of the largest private industrial projects in Québec history and would have acted as a major driver of the Province's economic development. Conscious from the start of the need to design the project in an environmentally responsible manner, Symbio undertook enormous efforts to ensure that the GNLQ Project met and surpassed all relevant provincial and federal environmental standards and to demonstrate as much to both Québec and Canadian regulators. Symbio also made the unprecedented commitment to realise the Projects while maintaining a net- zero impact on Québec's greenhouse gas (GHG) emissions footprint.
5. The Projects held out the promise of making Québec and Canada world leaders in energy transition at a critical environmental and political juncture. The Projects had the goal of supplying world markets with a substantial amount of safe and environmentally sound LNG as a key transitional energy source from a politically stable jurisdiction, making a material contribution to the overall global reduction of GHG emissions by displacing more pollutive energy sources such as coal, oil and LNG from higher-emitting suppliers, while addressing urgent geopolitical energy sourcing needs and concerns.
6. All of these efforts came to naught when the Québec Government radically altered its longstanding stance towards the Projects. After years of encouragement and direct support for the Projects both through specific commitments and through public statements, the highest political leadership of Québec suddenly developed cold feet and ultimately scuttled the Projects in the run-up to an election year. The Québec Cabinet unlawfully instrumentalized the applicable environmental review process to accomplish its political agenda, imposing criteria devised solely to negatively target the Projects. To attain its objective, Québec at the eleventh hour moved the goalposts of the review process, abruptly announcing that compliance with newly-framed "core criteria" would be required to obtain its approval; applied these new criteria in a manner never before nor subsequently applied to comparable projects in Québec; granted Symbio little time to assemble evidence demonstrating its compliance with the newly-framed criteria; ignored Symbio's expert demonstration and even its own experts' conclusions that GNLQ in fact met such criteria on the basis of scientific evidence; and ultimately, in July 2021, refused the GNLQ Project based on these newly-framed core criteria, not applied to other similar projects approved either before or since. Québec did so by abusively relying on statutory discretion intended to support the object and purpose of Québec's environmental protection regime. That statutory discretion was not meant to provide an arbitrary lever for imposing different standards based on the identity of the proponent, solely to gain political support ahead of an election.
7. Additionally, while dismissing the GNLQ Project on arbitrary and discriminatory grounds and in a procedurally grossly unfair manner, senior Québec politicians cynically stated that the termination of the GNLQ Project also implied the termination of the Gazoduq Project, without giving any reasons - even though the environmental approval process for the Gazoduq Project was (and remains) still formally underway.
8. Unwilling to wear the political flak of contradicting Québec, Canada's federal political leaders quickly followed suit. In September 2021, on the heels of Québec's manifestly arbitrary and discriminatory decision to deny approval to GNLQ, and only weeks before Canadians would vote in snap federal elections, the Liberal Party of Canada suddenly announced that the GNLQ Project would never be approved. This announcement prejudged the federal approval process that was still ongoing at the time, in gross breach of procedural justice. Unsurprisingly, a formal denial ultimately followed a few months later, confirming the fait accompli. This was despite express prior recognition by multiple federal ministers of the Projects' environmental soundness and expected contribution to the transition to a global low carbon economy, alongside the economic benefits the Projects would bring to Québec, Ontario and Canada more generally.
9. Meanwhile, both the Federal and the Québec Governments approved equivalent industrial projects in Québec, including in the Saguenay area, while failing to even consider factors allegedly "crucial" to the Projects, or applying substantially more lenient approval standards. The two governments also promoted - and in many cases invested in - politically favoured projects, despite such support being fundamentally at odds with their alleged rationale for destroying the Projects. In so doing, Canada and Québec acted in a manifestly arbitrary and discriminatory manner, contrary to the legitimate expectations of the Claimant and Symbio that the decision-making processes relevant to the approval of the Projects at a minimum would comply with Canadian law.
10. These measures individually and collectively violate NAFTA Articles 1102, 1103, 1105, and 1110. Canada is responsible both for Québec's and for its own measures in breach of the NAFTA, pursuant to NAFTA Article 105 and in accordance with customary international law. These breaches have resulted in material damages for Symbio in an amount to be fully quantified at a later stage, but no less than US$ 20 billion.
11. Following the termination of the GNLQ and Gazoduq Projects, the Claimant and Symbio have sought to resolve the matter amicably with the Québec and Federal Governments through direct discussions, to no avail. On 16 January 2023, the Claimant held formal consultations with the Respondent under Article 1118 of NAFTA regarding the damages they have suffered as a result of Québec and Canada's measures in breach of NAFTA Chapter Eleven. Since these consultations failed to result in a mutually agreeable resolution of the claim, this Request for Arbitration (Request) is filed to ensure that the Respondent compensates the Claimant in full for all damages, costs and other related losses that Symbio incurred as a result of Québec and Canada's measures.
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IX. OTHER INFORMATION
A. Authorization of the Request
169. The Claimant has taken all necessary internal actions to authorize this Request for Arbitration. The Claimant's two Co-Founders and Members, as well as Symbio's President and two Directors have considered the matter and authorised consent to arbitration and execution of the instruments necessary to make this request.41 In addition, the Claimant has appointed the undersigned as attorneys in this matter, provided the appropriate notification to the Secretariat pursuant to Rule 2(2) of the Arbitration Rules, and specifically authorised the undersigned to file this Request. This Request has been fully authorised in accordance with the law and applicable corporate instruments.
B. Appointment of Counsel
170. Legal counsel for the Claimant is. ..
C. Fee for lodging the Request
172. The Claimant has paid the fee for lodging this Request, a confirmation of which is attached
D. Constitution of the Tribunal
173. Having regard to Article 1123 of the NAFTA, Article 37 of the Convention, Rule 3(a)(i)
of the Institution Rules and Rules 15 and 16 of the Arbitration Rules, the Claimant requests the constitution of a tribunal consisting of three arbitrators, one appointed by each party, and the President of the tribunal appointed by agreement of the parties or, failing such agreement, by the Secretary-General of the Centre.
E. Language of the arbitration
174. Pursuant to Rule 3(a)(ii) of the Institution Rules, the Claimant proposes that further to Rule 7 of the Arbitration Rules, the language of the arbitration be English and French.
F. Third-party funding
175. Pursuant to Rule 14 of the Arbitration Rules, the Claimant is submitting the requisite written notice in support of this Request for Arbitration which discloses the name and address of the non-party from which the Claimant has received funds for the pursuit of the proceeding (third-party funding).43 As the non-party providing funding is a juridical person, the requisite written notice includes the names of the persons and entities that own and control that juridical person, in conformity with Rule 14 of the Arbitration Rules.
G. Supporting documentation
176. This Request is accompanied by Exhibits C-1 to C-40, and by Legal Authorities CL-1 to CL-5, listed in the attached Index of Exhibits and Legal Authorities.
X. SUBMISSION
177. On the basis of the above, the Claimant respectfully requests that the Secretary-General: (a) acknowledge receipt of the Request; and (b) proceed to register the Request as soon as possible and notify the Parties of the registration, in accordance with Rules 6(1) and 6(2) of the Institution Rules.
Dated: 17 February 2023 [SIGNATURE]
Footnotes omitted