A ‘lengthy and costly’ problem: Alberta to affix TC Vitality’s $15B NFTA declare over Keystone XL rejection

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It would mark the primary time a stage of presidency is instantly concerned in a NAFTA dispute as an investor

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CALGARY — The Alberta authorities intends to affix TC Vitality Corp. in difficult U.S. President Joe Biden’s cancellation of the Keystone XL pipeline, in what could be the primary time a stage of presidency is instantly concerned in a NAFTA dispute as an investor, in keeping with authorized consultants.


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TC Vitality introduced July 2 the corporate filed discover it might search US$15 billion “in damages that it has suffered because of the U.S. authorities’s breach of its NAFTA obligations.”

The case is being filed as a legacy North American Free Commerce Settlement Chapter 11 dispute beneath the newly renegotiated United States-Mexico-Canada Settlement, “to get well damages ensuing from the revocation of the Keystone XL challenge’s presidential allow.”

In 2020, Alberta Premier Jason Kenney’s provincial authorities had pledged to speculate $1.5 billion in Keystone XL and supply as much as $6 billion in mortgage ensures for its building. In complete, the challenge’s cancellation has price Alberta’s authorities $1.3 billion to this point.


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“We’ve been fairly clear that we’ll do no matter it takes to guard the taxpayers’ funding,” Alberta Vitality Minister Sonya Savage stated in an interview this week. “TC Vitality has given their letter of intent. We’ve acquired plenty of time to do this, there’s no limitation that we’re bumping up in opposition to.”

TC Vitality, then referred to as TransCanada Corp., beforehand launched a Chapter 11 declare in opposition to the U.S. authorities when former U.S. president Barack Obama denied Keystone XL a cross-border allow and nixed the pipeline in 2015. On the time, the Calgary-based pipeline firm had additionally launched a NAFTA problem and filed a $15-billion lawsuit in opposition to the U.S. authorities.


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U.S. President Donald Trump smiles after announcing a permit for TransCanada Corp’s Keystone XL oil pipeline while TransCanada Chief Executive Officer Russell Girling (L), U.S. Commerce Secretary Wilbur Ross (C) and Energy Secretary Rick Perry (R) stand beside him in the Oval Office of the White House in Washington, U.S., March 24, 2017.
U.S. President Donald Trump smiles after asserting a allow for TransCanada Corp’s Keystone XL oil pipeline whereas TransCanada Chief Government Officer Russell Girling (L), U.S. Commerce Secretary Wilbur Ross (C) and Vitality Secretary Rick Perry (R) stand beside him within the Oval Workplace of the White Home in Washington, U.S., March 24, 2017. Photograph by REUTERS/Kevin Lamarque/

The corporate withdrew these two fits when former U.S. president Donald Trump signed an govt order approving the pipeline and granting TC Vitality a cross-border allow — a transfer that Biden reversed on his first day in workplace in January.

Authorized consultants imagine  TC Vitality’s NAFTA declare will incorporate each Biden’s and Obama’s rejection of Keystone XL and the years the challenge spent in regulatory processes in its argument the challenge was not given “truthful and equitable remedy,” as required beneath the free commerce settlement.

“I might count on they’ll advance your entire historical past of Keystone XL,” stated Lawrence Herman, a Toronto-based worldwide commerce lawyer with Herman Associations and Cassidy, Levy, Kent LLP.


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Herman stated that if Alberta does comply with by and be part of TC Vitality in its NAFTA problem, it might mark the primary time a authorities has been concerned as an investor in any such commerce case.

“This is able to create a precedent. There has by no means been a NAFTA Chapter 11 arbitration the place a authorities has been a celebration to the case, so this can break new floor,” Herman stated. “The entire circumstances between Canada and the US have concerned solely buyers difficult actions by authorities however right here you’ve acquired one other authorities, a subunit of Canada, concerned in a dispute continuing.”

He stated some of these circumstances typically drag on for years and TC Vitality’s discover marks solely step one in what’s more likely to be an costly, five-year course of.


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“It is going to be a protracted, costly and challenged by the limitless assets of the US authorities,” Herman stated.

It’s unclear nevertheless, whether or not the province of Alberta could make a declare based mostly on your entire historical past of the challenge, for the reason that authorities solely turned an investor originally of 2020 in an effort to kick begin building on the road.

“You have to make a declare based mostly on the way you have been handled because you invested,” stated James Coleman, a professor on the Dedman College of Legislation at Southern Methodist College in Dallas.

“The U.S. would possibly say you’ll be able to’t depend on discrimination in opposition to TC that occurred in the course of the Obama administration since you hadn’t made your funding but,” Coleman stated.

No matter how the case is argued, TC Vitality and the Alberta face a frightening problem as a result of the US has by no means misplaced a Chapter 11 free commerce case, even in circumstances the place it appeared like there was clear discrimination in opposition to the investor, Coleman stated.

Not like the courts system, he stated there aren’t any precedents at commerce tribunals that affect the subsequent case. “Each case is taken as new,” he stated, which implies every earlier choice within the U.S. authorities’s favour doesn’t make it extra possible Washington will win once more.

• Electronic mail: gmorgan@nationalpost.com | Twitter:


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