After giving notice in January that it intended to do so, TransCanada Corporation has filed a claim under NAFTA’s Chapter 11 provisions seeking $15 billion from the United States in compensation for that country’s rejection of the company’s proposed Keystone XL pipeline from Alberta to the Gulf of Mexico.
In its statement of claim filed on Friday, the company asserts that the United States breached its NAFTA obligations to provide TransCanada with “National” and “Most-Favored-Nation” treatment, as well as commitments to a “Minimum Standard of Treatment” and others relating to “Expropriation and Compensation.” In brief, those commitments require the U.S. to treat Canadian companies as it does American ones, to give them the same benefits as investors enjoy under the most favourable trade terms that Washington offers companies from any other country, to meet international procedural standards, and to compensate investors when their interests are expropriated.
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TransCanada claims the eight years it waited for a decision violated international norms, while the decision itself “unjustifiably discriminated against Keystone.”
As is the case with all such claims under NAFTA, TransCanada’s will be heard by an international tribunal so as to avoid possible bias on the part of a U.S. domestic court. Claim and response documents are publically available and tribunal hearings are open to the public. In the past, only a minority of such claims have succeeded, and awards have been a small fraction of the amounts claimed.
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