Saint Marys VCNA, LLC v. Government of Canada
PCA · Investment (ICSID and treaty) · Canada · 29 Mar 2013
Why it matters
This case illustrates the use of NAFTA's Denial of Benefits clause (Article 1113(2)) to bar a claim by an investor lacking substantial business in the US. It also shows how a settlement can be incorporated into a consent award, with the claimant acknowledging it never had standing. The case highlights procedural issues such as bifurcation and privilege disputes.
Summary
St. Marys VCNA, LLC, a US company, brought a NAFTA Chapter 11 claim against Canada over an Ontario zoning order affecting its cement plant. Canada objected on jurisdictional grounds, arguing the claimant lacked substantial US business activities and invoked Article 1113(2) to deny benefits. The tribunal bifurcated proceedings to address jurisdiction first. During document production, the claimant inadvertently disclosed privileged documents; a neutral referee, Justice Spigelman, found no privilege or that it was waived. The parties then settled: the claimant withdrew its claim and acknowledged it never had standing, Canada agreed not to seek costs, and no payment was made. The settlement was incorporated into a consent award under UNCITRAL Rules Article 34(1). The award also fixed arbitration costs at USD 245,764.10 and ordered reimbursement of the unexpended deposit.
The detail
Parties: Saint Marys VCNA, LLC v. Government of Canada
Case number: PCA Case No. 2012-19
Outcome: The parties settled; the tribunal issued a consent award recording the settlement, with no payment by Canada and the claimant acknowledging it lacked standing.
Applicable law: NAFTA Chapter 11, UNCITRAL Rules 1976, laws of Ontario
Issues in play: NAFTA Article 1113(2) (Denial of Benefits) and Article 1120(1) (timing of arbitration) were central; Canada denied benefits to the claimant for lack of substantial US business activities.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.