Vito G. Gallo v. The Government of Canada
PCA · Investment (ICSID and treaty) · Canada · 15 Sep 2011
Why it matters
This case is a landmark on the temporal scope of NAFTA's investor-state arbitration. It clarifies that an investor must own or control the investment at the time of the alleged breach; a later acquisition does not confer standing. The decision reinforces the importance of the date of the measure and the investor's status on that date, and it illustrates the application of the UNCITRAL rules on costs in investment arbitration.
Summary
Vito G. Gallo, a US citizen, claimed that Canada violated NAFTA Chapter Eleven by enacting the Adams Mine Lake Act (AMLA) in 2004, which prevented the development of a landfill project at the Adams Mine in Ontario. Gallo had purchased shares in a company that owned the mine in 2005, after the AMLA was introduced. Canada objected to jurisdiction, arguing that Gallo did not own or control the investment at the time of the alleged breach. The Tribunal bifurcated proceedings to address jurisdiction first. It found that Gallo acquired his interest in the enterprise after the AMLA was enacted, and therefore the Tribunal lacked jurisdiction ratione temporis. The Tribunal dismissed all claims and ordered Gallo to pay USD 450,000 of Canada's arbitration costs, with each party bearing its own legal costs.
The detail
Parties: Vito G. Gallo v. The Government of Canada
Case number: PCA Case No. 2008-03
Outcome: The Tribunal declined jurisdiction over the claims. Claimant ordered to pay USD 450,000 to Canada for arbitration costs; each party bears its own legal costs.
Quantum: USD 450,000
Applicable law: NAFTA Chapter Eleven, UNCITRAL Arbitration Rules (1976)
Issues in play: The key issue was whether the claimant had standing as an investor under NAFTA, specifically whether he owned or controlled the investment at the time the alleged breach occurred. The Tribunal applied the ratione temporis requirement that the claimant must have owned the investment before the measure complained of.
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