Westmoreland Mining Holdings, LLC v. Canada (II), ICSID Case No. UNCT/20/3
ICSID · Investment (ICSID and treaty) · Canada · 31 Jan 2022
Why it matters
This case clarifies the standing requirements for successor entities in NAFTA Chapter Eleven claims. The Tribunal held that a claimant must be a protected investor at the time of the alleged breaches, and that a mere assignment of a claim does not confer standing if the assignor was the original investor. It also addressed the 'relate to' requirement, emphasizing that measures must specifically target the claimant's investment.
Summary
Westmoreland Mining Holdings LLC (Westmoreland) brought a NAFTA Chapter Eleven claim against Canada, alleging that Alberta's phase-out of coal-fired power plants by 2030 breached its investment protections. Westmoreland was the successor-in-interest to Westmoreland Coal Company (WCC), which had filed a similar claim but later withdrew it. Canada objected to jurisdiction, arguing that Westmoreland was not a protected investor at the time of the alleged breaches because it acquired the investment after the measures were taken. The Tribunal agreed, finding that under NAFTA Articles 1116(1) and 1117(1), a claimant must own or control the investment at the time of the alleged breach. Westmoreland acquired its interest in the Canadian mines after the phase-out policy was announced, so it lacked standing. The Tribunal also found that Westmoreland failed to make out a prima facie damages claim and that the challenged measures did not 'relate to' Westmoreland or its investment under Article 1101(1). The claim was dismissed in its entirety, with each party bearing its own costs.
The detail
Parties: Westmoreland Mining Holdings, LLC v. Canada (II), ICSID Case No. UNCT/20/3
Case number: italaw/cases/7002
Outcome: The Tribunal dismissed Westmoreland's claim in its entirety for lack of jurisdiction. Each party bears its own costs and shares arbitration costs equally.
Applicable law: NAFTA Chapter Eleven, UNCITRAL Arbitration Rules (1976)
Issues in play: The key issue was whether Westmoreland, as a successor-in-interest to Westmoreland Coal Company (WCC), had standing under NAFTA Articles 1116(1) and 1117(1) as a protected investor at the time of the alleged breaches. The Tribunal also considered whether the challenged measures 'relate to' Westmoreland or its investment under Article 1101(1).
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