The NAFTA Claim

Nice Star headline



"Moroun suit claims NAFTA breach

Bridge owner unlikely to win $3.5B, experts say"



He might win more given what DRIC has said about traffic volumes to justify the building of the DRIC Bridge. Note as well, Matty Moroun would keep the bridge too!



Moroun has a reputation of being litigious but no sophisticated business person wants lawsuits especially those against government. They are too expensive and time-wasting.



My personal view is that part of the reason for starting the NAFTA claim is to get the attention of the Government of Canada. The timing could not be better given the chilling relationship between Canada and the US as demonstrated by the anti-NAFTA legislation introduced into Congress and Secretary of State Clintion's recent comments.



It gives Canada the excuse to talk to Moroun if the PM really wants to do so. As Matthew Moroun said in the Toronto Star:



"After years of bruising lower-level skirmishes with the Canadian government, he has a "big ask," as they say in diplomatic parlance.



The Morouns know they are a bee in Stephen Harper's bonnet. Famously, during one of the Three Amigos summits, the Prime Minister pleaded for then-president George W. Bush's help in getting rid of the billionaire owners of the Ambassador Bridge – the aging link between Windsor and Detroit that accounts for a quarter of all trade between Canada and the U.S.



"Here's the thing. We have never had what I would call a real conversation with the Canadian government," says Moroun.



"All the talk so far has been at a lower level, and it starts with the Canadians saying, 'No matter what, we're going to build a new bridge and kill you. Now what did you want to talk about?' It's a pretty tough way to start off. It puts us in a position of saying, 'No matter what, we're going to stop you.' "



The Morouns say it's time to start anew. At the highest level.



If they can win an invitation to Ottawa, if the doors of the Prime Minister's Office will open, they are ready "to agree to what Canada needs to be able to sleep better at night. We can allay their concerns. We can be Canada's best friends."



The other thing it does, to be blunt, is to raise the ante if Canada is serious in wanting to buy the bridge. The Morouns are sayings clearly as is possible that they want to keep the bridge but if Canada wants it, then their terror tactics have not worked one bit. The Morouns will not be forced into giving away the bridge at a low cost since some bureaucrat thinks they can be scared off. Rather, Canada's stupidity has resulted in the INCREASE of the bridge's value over time.



So what do the Star's experets have to say about Moroun's NAFTA claim to justify the headline:

• Regulations under NAFTA allow for massive arbitration claims such as the one made by Ambassador Bridge owner Matty Moroun, who is seeking US$3.5 billion from the Canadian government, says a University of Western Ontario law professor specializing in international trade.
  
  
  
  But final settlements are often a fraction of what is originally sought.
  
  
  
  [There is no doubt that claims are often settled for a fraction of the original claim. However, the professor has NOT said how big that fraction can be in this claim. Moreover, there is no doubt that the NAFTA claim fits i n with the other lawsuits that have been started, an important matter that is NOT discussed in this article at all. One cannot look at the NAFTA claim in isolation.]



• This is the opening salvo. It's showcase litigation meant to get a lot of attention.
  
  [I agree. See above.]



• But over the long term most of the claims end up nowhere near that amount -- and several are dismissed."
  
  
  
  [There is no doubt that more salvos are coming with some of them being quite shocking. The war has just begun and not all of the ammunition has been used yet.
  
  
  
  Who is more likely to be more successful over the "long term" if this carries on. One need only take a look at the past to figure that out.
  
  
  
  
• Fair and equitable treatment as Moroun has claimed is the most common thread among the treaties, including NAFTA's Chapter 11.
  
  
  
  "It's a concept so broad, any good lawyer can say it's unfair," Cadieux said
  
  
  
  [Unfairness should not be too difficult to prove given the tactics practised against the Bridge Company, especially with the aid given to competitors.
  
  
  
  I wonder if Edgar (aka Eddie) will be dragged into this as a witness?]





• Another major linchpin is "national treatment," he said.
  
  
  
  "You cannot give a better treatment to Canadian citizens. You have to extend the same to (Americans) and Mexicans," he said.
  
  
  
  [It's a variation of what was said above and relatively easy to prove in this case]
  
  
  
  
• A potential exists for one party to endlessly delay the process by being slow to file documents or respond to requests for others, Cadieux said.
  
  
  
  Moroun could also push for a freeze on government actions that impact his business -- such as building the DRIC bridge. "Its equivalent to an injunction and the tribunal can say to the state 'freeze,'" Cadieux said. "These are very hard to get, but from time to time it does happen.
  
  
  
  "What generally happens is to award compensation in damages. Let (governments) build the bridge and we will compensate you later."
  
  
  
  [As I have said above, the long-term favours Moroun. If traffic builds up, then his damages increases don't they. If traffic does not build up, then who needs a DRIC bridge? And if he gets a freeze, it is virtually game-over for Canada then.]



• "Tribunals in the past have said governments have the right to legislate," he said. "The question is of the intent behind what it is doing -- whether it's regulatory valid in all facts."
  
  
  
  [It is another variation of what was said above. This time it is intent. It should not be too difficult to show the bad faith of the Governments in this file.]





• One view that might be argued by the government is on Moroun's endless promise to build a new crossing, Carmody said.
  
  
  
  "He waited and waffled so the governments were forced to build a competitor," he said. "Now (Moroun) is launching a claim to get money out it. That could be another view on what might be happening."
  
  


[Not too likely considering the hundreds of millions of private dollars that Moroun has paid out for the Gateway project and to build the Enhancement Project.]

There is one interesting element in the Star story that was not mentioned that really intrigued me. "Rene Cadieux, an investor state arbitration lawyer in Montreal who handles high-profile arbitration cases involving global treaties" works for the law firm Fasken Martineau DuMoulin. Guy Giorno, who served as chief of staff to former Ontario premier Mike Harris, and who took over as right-hand man to Harper from the NAFTA-gate Chief of Staff, Ian Brodie. Giorno also worked at Faskens.