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Pope & Talbot v. Canada

Type of decisionInterim Award
Date of decision26 June 2000
Tribunal
John Murray Dervaird (President)
Benjamin J. Greenberg
Murray J. Belman
Legal instrumentNorth American Free Trade Agreement
Related decision(s)
Further information

Statements from this decision

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International Investment Treaties (IITs)
International Law Rules Applicable to IITs
Relationship of IITs to Other Sources of International Law
Relationship of an IIT to General Principles of International Law
Estoppel
Definition of estoppel
Law of Treaties
Rules of Interpretation
Interpretation Rules of the Vienna Convention on the Law of Treaties (VCLT) as Reflecting Customary International Law
IITs must be interpreted using the rules of interpretation laid down in the VCLT
Protection of Investors under IITs
Expropriation and Standards of Protection
Expropriation
Scope of Protection
The access to foreign markets by exporting goods produced by the investment is an important part of the “business” of an investment and, thus, can be subject to expropriation according to Article 1110 NAFTA
General Requirements of an Expropriatory Act
Degree of Interference
An expropriation requires a certain degree of interference with the investment; a substantial deprivation of the investor is necessary
Indirect Expropriation / Regulations
Right to Regulate
Regulations can be exercised in a way that would constitute creeping expropriation and a blanket exception for regulatory measures would create a gaping loophole in international protections against expropriation
Measures Tantamount to Expropriation
The phrase “measure tantamount to expropriation” does not broaden the scope of protection of Article 1110 NAFTA beyond the protection against direct and indirect expropriation
Performance Requirements
Granting and maintaining quotas for the exportation of goods is an advantage within the meaning of Article 1106 (3) NAFTA
Article 1106 (1) and (3) NAFTA have to be interpreted restrictively; consequently, as the enumeration of seven requirements in (1) and four in (3) is limiting in each case, three of the seven requirements that may not be imposed or enforced under Article 1106 (1) NAFTA may nonetheless be stipulated as conditions for the receipt of an advantage – these are Articles 1106 (1)(a), (f) and (g) NAFTA
Article 1106 NAFTA not only precludes a state from imposing an obligation to increase exports; its language could admit equally the imposition or enforcement at any given level or percentage of those exports
A tariff-rate export restraint regime is not a requirement for establishing, acquiring, expanding, managing, conducting or operating an investment within the meaning of Article 1106 (1)(a) NAFTA, even though the regime decreases exports
Articles 1106 (1)(e) and (3)(d) NAFTA preclude a host state from restricting sales or services in its territory only; they do not apply to exports
Vienna Convention on the Law of Treaties
Article 31 - General rule of interpretation
Further Problems
Articles 31 et seq. Reflect Customary International Law
IITs must be interpreted using the rules of interpretation laid down in the VCLT
North American Free Trade Agreement
Article 102 – Objectives
NAFTA must be interpreted using the rules of interpretation laid down in the VCLT
Chapter Eleven – Section A – Investment
Article 1106 – Performance Requirements
Granting and maintaining quotas for the exportation of goods is an advantage within the meaning of Article 1106 (3) NAFTA
Article 1106 (1) and (3) NAFTA have to be interpreted restrictively; consequently, as the enumeration of seven requirements in (1) and four in (3) is limiting in each case, three of the seven requirements that may not be imposed or enforced under Article 1106 (1) NAFTA may nonetheless be stipulated as conditions for the receipt of an advantage – these are Articles 1106 (1)(a), (f) and (g) NAFTA
Article 1106 NAFTA not only precludes a state from imposing an obligation to increase exports; its language could admit equally the imposition or enforcement at any given level or percentage of those exports
A tariff-rate export restraint regime is not a requirement for establishing, acquiring, expanding, managing, conducting or operating an investment within the meaning of Article 1106 (1)(a) NAFTA, even though the regime decreases exports
Articles 1106 (1)(e) and (3)(d) NAFTA preclude a host state from restricting sales or services in its territory only; they do not apply to exports
Article 1110 – Expropriation and Compensation
Scope of Protection
The access to foreign markets by exporting goods produced by the investment is an important part of the “business” of an investment and thus can be subject to expropriation according to Article 1110 NAFTA
General Requirements of an Expropriatory Act
Degree of Interference
An expropriation requires a certain degree of interference with the investment; a substantial deprivation of the investor is necessary
Indirect Expropriation / Regulations
Right to Regulate
Regulations can be exercised in a way that would constitute creeping expropriation and a blanket exception for regulatory measures would create a gaping loophole in international protections against expropriation
Measures Tantamount to Expropriation
The phrase “measure tantamount to expropriation” does not broaden the scope of protection of Article 1110 NAFTA beyond the protection against direct and indirect expropriation

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