- Article 1102 (National Treatment);2
- Article 1103 (Most-Favored Nations Treatment);3
- Article 1105 (Minimum Standard of Treatment);4
- Article 1110 (Expropriation and Compensation);5
- Article 1503, paragraph 2 (State Enterprises);6
- Article 1502, paragraph 3(a) (Monopolies and State Enterprises).7
"1. A sum not less than U.S. $160,000,000.00[,] One Hundred Sixty Million United States Dollars in compensation for the damages caused by Canada's failure to accord the Investor the minimum standard of treatment and in expropriating of its medical technology. ...;
2. Costs associated with these proceedings, including all professional fees and disbursements;
3. Pre-award and post-award interest at a rate to be fixed by the Tribunal; and
4. Such further relief that counsel may advise and that the Tribunal may deem appropriate.
5. Tax consequences of the award to maintain the integrity of the award."10
The Disputing Parties agreed on December 4, 2009 that the PCA administer the arbitral proceedings and that the First Meeting of the Tribunal be held at the Peace Palace, The Hague, on March 19, 2010. The Disputing Parties also agreed to pay a deposit of US$ 100,000 each by March 1, 2010. Finally, the Disputing Parties jointly proposed to remunerate the arbitrators as follows:
"a fee of US $3,000.00 per day, or such other fee as may be set forth from time to time in the ICSID Schedule of Fees, for each day of participation in meetings of the Tribunal or 8 hours of work performed in connection with the proceeding, or [ pro rata ]; and (b) subsistence allowances and reimbursement of travel (in business class) and other expenses with[in] the limits set forth in Regulation 14 of the ICSID Administrative and Financial Regulations and the Memorandum on the Fees and Expenses of ICSID Arbitrators."
On March 8, 2010, the Claimants informed the Tribunal that, although they had informed the Tribunal that they had made arrangements to pay the required deposit while the challenge was being resolved, the Claimants' insurer advised them to "halt all activity so that these issues of conflict can be reassessed if need be to other authorities [sic]." In response, the Tribunal informed the Disputing Parties on March 9, 2010 that it would wait for the Deputy Secretary-General to decide on the Claimants' challenge.
"1. The Tribunal issue a termination order pursuant to Article 41(4) of the UNCITRAL Arbitration Rules;
2. The Tribunal issue an award of costs in favour of Canada, requiring the Claimants to pay (a) all of the arbitration costs incurred by the arbitrators and the Permanent Court of Arbitration, to be determined by the Tribunal prior to the termination of the arbitration; (b) Canada©s costs of legal representation and assistance, in the amount of $227,651.69 CAD; and (c) Canada©s disbursements in the amount of $4,667.99 CAD."
III. ARGUMENTS OF THE DISPUTING PARTIES
Article 41, paragraph 1, of the UNCITRAL Arbitration Rules provides:
"The arbitral tribunal, on its establishment, may request each party to deposit an equal amount as an advance for the costs referred to in Article 38, paragraphs (a), (b) and (c)."
Article 38, paragraph (a), concerns the fees of the arbitrators, paragraph (b) relates to the travel and other expenses incurred by the arbitrators, and, finally, paragraph (c) is relevant for the costs of expert advice and of other assistance required by the arbitral tribunal.
"If the required deposits [of costs] are not paid in full within thirty days after the receipt of the request, the arbitral tribunal shall so inform the parties in order that one or another of them may make the required payment. If such payment is not made, the arbitral tribunal may order the suspension or termination of the arbitral proceedings."
"When the arbitral tribunal issues an order for the termination of the arbitral proceedings or reaches an award on agreed terms, it shall fix the costs of arbitration referred to in Article 38 and Article 39, paragraph 1, in the text of that order or award."
Article 39, paragraph 1, provides that
"(t)he fees of the arbitral tribunal shall be reasonable in amount, taking into account the amount in dispute, the complexity of the subject-matter, the time spent by the arbitrators and any other relevant circumstances of the case."
The Parties agreed, on December 4, 2009, that they would propose to the Arbitrators a fee of US$ 3,000 per day or per 8 hours of work performed in connection with the proceeding (or pro rata). This is the standard fee currently applicable under the ICSID Schedule of Fees and the Parties agreed to calculate the Tribunal's fees on this basis. The Tribunal notes that there are arbitral tribunals, including NAFTA tribunals, which apply higher fees. Accordingly, the Tribunal considers fees assessed on this basis to be reasonable.
"(a) The fees of the arbitral tribunal to be stated separately as to each arbitrator and to be fixed by the tribunal itself in accordance with article 39;
(b) The travel and other expenses incurred by the arbitrators;
(c) The costs of expert advice and of other assistance required by the arbitral tribunal;
(d) The travel and other expenses of witnesses to the extent such expenses are approved by the arbitral tribunal;
(e) The costs for legal representation and assistance of the successful party if such costs were claimed during the arbitral proceedings, and only to the extent that the arbitral tribunal determines that the amount of such costs is reasonable;
(f) Any fees and expenses of the appointing authority as well as the expenses of the Secretary-General of the Permanent Court of Arbitration in The Hague."
President Judge Tomka: US$ 13,687.50 for 36.5 hours of work;
Arbitrator Professor Florestal: US$ 6,000 for 16 hours of work;
Arbitrator Mr. Alvarez, Q.C.: US$ 9,562.50 for 25.5 hours of work.
The total costs under Article 38, paragraph (a), thus amount to US$ 29,250.
"1. Except as provided in paragraph 2, the costs of arbitration shall in principle be borne by the unsuccessful party. However, the arbitral tribunal may apportion each of such costs between the parties if it determines that apportionment is reasonable, taking into account the circumstances of the case.
2. With respect to the costs of legal representation and assistance referred to in article 38, paragraph (e), the arbitral tribunal, taking into account the circumstances of the case, shall be free to determine which party shall bear such costs or may apportion such costs between the parties if it determines that apportionment is reasonable."
1. The Arbitral proceedings instituted by Melvin J. Howard, Centurion Health Corp. and Howard Family Trust against the Government of Canada are terminated in accordance with Article 41, paragraph 4, of the UNCITRAL Arbitration Rules on the day of the adoption of the present Order.
2. The Claimants (Melvin J. Howard, Centurion Health Corp. and Howard Family Trust) are jointly and severally liable to reimburse the Respondent (the Government of Canada) the costs of the arbitration proceedings in the amount of US$ 37,905.45 and disbursements in the amount of CAN$ 4,667.99.
3. Accordingly, the Claimants (Melvin J. Howard, Centurion Health Corp. and Howard Family Trust) shall pay to the Respondent (the Government of Canada) the sums of US$ 37,905.45 and of CAN$ 4,667.99 within 30 days of the adoption of this Award.
4. The Respondent's other requests set out in its Submission dated April 29, 2010 - including for the reimbursement of costs of legal fees incurred by lawyers working for the Government of Canada - are dismissed.