|The following abbreviations are adopted in this award:|
|BITs||Bilateral Investment Treaties|
|Basel Convention||convention on the Control of Transboundary Movements of|
|Hazardous Waste and Their Disposal (adopted 1989, in force May 5, 1992, ratified by CANADA August 29, 1992, in force for Canada November 26, 1992)|
|CANADA||The Government of CANADA|
|CCME||Canadian Council of Ministers of the Environment|
|CEPA||Canadian Environmental Protection Act 1995|
|Chem-Security||Chem-Security (Alberta) Ltd.|
|Disputing Parties||SDMI and CANADA|
|FI R.A||The Foreign Investment Review Act|
|GATT||General Agreement on Tariffs and Trade|
|ICSID||International Centre for the Settlement of Investment Disputes|
|MEXICO||The United States of Mexico|
|Myers Canada||S.D. Myers (Canada), Inc.|
|NAAEC||The North American Agreement on Environmental Co-operation|
|NAFTA||The North American Free Trade Agreement|
|Document: 742416:01||-3 -|
|OECD||Organization for Economic Co-operation and Development|
|Parties||CANADA, MEXICO and the USA|
|PCO||Privy Council Office of CANADA|
|Rules||UNCITRAL Arbitration Rules 1976|
|SDMI||S.D. Myers, Inc.|
|TCSA||Toxic Controlled Substances Act|
|Transboundary Agreement||CANADA-USA Transboundary Agreement on Hazardous Waste|
|UNCITRAL||United Nations Commission on International trade Law|
|USEPA||United States Environmental Protection Agency|
|U.S. or USA||The United States of America|
|WTO||The World Trade Organization|
...enquire whether your Government wishes to make any submissions to the Tribunal in this arbitration; and, if so, to establish an appropriate procedure that will ensure the orderly and expeditious future conduct of the proceedings
The Tribunal considers that the general principle to be applied is that, where written direct testimony is submitted with a memorial as evidence on which the relevant party relies, the witness in question should be offered for oral examination at the witness hearings unless the opposing party states that his or her presence is not required. Where a party fails or refuses to produce any such witness the written testimony will not be ruled inadmissible, but the Tribunal is likely to attach little or no weight to the written testimony concerned to the extent that it is not corroborated by other documentary or witness evidence. However, exceptional circumstances may justify exceptional measures, especially where the Tribunal itself wishes to have the benefit of hearing a particular witness ‘live Applying this principle to the present circumstances the Tribunal directs as follows:...
Recognizing that the close trading relationship and the long common border between the United States and CANADA engender opportunities for a generator of hazardous waste to benefit from using the nearest appropriate disposal facility, which may involve the transboundary shipment of hazardous waste:
It is still the position of the government that the handling of PCBs should be done in Canada by Canadians [emphasis added]
This may have reflected a movement from the 1989 policy, referred to above, that CANADA’S policy (in line with the Basel Convention), was simply that disposal of PCBs should take place in Canada.
• whether the enforcement discretion fully complied with U.S. law;
• whether exports of PCB wastes to the U.S., a non-party, would comply with the Basel Convention;
• whether PCBs would be disposed of in the U.S. in an environmentally sound manner;
• compliance with CANADA ’s 1989 policy to destroy Canadian PCBs in CANADA;
• the long-term viability of domestic PCB disposal facilities; and
• what would happen in the event that U.S. disposal facilities subsequently became unavailable, or if the U.S. border was closed again, as eventually happened.
I am writing to reaffirm your commitment to assist the Canadian hazardous waste industry by removing the exemption which allows export of PCB waste to the United States and to underline the urgency of the situation currently facing the industry...
You should be aware that EPA estimates that it will take only approximately 30 days to import the entire Canadian PCB inventory.
You will recall that we stressed the fact that the inventory is a finite resource which is vital to our industry’s growth and our ability to provide capital for the export of our technology. Any delay in the Canadian response to the EPA action could have serious repercussions.
INTERIM ORDER RESPECTING THE PCB WASTE EXPORT REGULATIONS
WHEREAS PCB’s are substances specified on the list of Toxic Substances in Schedule 1 to the Canadian Environmental Protection Act;
AND WHEREAS the Minister of the Environment and the Minister of National Health believe that PCBs are not adequately regulated and that immediate action is required to deal with a significant danger to the environment and to human life and health;
THEREFORE, the Minister of the Environment, pursuant to subsection 35(1) of the Canadian Environmental Protection Act, hereby makes the annexed Interim Order respecting the export of PCB wastes.
Ottawa, in the National Capital Region, November 20, 1995
The annexed Interim Order stated as follows:
INTERIM ORDER RESPECTING THE PCB WASTE EXPORT REGULATIONS
This Order may be cited as the PC8 Waste Export Interim Order
Section 4 of the PCB Waste Export Regulations is replaced by the following:
"4. Section 3 does not apply to a person who exports:
(a) to the United States, any PCB waste from United States agencies operating in CANADA where the Environmental Protection Agency has given prior consent in respect of the export or
(b) any product that is in good working order and has a capacitor that contains not more than 500 9 of PCB and is an Integral part of the product where the capacitor is necessary for the operation of the producer.
(This note is not part of the Order)
On becoming aware of information indicating that the U.S. Environmental Protection Agency is allowing PCB imports into the U.S. from CANADA for destruction, the Minister of the Environment made this Interim Order to Amend the PCB Waste Export Regulations on November 20, 1995. The purpose of the Interim Order is to ensure that Canadian PCB Wastes are managed in an environmentally sound manner in CANADA and to prevent any possible significant danger to the environment or to human life or health.
ORDER IN COUNCIL DEPARTMENT OF THE ENVIRONMENT
Interim Order Respecting the PCB Waste Export Regulations
P.C. 1995 2013November 28, 1995
Whereas, pursuant to subsection 35(1) of the Canadian Environmental Protection Act, the Minister of the Environment, on November 20, 1995, made the annexed Interim Order respecting the PCB Waste Export Regulations to deal with a significant danger to the environment or to human life or health;
Whereas the Minister of the Environment has, within 24 hours after making the Order, offered to consult the governments of all the affected provinces to determine whether they are prepared to take sufficient action to deal with the significant danger;
Whereas the Minister of the Environment has consulted with other Ministers of the Crown in right of CANADA to determine whether any action can be taken under any other Act of Parliament to deal with the significant danger;
And whereas less than 14 days have elapsed since the Order was made;
Therefore, His Excellency the Governor General in Council on the recommendation of the Minister of the Environment pursuant to subsection 35(3) of the Canadian Environmental Protection Act, is pleased hereby to approve the annexed Interim Order respecting the PCB Waste Export Regulations, made by the Minister of the Environment on November 20, 1995.
INTERIM ORDER RESPECTING THE PCB WASTE EXPORT REGULATIONS
Whereas PCBs are substances specified on the List of Toxic Substances in Schedule 1 to the Canadian Environmental Protection Act;
And whereas the Minister of the Environment and the Minister of the National Health and Welfare believe that PCBs are not adequately regulated and that immediate action is required to deal with a significant danger to the environment and to human life and health;
Therefore, the Minister of the Environment pursuant to subsection 35(1) of the Canadian Environmental Protection Act, hereby makes the annexed Interim Order respecting the export of PCB wastes.
Ottawa, in the National Capital Region, November 20, 1995
Minister of the Environment
WHEREAS, on November 20, 1995, the Minister of the Environment made, pursuant to subsection 35(1) of the Canadian Environmental Protection Act, the PCB Waste Export Interim Order.
WHEREAS, by Order in Council P.C. 1995 2013 of November 28, 1995 the Governor in Council approved the Interim Order pursuant to subsection 35(3) of the Act;
AND WHEREAS, pursuant to subsection 35(5) of the Act, the Minister of the Environment and the Minister of National Health and Welfare within ninety days after approval of the Interim Order by the Governor in Council, recommended to the Governor in Council that the PM Waste Export Regulations be amended under section 34 of the Act to have the same effect as the Interim Order,
THEREFORE HIS EXCELLENCY THE GOVERNOR GENERAL IN COUNCIL on the recommendation of the Minister of the Environment and the Minister of National Health and Welfare pursuant to subsection 35(5) of the Canadian Environmental Protection Act is pleased hereby to accept the recommendation of the Minister of the Environment and the Minister of National Health and Welfare that the PCB Waste Export Regulations be amended under section 34 of the Act to have the same effect as the PCB Wage Export Interim Order.
i Lost sales and profits since the date of introduction of the measures;
ii Loss of its investment in its joint venture with Myers CANADA
iii The cost of reducing operations in CANADA;
iv Fees and expenses of professional services incurred to defend itself NAFTA inconsistent measure.
v Tax consequences of the award to maintain the integrity of the award.
• Our domestic destruction capacity, either short term or long term, has seen limited development;
• CANADA ’s position at Basel Convention meetings has been to support the use of regional capacity;
• The U.S. EPA is considering a change to their PCB policy and may permit selected Canadian PCB imports;
• The U.S. ban has effectively allowed CANADA to restrict PCB shipments to the U.S. in the absence of authority in CEP A to do so.11
PCBs destroyed in either country is positive for the environment. PCB owners may have lower destruction costs due to competition and more incentive to destroy PCBs, but offset by liability insurance costs if U.S. option is selected.
Interim orders are design [sic] to provide immediate action to resolve ‘significant danger ’ to the environment and/or human health. It can be argued that the opening of the U.S. border poses no such significant danger.25
S.D. Myers will certainly seek redress through NAFTA intervention, since they have invested/lobbied heavily to get the border opened. The company can be expected to object formally to any action taken under CEP A to close the border;
It will be difficult to argue that the transportation of PCBs to the U.S. A. poses a greater danger than transporting PCBs to Swan Hills, Alberta.
Industry Canada and Foreign Affairs are likely to object to the closing of the Canadian border because it will appear to be an unjustifiable restriction on international trade.
Current practice of returning U.S. owned PCBs in Canada to their originators in the U.S. will be jeopardized if the Canadian border is completely shut. An ‘escape hatch ’ will have to be provided.
(i) We could ask an (independent?) consultant to assess that the disposal facilities in the U.S. that would be handling/disposing of Canadian PCB wastes in an environmentally acceptable way. U.S. EPA did this before accepting stablex (??);
(ii) We need to satisfy ourselves that U.S. consents are all adequate vis-a-vis our export-import of hazardous waste (eihw) regulations;26
Export of PCB waste from CANADA to the U.S. is consistent with the CANADA-U.S.A. Agreement on the Transboundary Movement of Hazardous Waste. Furthermore, the Canadian position at the Third Conference of the parties to the Basel Convention was to use facilities in other OECD countries where we could be sure that hazardous wastes would be managed in an environmentally sound manner for final disposal.28
We are meeting our obligations under the Basel Convention to dispose of our own PCBs. And this kind of action was supported by provincial and territorial environment ministers when they met in Charlottetown in 1989. The handling of PCBs should be done in Canada by Canadians. We have to take care of our own problems.
(a) promote conditions of fair competition in the free trade area;
(c) increase substantially investment opportunities in the territories of the Parties;
(d) provide adequate and effective protection and enforcement of intellectual property rights in each Party’s territory;
(e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and
(f) establish a framework for further trilateral, regional and multilateral co-operation to expand and enhance the benefits of this Agreement.
A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose.
The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) Any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;
(b) Any instrument which was made by one or more of the parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
Recognizing that the close trading relationship and the long common border between the United States and Canada engender opportunities for a generator of hazardous waste to benefit from using the nearest appropriate disposal facilities, which may involve the transboundary shipment of hazardous waste.
Recognizing that the most effective and efficient means of achieving environmentally sound management procedures for hazardous waste crossing the United States - Canada border is through cooperative efforts and controlled regulatory schemes.
The parties shall permit the export, import and transit of hazardous waste across their common border for treatment, storage or disposal pursuant to the terms of their domestic laws, regulations and administration practices, and the provisions of this agreement.
The parties will cooperate in monitoring and spot-checking shipments of hazardous waste to ensure, to the extent possible, that such shipments conform to the requirement of the applicable legislation and of this Agreement.
To the extent that any implementing regulations are necessary to comply with this Agreement, the parties will act expeditiously to issue such regulations consistent with domestic law. Pending such issuance, the parties will make their best efforts to provide notification in accordance with this Agreement where current regulatory authority is insufficient. The parties will provide each other with a diplomatic note upon the issuance and the coming into effect of any such regulation.
• reduce the production of hazardous waste (Article 4(2)(a));
• ensure the availability of adequate disposal facilities, to the extent possible, within its own boundaries (Article 4(2)(b));
• ensure that the transboundary movement of hazardous wastes and other waste is reduced to the minimum consistent with the environmentally sound and efficient management of such wastes and is conducted in a manner which will protect human health and the environment against the adverse effects which may result from such movement (Article 4(2)(d)).
Recognizing the right of each Party to establish its own levels of domestic environmental protection and environmental development policies and priorities, and to adopt or modify accordingly its environmental laws and regulations, each Party shall ensure that its laws and regulations provide for high levels of environmental protection and shall strive to continue to improve those laws and regulations.
• Parties have the right to establish high levels of environmental protection. They are not obliged to compromise their standards merely to satisfy the political or economic interests of other states;
• Parties should avoid creating distortions to trade;
• environmental protection and economic development can and should be mutually supportive.
(a) an enterprise;
(b) an equity security of an enterprise;
(c) a debt security of an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the debt security is at least three years,
but does not include a debt security, regardless of original maturity, of a state enterprise;
(d) a loan to an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the loan is at least three years,
but does not include a loan, regardless of original maturity, to a state enterprise;
(e) an interest in an enterprise that entitles the owner to share in income or profits of the enterprise;
(f) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution, other than a debt security or a loan excluded from subparagraph (c) or (d);
(g) real estate or other property, tangible or intangible, acquired in the expectation or used for the purpose of economic benefit or other business purposes; and
(h) interests arising from the commitment of capital or other resources in the territory of a Party to economic activity in such territory, such as under
(i) contracts involving the presence of an investor’s property in the territory of the Party, including turnkey or construction contracts, or concessions, or
(ii) contracts where remuneration depends substantially on the production, revenues or profits of an enterprise;
but an investment does not mean,
(i) claims to money that arise solely from
(i) commerdal contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of another Party, or
(ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by subparagraph (d); or
(j) any other claims to money,
that do not involve the kinds of interests set out in subparagraphs
(a) through (h);
investment of an investor of a Party means an investor other than an investor of a Party, that seeks to make, is making or had made an investment; "
[emphasis in original]
"Q. Now, just to return for a moment, and I understand it was in your capacity as an official with SDMI that you were involved in the operations in Australia, Saudi Arabia and MEXICO. And I wanted to clarify from what perspective you were operating in this sense: Were you providing direction as the Chief Executive of SDMI or were you providing direction as an officer of those companies in those locations?
A. Okay. Here’s how we operate. S.D. Myers was the big portion of our business. We were trying to expand into other countries, and so we would set up these other companies because it’s better to have a local presence in these companies countries. I’m sorry.
Specifically, I think it was my position as President of S.D. Myers, Inc. that I exercised control over all these other places because all these other places were basically just an offshoot or an outpost of S.D. Myers, Inc. to do business around the world.
Q. Now, but in each of those cases, they were corporations with their own directors and their own shareholders?
Q. And their own corporate officers?
Q. Were you a corporate officer of any of those concerns in Australia?
A. Yeah. Yes.
Q. And the same is true of Saudi Arabia and MEXICO?
A. Yes, yes.
Q. All right. Now you also told us, I believe it was in connection with MEXICO, but it may have been in connection with Saudi Arabia, as well, that you signed some papers
Q. in respect of those operations.
Were those papers that related to your arrangement with individuals within those companies or those countries, rather, for the delivery of PCB disposal services?
A. No. What it would have been was we had 51 per cent. My brothers and I had 51 per cent of the operation in MEXICO and the Mexican owner had 49 per cent. So we had a document that laid out what he was going to provide and what we were going to provide.
Q. And that’s what you would characterize as a joint venture, a joint venture agreement?
Q. Did you have a similar agreement in respect of Australia?
A. At the beginning, because we were dealing with a guy named Neil Richter and I forget the other guy’s name. So we had something. Then we bought them out and then basically there wouldn’t have been an agreement because it was just all within the family.
Q. So, in fact, in Australia, you did as well have
A. To begin with.
Q. a joint venture agreement?
A. For a year or two.
Q. All right. And that document set out the respective responsibilities and obligations of the participants?
Q. And indicated the extent to which they would share in the success of the venture?
Q. Now, in respect of Myers CANADA, was there such a document ever signed by you or anybody else for your company?
A. Because it was all in the family, no. "42
Scope and Coverage
This Chapter applies to measures adopted or maintained by a Party relating to:
(a) investors of another Party;
(b) investments of investors of another Party in the territory of the Party; and
(c) with respect to Articles 1106 and 1114, all investments in the territory of the Party.
Each Party shall accord to investors of another Party treatment no less favorable than it accords, in like circumstances, to its own investors, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
Each Party shall accord to investments of investors of another Party treatment no less favorable than it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a state or a province, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that state or province to investors, and to the investments of investors, or the Party of which it forms a part.43
[the interpretation and application of "like "] is a discretionary decision that must be made in considering the various characteristics of products in individual cases. No one approach to exercising judgment will be appropriate for all cases. The criteria in [an earlier case], Border Tax Adjustments should be examined, but there can be no one precise and absolute definition of what is "like ". The concept of "likeness " is a relative one that evokes the image of an accordion. The accordion of "likeness " stretches and squeezes in different places as different provisions of the WTO Agreement are applied. The width of the accordion in any one of those places must be determined by the particular provision in which the term "like " is encountered as well as by the context and the circumstances that prevail in any given case to which the provisions may apply.
• states have the right to establish high levels of environmental protection. They are not obliged to compromise their standards merely to satisfy the political or economic interests of other states;
• states should avoid creating distortions to trade;
• environmental protection and economic development can and should be mutually supportive.
As regards the expression ‘in like situations ’, the comparison between foreign-controlled enterprises is only valid if it is made between firms operating in the same sector. More general considerations, such as the policy objectives of Member countries could be taken into account to define the circumstances in which comparison between foreign-controlled and domestic enterprises is permissible inasmuch as those objectives are not contrary to the principle of national treatment.
• whether the practical effect of the measure is to create a disproportionate benefit for nationals over non nationals;
• whether the measure, on its face, appears to favour its nationals over non-nationals who are protected by the relevant treaty.
Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.
It not infrequently happens that under the rules of international law applied to controversies of an international aspect a nation is required to accord to aliens broader and more liberal treatment than it accords to its own citizens under its municipal laws... The citizens of a nation may enjoy many rights which are withheld from aliens, and conversely, under international law, aliens may enjoy rights and remedies which the nation does not accord to its own citizens.45
...it is submitted that the right to fair and equitable treatment goes much further than the right to most-favored-nation and to national treatment....so general a provision is likely to be almost sufficient to cover all conceivable cases, and it may well be that provisions of the Agreements affording substantive protection are not more than examples of specific instances of this overriding duty.46
No party may imposed or enforce any of the following requirements, or enforce any commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or a non Party in its territory:
(b) to achieve a given level or percentage of domestic content
(c) to purchase, use or accord a preference to goods produced or services provided in its territory or to purchase goods or services from persons in its territory;
In Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, the Panel summarized the line of WTO cases as follows, at paragraph 738 of its report:50
It is now well established that the WTO Agreement is a “Single Undertaking” and therefore all WTO obligations are generally cumulative and Members must comply with all of them simultaneously unless there is a formal “conflict” between them.
The WTO Panel in the Korean Dairy Products case adopted the definition of “conflict” in several earlier cases, including the report of the Appellate Body of the WTO in Guatemala Cement, at paragraph 65.51 The latter case suggests that provisions of agreements in the WTO system should be read as complementary unless there were a conflict in the sense that adherence to one provision would cause a violation of the other.
The Dispute Settling Panel, at footnote 422 to the quoted passage, elaborates:
The principle of interpretation against conflict has been confirmed by the Appellate Body in Canada - Certain Measures Concerning Periodicals adopted on 30 July 1997, WT/DS31/AB/R, (“Canada Periodicals“), page 19; in EC Bananas, paras. 219 222; in Guatemala Cement, para. 65; and by the panel in Indonesia - Certain Measures Affecting the Automobile Industry, adopted 23 July 1998, WT/DS54, 55, 59 and 64/R (not appealed) (“Indonesia Autos”), para. 14.28. For a definition of conflict, see for instance the Appellate Body statement in Guatemala Cement, para. 65 or the Panel Report on Indonesia Autos, para. 14.28
The view that different chapters of the NAFTA can overlap and that the rights it provides can be cumulative except in cases of conflict, was accepted by the decision of the Arbitral Tribunal in Pope and Talbot. The reasoning in the case is sound and compelling. There is no reason why a measure which concerns goods (Chapter 3) cannot be a measure relating to an investor or an investment (Chapter 11).
Chapter 3 deals with items of trade – namely, “goods”. A measure that relates to goods can relate to those who are involved in the trade of those goods and who have made investments concerning them. The thrust of a dispute under Chapter 11 is that the impugned measure relates to an investor or an investment. If it were to do so, it would be covered by Chapter 11 unless excluded. It if were not to do so, it would not be covered.
On the facts of this case there is a clear causal link between the Interim Order and the Final Order and the activities of SDMI. It is common ground that the Orders were passed in response to the Enforcement Discretion granted to SDMI by the US EPA. It was designed to prevent the export of PCBs for processing by SDMI. Insofar as SDMI can otherwise establish the requirements for it to be classified as an investor and can show that the measure related to it or its investment, Chapter 11 is engaged.
CANADA argued that Chapter 3 is inconsistent with Chapter 11 on the facts of this case. It contended that even if the export ban appears to contravene Chapter 11, it would also be an export ban with respect to goods and controlled by Chapter 3. CANADA appears to contend that insofar as the measure concerns the export of goods it was driven by proper environmental concerns. That proposition has been rejected by the Tribunal, but the contention also is not sustainable on a proper interpretation of the NAFTA.
The NAFTA Parties properly wanted to ensure that Chapter 11 could not be used to impugn government measures that are protected by other specific aspects of the NAFTA, but the Orders are not protected by either Article XX(b) (Human, Animal or Plant Life) or Article XX(e) (Conservation) of GATT. The measures taken by CANADA would not satisfy the requirements of the chapeau of Article XX (General Exceptions). CANADA could have satisfied any health or environmental concerns it had in a manner that did not impair open trade. As CANADA implicitly agreed when it subsequently lifted the ban, it would have better served the cause of a safe environment if it had kept the Canadian border open, but put in place safeguards.
As a first stage of the proceedings the Tribunal will determine (in a partial award) liability issues and issues as to the principles on which damages (if any) should be awarded, leaving the calculation of the quantification of such damages, if any, to a second stage.
1110(1). No Party may directly or indirectly nationalize or expropriate an investment of an investor or another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation "), except:
(a) For a public purpose;
(b) On a non-discriminatory basis;
(c) In accordance with due process of law and Article 1105(1); and
(d) On payment of compensation in accordance with paragraphs 2 through 6.
1110(2) Compensation shall be equivalent to the firm market value of the expropriated investment immediately before the expropriation took place ("date of expropriation ") and shall not reflect any change in value occurring because the intended expropriation had become known earlier. Valuation criteria shall include going concern value, asset value, including declared tax value of tangible property, and other criteria, as appropriate, to determine fair market value.
The essential principle contained in the actual notion of an illegal act is that reparation must, as far as possible, wipe-out all the consequences of the illegal act and reestablish the situation which would, in all probability, have existed if that act had not been committed. Restitution in kind or, if this is not possible, payment of a sum corresponding to the value which a restitution in kind would bear; the award, if need be, of damages for loss sustained which would not be covered by restitution in kind or payment in place of it - such are the principles which should serve to determine the amount of compensation for an act contrary to international law.
• the burden is on SDMI to prove the quantum of the losses in respect of which it puts forward its claims;
• compensation is payable only in respect of harm that is proved to have a sufficient causal link with the specific NAFTA provision that has been breached; the economic losses claimed by SDMI must be proved to be those that have arisen from a breach of the NAFTA, and not from other causes;
• damages for breach of any one NAFTA provision can take into account any damages already awarded under a breach of another NAFTA provision; there must be no "double recovery".
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