April 18, 2016 Practice Points

Mesa Fails to Establish Renewable Energy Discrimination Claims Against Canada

By Karl Bayer

A Texas-based renewable energy company has reportedly lost a North American Free Trade Agreement (NAFTA) claim filed against the Canadian government following arbitral proceedings. In Mesa Power Group LLC v. Government of Canada, No. 2012-17, Mesa accused the government of Ontario, Canada of engaging in discrimination against the private wind-energy company that was founded by Texas oil tycoon T. Boone Pickens. In the case, Mesa claimed the provincial government gave preference to other energy companies following private meetings with Ontario officials. As a result, Mesa sought over $600 million in damages from the Canadian government related to several wind-energy projects Mesa intended to build in Ontario that never came to fruition. 

According to the U.S. Department of State,

Mesa Power Group, LLC, a renewable energy company incorporated in Delaware, filed a NAFTA Chapter Eleven claim against the Government of Canada in October 2011, alleging arbitrary and unfair application of various government measures related to the regulation and production of renewable energy in Ontario. Claimant alleges that Canada has violated various NAFTA provisions, including Article 1102 (national treatment), Article 1103 (most favored nation treatment), Article 1105 (minimum standard of treatment), and Article 1106 (prohibition on performance requirements).

In October 2014, Mesa’s claims against Canada were heard by a NAFTA arbitration tribunal using the rules of the United Nations Commission on International Trade Law (UNCITRAL) and organized by the Permanent Court of Arbitration. Earlier this month, the arbitration panel ruled in favor of the Canadian government and ordered Mesa to pay Canada nearly $3 million in legal fees.

Although the tribunal’s written decision is not yet available, the entirety of the arbitral proceedings may be viewed online.

Keywords: alternative dispute resolution, adr, litigation, NAFTA, UNCITRAL, Canada, energy, discrimination

Karl Bayer is the founder of Karl Bayer Dispute Resolution in Austin, Texas.

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