1 The members of the Tribunal were Prof. J. Martin Hunter (president), Edward C. Chiasson, Q.C., and Prof. Bryan P. Schwartz.

2 North American Free Trade Agreement, Dec. 17, 1992, Can.-Mex.-U.S., 107 Stat. 2066,32 ILM 289 & 605 (1993).

3 UNCITRAL Arbitration Rules, Apr. 28, 1976, 15 ILM 701 (1976), available at <http://www.uncitral.org>.

4 Myers, S.D. , Inc. v. Canada, Partial Award (Nov. 13, 2000) (liability), 40 ILM 1408, paras. 1-2, 89-90,109 (2001)Google Scholar

[hereinafter SDMI award].

5 Id., para. 92.

6 Id., para. 93.

7 Id., paras. 113,118.

8 Id., paras. 164, 173, 177; see also id., paras. 165-66, 170, 176, 179.

9 Id., paras. 123-26, 184.

10 Id., paras. 169, 171,185.

11 Id., paras. 127, 162.

12 Id., paras. 6,145.

13 Id., para. 158.

14 Id., paras. 146-47

15 Id., para. ia., para. 227.

16 Id., para. 229.

17 NAFTA, supra note 2, Art. 1139 (emphasis added).

18 SDMI award, supra note 4, paras. 229, 231.

19 Id para 195

20 Id., para. 194.

21 Id., para. 297.

22 Id., paras. 299-300

23 Id., para. 281.

24 Id., paras. 282-84.

25 Id., paras. 276-78.

26 NAFTA, supra note 2, Art. 1102(1).

27 SDMI award, supra note 4, paras. 243-48. For the North American Agreement on Environmental Cooperation, Sept. 14, 1993, Can.-Mex.-U.S., see 32 ILM 1480 (1993). For the OECD Declaration on International Investment and Multilateral Enterprises June 21, 1976 (amended 1991), see OECD Guidelines for Multilateral Enterprises: Ministerial Booklet (June 2000), available at <http://www.oecd.org>.

28 SDMI award, supra note 4, para. 250.

29 Id., paras. 195,251.

30 Id., paras. 252, 254.

31 Id., para. 193.

32 Id., para. 194.

33 Id., para. 256.

34 Id., para. 258.

35 Id., para. 261.

36 Id., para. 263.

37 Id., para. 264.

38 Id., para. 266.

39 Id., paras. 306, 308.

40 Id., paras. 311-15.

41 Id., para. 308.

42 S.D. Myers, Inc. v. Canada, Procedural Order No. 18 (Feb. 26, 2001), paras. 1,13, at <http://www.dfait-maeci. gc.ca/tna-nac/gov-en.asp> [hereinafter SDMI P.O. 18]; see also Myers, S.D. , Inc. v. Canada, Second Partial Award (Oct 21, 2002)Google Scholar (damages), para. 4 & n.3, at id. [hereinafter SDMI damages award] (indicating that Canada defended the claim on the merits, but “later categorised” the “threshold investor question” as a “jurisdiction[al] issue”).

43 SDMI P.O. 18, supra note 42, para. 11.

44 SDMI damages award, supra note 42, paras. 173,179, 181, 261-62, 268-69, 271, 301.

45 S.D. Myers, Inc. v. Canada, Final Award (Dec. 30,2002), paras. 6, 53-54, at http://www.dfait-maeci.gc.ca/tnanac/gov-en.asp> [hereinafter SDMI final award].

46 See Attorney Gen. of Can. v. S.D. Myers, Inc., Order (Fed. Ct. July 4, 2003), at id. (scheduling the hearing for Dec. 1, 2003).

47 See Attorney Gen. of Can. v. S.D. Myers, Inc., [2004] F.C. 38, at <http://decisions.fct-cf.gc.ca/fct/2004/2004fc38.html> [hereinafter SDMI judgment].

48 Id., para. 39; see also id., paras. 35-38. The Commercial Arbitration Code applies to claims brought against the government of Canada and specifically defines “commercial arbitration” to include Chapter 11 proceedings. See Charles, H. Brower II, Investor-State Disputes Under NAFTA: The Empire Strikes Back, 40 Colum. J. Transnat’l L. 43, 62 n.108, 64, 74 (2001)Google Scholar. Therefore, in contrast to provincial arbitration statutes, it expressly preempts the argument that Chapter 11 proceedings fall outside the scope of commercial arbitration. See Mexico v. Metalclad Corp., Reasons for Judgment, 2001 B.C.S.C. 664, paras. 39-49, at <http://www.courts.gov.bc.ca>, summarized in95 AJIL 910 (2001) [hereinafter Metalclad judgment] (considering, but rejecting, the argument that Chapter 11 proceedings do not qualify as “commercial” arbitrations and therefore fall outside the scope of British Columbia’s International Commercial Arbitration Act).

49 SDMI judgment, supra note 47, para. 42.

50 Id., paras. 46-52.

51 Id., para. 47.

52 Id., para. 49.

53 See S.D. Myers, Inc. v. Canada, Statement of Defense (June 18, 1999), paras. 2(a), 37-38, at <http://www.dfakmaeci.gc.ca/tna-nac/gov-en.asp> [hereinafter statement of defense].

54 SDMI judgment, supra note 47, paras. 48-49, 51-53.

55 Id., paras. 58-61.

56 Id., paras. 62-70.

57 Id., para. 71.

58 Id., para. 45.

59 Id., paras. 72, 74.

60 Id., para. 74.

61 Id.

62 Id., para. 55.

63 See Howard, M. Holtzmann & Joseph, E. Neuhaus, The UNCITRAL Model Law on International Commercial Arbitration 483 (1989)Google Scholar (observing that, under the model law, parties cannot waive arguments about public policy).

64 SDMI judgment, supra note 47, para. 55.

65 Id., para. 56.

66 Id., para. 77.

67 UNCITRAL Model Law on International Commercial Arbitration June 21, 1985, 24 ILM 1302 (1985)Google Scholar, available at <http://www.uncitral.org> [hereinafter Model Law]; Metalclad judgment, supra note 48, para. 42 (observing that the “[M]odel [L]aw has been adopted in large part in all Canadian jurisdictions”).

68 See supra notes 23-25, 35-36 and corresponding text.

69 See supra notes 27-28 and corresponding text.

70 See Feldman v. Mexico, Award (Dec. 16, 2002), 42 ILM 625, paras. 176-77,181-82 (2003) [hereinafter Feldman award] (determining that the foreign investor established a prima facie case based on “admittedly limited” evidence that it had received less favorable treatment than a domestic investor, and also emphasizing the host state’s failure to establish any “rational justification” for the difference); Pope & Talbot, Inc. v. Canada, Award on the Merits of Phase 2 (Apr. 10, 2001), paras. 78-79, at <http://www.dfait-maeci.gc.ca/tna-nac/gov-en.asp> [hereinafter Pope & Talbot Phase 2 award] (holding that a foreign investor may establish a prima facie case for the denial of national treatment by showing that the host state has treated it differently from a domestic investor in the same business or economic sector, but that the state may justify the difference by showing that it bears a reasonable relationship to nondiscriminatory and rational policies).

71 See, e.g., Methanex Corp. v. United States, Award on Jurisdiction (Aug. 7, 2002), paras. 12, 15, 35-38, at <http://www.state.gov/s/l/c5818.htm> (describing the investor’s motion, shortly after the SDMI award, to add a claim for the denial of national treatment).

72 See Charles, H. Brower II, NAFTA’s Investment Chapter: Initial Thoughts About Second-Generation Rights, 36 Vand. J. Transnat’l L. 1533, 1562 (2003)Google Scholar (observing that “Chapter 11 tribunals have shown great reluctance to impose absolute limits on state action, but fewer inhibitions in demanding respect for principles of equal treatment”) Joel, C. Beauvais, Student Article, Regulatory Expropriations Under NAFTA: Emerging Principles and Lingering Doubts, 10 N.Y.U. Envtl. L.J. 245, 285–86 (2002)Google Scholar (concluding that national treatment claims, “by comparison, have had greater overall success” than expropriation claims).

73 SDMI award, supra note 4, para. 252.

74 Id., para. 254.

75 Id., para. 252.

76 See Pope & Talbot Phase 2 award, supra note 70, paras. 43-45, 64-66 (recording Canada’s arguments to this effect).

77 See SDMI award, supra note 4, para. 193, quoted in text at note 31 supra; Pope & Talbot Phase 2 award, supra note 70, para. 66 n.59 (arguing that “once the tribunal found any significant benefit for nationals over non-nationals, the predicate for a violation of Article 1102 was satisfied”) (emphasis added).

78 See Feldman award, supra note 70, para. 170 (defining discrimination in terms of “unreasonable distinctions” not justified by the situation); Pope & Talbot Phase 2 award, supra note 70, paras. 78-79 (indicating that any difference in treatment presumptively establishes a violation, thereby triggering the host state’s obligation to justify the difference).

79 See supra notes 39-41 and corresponding text.

80 See Metalclad Corp. v. Mexico, Award (Aug, 30, 2000), 40 ILM 36, paras. 13,119-21 (2001) (declining to consider future profits as an element of the fair market value of a start-up enterprise belonging to a publicly traded company).

81 See id., para. 120 (stating that future profits cannot be used to establish the fair market value of an enterprise that “has not operated for a sufficiently long time to establish a performance record,” and suggesting that an investment must operate for at least two or three years to generate its own goodwill).

82 See SDMI damages award, supra note 42, paras. 94, 100, 173-74.

83 See id., paras. 173, 179, 181, 261-62, 268-69, 271 (assessing SDMI’s lost profits in the light of its long history of profitable operations in other markets).

84 See Mondev Int’l Ltd. v. United States, Award (Oct. 11, 2002), 42 ILM 85, para. 71 (2003) (“There is a distinction between compensation offered or provided for a lawful taking of property and damages for the wrongful seizure of property.”).

85 Compare SDMI award, supra note 4, para. 308 & n.53 (declaring that the larger recovery for unlawful conduct does not have a punitive character), with SDMI damages award, supra note 42, para. 149 (declining to increase the scope of recoverable damages based on the egregiousness of the respondent’s conduct because that would constitute an award of punitive damages specifically prohibited by Chapter 11), and SDMI final award, supra note 45, paras. 43-45 (declining to consider the conduct giving rise to liability when apportioning costs because that would inject an improper element of punishment).

86 See supra notes 69-72 and corresponding text.

87 See supra notes 51-54 and corresponding text.

88 See Holtzmann & Neuhaus, supra note 63, at 484; Michael, J. Mustill & Stewart, C. Boyd, Commercial Arbitration 363 (2ded. Companion Vol. 2001)Google Scholar; Redfern, Alan & Hunter, Martin, Law and Practice of International Commercial Arbitration 272,274,421–22 (3d ed. 1999)Google Scholar.

89 Statement of defense, supra note 53, paras. 2(a), 37-38.

90 See SDMI award, supra note 4, paras. 222-32, 289-300; SDMI damages award, supra note 42, paras. 102-39.

91 See SDMI judgment, supra note 47, para. 53 (criticizing the respondent for not using the proper “term of art”).

92 See Metalclad judgment, supra note 48, para. 75 (suggesting that, by raising general arguments about the incorporation of principles of transparency into Article 1105 (1), Mexico had “raised a sufficient objection” to prevent waiver of its right to make jurisdictional arguments on the subject during judicial review).

93 See, e.g., Mondev, supra note 84, para. 86 (“International law does not place emphasis on merely formal considerations, nor does it require new proceedings to be commenced where a merely procedural defect is involved”); Methanex, supra note 71, para. 92 (“[T]he jurisdictional challenge is technical and capable of being cured . , . “ ); SDMI award, supra note 4, para. 229, quoted in text at note 16 supra, Pope & Talbot, Inc. v. Canada, Award Concerning the “Super Fee” (Aug. 7, 2000), para. 26, at <http://www.naftalaw.org> (“ [T] he Tribunal has concluded in its previous rulings that . . . strict adherence to the letter of... NAFTA articles [111 6-1122] is not necessarily a precondition to arbitrability...”); Azinian v. Mexico, Award (Nov. 1, 1999), 39 ILM 537, para. 101 (2000) (“The Arbitral Tribunal does not. . . wish to create the impression that the Claimants fail on account of an improperly pleaded case.”); Ethyl Corp. v. Canada, Award on Jurisdiction (June 24, 1998), 38 ILM 708, para. 85 (1999) (“Clearly a dismissal of the claim [for minor procedural defects] at this juncture would disserve, rather than serve, the object and purpose of NAFTA.”).

94 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, Mar. 18, 1965, Art 25(1), 17 UST 1270,575 UNTS 159 (“The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment...”) (emphasis added). But see Christoph, H. Schreuer, The ICSID Convention: a Commentary 135 (2001)Google Scholar (explaining that ICSID’s Additional Facility offers “arbitration proceedings for the settlement of legal disputes that are not within the jurisdiction of the Centre because they do not arise directly out of an investment”).

95 See Barcelona Traction, Light & Power Co., Ltd. (Belg. v. Spain), Second Phase, 1970 ICJ Rep. 3, 6,51 (Feb. 5); Brownlie, Ian, Principles of Public International Law 459 (6th ed. 2003)Google Scholar; Collier, John & Lowe, Vaughan, The Settlement of Disputes in International Law l57 (1999)Google Scholar. Compare NAFTA, supra note 2, Art. 1116 (permitting an “investor” to “submit” certain claims under Chapter 11), with Ethyl Corp., supra note 93, para. 91 (concluding that “conditions precedent” to the “submission” of a claim refer to the admissibility of the claim as opposed to the tribunal’s jurisdiction). But see Methanex, supra note 71, paras. 107,122-26 (observing that neither Chapter 11 nor the UNCITRAL Rules authorize tribunals to decide questions of admissibility).

96 See South West Africa cases (Eth. v. S. Afr.; Liber, v. S. Afr.), Second Phase, 1966 ICJ Rep. 6, 18, 37-38, 42, 51 (July 18) (describing the claimant’s legal interest in the subject matter as a “matter of the merits of the case”); BROWNLIE, supra note 95, at 451 (mentioning the claimant’s legal interest as “an issue of merits”); see also Methanex, supra note 71, paras. 87-88,125 (responding to the United States assertion that the claimant had “failed to identify an ‘investment’ that could be expropriated” by holding that the argument “does not qualify as a jurisdictional challenge,” declining to address the issue as one of “admissibility,” and suggesting that it fell within the merits of the dispute).

Because NAFTA Articles 1102, 1103, 1105, 1106, and 1110 all identify standards of treatment for “investors” or their “investments,” claimants must establish their legal interest in an investment to prevail on the merits under any of these provisions. See SDMI damages award, supra note 42, paras. 102-03 (making this point with respect to Articles 1102 and 1105).

97 Statement of defense, supra note 53, para. 38; SDMI award, supra note 4, para. 158.

98 See Ethyl Corp., supra note 93, para. 73 (“Determination of the extent to which the damages claimed . . . are in fact compensable under Chapter 11 is an issue that can be considered . . . only in the context of die merits.”); see also Michael, J. Mustill & Stewart, C.Boyd, Commercial Arbitration 554–55 (2ded. 1989)Google Scholar (explaining that tribunals commit a mistake of law, but do not exceed their jurisdiction, when they award damages not authorized by contractual limitations on remedies).

99 See Methanex, supra note 71, para. 160; Mustill & Boyd, supra note 98, at 574-75; REDFERN & HUNTER, supra note 88, at 271.

100 SDMI judgment, supra note 47, para. 49.

101 Cf. Cheng, Bin, General Principles of Law 123,136 (1987)Google Scholar (opining that the obligation of good faith requires states to exercise their rights “honestly,” “loyally,” “sincerely,” “in conformity with the spirit of the law and with due regard to the interests of others”).

102 See Model Law, supra note 67, Art. 16(3); REDFERN & HUNTER, supra note 88, at 422.

103 See REDFERN & HUNTER, supra note 88, at 432 (“Indeed, arbitration then becomes merely the first stage in a process that may lead, by way of successive appeals, to the highest appellate court at the place of arbitration.”); Brower, supra note 48, at 85-86 (admonishing that “arbitration should mark the end—and not the beginning—of investor-state disputes”).

104 See supra note 55 and corresponding text.

105 See Quintette Coal Ltd. v. Nippon Steel Corp., [1991] W.W.R. 219,223 (B.C. Ct. App.); Whittemore, Parsons Overseas Co. v. Societe Generale d l' Tndustrie du Papier, 508 F.2d 969,976 (2d Cir. 1974)Google Scholar; Gary, B. Born, International Commercial Arbitration 708–09 (2d ed. 2001)Google Scholar; Charles, H. Brower II, Beware the Jabberwock: A Reply to Mr. Thomas, 43 Colum.J. Transnat’l L. 465, 476–77 (2002)Google Scholar; Brower, supra note 48, at 63.

106 See, e.g., First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 943-45 (1995); Mgmt. & Tech. Consultants v. Parsons-Jurden Int’l Corp., 820 F.2d 1531,1534 (9th Cir. 1987).