Reproduced from www.worldbank.org/icsid with permission of ICSID.
1. Canada contends that decisions on jurisdiction and admissibility are ripe, require no factual inquiry, and can be decided as a matter of law as if subject to a motion to dismiss.1 Claimant, Westmoreland Mining Holdings LLC ("Westmoreland"), disagrees.
2. Canada invokes a three-factor test for determining when bifurcation is appropriate to decide jurisdiction and admissibility.2 First, the moving party's arguments must be prima facie serious and substantial. But here, Canada's arguments regarding jurisdiction ratione temporis, the exception in Article 1108(7)(b) for "subsidies and grants," and the statute of limitations all reflect a cramped view of the law and a limited appreciation of the facts. Second, Canada contends there is no factual overlap of the facts pertaining to jurisdiction and admissibility, on the one hand, and the merits of the dispute, on the other. However, there is overlap. And, third, Canada argues that Article 1108(7)(b) and the statute of limitations would dispose of the entirety of this arbitration, which is not so.
3. Canada's primary plea for bifurcation is for efficiency. Canada argues that "[i]t would be procedurally unfair and inefficient to require either disputing party to spend potentially millions of dollars and thousands of hours of lawyer, expert, and witness time litigating claims over which the Tribunal has no jurisdiction or which are inadmissible."3
4. The value of efficiency as presented by Canada presumes an outcome, that the Tribunal would determine, pursuant to bifurcation, that it has no jurisdiction. But were the Tribunal to decide against Canada and find that it does have jurisdiction, everything Canada says about efficiencies would be untrue. The parties would have spent more money and hours of lawyer, expert, and witness time on separate and additional pleadings and hearings, and proceedings to arbitrate the merits may be delayed as much as a year. The proposed jurisdictional phase envisions a hearing (subject to Tribunal availability) in mid-July 2021; assuming the Tribunal takes two months to render a decision, the merits phase will not begin until almost October 2021. Under this schedule, the merits phase would be delayed by another year and Claimant would not get to a merits hearing until fall/winter 2023--four years after initiating this arbitration. Canada knows this trap because it has led tribunals into it before.4
5. Canada presents its arguments as simple inquiries, but this superficial analysis omits complicated issues regarding the bankruptcy restructuring of Westmoreland Coal Company; the basis (as opposed to the funding source) of the Off- Coal Agreements; and any measures involved with Alberta's Climate Leadership Plan. All of these issues will require factual inquiry despite Canada's contentions otherwise.
Were the Tribunal to bifurcate and then find it has jurisdiction, it would have to resolve overlapping arguments and complicated factual issues twice. The significant risk of increased burdens on the Tribunal and the Parties ought to persuade the Tribunal not to bifurcate.
II. THE TEST FOR BIFURCATION
III. BIFURCATION IS NOT APPROPRIATE FOR CANADA'S DEFENSE THAT THE BREACHES SUPPOSEDLY PRE-DATED CLAIMANT'S INVESTMENT
A. Canada's Objections Are Not Serious And Substantial
B. The Remaining Factors Do Not Support Bifurcation
IV. CANADA IS NOT ENTITLED TO BIFURCATION FOR ITS ARTICLE 1108(7)(b) OBJECTION
V. CANADA'S STATUTE OF LIMITATIONS OBJECTION DOES NOT WARRANT BIFURCATION