Summary

Reproduced from www.worldbank.org/icsid with permission of ICSID.

TABLE OF CONTENTS

A. Shale Gas Exploration and Development
(1) St. Lawrence Lowlands and the St. Lawrence River
(2) Utica Shale
(3) Shale Gas
(4) Hydraulic Fracturing and Horizontal Drilling
(5) Conventional and Non-Conventional Resources
(6) Relevant Laws and Regulations
(7) Relevant Regulatory Bodies
(8) SEA
(9) BAPE
(10) Exploration License or Permit
(11) Other Permits
(12) Mining Register
(13) QOGA
(14) Farmout and Farmin Agreements

B. Québec's Energy Policies
(1) Québec Energy Strategy 2006-2015
(2) QMNR Budget 2009-2010

C. Factual Background to Claimant's Claims
(1) Claimant's entry into Québec's oil and gas market
a. Farmout Agreement and Original Permits
b. River Permit Agreement and River Permit
c. Assignment Agreements
(2) Events Leading up to the Introduction and Passage of Bill 18
a. SEA-1 and SEA-2
b. BAPE Report 273
c. SEA-SG Committee
d. Bill 18
e. The Act
f. Studies and Reports on Shale Gas Development Post-Enactment of the Act79

A. Claimant
B. Respondent

A. Claimant's Request to Draw Adverse Inferences from Respondent's Allegedly Deficient Document Production
(1) Parties' Positions
(2) The Tribunal's Analysis
a. Non-Production of Documents by Respondent
b. Non-production of appropriate witnesses by Respondent at the Hearing

B. Respondent's Request to Strike Out from the Arbitration Record Certain Slides From Claimant's Closing Presentation at the November 2017 Merits Hearing
(1) Parties' Positions
(2) The Tribunal's Analysis

A. Introduction
B. Objection to the Tribunal's Jurisdiction Ratione Materiae

(1) Relevant Treaty Provisions
(2) Parties' Positions

a. Respondent's Position
b. Claimant's Position
(3) Non-Disputing Parties' Submissions
a. USA NDP Submission
b. Mexico NDP Submission
(4) The Tribunal's Analysis
a. Scope of Claimant's Alleged "Investment" in Canada
b. Whether the River Permit Rights are a protected investment under NAFTA Article 1139

C. Objection to the Tribunal's Jurisdiction due to the Alleged Lack of a "Legally Significant Connection" Between the Impugned Act and the Enterprise or its Investments
(1) Relevant Treaty Provisions
(2) The Parties' Positions
a. Respondent's Position
b. Claimant's Position
(3) Non-Disputing Parties' Submissions
a. USA NDP Submission
b. Mexico NDP Submission
(4) The Tribunal's Analysis
a. Legal Standard
b. NAFTA Article 1101(1) in this Case

A. Expropriation
(1) Relevant Treaty Provisions
(2) Parties' Positions
a. Claimant's Position
b. Respondent's Position
(3) Non-Disputing Parties' Submissions
a. USA NDP Submission
b. Mexico NDP Submission
(4) Amicus Curiae Submissions
a. CQDE's Submission
b. Claimant's Reply to CQDE's Amicus Curiae Submission
(5) The Tribunal's Analysis
a. Legal Standard
b. Alleged Expropriation in this Case

B. Minimum Standard of Treatment
(1) Relevant Treaty Provisions
(2) The Parties' Positions
a. Claimant's Position
b. Respondent's Position
(3) Non-Disputing Parties' Submissions
a. USA NDP Submission
b. Mexico NDP Submission
(4) The Tribunal's Analysis
a. The Legal Standard
b. FET Breach in this Case

INTRODUCTION

1. Claimant, Lone Pine Resources Inc. ("Lone Pine" or "Claimant"), has submitted the present dispute to international arbitration pursuant to Chapter Eleven of the North American Free Trade Agreement, which entered into force on 1 January 1994 ("NAFTA") and the United Nations Commission on International Trade Law ("UNCITRAL") Arbitration Rules, as revised in 2010 and adopted in 2013 ("UNCITRAL Rules").1 By agreement of the Parties, the International Centre for Settlement of Investment Disputes ("ICSID" or "Centre") serves as the administrative authority for this arbitration

2. Claimant has initiated this arbitration on behalf of its enterprise, Lone Pine Resources Canada Ltd. (the "Enterprise" or "LPRC"), pursuant to NAFTA Article 1117, seeking relief against the Government of Québec's allegedly arbitrary, capricious and illegal revocation of the Enterprise's rights to mine for oil and gas under the St. Lawrence River through the passage of Bill 18, An Act to limit oil and gas activities ("Bill 18") in the Québec National Assembly as an Act to limit oil and gas activities (the "Act"). Claimant contends that the actions of the Government of Québec violate the substantive protections offered under NAFTA Articles 1105 and 1110.

3. Respondent, the Government of Canada ("Canada" or "Respondent"), objects to the jurisdiction of the Tribunal and also denies Claimant's assertions regarding the alleged violations of NAFTA Articles 1105 and 1110.

4. This Final Award is divided into the following Sections. Section II sets out the particulars of the Parties. Section III sets out the procedural history of the case. Section IV sets out the factual background to the dispute between the Parties. Section V contains a summary of the Parties' claims and reliefs sought. Section VI contains an introduction into the Tribunal's analysis. Section VII addresses the Parties' disputes on procedural matters. Section VIII addresses the applicable law governing the merits of the dispute. Section IX addresses the jurisdictional objections raised by Respondent and Section X addresses the merits of Claimant's claims regarding Respondent's violations under NAFTA. Sections XI pertains to Claimant's claim for damages and Section XII pertains to costs. The Tribunal's decisions are contained in Section XIII.

...

AWARD

653. FOR THE FOREGOING REASONS, the Tribunal decides as follows:

(1) DECLARES that it has jurisdiction over Claimant's claims in this arbitration;

(2) DISMISSES Claimant's claim of breach by Respondent of its obligations under NAFTA Article 1110(1);

(3) DISMISSES, by majority, Claimant's claim for of breach by Respondent of its obligations under NAFTA Article 1105(1);

(4) DISMISSES Claimant's claim for compensatory damages;

(5) DETERMINES that, following an agreement between the Parties, the Arbitration Costs amounting to USD 1,407,023.53 shall be borne in equal shares by each Party and that Claimant is liable for an amount of USD 703,511.76 towards the Arbitration Costs and Respondent is liable for an amount of USD 703,511.76 towards the Arbitration Costs; and

(6) REJECTS all other relief sought by the Parties.

Place of arbitration: Ottawa
Date: 21 November 2022
THE ARBITRAL TRIBUNAL
Mr. David R. Haigh Q.C.
Professor Brigitte Stern
Professor Albert Jan van den Berg (President of the Tribunal)