On January 6, 2016, TransCanada Corporation filed two separate lawsuits against the U.S. government’s November 2015 rejection of TransCanada’s plan to build the Keystone XL pipeline to transport crude oil from Canada to the United States:
- One case was brought in the U.S. District Court for the Southern District of Texas, claiming that the president acted unconstitutionally in unilaterally prohibiting further development of the Keystone XL pipeline, arguing his action was unsupported by any statute and contrary to the expressed wishes of Congress. The claim seeks in principal part to secure a declaration that no presidential approval is needed to construct the Keystone XL pipeline.
- A second case was noticed and will be brought before international arbitration under the Chapter 11 investor-state dispute settlement (ISDS) procedures of the North American Free Trade Agreement (NAFTA) claiming that the rejection of the Keystone XL pipeline was contrary to the United States’ NAFTA obligations to provide Canadian investment treatment in accordance with international law, to protect against uncompensated expropriation and to ensure non-discriminatory treatment. TransCanada is seeking damages for the NAFTA violations. The claim cannot be formally filed until six months after the November 6 denial of the presidential permit to build the pipeline.
Trade and investment critics have focused on the NAFTA ISDS case as a new “cause célèbre” to once again suggest that the sky is falling and urge the rejection of the recently negotiated Trans-Pacific Partnership (TPP). Once again, they have it completely wrong. Read More