Embassy Law Web Log   
Washington, DC, USA      

Limited Review of NAFTA Arbitration Award

In Mesa Energy Group LLC v. Government of Canada, the United States District Court for the District of Columbia explored numerous challenges to an adverse arbitral award issued in Miami under NAFTA rules. The plaintiff had entered into an energy supply contract with Canada and assumed it had won a regional exclusivity. Canada supposedly breached the contract, and arbitration followed. The panel decided against the plaintiff, supported by its finding that the plaintiff misunderstood the contract and had been aware of other supply arrangements.

Canada argued unsuccessfully that the court in Washington, DC, should apply the precedent developed in the Eleventh Circuit where Miami is located. The district court analyzed the requirements of the Federal Arbitration Act as well as general procedural rules and precedent. On June 15, 2017, it found that while precedent in the Eleventh Circuit would be less favorable to the plaintiff than that in the D.C. Circuit, the outcome would be identical.

Bound by its limited powers of review, which the court discussed in detail, as well as its analysis of alleged errors, it determined that the arbitral award must stand. In addition to the type of mistakes and errors in arbitration, its opinion explores also the deference afforded governments in procurement matters and generally under NAFTA. The court granted Canada's counter-petition to affirm the award but did not grant Canada's request for an award of attorneys' fees because Mesa's arguments that these three grounds justify vacating the award are not meritorious, they are not so lacking in merit to be described as frivolous or as evidence of bad faith. Id. 22. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.