Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Softwood Lumber Still in the Headlines

In August, 2008, a bid by a Canadian softwood lumber company, Tembec, to vacate a NAFTA Chapter 11 cost award was dismissed by a United States District Court.

This was the second request by Tembec to the United States District Court for the District of Columbia. In 2005, Tembec attempted to vacate an order which consolidated Tembec’s NAFTA Chapter 11 claims with two other similar claims by Canadian lumber companies. A number of Canadian softwood lumber companies had filed NAFTA Chapter 11 cases against the United States relating to their collection of anti-dumping and countervailing duties against softwood lumber from Canada.

Tembec later agreed dismiss its petition before the US district court – as well as withdraw its NAFTA chapter 11 claim – following a political agreement between the United States and Canada over the softwood lumber dispute. The day after the Softwood Lumber Agreement, however, the United States submitted to the NAFTA tribunal that Tembec bear all the costs associated with the arbitration. The NAFTA tribunal ultimately decided that Tembec should pay all the costs; a decision that contrasts with many investment-treaty arbitrations, in which the costs are shared between the parties.

In 2007, Tembec filed another petition before the US District Court for Columbia to vacate the NAFTA award on costs. But in a decision dated August 14th, the district court rejected the petition on the grounds of res judicata and collateral estoppel.

A copy of the 14 August 2008 opinion of the United States District Court for the District of Columbia in Tembec Inc. et al v. United States of America is available from the Investment Treaty Arbitration website.

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