Thoughts and Opinions On Today's Important Issues

Friday, April 30, 2010

More Litigation

The fun continues:

DIBC to file $550 million NAFTA claim against Canada

WARREN, Mich. – The Detroit International Bridge Company is preparing to file a claim under the North American Free Trade Agreement (NAFTA) against the Canadian government because of its offer to provide $550 million to the state of Michigan for a proposed new border crossing.

Canada’s offer is to pay Michigan’s costs connected with the Detroit River International Crossing (DRIC). The DRIC is a project proposed by the Michigan, Ontario, U.S. and Canadian governments for the construction of another international border crossing a little over a mile from the existing Ambassador Bridge.

“The only way the DRIC project will have enough traffic to justify its construction is by diverting traffic from and bankrupting the three existing international crossings in the area: The Ambassador Bridge, Blue Water Bridge and Detroit-Windsor Tunnel,” said Patrick Moran, corporate counsel for the Detroit International Bridge Co. (DIBC).

Moran said DIBC would file a second NAFTA claim against the Canadian government, adding that “it is clear that the Canadian government is using its legislative power inappropriately to discriminate against an Arab-American businessman who has owned and operated the Ambassador Bridge for more than 30 years.”

The Ambassador Bridge has become the No. 1 border crossing in North America under the ownership of Manuel J. (Matty) Moroun and is highly regarded for its efficient operation, Moran said. The Ambassador Bridge alone carries more 27 percent of the trade between the two countries.

“The Canadian government is using its power inappropriately to coerce the Michigan Legislature into adopting legislation necessary to ensure the implementation of the DRIC project to the detriment of necessary infrastructure projects in Canada and the U.S. ,” Moran said. “Not only is it clear that the DRIC project is not needed at this time, the Canadian government is trying to use its authority to steal a viable for-profit business from an American businessman.”

By offering to increase its financial participation in the DRIC project and give Michigan $550 million, Canada is intentionally undermining a U.S. citizen’s right to own and operate a business in Canada, Moran said.

The new NAFTA claim against Canada is the second one DIBC filed against Canada in connection with actions related to the DRIC project. DIBC filed a Claim of Arbitration under Chapter 11 of NAFTA on March 23. In that case, DIBC seeks a determination that Canada has breached its obligations under NAFTA, an award of damages of at least $3.5 billion and other appropriate relief.

The arbitration arises from the decisions by Canada, the Province of Ontario and the City of Windsor to locate the parkway serving the DRIC so it steers traffic away from the Ambassador Bridge.