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INTERNATIONAL CENTRE FOR THE SETTLEMENT OF INVESTMENT DISPUTES

TC ENERGY CORPORATION AND TRANSCANADA PIPELINES LIMITED

—V—

UNITED STATES OF AMERICA

ICSID CASE NO. ARB/21/63

PRIVILEGE MASTER'S REPORT

1. PROCEDURAL BACKGROUND

1.1 On 11 September 2023, Claimants made Document Production Requests of Respondent.

1.2 On 11 October 2023, Respondent filed Responses and Objections to Claimants' Document Production Requests.

1.3 On 26 October 2023, Claimants filed Replies to Respondent's Responses and Objections to Claimants' Document Production Requests.

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1.4 On 6 November 2023, the Arbitral Tribunal issued Procedural Order 3 setting out its decisions on Claimants' requests for production in Annex A to that Order and ordered production by 27 November 2023.

1.5 To the extent Respondent objected to producing documents on the grounds that they were protected by attorney-client privilege, the Arbitral Tribunal said that it was Respondent that bears the burden of proving its objection and directed Respondent to produce a privilege log identifying (i) the date, authors and recipients of the document, (ii) a summary of its nature and content and (iii) the legal basis adduced for the objection. Procedural Order 3, Annex A at 9.

1.6 On 27 November 2023, Respondent produced documents and filed a privilege log.

1.7 On 1 December 2023, Claimants filed Objections to Respondent's Deficient Document Production, to which Respondent responded on 6 December 2023. With that response, Respondent provided a list of Attorneys on Privilege Log as Attachment 1.

1.8 On 8 December 2023, Claimants filed a Reply to Respondent's Comments on Claimants' Objections to Respondent's Document Production.

1.9 On 11 December 2023, the Arbitral Tribunal issued Procedural Order 4. In that Order, the Arbitral Tribunal, among other things, ordered that documents in respect to which Respondent had invoked attorney-client privilege would be reviewed by a Privilege Master before any decision of the Arbitral Tribunal in respect of their disclosure to Claimants.

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1.10 With respect to attorney-client privilege, the arbitral tribunal said the following:

The Tribunal first notes that there does not seem to be any difference between the parties as to the applicable standard. The Claimants submit in this respect, by relying on Respondent's letter dated 27 December 2023 quoting Animal Welfare Inst. v. Nat'l Oceanic & Atmospheric Admin., that the applicable standard is the protection of “confidential communications from clients to their attorneys made for the purpose of securing legal advice or services” as well as “communications from attorneys to their clients if the communications rest on confidential information obtained from the client.” The Respondent does not object to that contention. As a consequence, the parties agree that documents involving the provision of legal advice by attorneys acting in that capacity are privileged, whether the legal advice relates to the arbitration or to the treaty negotiation process itself.

Procedural Order 4 ¶ 16.

1.11 The Arbitral Tribunal ordered that, unless the parties agreed on the Privilege Master within 72 hours from the issuance of Procedural Order 4, the Privilege Master would be proposed by the Arbitral Tribunal and then appointed after considering possible objections of the parties based on proper disclosures made by the Privilege Master.

1.12 In the event, the parties did not agree upon a privilege master and, on 20 December 2023, the Arbitral Tribunal appointed Ms. Jennifer Kirby (https://www.jennifer-kirby.com) as the Privilege Master.

1.13 That same day, the Privilege Master signed a Non-Disclosure Statement.

1.14 On 21 December 2023, Respondent filed a revised privilege log.

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1.15 On 22 December 2023, Respondent provided the Privilege Master with 1513 documents for her review.

1.16 That same day, the Privilege Master informed the parties and the Arbitral Tribunal that she did not consider that what Respondent had provided her was sufficient for her to perform her review and prepare her report and invited Respondent to resubmit the documents at issue in accordance with her directions.

1.17 On 27 December 2023, the Arbitral Tribunal granted Respondent until 3 January 2024 to resubmit the documents at issue to the Privilege Master and invited the Privilege Master to complete her report by 12 January 2024.

1.18 On 3 January 2024, Respondent submitted 1534 documents to the Privilege Master for her review, along with a revised privilege log (“Privilege Log”) and a list of attorneys on the Privilege Log (“Attorney List”).

1.19 On 9 January 2024, the Arbitral Tribunal extended the time limit for the Privilege Master to complete her report to 19 January 2024.

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2. PRIVILEGE MASTER'S TERMS OF REFERENCE

2.1 The Privilege Master's Terms of Reference were signed by the parties, the members of the Arbitral Tribunal and the Privilege Master (“Terms of Reference” or “TOR”).

2.2 Pursuant to the Terms of Reference, the Privilege Master shall review each of the documents for which Respondent claims attorney-client privilege in the Privilege Log and determine which of them are protected by attorney-client privilege.¹ TOR ¶ 5.

2.3 The applicable standard is that described in paragraph 16 of Procedural Order 4, namely the protection of “confidential communications from clients to their attorneys made for the purpose of securing legal advice or services” as well as "communications from attorneys to their clients if the communications rest on confidential information obtained from the client". Id.

2.4 Attachments to privileged documents are not automatically covered by the privilege pertaining to the accompanying document and must be individually assessed to determine whether privilege attaches to them. Id. ¶ 6.

2.5 The Privilege Master shall review the documents in dispute on an ex parte basis. Id. ¶ 7.

¹ The Terms of Reference make reference to the privilege log from Respondent that appears in the record as Exhibit C141. For avoidance of doubt, that privilege log was superseded by the revised privilege log Respondent submitted on 3 January 2024. It is the revised privilege log of 3 January 2024 that the Privilege Master has defined as the “Privilege Log” and used in performing her work. ↩

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2.6 The Privilege Master may, if necessary, seek additional explanations from Respondent in respect of one or more of the documents in dispute on an ex parte basis. Id. ¶ 8.

2.7 Respondent shall provide the Privilege Master on an ex parte basis with a copy of each of the documents allegedly covered by attorney-client privilege. Id. ¶ 10.

2.8 The allegedly privileged documents shall not be disclosed to Claimants and the Arbitral Tribunal unless their production is ordered by the Arbitral Tribunal in light of the report of the Privilege Master. Id. ¶ 11.

2.9 The decisions of the Privilege Master shall be communicated to the Arbitral Tribunal and the parties in the form of a report. Id. ¶ 12.

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3. DETERMINATIONS AND APPROACH

3.1 My determinations are set out in Annex A to this report.

3.2 Where I am persuaded that a document is protected by attorney-client privilege, I have indicated on Annex A that it is “Privileged”. Where I am not so persuaded, I have indicated that it is “Not Privileged”.

3.3 Subject to the notes that appear on pages 24, 36, 42, 64 and 73 of Annex A, I have reviewed each of the documents for which Respondent claims attorney-client privilege in the Privilege Log and determined which of them are protected by attorney-client privilege.

3.4 In making my determinations, I have applied the standard described in paragraph 16 of Procedural Order 4.

3.5 In applying this standard, it has not always been obvious for each document what my determination should be.

3.6 As explained in the Animal Welfare case (referenced in paragraph 16 of Procedural Order 4), in the governmental context, the attorney-client privilege applies when the “Government is dealing with its attorneys as would any private party seeking advice to protect personal interests, and needs the same assurance of confidentiality so it will not be deterred from full and frank communications with its counsellors." Animal Welfare, Ex. RL67, at 8.²

² Pin cites are to PDF page numbers. ↩

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3.7 "It is well-established, however, that not every communication between an attorney and a client-government or otherwise is made for the purpose of securing legal advice or services". Id. “[C]onsultation with one admitted to the bar but not in that other person's role as a lawyer is not protected.” Id. (internal quotation marks omitted).

3.8 As a consequence, “a government attorney's ‘advice on political, strategic, or policy issues, valuable as it may [be], would not be shielded from disclosure by the attorney-client privilege.” Id.

3.9 In the context of the documents at issue here, it is not always entirely clear in what role the lawyers mentioned in the documents are acting or whether the government is seeking legal advice (as opposed to political, strategic, or policy advice). In making my determinations, I have done the best I can in light of these ambiguities and have been mindful that Respondent bears the burden of proving with respect to each document that the attorney-client privilege applies.

3.10 The fact that a lawyer appears on a document as author, addressee or copyee—or is otherwise mentioned in the document—does not in and of itself make the document "Privileged".

3.11 Moreover, when a person seeks input from a lawyer (e.g., request for “comments”) or sends a document to a lawyer “FYI” or seeks “clearance” of a document, I have not assumed that the person is seeking legal advice. Instead, I have considered the particularities of the document and its context to ascertain the nature of the input (if any) being sought.

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3.12 And I have not assumed that anything a lawyer says is legal advice. Instead, I have considered the particularities of what the lawyer is saying and its context to determine whether the lawyer is giving legal advice.

3.13 I also note that the vast bulk of the 60 lawyers on the Lawyers List work for either the US Department of State (“State Department”) (38) or the Office of the US Trade Representative (“Trade Office”) (14)—with a handful from the Department of Justice (4), the Department of the Treasury (3) and the Department of Commerce (1), as well.

3.14 In doing my work, I have presumed that the “client” of a lawyer on the Lawyer List is the entity for which the lawyer works (as opposed, for example, to the government of the United States more generally). In other words, I have presumed, for example, that the client of a lawyer working for the State Department is the State Department and the client of a lawyer working for the Trade Office is the Trade Office. As a consequence, I have considered communications between a lawyer on the Lawyer List and someone outside his / her Department or Office presumptively not covered by attorney-client privilege. These are only presumptions, however, and have sometimes been overcome depending on the particularities of the document and its context.

3.15 Where lawyers within a given Department or Office discuss among themselves legal advice for a client, I have determined such documents to be “Privileged”. I have not, however, assumed that all internal discussions among lawyers in a given Department or Office concern legal advice for a client. Instead, I have considered the particularities of each document and its context in making my determinations.

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3.16 Where non-lawyers in a given Department or Office are discussing between themselves legal advice they have received or intend to seek, I have treated such documents as covered by attorney-client privilege.

3.17 Where a document is a mark-up that reflects a lawyer's legal advice to his / her client in the form of comments or proposed revisions, I have determined the entire document to be “Privileged”, not just those sections where the comments appear. I have not, however, assumed that any and all comments or proposed revisions from a lawyer on a mark-up are “Privileged". Instead, I have considered the particularities of each document and its context in making my determinations.

3.18 Where a lawyer has given legal advice with respect to a document at some point, and that advice has been incorporated into the document in a way that is no longer discernable on the face of the document, I have determined that the document is "Not Privileged".

3.19 Where a document is an email chain that contains an email that is covered by attorney-client privilege and other emails that are not, I have determined the entire document to be “Privileged”, not just those portions where the privileged email appears.

3.20 I have also been mindful that attachments to documents I determine to be "Privileged" are not automatically also covered by the attorney-client privilege and have assessed each attachment individually to determine whether it is “Privileged” or not.

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3.21 In closing, I note that, to the extent documents raise similar issues as to attorney client privilege, I have endeavored to treat them similarly when making my determinations. Given the volume of material, however, it is possible that I have sometimes failed to do so despite my best efforts. The danger of this is especially acute where borderline documents are concerned (i.e., documents that were to me neither obviously "Privileged" nor obviously "Not Privileged"). This is because borderline documents appear at various times throughout the file and the sheer number of documents prevented me from holding all of them in my mind over the course of my review to ensure their consistent treatment.

3.22 I remain at the Arbitral Tribunal's disposal should it have any questions or wish any further information.

Date: 18 January 2024

Signature

Jennifer Kirby

Privilege Master

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Annex A to Privilege Master's Report

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