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IN THE MATTER OF AN ARBITRATION UNDER CHAPTER ELEVEN OF THE
NORTH AMERICAN FREE TRADE AGREEMENT AND THE
UNCITRAL ARBITRATION RULES, 1976

-between-

TENNANT ENERGY, LLC
(the “Claimant”)

-and-

GOVERNMENT OF CANADA
(the “Respondent”, and together with the Claimant, the “parties”)

PROCEDURAL ORDER NO. 14

The Arbitral Tribunal
Mr Cavinder Bull SC (Presiding Arbitrator)
Mr Doak Bishop
Sir Daniel Bethlehem QC

Registry
Permanent Court of Arbitration

Tribunal Secretary
Mr José Luis Aragón Cardiel

2 November 2021

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1. Procedural History

1.1 In respect of hearings, Section 13 of Procedural Order No. 1 (“PO1”) provides, inter alia, that:

13.1 After consultation with the Parties, the Tribunal shall issue, for each hearing, a procedural order convening the meeting, establishing its place, time, agenda and all other technical and ancillary aspects.

13.2 Subsequent procedures shall be determined by the Tribunal in further consultation with the Parties.

1.2 On 23 March 2021, and having consulted the parties, the Tribunal, inter alia, decided that the bifurcated jurisdictional hearing (the “Hearing”) shall take place over a maximum of four days, in the period from 15 to 19 November 2021, the final Hearing schedule to be determined in the light of the parties’ agreement, if any, or submissions in advance of the pre-hearing conference. In addition, the Tribunal expressed its intention to hold the Hearing in an in-person format in Washington D.C., but noted that this issue would be revisited in the light of the prevailing circumstances, notably concerning any subsisting COVID-19-related travel constraints.

1.3 After further consultations with the parties, on 30 March 2021, the Tribunal confirmed that the pre-hearing conference shall take place at 09:00 EST on 19 October 2021 via videoconference using the Zoom platform.

1.4 In accordance with the Tribunal’s letters dated 23 and 30 March 2021, on 15 April 2021, the Tribunal issued Procedural Order No. 10, inter alia, fixing the aforementioned dates of the pre-hearing conference and the Hearing in the Procedural Calendar for the Bifurcated Jurisdictional Phase.

1.5 On 27 August 2021, the Respondent proposed that the Hearing take place in-person in Toronto, Canada. In support thereof, the Respondent relied on paragraph 3.2 of PO1, which provided that hearings may take place at locations other than Washington D.C., if so decided by the Tribunal after consultation with the parties.

1.6 On 3 September 2021, the Claimant advised the Tribunal that it did not share the Respondent’s view about holding the Hearing in-person due to the on-going COVID-19-related health concerns and travel restrictions.

1.7 On 8 September 2021, the Tribunal decided that the Hearing will proceed by way of a videoconference, noting that virtual hearings have been conducted in numerous cases with good efficiency. The Tribunal further informed the parties that, in accordance with paragraphs 13.1 and 13.2 of PO1, it would propose a draft virtual hearing protocol for the parties to consider.

1.8 On 16 September 2021, the Tribunal circulated a draft of this Order and invited the parties’ comments thereon. The parties submitted their written comments on the draft on 13 October 2021.

1.9 On 19 October 2021, the Tribunal and the parties held a pre-hearing conference.

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1.10 Following several exchanges, on 1 November 2021 the parties confirmed that they had reached agreement on a detailed schedule for the Hearing.

1.11 Taking into account the parties’ comments, the Tribunal makes the following directions for the procedure of the Hearing.

2. Hearing Dates

2.1 In accordance with the Procedural Calendar for the Bifurcated Jurisdictional Phase, the Hearing will take place from Monday, 15 November 2021 to Friday, 19 November 2021. In view of the Tribunal’s determination to conduct the Hearing by videoconference, the Tribunal has decided that the hearing will last five days, instead of four, as originally envisioned.

3. Pre-Hearing Preparation

3.1 As foreseen in the Procedural Calendar for the Bifurcated Jurisdictional Phase, a pre-hearing conference shall be held on 19 October 2021 at 09:00 EST in order to discuss the organization of the Hearing.

3.2 The pre-hearing conference shall also serve to verify the proper functioning of the videoconference system. All participants shall strive to replicate the conditions under which they will participate in the Hearing:

(a) To the extent possible, at least one participant per device or connection to be used at the Hearing should attend the pre-hearing videoconference;

(b) Each participant should join the pre-hearing conference with the same device(s) and internet connection and from the same physical location that they intend to use for the Hearing; and

(c) Participants will join the pre-hearing conference through the waiting room function and will follow the same identification procedure as for the Hearing itself (see paragraphs 8.3 to 8.5 below);

3.3 In addition to the pre-hearing conference, the parties are invited to undertake further test calls with the PCA of different groups of Participants (as defined in Section 8 below), both prior to and following the pre-hearing conference, in order to facilitate the readiness of all Participants for the Hearing.

3.4 The Tribunal may direct further videoconference testing sessions to take place with all or some Participants, as it considers necessary.

4. Joint Hearing Bundle

4.1 The disputing parties shall provide the PCA with an Agreed Bundle of Documents (“ABD”) to the Tribunal no later than Tuesday, 2 November 2021. The PCA shall produce and distribute the ABD. The ABD shall take the form of A5 hard-copies and PDF electronic copies as set out

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below. While the parties shall make best efforts to include relevant exhibits in the ABD, the parties shall nevertheless be permitted to cite exhibits that are not included in the ABD at the Hearing.

The disputing parties have conferred and agreed that the ABD will include the following documents: Notice of Intent; Notice of Arbitration; Statement of Defence; Claimant’s Memorial on Jurisdiction, Merits, and Damages; Canada’s Counter-Memorial on Jurisdiction; Claimant’s Reply Memorial on Jurisdiction; Canada’s Rejoinder Memorial on Jurisdiction; the Non-Disputing Party Article 1128 Submissions; the disputing parties’ Responses to the Article 1128 Submissions; all witness statements and expert reports that have been filed to date, including the documents relied therein; the NAFTA, specifically Chapters 1, 2, and 11; the 1976 UNCITRAL Arbitration Rules; the IBA Rules on the Taking of Evidence; the ILC Article on State Responsibility; and the Vienna Convention on the Law of Treaties.

4.2 A hard-copy of the ABD shall be provided only to Mr. Bishop at his professional address, shall be indexed, paginated and in double-sided print and shall contain the following documents:

(a) the Procedural Orders;

(b) the Memorials;

(c) the witness statements and expert reports; and

(d) the exhibits.

4.3 The parties shall also produce consolidated searchable USB flash drives (or hard-drives), which should contain the entire docket of the case, including the ABD, and should be sent to all members of the Tribunal at their respective professional addresses and to the PCA at its premises in The Hague. The electronic version of the ABD should also be made available via a download link. A searchable PDF copy of the full index to the ABD shall be produced to the Tribunal together with the ABD.

4.4 The ABD shall be produced to the Tribunal by consent on the basis that production extends only to proof of authenticity and is not to be taken as an admission by any party of the relevance or the truth of the contents of the documents contained therein. In particular, the ABD shall be produced to the Tribunal on the basis that each document in it:

(a) is what it purports to be;

(b) was signed by any purported signatory shown on its face;

(c) was sent by the purported author and/or received by any purported addressee shown on its face; and

(d) if a copy, is a true copy of the original.

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If there are any documents in respect of which authenticity is disputed or challenged, the originals of such documents shall be produced and included in a separate bundle, and the Tribunal will rule on them at the appropriate time.

5. Hearing Schedule

5.1 The timing of the Hearing shall proceed as follows:

(a) Commence each day at 9:00 AM EST;

(b) Conclude each day at 3:15 PM EST; and

(c) Total time each day: 5 sitting hours, two breaks of 15 minutes each and one 45-minute lunch break, for a total of 6 hours and 15 minutes per day.

5.2 The schedule for the Hearing is included in the Annex to this Order and is subject to any changes that the Tribunal may deem necessary or appropriate to make during the Hearing. In particular, the Tribunal may adjust the schedule of the Hearing as necessary in the event of delays or other interruptions caused by technical problems in the functioning of the videoconference.

5.3 Each party is responsible for ensuring that its witnesses and experts shall hold themselves available to appear the day before, and to continue the day after, they are scheduled to testify.

5.4 The Tribunal notes that, having received written submissions from Mexico and the United States in these proceedings pursuant to NAFTA Article 1128, the non-disputing Parties have notified the Tribunal that they do not expect to make oral submissions during the hearing. The annexed Hearing schedule, accordingly, does not allocate time for oral submissions by the non-disputing Parties.

6. Allocation of Time

6.1 The Hearing will be ordered sequentially, hearing from each of Claimant and Respondent as to each item, as follows: Opening Statements, Witnesses, Experts, and Closing Statements.

6.2 Except where otherwise provided in the Annex or decided by the Tribunal, the Hearing shall take place for 6 hours and 15 minutes each day in total, subject to the directions of the Tribunal.

6.3 The principle of equal time as between the parties shall be observed in the conduct of the Hearing. The allocation of time to the parties at the Hearing (excluding breaks, procedural discussions and Tribunal questions) shall be as follows:

(a) Each party shall be allocated 12.5 hours of total Hearing time;

(b) Opening Statements: Each party shall have a maximum of 2 hours and 30 minutes for its Opening Statement; and

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(c) Closing Statements: Each party shall have a maximum of 2 hours and 30 minutes to make its Closing Statement.

6.4 Time spent on direct or re-direct examination of witnesses and experts, including expert presentations, shall be counted toward the time account of the side presenting the witness or expert, whereas time spent on cross-examination shall be counted toward the time of the party conducting the cross-examination.

6.5 Time will be kept by the PCA under the supervision of the Tribunal. The Tribunal shall have full discretion to resolve any disputes as to the allocation of time as it sees fit. The parties agree that the Tribunal’s determination shall be final and binding on the parties, and that they shall abide by any such determination.

7. Videoconference Platform

7.1 The Hearing shall be held by videoconference using the Zoom videoconference platform. There shall be one virtual main hearing room, and five virtual breakout rooms (one for each party and non-disputing Party and one for the Tribunal). Other breakout rooms may be created as necessary by the PCA or its authorized agent.

7.2 The log-in and other access details for the videoconference shall be circulated by the PCA on the day prior to the start of the Hearing day.

7.3 Once admitted to the videoconference, and barring technical issues or other exceptional circumstances, counsel and party representatives should remain connected throughout the Hearing day.

7.4 The parties will make use of the breakout room functions within the Zoom videoconference platform to avoid delays associated with admitting Participants to the videoconference and to enable the Tribunal promptly to reconvene all Participants following breaks.

7.5 The chat function of Zoom shall be disabled save for communications between Participants and the PCA. Each party is responsible for arranging its own procedures (in addition to the virtual breakout rooms) for internal communications during the course of the Hearing.

8. Participants

8.1 Access to the videoconference shall be restricted to the members of the Tribunal, the parties’ and the non-disputing Parties’ representatives, the parties’ respective witnesses and experts, PCA staff, court reporters, and any further technical support personnel retained by the PCA in connection with the Hearing (the “Participants”). All Participants in the Hearing bear an ongoing duty to warn of the presence of any other person on the videoconference. Non-participants may follow the videoconference through a separate public webcast, as established in paragraph 17.1 below.

8.2 The parties are each requested to provide a full list of the representatives who will attend the Hearing on their behalf by no later than Friday, 5 November 2021. The list should indicate

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which participants should be considered essential for the purposes of paragraph 15.1 below (“Essential Participants”). Any person not included on the lists of representatives provided by the parties will not be admitted to the videoconference, unless otherwise decided by the Tribunal upon request by any of the parties.

8.3 To ensure the timely commencement of each Hearing day, and to enable the PCA to undertake an orderly verification and admission process, all Participants shall join the videoconference at least 30 minutes in advance of the start of each day. Parties are encouraged to join the videoconference earlier if possible.

8.4 Participants will join the videoconference through a “waiting room” to be managed by the PCA. Each party shall identify all of its representatives at the opening of each day of the Hearing. In order to facilitate identification of all attendees, Participants must join the videoconference showing a username that enables them to be readily identified (i.e., “(C)” for Claimant or “(R)” for Respondent [First Name] [Last Name]¹). Any prospective Participant who cannot be identified shall not be granted access to the videoconference, unless otherwise decided by the Tribunal upon request by any of the parties.

8.5 After having been identified by the PCA, Participants will be assigned to their corresponding breakout room until the Hearing commences. The PCA shall be responsible for redirecting the Tribunal and each party to their respective breakout rooms at the commencement of a break in each Hearing day. The PCA shall also be responsible for closing the breakout rooms and returning all Participants to the main hearing room before the start of each session. When the breakout rooms are about to be closed, a countdown shall apply before Participants are automatically returned to the main hearing room.

9. Evidence and Demonstrative Exhibits

9.1 In accordance with paragraphs 8.4 and 13.4 of PO1, no new evidence may be presented at the Hearing except with leave of the Tribunal. Should the Tribunal grant leave to a party to present new evidence in the course of the Hearing, it will grant the other party the opportunity to introduce new evidence to rebut it.

9.2 As further established in paragraph 13.5 of PO1, demonstrative exhibits, such as PowerPoint slides, in aid of argument may be used by any party during the Hearing, provided that those materials reflect evidence on the record and do not introduce new evidence, directly or indirectly, and that the exhibit from which the referred information originates is clearly identified in each presentation. Each party shall number its demonstrative exhibits consecutively.

9.3 The parties shall provide electronic copies of any demonstrative exhibits to be displayed during the Hearing by e-mail or secure file-sharing platform to all other Participants (including the other side, the members of the Tribunal, the PCA, the court reporters, and further technical support personnel retained by the PCA) at least one hour prior to their use during the Hearing.

¹ Participants joining collectively from a conference room should be identified by “Conference Room” and the name of relevant Party. ↩

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9.4 The presentation of any evidence, authority, or demonstrative exhibit shall be made through the screen-sharing function of the Zoom platform in order that the speaker and the relevant document can be seen simultaneously at all times. The parties are encouraged to designate one person on each side (the “Document Manager”) who shall be responsible for presentation of evidence, authority or demonstrative exhibit through the screen sharing function of the Zoom platform during the Hearing.

10. Witness Examination

10.1 The examination of fact and expert witnesses shall be governed by the rules set out in paragraphs 9 and 10 of PO1, unless otherwise provided in this Order.

10.2 The parties shall ensure that their fact witnesses are provided with an exact copy of their own statements, in hard copy, devoid of any annotations or markings, during their testimony. The parties shall ensure that their expert witnesses are provided with an exact copy of their own reports and the reports of any expert relied on by the other party addressing the same subject, in hard copy, devoid of any annotations or markings, during their testimony. At the Tribunal’s discretion, fact and expert witnesses may be asked to hold the hard copy of their statements or reports up to the camera for confirmation that they have not been marked.

10.3 Each party is free to provide bundles to its own fact and expert witnesses or the fact and expert witnesses it cross-examines, either in paper or electronic form as it sees fit. The parties shall notify the other party and the Tribunal of precisely what is being provided at the same time as the documents are provided to the witnesses.

10.4 In accordance with paragraph 10.3 of PO1, expert witnesses called for cross-examination may make a presentation on their expert reports filed in the arbitration as part of their direct testimony. This summary presentation may take no more than 30 minutes.

10.5 Each fact and expert witness shall testify without conferring with anyone else during testimony or referring to any documents to which the other Participants do not have access. Each fact and expert witness may testify through videoconference in the presence of an assistant and/or a technician, provided that the individual is identified by name and by title in advance of the start of the testimony and is visible to all other Participants at all times.

10.6 No fact and expert witness may have notes with him or her or communicate with counsel from the start of his or her examination until the conclusion of his or her evidence, in the case of fact witnesses, or until the conclusion of the relevant expert segment, in the case of experts, including during any breaks during the testimony.

10.7 It is not permitted for counsel to communicate with fact or expert witnesses during their examination by any means other than communication on the record.

10.8 In accordance with paragraph 9.14 of PO1, fact witnesses shall not attend the Hearing during the hearing of oral testimony prior to their examination nor view a recording or read the transcript prior to the end of his/her examination, unless they are designated by a party to act as its agent and give instructions to counsel at the Hearing. Only one witness may be designated by a party

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to be its party representative. This limitation does not apply to experts, who shall be permitted to attend the Hearing at any time.

10.9 The Tribunal shall have the authority at any time during the examination of a witness to request the witness to reorient their camera, whether to provide a better angle, lighting, or to verify the surroundings or any materials available to the witness.

11. Internet Connection and Devices

11.1 The parties are responsible for ensuring that each of their representatives connects to the videoconference through a stable internet connection offering sufficient bandwidth and uses a camera, microphone, and speaker of adequate quality.

11.2 Participants should consider using a wired Ethernet connection instead of WiFi. Participants are also encouraged to keep a smartphone or tablet, having at the minimum a 4G data connection and mobile hotspot functionality, available as a backup internet connection at all times during the Hearing.

11.3 A dial-in telephone audio option shall be offered as a backup option for Participants experiencing difficulties with computer audio. Certain key Participants may wish to dial-in by phone in addition to connecting through their computer, so as to be able to switch seamlessly to telephone audio in case they should happen to be disconnected at any point.

11.4 Each Participant is encouraged to have at least two devices or screens available for use during the Hearing, one to connect to the videoconference and another for the transcription. Where possible, using a third device or screen to display evidence and demonstrative exhibits is recommended.

12. Videoconference Etiquette

12.1 The parties shall provide a list of the Participants from each side who will speak to each point on the day’s agenda by e-mail to all other Participants (including the other side, the members of the Tribunal, the PCA, the court reporters, and further technical support personnel retained by the PCA) at least one hour prior to the start of each day.

12.2 All Participants without an active role at any given moment should mute their own audio and turn off their video.

12.3 Participants should join the Hearing from a location without background noise and with adequate lighting. Participants should also consider using a complete headset (headphones with integrated microphone) of good quality.

12.4 The above provisions on etiquette may be adjusted or supplemented by the Tribunal, in consultation with the parties, in the course of the Hearing.

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13. Transcription

13.1 Live transcripts of the Hearing will be organized by the PCA and made available on a separate platform. Final transcripts will be circulated by e-mail at the end of each day.

13.2 The PCA will circulate the connection details for the transcript on the day prior to the start of the Hearing. Participants are encouraged to use a second device or a second screen for viewing the transcript.

14. Recording

14.1 The PCA shall record the Hearing in both audio and video. No other Participants, except for the court reporters, shall record, transcribe or take screenshots or pictures of any part of the Hearing, unless otherwise decided by the Tribunal upon request by any of the parties.

15. Technical Problems

15.1 Each party shall designate, no later than Friday, 5 November 2021 one of its representatives to act as videoconferencing contact person (“VC Emergency Contact Person”) for purposes of addressing any technical incidents which arise during the videoconference. The VC Emergency Contact Person shall be responsible for advising the Tribunal and the PCA on the videoconference if an Essential Participant from their side is disconnected or otherwise cannot participate, such that the Tribunal is requested to pause the Hearing. Otherwise, the VC Emergency Contact Person shall notify and address technical issues with Diana Pyrikova of the PCA (tel.: +31 70 302 4252; e-mail: [email protected]), without interrupting the Hearing.

15.2 The Tribunal may temporarily or permanently suspend the Hearing if it deems the functioning of the videoconference system to be inadequate or likely to prejudice the due process rights of either of the parties or the integrity of the proceeding. The parties are asked to bear in mind that full recordings and transcripts will be available, mitigating any prejudice arising from the failure of any given Participant to be able to follow the entire Hearing on the videoconference platform.

16. Post-Hearing Matters

16.1 At the conclusion of the Hearing, the Tribunal shall decide whether the parties will file any post-hearing briefs, as well as the format, content, and timing of those submissions, in accordance with paragraph 13.8 of PO1. In any event, any such submissions shall not contain new evidence, documents, sources, declarations, or expert reports.

16.2 The need and schedule for correction of the transcript will be discussed at the conclusion of the Hearing.

16.3 The Tribunal shall also consider whether and when the parties shall file submissions regarding costs.

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17. Transparency and Confidentiality

17.1 In accordance with paragraph 12.2 of PO1, the PCA shall arrange for a public webcast of the Hearing.

17.2 In accordance with paragraph 37 of the Confidentiality Order, any Participant who intends to refer to confidential or protected information during the Hearing shall so inform the Tribunal prior to making any such reference. The Tribunal shall then direct the PCA to pause the webcast for the period of time that such confidential or protected information is being addressed.

17.3 As further established in paragraph 23 of the Confidentiality Order, the parties shall have 30 calendar days from the date of the Hearing to designate information as Confidential or Restricted Access Information in the transcript and to exchange such designations. The parties shall have an additional 21 calendar days from the receipt of such designations to raise any objection to the other party’s designations. After that period, if the parties are unable within 21 calendar days to agree on any designations of Confidential or Restricted Access Information, a party may submit the issues to the Tribunal for resolution.

17.4 The transcripts of the Hearing and, if appropriate, its recordings, shall be made available to the public following the conclusion of the Hearing as directed by the Tribunal and in accordance with the Confidentiality Order, after consulting with the parties.

Dated: 2 November 2021

Place of Arbitration: Washington, D.C.

Signature

Cavinder Bull SC
(Presiding Arbitrator)

On behalf of the Tribunal

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Annex: Hearing Schedule with Estimated Indicative Times

² The actual time for opening presentations will be 2.5 hours, but they reflect 2 hour and 45 minutes to account for one 15-minute break. ↩

³ The actual time for opening presentations will be 2.5 hours, but they reflect 2 hour and 45 minutes to account for one 15-minute break. ↩

⁴ The times for witness and expert cross-examinations do not include the time estimated for direct examination. Direct examination time will be deducted from the 7.5 hour overall sitting time allocated equally to the two disputing parties. ↩

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⁵ The estimated cross-examination time for the experts (Justice Grignon and Margaret Lodise) includes 30 minutes allotted for presentations which form a part of their direct examination. ↩

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⁶ The actual time for closing presentations will be 2.5 hours, but they reflect 2 hour and 45 minutes to account for one 15-minute break. ↩

⁷ The actual time for closing presentations will be 2.5 hours, but they reflect 2 hour and 45 minutes to account for one 15-minute break. ↩