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PUBLIC VERSION

PCA Case No. 2021-26

IN THE MATTER OF AN ARBITRATION UNDER
ANNEX 14-C OF THE CANADA-UNITED STATES-MEXICO AGREEMENT
(“CUSMA”), CHAPTER 11 OF THE NORTH AMERICAN FREE TRADE
AGREEMENT (“NAFTA”),
AND THE 2013 UNCITRAL ARBITRATION RULES

- between -

WINDSTREAM ENERGY LLC

(the “Claimant”)

- and -

THE GOVERNMENT OF CANADA

(the “Respondent”, and together with the Claimant, the “disputing parties”)

AWARD

(WINDSTREAM II)

The Arbitral Tribunal
Ms Wendy Miles KC (Presiding Arbitrator)
Prof. John Gotanda
Rt. Hon. Beverley McLachlin

Administering Authority
Permanent Court of Arbitration

Tribunal Secretary
Mr José Luis Aragón Cardiel

20 April 2026

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GLOSSARY OF DEFINED TERMS / LIST OF ABBREVIATIONS

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TABLE OF CASES

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I. INTRODUCTION

A. THE DISPUTING PARTIES

1. Windstream Energy LLC (the “Claimant”) is a company incorporated in the United States of America, with a registered address at 20 Pine Brook Road, Bedford, NY 10506, United States of America.¹ It is a company in the business of developing renewable energy, founded in 2007 by an investment group with experience developing and operating energy projects,² and is managed by its managing director White Owl Capital Partners LLC, a private equity firm based in New York City, United States.³

2. The Claimant is represented in these proceedings by:

Mr John Terry
Ms Rachael Saab
Ms Emily Sherkey
Ms Alexandra Shelley
Ms Julie Lowenstein
Ms Natasha Williams
Torys LLP
Suite 3000
79 Wellington St. W.
Box 270, TD South Tower
Toronto, Ontario
Canada M5K 1N2

3. The Government of Canada (“Canada” or the “Respondent” and together with the Claimant, the “disputing parties”) is represented in these proceedings by:

¹ Notice of Arbitration, para. 4. ↩

² Memorial, para. 59. ↩

³ Memorial, para. 60. ↩

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Mr Rodney Neufeld
Ms Heather Squires
Ms Alexandra Dosman
Mr Yu Cai Tian
Ms Kayla McMullen
Ms Darian Bakelaar
Ms Christine Ayoub
Trade Law Bureau (JLT)
Government of Canada
Global Affairs Canada
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario
Canada K1A 0G2

B. THE DISPUTE

4. This is the second arbitration in Windstream Energy LLC v. Canada (i.e., Windstream II). It arises out of the first arbitration award, the Windstream I Award, and events thereafter. For consistency, where possible, this Award mirrors the factual findings in the Windstream I Award.

5. The original dispute is set out in the Windstream I Award as follows (the same defined terms are adopted in this Award):⁴

The dispute between the Parties arises out of an offshore wind electricity generation project in the Wolfe Island Shoals area in Ontario, Canada (the "Project" or the “WWIS Project"). The Project was undertaken following Ontario's enactment of the Green Energy and Green Economy Act of 2009 ("GEGEA") and the subsequent promulgation of additional rules and regulations, creating a Feed-in-Tariff (“FIT”) program (“FIT Program") (the “FIT Program") for the development of renewable energy projects, including onshore

⁴ Windstream I Award, para. 5 [Emphasis added]. ↩

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and offshore wind. According to the Claimant, following the award of a Feed-in-Tariff Contract (the “FIT Contract") to the Claimant, the Government of Ontario (also referred to as the “Government” or “Ontario") delayed the approval of the required permits and authorizations, including those allowing access to Crown land, and eventually, on 11 February 2011, imposed a moratorium on the development of offshore wind that frustrated the Claimant's attempts to develop the Project.

6. The disputing parties’ positions in the Windstream I dispute were as follows:⁵

6. The Claimant argue[d] that the conduct of the Government, including the Ontario Power Authority (the “OPA”), is attributable to the Respondent and contends that the measures taken by Ontario authorities are inconsistent with the Respondent's obligations under Chapter 11 of the North American Free Trade Agreement ("NAFTA"), specifically Articles 1110 (Expropriation and Compensation), 1105 (Minimum Standard of Treatment), 1102 (National Treatment), 1103 (Most-Favored-Nation Treatment) and, to the extent that the OPA is a State enterprise as defined in NAFTA Article 1505, Article 1503(2) (State Enterprises).

7. The Respondent dispute[d] that it is in breach of any of its obligations under NAFTA. According to the Respondent, the Claimant was always aware of the regulatory risks related to the development of the regulatory processes and the significant scientific uncertainty regarding the effects of offshore wind projects on human health, safety and the environment. The Respondent contends that Ontario's decision to defer the development of offshore wind was taken to allow the necessary scientific research to be completed and applied to all such projects and thus was not discriminatory, and fell within the legitimate policy-making power of the Government of Ontario to regulate in the public interest.

7. The Windstream I Award determined that the Respondent had breached NAFTA Article 1105 by failing to accord the Claimant’s investments in Windstream Wolfe Island Shoals Inc. (“WWIS”), the WWIS Project and the FIT Contract, fair and equitable treatment, awarding the Claimant CAD 25 million in compensatory

⁵ Windstream I Award, paras. 6 to 7. ↩

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damages.⁶ It rejected three remaining claims for breach of (i) NAFTA Article 1110 (alleged unlawful expropriation of the Claimant’s investments); (ii) NAFTA Article 1102 (alleged failure to accord treatment no less favourable than accorded, in like circumstances, to its own investors); and (iii) NAFTA Article 1103 (alleged failure to accord treatment no less favourable than that accorded to investors of third party States).⁷

8. Most significantly for the Windstream II arbitration and Award, the Windstream I Award made the following findings in respect of alleged expropriation:⁸

290. The Tribunal has carefully reviewed the relevant evidence and finds that, on the facts, no expropriation has taken place in this case. First, the Claimant's FIT Contract is still formally in force and has not been unilaterally terminated by the Government of Ontario; consequently, while the Tribunal agrees with the Claimant that the Project can no longer be completed by the MCOD, 4 May 2017, it continues to remain open for the Parties to re-activate and, as appropriate, renegotiate the FIT Contract to adjust its terms to the moratorium. Second, and more importantly in the context of the Claimant's expropriation claim, the Claimant's CAD 6 million security deposit is still in place and has not been taken or rendered otherwise worthless as a result of any action taken by the Government of Ontario. Under Article 10.1(g) of the FIT Contract, if by reason of force majeure the MCOD is delayed for an aggregate of more than 24 months (which is the case here), completion and performance security will be returned at the time of the termination of the agreement by either party. Consequently, the Respondent cannot terminate, and indeed confirmed at the hearing that it would not be able to terminate, the FIT Contract pursuant to Article 10.1(g) without returning the security. It therefore cannot be said that the Claimant has been substantially deprived of its investment.

291. In reaching the conclusion that, on the facts, the Claimant has not been substantially deprived of its investment, the Tribunal has taken into account

⁶ Windstream I Award, para. 515. ↩

⁷ Windstream I Award, para. 515. ↩

⁸ Windstream I Award, paras. 290 to 291 [Emphasis added]. ↩

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its determination of the overall value of the Claimants' investment, as set out in Section B below. As determined in Section B, the amount of money invested by the Claimant in the Project – its sunk costs – do not substantially exceed, if at all, the value of the security deposit. Consequently, although the Tribunal accepts (as determined in Section B below) that the Claimant's investment consists not only of the sunk investment costs and the security deposit, but also of the value created by the Claimant in developing the Project, the value of the asset that is still available to the Claimant as it has not been taken (i.e., the security deposit) is substantial, in particular when compared to the overall value of the investment. In the circumstances, the Tribunal is unable to conclude that the Claimant has been substantially deprived of the value of its investment.

9. In Windstream II, the Claimant submitted that it was “[e]ncouraged by the tribunal’s decision and Canada’s representations that the Project had a future”, and claimed to have “emerged from the NAFTA proceedings with the expectation that the Project would proceed”.⁹ Accordingly, and thereafter it proceeded as follows:¹⁰

While courting substantial third-party interest in investing in the Project, Windstream worked to advance the Project and attempted to engage the Government of Ontario and the Independent Electricity System Operator ["IESO"] [the successor of the OPA] in discussions about the path forward. The Ontario Government ignored those requests – and its promise in 2011 to “freeze” the FIT Contract – and allowed the IESO to terminate the FIT Contract in February 2020.

10. According to the Claimant, despite its own post-Windstream I Award efforts, the Respondent:

1. failed in a timely manner to complete the work necessary for lifting the moratorium to ensure it would not further prejudice WWIS by continued delay to the WWIS Project (claiming that none of the studies stated to be

⁹ Memorial, para. 6. ↩

¹⁰ Memorial, para. 6. ↩

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the basis for the moratorium was completed) and no steps were taken to lift it;

2. continued the moratorium, knowing it would create conditions allowing IESO to terminate the FIT Contract (directly contradicting its promise to protect the WWIS Project from the effects of the moratorium); and
3. failed to direct IESO not to terminate the FIT Contract, or to amend the FIT Contract to ensure that the Project would be “deferred”, “frozen” and “on hold”.¹¹

11. In the meantime, on 1 July 2020, the applicable investment protection regime changed. NAFTA was terminated and replaced by the Canada-United States-Mexico Agreement (“CUSMA”), which contains no investor-State arbitration mechanism for investments of U.S. investors in Canada. However, the CUSMA Contracting Parties consented to submit to arbitration, in accordance with NAFTA Chapter 11 Section B and CUSMA Annex 14-C, claims arising out of alleged breach of NAFTA Chapter 11 Section A obligations for “an investment of an investor of another Party [to CUSMA] in the territory of the Party established or acquired between January 1, 1994, and the date of termination of NAFTA 1994 [i.e., 1 July 2020], and in existence on the date of entry into force of this Agreement [i.e., also 1 July 2020]”, for a period of three years from the date of NAFTA termination.¹²

12. In December 2020, the Claimant commenced the Windstream II arbitration pursuant to the provisions of CUSMA Annex 14-C, seeking “the full value of its investment”, which it alleges “has now been destroyed – not just damaged – as a result of the Ontario Government’s actions (and inaction) after the Windstream I Award”.¹³

¹¹ Memorial, para. 7. ↩

¹² CUSMA Annex 14-C, para. 6. ↩

¹³ Memorial, para. 7. ↩

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13. In these Windstream II arbitration proceedings, the Claimant requests by way of relief:¹⁴

1. a declaration that the Respondent has now unlawfully expropriated its investments in WWIS, the Project, and the FIT Contract, contrary to NAFTA Article 1110;
2. a declaration that the Respondent has again failed to accord its investments fair and equitable treatment in accordance with international law, contrary to NAFTA Article 1105;
3. alternatively, a declaration that the Respondent failed to ensure through regulatory control, administrative supervision or the application of other measures, that its State enterprise, the IESO, acted in a manner consistent with the Respondent’s obligations under NAFTA Chapter 11;
4. damages in the range of between CAD 291.4 million and CAD 333 million, to be updated as at the time of the hearing, or alternatively between CAD 284.7 million and CAD 299.1 million, to be updated as at the time of the hearing;
5. pre- and post-award interest at a rate to be fixed by the Tribunal;
6. all legal fees and costs associated with this arbitration; and
7. such other relief as the Tribunal considers appropriate.

14. The Respondent requests that the Tribunal dismiss the claims in their entirety and with prejudice, order that the Claimant bear the costs of this arbitration, including the Respondent’s costs for legal representation and assistance, and grant any further relief it deems just and proper.¹⁵

¹⁴ Memorial, para. 563; Reply, para. 443. ↩

¹⁵ Counter-Memorial, para. 293; Rejoinder, para. 259. ↩

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II. PROCEDURAL HISTORY

15. A brief procedural history of the Windstream II arbitration is set out below.

A. COMMENCEMENT OF ARBITRATION

16. On 22 January 2020, the Claimant issued a Notice of Intent to Submit a Claim to Arbitration pursuant to Article 1119 of NAFTA.

17. By Notice of Arbitration dated 22 December 2020, the Claimant commenced arbitration proceedings against the Respondent “on its own behalf and on behalf of its enterprise [...] [WWIS],”¹⁶ pursuant to Article 3 of the 2013 UNCITRAL Arbitration Rules (the “UNCITRAL Rules”), Articles 1116, 1117 and 1120 of NAFTA, and Annex 14-C to CUSMA.¹⁷

18. The Tribunal is composed of Professor John Gotanda, an American national appointed by the Claimant; The Rt Hon. Beverley McLachlin, a Canadian national appointed by the Respondent; and Ms Wendy J. Miles KC, a New Zealand national appointed by agreement of the disputing parties as presiding arbitrator.

19. On 21 December 2021, the Tribunal issued Procedural Order No. 1, which:

1. names Toronto, Ontario as the place of arbitration (Section 4);
2. sets out the applicable procedural rules of the arbitration as the UNCITRAL Rules (as modified by the provisions of Annex 14-C to CUSMA and Chapter 11 of NAFTA) (Section 5);
3. determines the language of the arbitration to be English (Section 6);
4. establishes the Procedural Calendar for the arbitration and procedural rules for the conduct of the proceedings (Section 7); and

¹⁶ Notice of Arbitration, para. 1. ↩

¹⁷ Notice of Arbitration, para. 6. ↩

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5. establishes the PCA’s role as administering authority (Section 23).

20. Mr José Luis Aragón Cardiel, PCA Senior Legal Counsel, was designated to act as Registrar and Secretary to the Tribunal. Together with Procedural Order No. 1, the disputing parties also executed a confidentiality agreement.¹⁸

B. PRELIMINARY ISSUE – BIFURCATION

21. On 18 February 2022, the Claimant submitted its Memorial (“Memorial”), together with factual exhibits C-1907 to C-2528, legal authorities CL-139 to CL-174, seven witness statements,¹⁹ and 13 expert reports.²⁰

22. On 12 May 2022, the Respondent submitted its Request for Bifurcation and Memorial Objecting to Jurisdiction and Admissibility (“Request for Bifurcation and Memorial on Jurisdiction”), together with factual exhibits R-0659 to R-0666 and legal authorities RL-109 to RL-164.

23. On 16 June 2022, the Claimant submitted its Response to Canada’s Request for Bifurcation (“Response to Request for Bifurcation”), together with legal authorities CL-175 to CL-179.

24. On 27 June 2022, the Tribunal confirmed the disputing parties’ agreement, as set out in their joint communication of 24 June 2022, that the Tribunal should proceed

¹⁸ Windstream II Confidentiality Agreement, Annex B to Procedural Order No. 1. ↩

¹⁹ CWS-N. Baines, Witness Statement of Nancy Baines; CWS-Mars-3, Third Witness Statement of David Mars; CWS-Baines-3, Third Witness Statement of Ian Baines; CWS-Ziegler-3, Third Witness Statement of William Ziegler; CWS-Killeavy, Witness Statement of Michael Killeavy; CWS-Smitherman-2, Second Witness Statement of George Smitherman; CWS-Benedetti-2, Second Witness Statement of Chris Benedetti. ↩

²⁰ CER-Secretariat, Independent Expert Report of Chris Milburn, Edward Tobis, and Pierre-Antoine Tetard; CER-Wood, Technical Expert Report of Wood Group; CER-Power Advisory-2, Second Expert Report of Power Advisory, Jason Chee-Aloy; CER-Powell-3, Third Expert Report of Sarah Powell; CER-WSP-2, Second Expert Report of WSP Canada Inc.; CER-Baird-3, Third Expert Report of W.F. Baird & Associates Coastal Engineers Ltd.; CER-Aercoustics-2, Second Expert Report of Aercoustics Engineering Ltd.; CER-Two Dogs (Wind Turbine Selection Report), Expert Report of Two Dogs Projects Ltd., Ian Irvine; CER-Two Dogs (Capex Opex Sensitivity Report), Expert Report of Two Dogs Two Dogs Projects Ltd., Mr Ian Irvine; CER-COWI (Wind Turbine Gravity Base Foundation Design), Expert Report of COWI North America Inc., Brent Cooper, Jørn Thomsen, Jørgen Bang Cramwikt, Carly Wilmott and, Emma Chick; CER-COWI (Opinion of Probable Cost), Expert Report of COWI North America Inc., Brent Cooper, Jørn Thomsen, Jørgen Bang Cramwikt, Carly Wilmott and, Emma Chick; CER-4C Offshore-3, Third Expert Report of 4C Offshore Ltd.; CER-Weeks-2, Expert Report of Weeks Marine. ↩

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to decide the Respondent’s Request for Bifurcation on the basis of the written submissions already filed with no oral hearing.

25. On 13 September 2022, the Tribunal issued Procedural Order No. 2 (Decision on Bifurcation), stating in its operative part as follows:²¹

71. On the basis of the foregoing, the Tribunal makes the following decisions:

(a) the Respondent’s Request for Bifurcation is denied;

(b) the Tribunal reserves its decision on costs relating to the Request for Bifurcation;

(c) the arbitration shall proceed on the basis of the procedural timetable in Procedural Order No. 1, Annex A.2, which provides for the time periods that will apply if the Respondent’s Request for Bifurcation is denied; and

(d) the disputing parties are directed to confer with a view to agreeing on a joint proposed timetable [...], and to submit such a modified annex to the Tribunal, jointly if possible, and separately if not, on or before Friday, 30 September 2022.

C. AMENDMENTS TO PROCEDURAL CALENDAR

26. On 23 September 2022, the disputing parties submitted a joint proposed timetable for the proceedings.

27. On 26 September 2022, the Tribunal (i) confirmed the disputing parties’ agreed schedule; and (ii) invited the disputing parties to confer and identify potential dates for a hearing in February 2024, as well as to express their preferences regarding the hearing venue.

28. On 29 September 2022, the disputing parties confirmed their availability for a hearing during the weeks of 5 February and 12 February 2024. They further

²¹ [Emphasis omitted]. ↩

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expressed their preference to reserve 10 business days for the hearing and for Arbitration Place in Toronto to be the hearing venue.

29. On 3 November 2022, the Tribunal issued Procedural Order No. 3, setting out the revised Procedural Calendar for the arbitration.

30. On 12 December 2022, the Respondent submitted its Counter Memorial on Jurisdiction, Merits and Damages (“Counter-Memorial”), together with factual exhibits R-0667 to R-0819, legal authorities RL-165 to RL-200, one (1) witness statement,²² and one (1) expert report.²³

D. DOCUMENT PRODUCTION PHASE

31. On 31 March 2023, the Claimant submitted its completed Redfern Schedule, and requested a ruling from the Tribunal in respect of three outstanding document production requests. At the same time, the Claimant informed the Tribunal that the disputing parties had reached agreement as to the remaining Claimant document production requests and all of the Respondent document production requests.

32. On 1 May 2023, the Tribunal issued Procedural Order No. 4 on Document Production dealing with the outstanding Claimant requests. The Tribunal granted the Claimant’s first document production request in full and the second document production request in part, and denied the Claimant’s third document production request.

33. Pursuant to Procedural Order No. 3 and Procedural Order No. 4, the Tribunal ordered the Respondent to produce all documents in accordance with its ruling no later than 31 May 2023.

²² RWS-Lyle, Witness Statement of Michael Lyle. ↩

²³ RER-Guillet, Expert Report of Dr Jérôme Guillet on Damages Valuation. ↩

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E. FURTHER SUBMISSIONS

34. On 14 August 2023, the Claimant submitted its Reply Memorial (“Reply”), together with factual exhibits C-2529 to C-2840, legal authorities CL-180 to CL-206, two (2) witness statements,²⁴ and three (3) expert reports.²⁵

35. On 30 October 2023, the Respondent submitted its Rejoinder Memorial (“Rejoinder”), together with factual exhibits R-820 to R-951, legal authorities RL-201 to RL-227, one (1) witness statement,²⁶ and one (1) expert report.²⁷

36. On 21 November 2023, the Tribunal provided the disputing parties with a draft procedural order on the organisation of an oral hearing and invited them to provide their comments (with the disputing parties providing comments on 1 December 2023).

37. On 29 November 2023, the United Mexican States (“Mexico”) and the United States of America (“US”) each filed Submissions Pursuant to NAFTA Article 1128 (“1128 Submissions”).

38. The same day, the Respondent submitted a Motion for Costs Undertaking (“Motion for Costs Undertaking”), together with factual exhibits R-952 to R-962 and legal authorities RL-228 to RL-259.

39. On 6 December 2023, having taken note of the disputing parties’ agreement on the terms of the draft procedural order, the Tribunal vacated the scheduled pre-hearing conference scheduled for 7 December 2023 and issued Procedural Order No. 5, convening a hearing on jurisdiction, the merits, and quantum (the “Oral Hearing”),

²⁴ CWS-N. Baines-2, Second Witness Statement of Nancy Baines; CWS-Mars-4, Fourth Witness Statement of David Mars. ↩

²⁵ CER-Secretariat-2, Independent Expert Reply Report of Chris Milburn, Edward Tobis, and Pierre-Antoine Tetard; CER-Power Advisory-3, Third Expert Report of Power Advisory, Jason Chee-Aloy; CER-Two Dogs-2, Second Expert Report of Two Dogs Projects Ltd., Ian Irvine. ↩

²⁶ RSW-Teliszewsky, Witness Statement of Andrew Teliszewsky. ↩

²⁷ RER-Guillet-2, Second Expert Report of Dr Jérôme Guillet on Damages Valuation. ↩

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establishing its place, time, agenda, format, and all other technical and ancillary aspects.

40. On 14 December 2023, the Claimant submitted its Response to the Motion for Costs Undertaking (“Response to Motion for Costs Undertaking”).

41. Further on 14 December 2023, both the Claimant and the Respondent submitted their responses to Mexico and the United States’ Article 1128 Submissions and the accompanying indexes.

42. On 17 January 2024, the Tribunal issued Procedural Order No. 6, denying the Respondent’s Motion for Costs Undertaking from the Claimant.

F. HEARING AND POST-HEARING SUBMISSIONS

43. From 5 February 2024 to 9 February 2024, the Oral Hearing was held at Arbitration Place, in Toronto, Ontario. The following persons were present:

Tribunal

Ms Wendy Miles KC (Presiding Arbitrator)
Professor John Gotanda
Rt Hon Beverley McLachlin

Claimant

Party Representative
Mr David Mars

Counsel
Mr John Terry, Counsel, Torys LLP
Ms Emily Sherkey, Counsel, Torys LLP
Ms Alexandra Shelley, Counsel, Torys LLP
Ms Julie Lowenstein, Counsel, Torys LLP
Ms Natasha Williams, Counsel, Torys LLP
Ms Shoshana Israel, Clerk, Torys LLP

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Ms Nicole Wannop, Clerk, Torys LLP

Fact and Expert Witnesses
Ms Nancy Baines
Mr Michael Killeavy

Mr Edward Tobis, Secretariat
Mr Chris Milburn, Secretariat
Mr Pierre-Antoine Tetard

Respondent

Party Representatives
Ms Karen Slawner, Team Lead, Ministry of Energy, Government of Ontario
Mr Erik Guloien, Counsel, Ministry of Energy, Government of Ontario
Ms Sejal Shah, Senior Legal Counsel, Independent Electricity System Operator
Ms Adrianna Militano, Senior Policy Advisor, Ministry of Economic Development, Job Creation and Trade, Government of Ontario
Ms Sidrah Naveed, Policy Advisor, Ministry of Economic Development, Job Creation and Trade, Government of Ontario
Mr Luka Petrusevski, Counsel, Ministry of the Attorney General, Government of Ontario
Mr Andrew Christie, Counsel, Ministry of the Attorney General, Government of Ontario
Mr Rahim Punjani, Counsel, Ministry of the Attorney General, Government of Ontario

Counsel
Mr Rodney Neufeld, Senior Counsel, Global Affairs Canada, Trade Law Bureau
Ms Heather Squires, Senior Counsel and Deputy Director, Global Affairs Canada, Trade Law Bureau
Ms E. Alexandra Dosman, Counsel, Global Affairs Canada, Trade Law Bureau

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Mr Yu Cai Tian, Counsel, Global Affairs Canada, Trade Law Bureau
Ms Kayla McMullen, Paralegal, Global Affairs Canada, Trade Law Bureau
Mr Darian Bakelaar, Paralegal, Global Affairs Canada, Trade Law Bureau
Ms Christine Ayoub, Paralegal, Global Affairs Canada, Trade Law Bureau

Fact Witnesses
Mr Andrew Teliszewsky
Mr Michael Lyle

Expert Witness
Dr Jérôme Guillet

Trial Graphic Expert
Mr Ryan Knecht, Core Legal Concepts
Ms Nathalie Korth, Core Legal Concepts

Permanent Court of Arbitration

Mr José Luis Aragón Cardiel
Mr Stefan Schäferling
Ms Helen Griffin

Court Reporter

Ms Lisa Lamberti

44. Following oral closing submissions, the Oral Hearing closed on 9 February 2024.

45. On 27 March 2024, the Tribunal wrote to the disputing parties to direct as follows:

1. for Post-Hearing Submissions, noting that the disputing parties were provided with the opportunity to make closing statements at the Oral Hearing, the Tribunal did not require written any further written submissions; and
2. for costs, the disputing parties were requested to file submissions by 26 April 2024, which were required succinctly to enumerate and describe the

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costs incurred by each Party, quantified by separate cost categories, permitted to include brief reasons for requests for an award on costs, and not required to append supporting documentation.

46. On 26 April 2024, the disputing parties simultaneously submitted costs submissions.

III. FACTUAL BACKGROUND

47. The disputing parties agree that events underlying the Windstream I arbitration proceedings form part of the factual background in the Windstream II arbitration; both disputing parties rely on submissions in Windstream I and factual findings in the Windstream I Award.²⁸ Accordingly, Procedural Order No. 1 Section 10.1 declares that the record of written submissions, witness statements, expert reports, exhibits, and legal authorities in the Windstream I arbitration proceedings also forms part of the record in the Windstream II arbitration.

48. At Annex A to this Award, the relevant factual findings of the Windstream I Award are set out in full and incorporated by reference in this Windstream II Award. To the extent that the disputing parties rely on specific factual findings in the Windstream I Award in their submissions in Windstream II, reference is made to those findings.²⁹ A brief summary of key factual findings in the Windstream I Award, as relevant to Windstream II, and facts arising after the Windstream I Award, is set out below.

A. THE RELEVANT ENTITIES

(i) The Claimant's Subsidiaries and Management

49. WWIS is a subsidiary of the Claimant, incorporated in Ontario in 2007 as a special purpose company to develop and operate the Project.³⁰ The Claimant directly owns

²⁸ Memorial, para. 86; Counter-Memorial, para. 19. ↩

²⁹ For the detailed factual findings of the Windstream I tribunal see Windstream I Award, paras. 86 to 160. ↩

³⁰ Memorial, para. 61. ↩

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85% of the shares of WWIS, and indirectly owns the remaining 15% of the shares through OCP Option Inc., which is a wholly-owned subsidiary of the Claimant.³¹ WWIS is the counterparty to the FIT Contract and is the holder of all rights under that contract.³²

50. The President of WWIS is Mr Ian Baines, an Ontario-based engineer with experience in renewable energy projects.³³ Mr Baines is also the President of Windstream Energy Inc. (“WEI”),³⁴ another subsidiary of the Claimant owned wholly by the Claimant,³⁵ which provides various services to WWIS under a Management Services Agreement.³⁶

(ii) The Respondent's Organs of State

51. Ontario is one of the Respondent’s 10 provinces. Lake Ontario, Lake Erie, Lake Huron and the St. Lawrence Seaway form the southern and western borders of the southern area of Ontario.³⁷ Ontario’s de facto head of government is its Premier.³⁸

52. Three organs of government within the Ontario province are relevant to the arbitrations, as follows.

53. First, the Ontario Ministry of Energy (“MEI”), previously known as the Ministry of Energy and Infrastructure, is responsible for developing Ontario’s electricity generation, transmission and other energy-related facilities.³⁹ The Ontario Minister of Energy, the head of MEI, is an elected member of the Legislature of Ontario and

³¹ Memorial, para. 61. ↩

³² Memorial, para. 62; C-251, OPA Feed-In Tariff Contract (FIT Contract), 4 May 2010. ↩

³³ Memorial, paras. 68 to 69; CWS-Baines, Witness Statement of Ian Baines, paras. 1, 3 to 6. ↩

³⁴ CWS-Baines-3, Third Witness Statement of Ian Baines, para. 1. ↩

³⁵ Memorial, para. 61. ↩

³⁶ Windstream I Award, para. 2; CWS-Baines, Witness Statement of Ian Baines, para. 30. ↩

³⁷ Memorial, para. 70. ↩

³⁸ Memorial, paras. 72 to 73. From 23 October 2003 to 11 February 2013, Ontario’s Premier was Dalton McGuinty; from 11 February 2013 to 29 June 2018, Ontario’s Premier was Kathleen Wynne; the current Premier is Doug Ford. ↩

³⁹ Memorial, para. 75. ↩

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is accountable to the Legislature of Ontario.⁴⁰ The MEI has put in place bodies to regulate and operate electricity systems in Ontario:

1. in 2004, OPA was established as “an independent non-share capital corporation responsible for medium and long-term system planning, conservation, demand management and procurement of new generation through long-term power purchase agreements [...]”;⁴¹

2. the Green Energy and Green Economy Act 2009 (“GEGEA"), empowered the Minister of Energy to direct OPA, among other things, to procure electricity supply from renewable sources and develop a feed-in-tariff programme (“FIT Program") for electricity produced by renewable sources;⁴²

3. on 1 January 2015, OPA was amalgamated with Ontario's Independent Electricity System Operator, (“IESO”), a corporation established under the Electricity Act 1998, which:

   1. is governed by a Board of Directors that oversees its business and affairs, appointed by and serving at the pleasure of the Minister of Energy (with exception of the CEO);
   2. is subject to mandatory directives issued by the Minister of Energy pursuant to the Electricity Act 1998;⁴³
   3. is now responsible for forecasting electricity demand, planning for electricity generation and engaging in activities to ensure an adequate supply of electricity in Ontario, including procuring electricity, such

⁴⁰ Memorial, para. 76. ↩

⁴¹ Windstream I Award, para. 87. ↩

⁴² Memorial, para. 77. ↩

⁴³ Memorial, para. 79. ↩

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as by entering into long-term purchase agreements with private sector developers;⁴⁴ and

4. from 2015, OPA's objects, powers, and contracts were transferred to IESO,⁴⁵ making IESO the successor to the FIT Contract with WWIS.⁴⁶

54. Secondly, the Ministry of Northern Development, Mines, Natural Resources, and Forestry (“MNR"), also known as the Ministry of Natural Resources, ⁴⁷ is responsible for the Public Lands Act, and for managing, selling and disposing of Crown lands in Ontario.⁴⁸ It exercises regulatory authority on behalf of Ontario Government for granting access to Crown land for offshore wind development.⁴⁹

55. Thirdly, the Ministry of the Environment, Conservation and Parks ("MOE”) is constituted by the Ministry of the Environment Act and is responsible for managing and protecting the natural environment in Ontario.⁵⁰ It is empowered under the Environmental Protection Act to “issue, amend or revoke policies in respect of renewable energy approvals” in Ontario.⁵¹

B. THE REGULATORY FRAMEWORK

56. The Ontario renewable policy and regulatory framework from 2004 to 2014 is set out in full in Annex A. The renewable energy framework governs (i) site control, (ii) permitting, (iii) offtake (or revenue); and (iv) grid connection. The key elements for this arbitration are the renewable energy regime under GEGEA (implemented through OPA then IESO) and the Crown land lease regime.

⁴⁴ Memorial, para. 80. ↩

⁴⁵ Counter-Memorial, para. 52. ↩

⁴⁶ Memorial, para. 78. ↩

⁴⁷ Memorial, para. 81. ↩

⁴⁸ Memorial, para. 81. ↩

⁴⁹ Windstream I Award, para. 89. ↩

⁵⁰ Memorial, para. 83. ↩

⁵¹ Memorial, para. 85. ↩

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57. Regarding the renewable regime, in 2009, the Ontario Government announced its proposal to enact the GEGEA, introducing three project procurement process elements to encourage private investment in new renewable infrastructure in Ontario, relating to economics, grid connection and permitting, respectively:⁵²

1. a FIT Program, intended to provide standard program rules, contracts and pricing for specified renewable energy sources in order to increase investor confidence in renewable energy projects;

2. a “right to connect” to the electricity grid for renewable projects; and

3. a streamlined approvals process for renewable energy projects, which combined the previous amalgam of municipal and provincial permits into a single new “renewable energy approval” (“REA”).

58. As to the FIT Program, on 14 May 2009, the GEGEA was adopted and entered into force,⁵³ making the MOE the primary regulator in the renewable energy sector, and authorising the MEI to direct OPA (IESO from 2015) to develop that Program. In September 2009, the MEI exercised its directing authority, and in October 2009, OPA began taking applications for the FIT Program, in relation to which:⁵⁴

1. OPA was to pay a 20-year fixed premium price for energy from renewable sources (except waterpower projects), including onshore and offshore wind; and

2. OPA developed feed-in-tariff rules and a standard contract, i.e., a standard long-term fixed-price contract with general terms and conditions applicable to all feed-in-tariff related projects, and specific terms and conditions for different types of renewable energy sources.⁵⁵

⁵² Memorial, para. 90; Windstream I Award, para. 96. ↩

⁵³ Memorial, para. 94; Windstream I Award, para. 96. ↩

⁵⁴ Memorial, para. 95; Windstream I Award, para. 97. ↩

⁵⁵ Memorial para. 98; Windstream I Award, paras. 98 to 99. ↩

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59. As to the “right to connect" in relation to projects generating greater than 10 megawatts, (as here) applicants were required to obtain a connection assessment, which included:

1. an IESO System Impact Assessment (“SIA"), to assess the impact of a project on Ontario's integrated power system; and

2. a Customer Impact Assessment ("CIA") from the relevant transmitter, to assess the impact on existing customers of the new project connection to the grid.⁵⁶

60. As to the streamlined approvals process, on 14 May 2009, the Renewable Energy Approval Regulation (“REA Regulation") (Ontario Regulation 359/09) was adopted and entered into force, providing for a single streamlined approvals process with a six-month service guarantee. Under this process, developers could submit a single application to satisfy all provincial and municipal regulatory requirements for developing renewable energy projects,⁵⁷ including offshore wind,⁵⁸ which would follow four sequential steps:

1. the project proponent conducts certain “pre-submission activities,” including:⁵⁹

   1. a draft project description report submission to the MOE;
   2. consultations with stakeholders and preparing a consultation report; and
   3. a natural heritage assessment, as well as a water assessment;

2. the proponent then submits the application and accompanying materials to the MOE;

⁵⁶ Windstream I Award, para. 112. ↩

⁵⁷ Memorial, para. 101; CER-Powell, Expert Report of Sarah Powell, para. 25. ↩

⁵⁸ Memorial, para. 104; Windstream I Award, para. 103. ↩

⁵⁹ Windstream I Award, paras. 103, 111. ↩

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3. the MOE completes its technical review, making “an independent and discretionary determination of whether or not it [was] in the public interest to issue a REA”;⁶⁰ and

4. the applicant and any resident of Ontario may appeal the determination to the Environmental Review Tribunal.⁶¹

61. Regarding the Crown land lease regime, in 2009 when the FIT Program was launched, all but one lakebed in Ontario was on Crown land.⁶² Therefore, the MNR established a three-stage process for applications for access to Crown land for wind testing and project construction and operation which included:⁶³

1. the Site Release process to obtain an Applicant of Record (“AOR”) status for specific "grid cells” or groupings of grid cells of Crown land,⁶⁴ divided into two-stages, including:

   1. wind power testing application and review; and
   2. wind power development review; then

2. the process for requesting necessary permits and approvals for development of the project,⁶⁵ including tenure for development of a wind farm on Crown land.⁶⁶

⁶⁰ Windstream I Award, para. 111. ↩

⁶¹ Windstream I Award, para. 111. ↩

⁶² Memorial, para. 107. ↩

⁶³ Memorial, para. 107. ↩

⁶⁴ Memorial, para. 107; Windstream I Award, para. 107. ↩

⁶⁵ Windstream I Award, para. 107. ↩

⁶⁶ Windstream I Award, para. 107. ↩

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C. THE WOLFE ISLAND SHOALS PROJECT

62. In 2008, the Claimant began its investment in developing the Project, a 300-megawatt offshore wind energy facility in Lake Ontario,⁶⁷ including resource evaluation, engineering and technical reviews.⁶⁸

63. In February 2008, the Claimant submitted for its “right to connect” and Crown land access the following two applications:

1. a SIA application to IESO (whilst undertaking other preparatory work);⁶⁹ and

2. an AOR status application to the MNR to develop a wind facility on Crown land,⁷⁰ (with the Project occupying a subset of the “grid cells” within the application).⁷¹

64. In September 2009, the MNR acknowledged the Claimant's Crown land AOR status application in writing and informed it that in order to maintain priority position within MNR's site release process, it needed to submit an application to the FIT Program.⁷²

65. On 27 November 2009, the Claimant (through WWIS and other subsidiaries), submitted its application to OPA for (among other things), a feed-in-tariff contract in respect of the Project, with WWIS posting a CAD 3 million letter of credit.⁷³

⁶⁷ Memorial, para. 55. ↩

⁶⁸ Memorial, para. 112; Windstream I Award, para. 117. ↩

⁶⁹ Memorial, para. 113; Windstream I Award, para. 118. ↩

⁷⁰ Memorial, para. 113. ↩

⁷¹ Memorial, para. 115; Windstream I Award, para. 123. ↩

⁷² Memorial, para. 114; Windstream I Award, para. 121. ↩

⁷³ Memorial, para. 115; Windstream I Award, para. 123. ↩

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66. In May 2010, the OPA offered a feed-in-tariff contract to WWIS for the Project,⁷⁴ followed by meetings with government representatives.⁷⁵ On 20 August 2010, WWIS executed the FIT Contract, and posted an additional CAD 3 million as security (total CAD 6 million).⁷⁶

67. From 2009 to spring 2012, the Claimant carried out work to advance the Project, including wind resource/energy yield testing, preparing designs for the electrical system, a lake bottom investigation, financial assessments and the organisation of specialised consultants.⁷⁷

68. According to the Claimant, by Spring 2012 the Project assets included:⁷⁸

1. the FIT Contract;

2. the CAD 6 million letter of credit;

3. all WWIS work product in connection with the Project development, including all studies to define the wind resource and determine the Project feasibility;

4. all data that WWIS collected or acquired in connection with the Project, including wind resource data and meteorological data;

5. the Project meteorological tower;

6. WWIS's turbine supply agreement with Siemens for the Project; and

7. land leases applications for the Project

⁷⁴ Memorial, para. 127. ↩

⁷⁵ Memorial, paras. 128 to 135; see below paras. 72.b-73. ↩

⁷⁶ Memorial, paras. 121, 137. ↩

⁷⁷ Memorial, para. 116; Windstream I Award, para. 124. ↩

⁷⁸ Memorial, para. 417. ↩

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69. It is undisputed that, by Spring 2012, the Project had not obtained the right to connect or control over the Crown land Project site. It did, however, have a FIT Contract.

D. THE FIT CONTRACT

70. The WWIS FIT Contract provided as follows:

1. WWIS became an electricity Supplier;

2. OPA would purchase all electricity generated by the Project from the Supplier:⁷⁹

   1. at a rate of CAD 190 per MW/hour;
   2. with full escalation for inflation until the Project's commercial operation date, and up to a maximum of 20 percent in total thereafter;
   3. for 20 years starting from commercial operation date;

3. the Supplier would put in place a security deposit;

4. construction could not commence until the OPA issued a Notice to Proceed (FIT Contract section 2.4), which was subject to the Supplier's:

   1. receipt of REA (the approval) and any other equivalent environmental and site plan approvals necessary for construction to commence, and
   2. submission of a financing plan including signed commitment letters from sources of financing representing at least 50 percent of expected development costs, stating agreement in principle to provide necessary financing;⁸⁰

⁷⁹ Memorial, para. 117; Windstream I Award, para. 137. ↩

⁸⁰ C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 2.4(b), p. 8. ↩

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5. prior to the Notice to Proceed, the Supplier could terminate only by forfeiting its security of CAD 6 million security,⁸¹ (the original draft permitted OPA to terminate prior upon refunding the security and compensating supplier for a portion of its pre-construction development costs, but that was subsequently waived by OPA);⁸²

6. the Supplier must commence commercial operation by the “Milestone Date for Commercial Operation”(“MCOD”), i.e., usually four years from contract date,⁸³ although the Claimant obtained a specific term to extend by one year, i.e., five years from contract date;⁸⁴

7. once the Project achieved MCOD, the CAD 6 million security would be refunded;⁸⁵

8. if the Supplier failed to achieve MCOD within 18 months (i.e., by 4 November 2016), OPA would be entitled to terminate, retain the CAD 3 million initial security and sue the Claimant for damages;⁸⁶

9. in the event of a force majeure event (within the meaning of the FIT Contract):

   1. the Supplier's obligation to achieve commercial operation by MCOD was suspended for the duration of the force majeure status;⁸⁷

⁸¹ C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 2.4(a)(ii), p. 8. ↩

⁸² C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 2.4(a), pp. 7 to 8; C-549, Waiver Agreement OPA and WWIS re: Pre-NTP Termination Right, 29 August 2011; C-575, Email from Ian Baines (WEI) to John Vellone (BLG) and Adam Chamberlain (BLG), 19 December 2011. ↩

⁸³ Windstream I Award, para. 100. ↩

⁸⁴ Windstream I Award, para. 136; Memorial, para. 118; C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 2.5, p. 9. ↩

⁸⁵ C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 5.1(c), p. 19. ↩

⁸⁶ C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 9.2(d), p. 29. ↩

⁸⁷ C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Sections 10.1(a) and (g), pp. 31-32; Windstream I Award, para. 102. ↩

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2. if, by reason of force majeure event, commercial operation was delayed more than 24 months after MCOD, either party could unilaterally terminate without costs or payments of any kind, and the security would be returned;
3. if one or more events of force majeure prevented the Supplier from complying with its obligations for more than an aggregate of 36 months in any 60-month period, either party could unilaterally terminate;⁸⁸

71. WWIS did not execute the FIT Contract until 20 August 2010,⁹¹ by which time a review of Ontario's offshore wind policy had commenced, as below.

⁸⁸ Windstream I Award, para. 102; C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 10.1(h), p. 32. ↩

⁸⁹ C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010), Section 9.1(j), p. 28. ↩

⁹⁰ Memorial, para. 119; C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 2.6(a)(iv), pp. 9 to 10. ↩

⁹¹ Memorial, para. 137; Windstream I Award, para. 137. ↩

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Ε. MOE OFFSHORE WIND STRATEGY REVIEW AND FORCE MAJEURE

72. In the period after the FIT Contract was agreed but prior to its execution:

1. on 25 June 2010, MOE sought comment on a policy proposal entitled “Renewable Energy Approval Requirements for Off-Shore Wind Facilities – An Overview of the Proposed Approach” (“Offshore Wind Policy Proposal"), including a proposed five-kilometre exclusion zone for offshore wind projects;⁹²

2. in late June 2010, the Claimant sent a proposal to the Ontario Government, suggesting release of its application for parts of the lakebed within five kilometres of Wolfe Island in exchange for other lakebed lands further offshore;⁹³

3. subsequently, land swap discussion continued, the Claimant formally applied to MNR to “swap” Crown land grid cells, and it reiterated its request for AOR status;⁹⁴ and

4. no "swap" occurred prior to the FIT Contract execution in August 2010.

73. Following the execution of the FIT Contract:

1. in September 2010, WWIS sought permission from MNR to erect a temporary wind monitoring mast to carry out wind speed testing;⁹⁵

2. on 8 November 2010, IESO sent Notification of Conditional Approval for Connection to the WWSI, allowing it to connect to the grid at the Lennox Connection Point; and

⁹² Memorial, para. 129; Windstream I Award, para. 131. ↩

⁹³ Memorial, para. 130; Windstream I Award, para. 133. ↩

⁹⁴ Memorial, paras. 131 to 141; Windstream I Award, paras. 134 to 139. ↩

⁹⁵ Memorial, para. 141 b); Windstream I Award, para. 139. ↩

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3. also on 8 November 2010, Hydro One, owner of the relevant power lines, issued a CIA for WWIS, which provided that WWIS was not expected adversely to impact transmission customers in the area of Lennox County.⁹⁶

74. On 22 November 2010, MNR informed WWIS that:

1. the Offshore Wind Policy Proposal review remained “still outstanding";

2. it had yet to consider granting AOR status to the Project;⁹⁷ and

3. WWIS should not expect any decision on permission to conduct testing while the review was outstanding.⁹⁸

75. On 10 December 2010, WWIS claimed a force majeure event under its FIT Contract “on account of the lack of regulatory assistance from MNR and MOE”, in light of its inability to advance the Project in the absence of an AOR status,⁹⁹ and accordingly claimed that:

1. the MCOD was to be extended for the duration of the force majeure event; and

2. either party to the FIT Contract could unilaterally terminate if the Project did not reach commercial operation within two years of the original MCOD.¹⁰⁰

76. Subsequently, WWIS proposed to the MOE that the Project proceed as a pilot project that would generate scientific data to assist Ontario; discussions on this proposal took place but no decision was made.¹⁰¹

⁹⁶ Windstream I Award, para. 140. ↩

⁹⁷ Memorial, para. 141 (d). ↩

⁹⁸ Windstream I Award, para. 141. ↩

⁹⁹ Memorial, para. 143; Windstream I Award, para. 142. ↩

¹⁰⁰ Memorial, para. 144; Windstream I Award, para. 142. ↩

¹⁰¹ Windstream I Award, paras. 143 to 144. ↩

[Page 52]

77. In the course of February and March 2011, the OPA contacted each Supplier, including the Claimant, with an offer to execute an amending agreement that would extend the MCOD by up to one year in exchange for settlement of force majeure rights. WWIS did not accept this offer.¹⁰²

F. THE MORATORIUM

78. On 11 February 2011, the Government of Ontario publicly announced the offshore wind moratorium, which included the Project (i.e., that it would not be “proceeding with any development of offshore wind projects until the necessary scientific research is completed and an adequately informed policy framework can be developed").¹⁰³

79. Thereafter, the Claimant continued unsuccessfully to seek to renegotiate the FIT Contract terms,¹⁰⁴ and events proceeded as follows:

1. in October 2011, the Claimant again unsuccessfully sought to have the Project proceed as a pilot, requesting reconfiguration of its AOR status application to permit testing activities;¹⁰⁵

2. on 9 September 2011, OPA confirmed that delays arising out of the moratorium had constituted a force majeure event from 22 November 2010;¹⁰⁶

3. in 2013, the Minister of Energy directed OPA:

   1. to end procurement of electricity from large-scale FIT projects,¹⁰⁷ and

¹⁰² Counter-Memorial, para. 35; Windstream I Award, para. 145. ↩

¹⁰³ Memorial, para. 148; Counter-Memorial, para. 34; Windstream I Award, para. 147. ↩

¹⁰⁴ Memorial, paras. 164 to 169; Windstream I Award, paras. 150 to 155. ↩

¹⁰⁵ Memorial, para. 170; Windstream I Award, para. 158. ↩

¹⁰⁶ Memorial, para. 147; Windstream I Award, para. 157. ↩

¹⁰⁷ Counter-Memorial, para. 55. ↩

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2. to undertake a competitive Large Renewable Procurement process;¹⁰⁸ and

80. By the end of 2012 the moratorium remained in place.

G. WINDSTREAM I ARBITRATION

81. On 28 January 2013,¹¹⁰ the Claimant commenced the Windstream I arbitration, arguing that Ontario Government's conduct breached NAFTA Articles 1110, 1105, 1102 and 1103 rendering its Project investment worthless.¹¹¹

82. The Windstream I Award granted one claim (NAFTA Article 1105 on fair and equitable treatment) and dismissed the other three (expropriation, non-discrimination, and most favoured nation treatment) as follows:¹¹²

(a) The Claimant's claim that the Respondent has unlawfully expropriated the Claimant's investments in WWIS, the Project and the FIT Contract, contrary to Article 1110 of NAFTA, is dismissed;

(b) The Claimant's claim that the Respondent has failed to accord the Claimant's investments fair and equitable treatment in accordance with international law, contrary to Article 1105 of NAFTA, is granted;

(c) The Claimant's claim that the Respondent has failed to accord the Claimant's investments treatment no less favorable than that accorded, in like circumstances, to its own investors contrary to Article 1102 of NAFTA is dismissed;

¹⁰⁸ Counter-Memorial, para. 55. ↩

¹⁰⁹ Memorial, para. 172. ↩

¹¹⁰ Windstream I Award, para. 11. ↩

¹¹¹ Windstream I Memorial, para. 5. ↩

¹¹² Windstream I Award, para. 515 [Emphasis added]. ↩

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(d) The Claimant's claim that the Respondent has failed to accord the Claimant's investments treatment no less favorable than that accorded, in like circumstances, to investors of any other Party or of a non-Party contrary to Article 1103 of NAFTA is dismissed;

(e) The Claimant is awarded compensation for the Respondent's breach of its obligations under Article 1105(1) of NAFTA in the amount of CAD 25,182,900. This amount is payable within 30 days of the notification of this award;

(f) The Claimant's claim for post-award interest is dismissed; and

(g) The Respondent is ordered to pay CAD 2,912,432 to the Claimant within 30 days of notification of this award.

83. Specifically in respect of the successful NAFTA Article 1105(1) claim, the Windstream I Award held:¹¹³

[...] the Government did little to address the legal and contractual limbo in which Windstream found itself after the imposition of the moratorium. While the regulatory framework continued to envisage the development of offshore wind, additional and more detailed regulations governing offshore wind specifically were never developed. The Government let the OPA conduct the negotiations with Windstream even if the decision on the moratorium had been taken by the Government and not by the OPA, and without providing any direction to the OPA for the negotiations although it had the authority to do so under the GEGEA (a power it had exercised when introducing the FIT program). As a result, as the negotiations between the OPA and Windstream failed to produce results, by May 2012 the Project had a reached a point at which it was no longer financeable. Nonetheless, the Government failed to clarify the situation, either by way of promptly completing the required scientific research and establishing the appropriate regulatory framework for offshore wind and reactivating Windstream's FIT Contract, or by amending the relevant regulations so as to exclude offshore wind altogether as a source of renewable energy and terminating Windstream's FIT Contract in accordance with the applicable law. For these reasons, the Tribunal finds that the Government's

¹¹³ Windstream I Award, para. 379 [Emphasis added]. ↩

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conduct vis-à-vis Windstream during the period following the imposition of the moratorium was unfair and inequitable within the meaning of Article 1105(1) of NAFTA.

84. The Windstream I Award awarded the Claimant CAD 25,182,900 in damages to compensate for that breach of the fair and equitable treatment standard, reasoning that it was "not entitled to compensation for the full value of its investment” as a consequence of breach because:¹¹⁴

1. “the Claimant has not lost the letter of credit, which is still in place”, therefore:

   1. “in order to quantify the damage caused by the Respondent's breach to the value of the Claimant's investment”;
   2. “a further adjustment must be made to reflect the value of the letter of credit (CAD 6 million)”; and

2. “the FIT Contract is still in force and could, in theory, be still revived and renegotiated if the Parties so agreed”, however:

   1. “the Tribunal does not consider it appropriate or necessary to make any further adjustments to reflect the fact that the FIT Contract is still formally in place";
   2. “although the FIT Contract could have been reactivated and renegotiated by the Parties at any time during the period from 11 February 2011 until the date of this award, as a matter of fact this has not happened and consequently, as at the date of this award, the FIT Contract cannot be considered to have any value”; and
   3. “[i]t is another matter that the Parties can create such value by reactivating and renegotiating the FIT Contract after the award, which option is still open to them".

¹¹⁴ Windstream I Award, para. 483 [Emphasis added]. ↩

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85. The final Windstream I Award was released on 6 December 2016, following the uncorrected Award, which had been circulated on 30 September 2016.

H. EVENTS POST-WINDSTREAM I ARBITRATION

86. Following the Windstream I Award, the Claimant allegedly proceeded to seek to create value by reactivating and renegotiating the FIT Contract on the basis that the Windstream I Award identified this to be an option. It proceeded to engage with potential investors, conducted further studies, and sought to interact with the MOE and MEI, IESO and Ontario Government, as set out below.

(i) Post-Windstream I Award Potential Investors

87. During the course of 2016 and 2017, the Claimant engaged with potential investors and partners in relation to the Project.¹¹⁵ According to the Claimant, third parties, [Redacted]¹¹⁶ expressed interest in investing in the Project following the Windstream I Award, as follows:¹¹⁷

1. a number of parties proactively reached out to the Claimant to express interest in learning more about the Project, including [Redacted] in October 2016, [Redacted] in October 2016, and [Redacted] in November 2016;

2. in May 2017, the Claimant met with [Redacted] and all of whom expressed interest in the Project and learning more about the potential opportunity;

3. in June 2017, the Claimant met a second time with [Redacted] about potential investment in the Project;

¹¹⁵ Memorial, para. 225; Counter-Memorial, para. 84. ↩

¹¹⁶ Memorial, para. 225; Reply, para. 101. ↩

¹¹⁷ Memorial, para. 228. ↩

[Page 57]

4. in June and July 2017, the Claimant met with [Redacted], the former offering to demonstrate its capabilities to the Claimant;

5. by June 2017, [Redacted]

6. in July 2017, the Claimant launched a data room so that potential investors could review information related to the Project and conduct due diligence; and

7. in August and September 2017, the Claimant continued to meet up with [Redacted] to discuss investment in the Project.

88. According to the Claimant, [Redacted]
[Redacted]¹¹⁸ The Respondent questioned the seriousness of the negotiations and interest in the Project.¹¹⁹

(ii) Post-Windstream I Award Work Conducted

89. According to the Claimant, in 2017, it engaged Canadian Seabed Research to use more advanced software and hardware to interpret the original data obtained in 2010 by Canadian Seabed Research in its preliminary site investigation.¹²⁰ In particular:

1. in February 2017, Ortech prepared the updated Project Description Report that was submitted to MOE and, in the spring of 2017, also prepared an updated wind resource assessment;¹²¹ and

¹¹⁸ Memorial, paras. 229 to 230. ↩

¹¹⁹ Counter-Memorial, paras. 83 to 85, 180; Reply, paras. 86 to 101. ↩

¹²⁰ Memorial, para. 219; CWS-Baines-3, Third Witness Statement of Ian Baines, paras. 42 to 43; C-2143, CSR 2017 Geological Assessment Report Project Number 1714, 27 February 2018. ↩

¹²¹ C-2074, ORTECH Report: Project Description - Wolfe Island Shoals Offshore Wind Farm, 15 February 2017; CWS-N. Baines-2, Second Witness Statement of Ian Baines; C-2713, Email from Hank Van Bakel to Tyler G. Nielsen, David Mars, et al. re Windstream Contract and WRA, 30 June 2017. ↩

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2. also in 2017, CSR updated its report on the regional bathymetry and geophysical conditions of the turbine area.¹²²

(iii) Post-Windstream I Award Interactions with MOE and MEI

90. Following receipt of the uncorrected Windstream I Award in September 2016, the Claimant unsuccessfully sought to reactivate and renegotiate the FIT Contract with the MOE and MEI as follows:¹²³

1. the Claimant's Government Relations consultant, Mr Chris Benedetti, unsuccessfully sought to facilitate a meeting between the Claimant and MEI to discuss the Project:¹²⁴

   1. on 6 October 2016, Mr Benedetti spoke with MEI Chief of Staff, Mr Andrew Teliszewsky, to seek a meeting for the Claimant, but Mr Teliszewsky requested discussions to take place between legal counsel;
   2. on 13 October 2016, Mr Benedetti met with the Minister of Energy, who stated that he was not willing to meet with the Claimant;
   3. on 16 October 2016, Mr Benedetti spoke again to Mr Teliszewsky about meeting with the Claimant, but Mr Teliszewsky stated that MEI lawyers were still digesting the implications of the Windstream I Award;
   4. on 9 November 2016, Mr Benedetti spoke again to Mr Teliszewsky, but the latter informed him that the MEI had been advised by counsel not to engage with the Claimant;

¹²² See Memorial, para. 219; C-2143, CSR 2017 Geological Assessment Report Project Number 1714, 27 February 2018. ↩

¹²³ Counter-Memorial, para. 59; CWS-Benedetti-2, Second Witness Statement of Chris Benedetti, para. 5. ↩

¹²⁴ Reply, paras. 108 to 122; Memorial, para. 236; CWS-Benedetti-2, Second Witness Statement of Chris Benedetti, para. 5. ↩

[Page 59]

2. following the legislative debate on 17 October 2016, the Claimant's efforts to re-open discussions with the Ontario Government intensified, based on:¹²⁵

   1. comments by the Premier of Ontario, Ms Kathleen Wynne, that:

      1. the Ontario Government was continuing to take a “cautious and reasonable approach to offshore wind to allow for the development of research and coordination", which was the reason “why there's a moratorium”;¹²⁶
      2. “the Minister of the Environment is finalizing research on the issue, including decommission requirements and noise over water";¹²⁷
      3. two preliminary studies were commissioned in 2014;¹²⁸
      4. until the necessary work was undertaken, the moratorium would not be lifted;¹²⁹ and
      5. the Government was “going to continue to work with the renewable industry”;¹³⁰

   2. comments by Minister Glenn Thibeault, the then-Minister of Energy, that:

¹²⁵ Counter-Memorial, para. 61. ↩

¹²⁶ Memorial, para. 200; C-2471, Exhibit 78, Official Report of Debates (Hansard) Transcript - English, Legislative Assembly of Ontario, 17 October 2016, p. 720. ↩

¹²⁷ Memorial, para. 200; C-2471, Exhibit 78, Official Report of Debates (Hansard) Transcript - English, Legislative Assembly of Ontario, 17 October 2016, p. 720. ↩

¹²⁸ Counter-Memorial, para. 60; R-383, Merx Opportunity Abstract, "Technical Evaluation to Predict Offshore Wind Farm Noise Impacts in Ontario", 4 September 2014; R-384, Merx Opportunity Abstract, "Assessment of Offshore Wind Farm Decommissioning Requirements", 4 September 2014. ↩

¹²⁹ C-2471, Exhibit 78, Official Report of Debates (Hansard) Transcript - English, Legislative Assembly of Ontario, 17 October 2016, p. 720. ↩

¹³⁰ Memorial, para. 200; C-2471, Exhibit 78, Official Report of Debates (Hansard) Transcript - English, Legislative Assembly of Ontario, 17 October 2016, p. 720. ↩

[Page 60]

1. “[t]he decision to place a moratorium on offshore wind is one our government still believes is correct, and that's why we're going to continue to take a cautious approach to offshore wind";¹³¹
2. the Government was “continuing to move forward with that cautious approach to offshore wind, which include[d] finalizing that research to make sure that [they] [were] protective of both human health and the environment” (in a subsequent parliamentary session on 26 October 2016 in response to questioning about the Windstream I Award);¹³²

¹³¹ Memorial, para. 201; C-2041, Official Report of Debates (Hansard) Transcript - English, Legislative Assembly of Ontario, 17 October 2016, p. 723. ↩

¹³² Memorial, para. 202; C-2045, Official Report of Debates (Hansard) Transcript - English, Standing Committee on Estimates, Legislative Assembly of Ontario, 26 October 2016, p. E-159. ↩

¹³³ R-784, Letter from David Mars (Windstream) to Minister Murray (MOE), 23 November 2016. ↩

¹³⁴ C-2049 (A), Letter from David Mars (Windstream) to Minister Thibeault (MEI), 28 November 2016. ↩

¹³⁵ R-787, Letter from Minister Thibeault (MEI) to David Mars (Windstream), 6 December 2016. ↩

[Page 61]

3. "it would [not] be appropriate to meet” because the period for the setting aside the Windstream I Award had yet to expire;¹³⁶

¹³⁶ R-787, Letter from Minister Thibeault (MEI) to David Mars (Windstream), 6 December 2016. ↩

¹³⁷ Memorial, para. 204; R-788, Article, "Energy minister says all options still being considered in offshore wind power case", 6 December 2016. ↩

¹³⁸ Counter-Memorial, para. 65. ↩

¹³⁹ C-2055 (A), Letter from David Mars (Windstream) to Minister Thibeault (MEI), 15 December 2016. ↩

¹⁴⁰ C-2055 (A), Letter from David Mars (Windstream) to Minister Thibeault (MEI), 15 December 2016. ↩

¹⁴¹ C-2471, Exhibit 80, Email from Sarah Paul (MOE) to David Mars (Windstream), 23 December 2016. ↩

[Page 62]

9. on 15 February 2017, the Claimant submitted an updated REA to the MOE:¹⁴²

   1. characterised as its third REA submission;¹⁴³

   2. making three requests in the cover letter:

      1. cessation of the moratorium;
      2. confirmation of the proposed 5 km setback; and
      3. provision of an Aboriginal Consultation List, which was required under the REA's guidelines;¹⁴⁴ and

   3. the Claimant did not receive an immediate response,¹⁴⁵ and sent follow up letters on 21 April 2017, 13 June 2017 and 10 August 2017;¹⁴⁶

10. on 21 February 2017, Minister Thibeault replied to the Claimant's letter dated 15 December 2016, stating again that:

    1. "the Ministry [was] not in a position to discuss matters related to individual Feed-in-Tariff (FIT) contracts”; and
    2. the IESO, "as the administrator of the FIT program and counterparty to all FIT contracts, would be the appropriate contact on such matters";¹⁴⁷

¹⁴² C-2073, Letter from Ian Baines (WEI) to Dolly Goyette (MOE), 15 February 2017. ↩

¹⁴³ Memorial, paras. 211 to 214; C-2073, Letter from Ian Baines (WEI) to Dolly Goyette (MOE), 15 February 2017. ↩

¹⁴⁴ Memorial, para. 213. ↩

¹⁴⁵ Memorial, para. 215. ↩

¹⁴⁶ Memorial, para. 215; C-2477, Part 1, Exhibit D, Letter from Ian Baines (WWIS) to Dolly Goyette (MOE), 13 June 2017; C-2477, Part 1, Exhibit D, Letter from Ian Baines (WWIS) to Dolly Goyette (MOE), 10 August 2017. ↩

¹⁴⁷ C-2076, Letter from Minister Thibeault (MEI) to David Mars (Windstream), 21 February 2017. ↩

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11. on 25 August 2017, the MOE responded to the Claimant's REA submission:¹⁴⁸

    1. making the following statements in response to the Claimant's 15 February 2017 submission:

       1. the documents provided did not constitute the required reports for an REA application;¹⁴⁹
       2. Ontario still had not “developed an offshore wind policy framework on approval requirements” nor “a process for obtaining Crown land site access under the Public Lands Act";
       3. it was not able to “confirm whether or when Ontario will be revisiting the February 2011 decision”;¹⁵⁰
       4. “the Ministry does not endorse any of the studies that [it has] conducted in the absence of any provincial framework on offshore wind"; and
       5. "[a]ny studies [it carries] out are entirely at [its] own risk" for they “may not meet the standards set out in the provincial guidelines and policies should these be developed”;¹⁵¹ and

    2. further provided a list of aboriginal communities pursuant to section 14 of Ontario Regulation 359/09, as requested by the Claimant, noting that:¹⁵²

¹⁴⁸ R-795, Letter from Dolly Goyette (MOE) to Ian Baines (WWIS), 25 August 2017. ↩

¹⁴⁹ R-795, Letter from Dolly Goyette (MOE) to Ian Baines (WWIS), 25 August 2017. ↩

¹⁵⁰ R-795, Letter from Dolly Goyette (MOE) to Ian Baines (WWIS), 25 August 2017. ↩

¹⁵¹ R-795, Letter from Dolly Goyette (MOE) to Ian Baines (WWIS), 25 August 2017 [Emphasis omitted]. ↩

¹⁵² R-795, Letter from Dolly Goyette (MOE) to Ian Baines (WWIS), 25 August 2017. ↩

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1. “doing so does not imply approval or support of this project or the contents of the [Project] or any other studies that [the Claimant has] prepared";
2. it would “write to these communities to advise them that they have been identified as potentially having aboriginal or treaty rights that may be adversely impacted or may otherwise be interested in the negative environmental effects of [the Project]", and
3. they would be advised that “the policy framework governing offshore wind has yet to be developed and that no decisions have been made granting [the Claimant] access to Crown land”.¹⁵³

(iv) Post-Windstream I Award Interactions with IESO

91. Following receipt of the uncorrected Windstream I Award in September 2016, and after receipt of the corrected Award on 6 December 2016, the Claimant unsuccessfully sought to reactivate and renegotiate the FIT Contract with the IESO as follows:

1. on 2 December 2016, the Claimant wrote to IESO requesting to meet and discuss the Project and the FIT Contract;¹⁵⁴

2. on 10 December 2016, the Claimant sent a follow-up letter and asked for a response;¹⁵⁵

3. on 13 December 2016, IESO replied and agreed to meet with the Claimant;¹⁵⁶

¹⁵³ R-795, Letter from Dolly Goyette (MOE) to Ian Baines (WWIS), 25 August 2017. The Claimant submitted in the Windstream II arbitration that it did not consult directly with the aboriginal communities because it did not consider it respectful to do so, "until it received clarity about the Project". Counter-Memorial, para. 79; Reply, para. 84. ↩

¹⁵⁴ C-2050 (A), Letter from David Mars (Windstream) to Michael Killeavy (IESO), 2 December 2016. ↩

¹⁵⁵ C-2052 (A), Letter from David Mars (Windstream) to Michael Killeavy (IESO), 10 December 2016. ↩

¹⁵⁶ Memorial, para. 246. ↩

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4. on 12 January 2017, WWIS and IESO met to discuss the FIT Contract:¹⁵⁷

   1. WWIS indicated that it did not want the FIT Contract to terminate and that it was prepared to build the Project;
   2. IESO indicated that it would not waive its contractual right to terminate, and that it had no intention of extending any of the milestone dates;
   3. when asked about the Ontario Government's indication that it would "freeze" the FIT Contract, IESO responded that freezing did not mean a perpetual force majeure, which IESO was not prepared to give;¹⁵⁸
   4. the Claimant asked IESO to consider amending the FIT Contract; and
   5. IESO agreed to consider the matters discussed;¹⁵⁹

5. on 9 February 2017, IESO wrote to the Claimant stating that:

   1. it was “not prepared to amend the FIT Contract to provide an extension of the [MCOD] or the date that would be an event of default under Section 9.1(j)";
   2. it would not "waive any of its rights under the FIT Contract, including its rights to terminate the FIT Contract pursuant to Section 10.1(g)”; and
   3. it had "not made a decision whether to exercise its termination right", which would arise in three months' time.¹⁶⁰

¹⁵⁷ C-2067, Meeting Minutes of Windstream and IESO Meeting, 12 January 2017. ↩

¹⁵⁸ C-2067, Meeting Minutes of Windstream and IESO Meeting, 12 January 2017. ↩

¹⁵⁹ C-2067, Meeting Minutes of Windstream and IESO Meeting, 12 January 2017. ↩

¹⁶⁰ R-662, Letter from Michael Killeavy (IESO) to Nancy Baines (WEI), 9 February 2017. ↩

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(v) Post-Windstream I Award Public Information Regarding Moratorium

92. In September 2016, the IESO released the Ontario Planning Outlook, stipulating that "Ontario's existing, committed and directed resources would be sufficient to meet the flat demand outlook”.¹⁶¹

93. On 26 October 2017, Ontario released its Long-Term Energy Plan, announcing a move away from “relying on long-term electricity contracts", preferring a “market-based approach to reduce electricity supply costs”.¹⁶²

94. On 13 February 2017, media articles indicated that the moratorium on offshore wind in Ontario would continue.¹⁶³

(vi) Post-Windstream I Award Internal Ontario Government Correspondence

95. In the course of document production in the Windstream II proceedings, the Claimant obtained internal Ontario Government correspondence as follows:

1. September 2016 MNR and MOE internal correspondence regarding the response to the question “what research have you done into offshore" in which:¹⁶⁴

   1. MOE proposed “not to mention future decisions or reg development to avoid speculation on the possibility of offshore development in Ontario";¹⁶⁵
   2. MNR proposed to remove any indication that the Ontario Government was conducting further research or would proceed with offshore wind development in Ontario (i.e., amend the sentence, “[t]he province is

¹⁶¹ Counter-Memorial, para. 54; C-2035, IESO Ontario Planning Outlook, 1 September 2016, pp. 8 to 9. ↩

¹⁶² Memorial, para. 315; Counter-Memorial, para. 54; C-2061, Ontario's Long-Term Energy Plan 2017, p. 35. ↩

¹⁶³ R-794, The Globe and Mail, "Ontario signals moratorium on offshore wind projects will continue for years", 13 February 2017; C-2072, Chat News Today, "Ontario signals offshore wind moratorium will continue for years", 13 February 2017. ↩

¹⁶⁴ Memorial, para. 299; C-2037, Email from Kate Jordan (MNR) to Mark Rabbior (MOE), 8 September 2016. ↩

¹⁶⁵ C-2037, Email from Kate Jordan (MNR) to Rosalyn Lawrence (MNR), 30 September 2016. ↩

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meeting its short term renewable energy targets and will not proceed with offshore projects until there is sufficient scientific evidence demonstrating that they will not have adverse effects to humans or the local environment”, to delete the words from “until” and to replace with language that the Ontario Government would “continue to monitor the latest developments and research in other jurisdictions”;¹⁶⁶

3. a subsequent MOE response shared internally at the MNR omitted the entire paragraph;¹⁶⁷ and

(vii) Post-Windstream I Award Emerging Renewable Power Program

96. In January 2018, Canada's Minister of Natural Resources announced the launch of an expression of interest for Emerging Renewable Power Program (“ERPP") to expand renewable energy sources available to provinces.¹⁶⁹

97. On 20 April 2018, WWIS submitted an application under the ERPP for the Project.¹⁷⁰

98. On 13 July 2018, Natural Resources Canada responded that, despite scoring well, the Project was not recommended to be funded under Phase 1 of the ERPP, but

¹⁶⁶ C-2037, Email from Kate Jordan (MNR) to Mark Rabbior (MOE), 8 September 2016. ↩

¹⁶⁷ C-2037, Email from Kate Jordan (MNR) to Rosalyn Lawrence (MNR), 30 September 2016. ↩

¹⁶⁸ C-2219, Email from Pauline Desroches (MNR) to Kevin Edwards (MNR), 16 May 2019. ↩

¹⁶⁹ C-2138, Natural Resources Canada News Release, "Canada Supports Next Wave of Emerging Renewable Power", 18 January 2018. ↩

¹⁷⁰ C-2149, C-2149 (A), C-2149 (B), and C-2149 (C), Cover letter from Windstream Energy to Natural Resources Canada with attached supporting documentation, 20 April 2018. ↩

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upon agreement by the Claimant included it under the Phase 2 project list, among other projects that could be considered for funding in the future.¹⁷¹

I. COURT PROCEEDINGS AND FIT CONTRACT TERMINATION

99. On 15 March 2017, the Respondent paid the Claimant the amount ordered in the Windstream I Award, i.e., CAD 25 million with interest.

100. On 27 March 2017, the Claimant filed an Ontario municipal court application against the IESO (“Court Proceedings”), requesting inter alia:

1. an order restraining the IESO from exercising any of its termination rights under the FIT Contract; and

2. a declaration that the IESO could not rely on the moratorium or pre-moratorium delays to exercise any of those termination rights,¹⁷² (IESO's FIT Contract section 10.1(g) termination rights would arise on 5 May 2017).

101. On 28 April 2017, IESO agreed to defer its termination decision pending the resolution of the Court Proceedings, reserving its FIT Contract section 10.1(g) right to do so if circumstances changed, upon a 30-day notice.¹⁷³

102. From March to October 2017, IESO and the Claimant exchanged affidavits, document productions and conducted cross-examinations in the Court Proceedings.¹⁷⁴

103. On 1 November 2017, IESO and the Claimant agreed to adjourn the Court Proceedings to allow IESO to make a decision regarding the exercise of its

¹⁷¹ Memorial, paras. 220 to 223; C-2164, Letter from Natural Resources Canada to Ian Baines (WWIS), 13 July 2018; CWS-Baines-3, Third Witness Statement of Ian Baines, paras. 44 to 49. ↩

¹⁷² C-2471, Exhibit A, WWIS Notice of Application, 27 March 2017. ↩

¹⁷³ Memorial, para. 267; Counter-Memorial, para. 82; C-2083, Email from Melanie Ouanounou (Goodmans LLP) to Emily Sherkey (Torys LLP), 28 April 2017. ↩

¹⁷⁴ Memorial, para. 268; CWS-N. Baines, Witness Statement of Nancy Baines, para. 48. ↩

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termination right under the FIT Contract (“Adjournment Agreement”).¹⁷⁵ IESO requested that the Claimant provide information relating to the Project, which the Claimant provided accordingly.¹⁷⁶

104. On 29 November 2017, the Claimant wrote to inform IESO that it would:

1. commence commercial operation within 63 months of the end of the force majeure;¹⁷⁷

2. “allow the IESO to exercise whatever rights it has under section 10.1(g) of the FIT Contract if the FIT Contract has remained under force majeure as a result of the current Force Majeure event and the Moratorium for the period beginning on November 22, 2010 and ending on the date that is ten years after the date the IESO accept[ed] WWIS' offer";

3. “not exercise whatever rights it has under s. 10.1(g) of the FIT Contract during the ten year period described"; and

4. “leave in place its fully-cash collateralized $6 million Completion and Performance Security in accordance with the terms of the FIT Contract”.¹⁷⁸

105. On 16 February 2018, IESO's contract management presented an analysis memorandum to Mr Michael Lyle, IESO's General Counsel and Vice-President, Legal Resources and Corporate Governance, recommending that [Redacted] ("Analysis Memorandum”).¹⁷⁹

106. The Analysis Memorandum [Redacted]

¹⁷⁵ Memorial, para. 271; Counter-Memorial, para. 86; R-664, Adjournment Agreement between IESO and Windstream, 1 November 2017. ↩

¹⁷⁶ Memorial, para. 272; Counter-Memorial, paras. 87 to 89. ↩

¹⁷⁷ R-801, Letter from Nancy Baines (WWIS) to Michael Killeavy (IESO), 29 November 2017, pp. 2 to 3. ↩

¹⁷⁸ R-801, Letter from Nancy Baines (WWIS) to Michael Killeavy (IESO), 29 November 2017, p. 8. ↩

¹⁷⁹ R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018. ↩

[Page 70]

1. it conducted an analysis guided by [Redacted]
   [Redacted]
2. [Redacted]
   [Redacted]¹⁸⁰ and
3. [Redacted]

107. [Redacted]

1. [Redacted]
   [Redacted]¹⁸¹
2. [Redacted]
   [Redacted]¹⁸² and
3. [Redacted]
   [Redacted]¹⁸³

108. [Redacted]
[Redacted]
[Redacted]
[Redacted]

¹⁸⁰ Counter-Memorial, paras. 98 to 101; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, pp. 9 to 14. ↩

¹⁸¹ Counter-Memorial, para. 99; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, p. 13. ↩

¹⁸² Counter-Memorial, para. 99; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, p. 14. ↩

¹⁸³ Counter-Memorial, para. 99; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, p. 14. ↩

¹⁸⁴ Counter-Memorial, para. 100; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, pp. 14 to 15. ↩

[Page 71]

[Redacted]¹⁸⁵

109. [Redacted]

1. [Redacted]
   [Redacted]
   [Redacted]¹⁸⁶ and
2. [Redacted]
   [Redacted]¹⁸⁷

110. [Redacted]
[Redacted]
[Redacted]¹⁸⁹

111. [Redacted]¹⁹⁰
[Redacted]
[Redacted]
[Redacted]
[Redacted]
[Redacted]
[Redacted]

¹⁸⁵ Counter-Memorial, para. 101; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, pp. 15 to 17. ↩

¹⁸⁶ Counter-Memorial, para. 102; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, p. 17. ↩

¹⁸⁷ R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, p. 17. ↩

¹⁸⁸ Counter-Memorial, para. 103; R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, p. 18. ↩

¹⁸⁹ Memorial, para. 329; Reply, para 137. ↩

¹⁹⁰ R-808, Section 10.1(g) Analysis Memorandum, 16 February 2018, p. 18. ↩

[Page 72]

[Redacted]

112. On 20 February 2018, IESO communicated its decision to terminate to the Claimant ("Termination Decision”).¹⁹¹ Pursuant to the Adjournment Agreement, WWIS had 60 days to notify IESO if it intended to continue the Court Proceedings to challenge the Termination Decision, in which case it would not be effective pending the outcome.¹⁹²

113. On 23 February 2018, the Claimant requested reasons for the Termination Decision.¹⁹³

114. On 2 March 2018, IESO responded to provide the bases for the Termination Decision, as follow:¹⁹⁴

1. the “factual circumstances surrounding the FIT Program and its objectives, as well as the FIT Contract itself", including:

   1. extensive delays to the Project;
   2. lack of clarity as to whether the force majeure event would be resolved;
   3. that WWIS had not been able to gain site access or commence certain regulatory approval processes (which first required resolution of the moratorium); and
   4. that the Ontario Government had not yet established regulatory guidelines (and therefore timelines) for offshore wind;

¹⁹¹ R-665, Letter from Michael Lyle (IESO) to Nancy Baines (WWIS), 20 February 2018. ↩

¹⁹² R-664, Adjournment Agreement between IESO and Windstream, 1 November 2017. ↩

¹⁹³ C-2477, Exhibit N, Letter from Nancy Baines (WWIS) to Michael Lyle (IESO), 23 February 2018. ↩

¹⁹⁴ Memorial, para. 276; C-2477, Exhibit O, Letter from Michael Lyle (IESO) to Nancy Baines (WWIS), 2 March 2018. ↩

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2. the evidence and documentary productions obtained in the Court Proceedings;

3. the Ontario Government's 2017 Long-Term Energy Plan;

4. directions from the Minister of Energy dated 12 June 2013 and 27 September 2016;

5. a letter from MOE to IESO dated 2 February 2018, which confirmed that Ontario had not, among other things, “developed an offshore wind policy framework on approval requirements" and was “not in a position to confirm whether or when Ontario [would be] revisiting" the Moratorium; and

6. information from WWIS from late 2017 to early 2018.

115. On 20 April 2018, WWIS delivered a Notice of Return (“NOR”), indicating its intention to continue with the Court Proceedings against the IESO:

1. challenging its decision to exercise its section 10.1(g) termination right; and

2. seeking a declaration that the IESO could not rely on the moratorium or the pre-moratorium delays to exercise any of its termination rights under the FIT Contract.¹⁹⁵

116. From May 2018 to March 2019, the disputing parties exchanged documents in the Court Proceedings, but disagree as to causes of procedural delay.¹⁹⁶

117. In parallel, the Claimant continued with its efforts to engage with the Ontario Government.¹⁹⁷

¹⁹⁵ C-2148, Email from Nick Kennedy (Torys LLP) to Melanie Ouanounou (Goodmans LLP), 20 April 2018. ↩

¹⁹⁶ Counter-Memorial, para. 108; Reply, para. 129. ↩

¹⁹⁷ Counter-Memorial, para. 109; R-812, Office of the Integrity Commissioner, “Lobbyists Registration", search results for Patrick Harris; R-814, Office of the Integrity Commissioner, "Lobbyists Registration", search results for Kory Teneycke and Christine Simundson; Reply, para. 130. ↩

[Page 74]

J. THE FORD GOVERNMENT ELECTION

118. On 7 June 2018, Ontario elected a new provincial Government, replacing the Liberals with Premier Ford's Conservatives.¹⁹⁸ The new Government made statements regarding renewable energy generation and rising electricity prices in Ontario.¹⁹⁹ Following the 2018 election, in the renewable sector:

1. in July 2018, the MEI issued a directive ordering IESO to “immediately take all steps necessary to wind down all FIT 2, 3, 4 and 5 contracts where the IESO has not issued [a] Notice to Proceed”, resulting in the cancellation of 758 renewable energy contracts,²⁰⁰ pursuant to which, according to the Claimant:

   1. Ontario spent CAD 231 million compensation for cancelled contracts, with limited liability because, “IESO had not granted these FIT 2, 3, 4, and 5 contracts a waiver of the IESO's contractual right to terminate the FIT Contract prior to the issuance of a Notice to Proceed (NTP) upon refunding the security and compensating the contract holder for a portion of its pre-construction development costs, up to a liability limit”;²⁰¹ and
   2. for the White Pines project in particular, a FIT contract supplier (for a much smaller project than the Claimant's), settlement payment is estimated in the sum of CAD 100 million upward,²⁰² following legislation terminating the project;²⁰³

¹⁹⁸ Counter-Memorial, para. 111. ↩

¹⁹⁹ Memorial, para. 254. ↩

²⁰⁰ C-2162, Order in Council and Directive of the Minister of Energy, Northern Development and Mines to the IESO, "Wind Down of Feed-in Tariff and Large Renewable Procurement Contracts", 13 July 2018. ↩

²⁰¹ Reply, paras. 170 to 171. ↩

²⁰² C-2759, CityNews, “Ford government spending $231M to cancel renewable energy projects", 19 November 2019; C-2751, Global News, "Ontario to compensate White Pines wind turbine developers for cancelled contracť', 11 July 2019. ↩

²⁰³ Reply, paras. 172 to 174; C-2741, White Pines Wind Project Termination Act, 2018, S.O. 2018, Chapter 10, Schedule 2. ↩

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2. on 6 December 2018, the Green Energy Repeal Act, 2018 was adopted and entered into force:

   1. repealing the Green Energy Act 2009, and
   2. enhancing the authority of the Environmental Protection Act to prohibit the issuance of renewable energy approvals including where demand for electricity is not demonstrated;²⁰⁴ and

3. on 30 May 2019, the REA regulation (O. Reg. 359/09) was amended to require current and future applicants for renewable energy approval to show that the proposed project fulfils a need for the electricity produced.²⁰⁵

119. Despite the new directives, legislative amendments and regulations in 2018 and 2019, according to the Claimant, “little has changed to the regulatory framework"²⁰⁶ (relying on the Environmental Protection Act provisions on renewable energy and REAs (Section 6 of O. Reg. 359/09), which still includes offshore wind projects for the class of “wind facilities” eligible to obtain an REA).²⁰⁷

К. СомMENCEMENT OF THE CURRENT ARBITRATION

120. On 26 November 2019, the Claimant wrote to then-Minister of Energy, Minister Greg Rickford:

1. “request[ing] that [he] exercise[s] [his] powers, both formal and informal, to direct the IESO to take certain steps regarding WWIS' [FIT] Contract with the IESO”;²⁰⁸

²⁰⁴ Counter-Memorial, para. 113. ↩

²⁰⁵ Counter-Memorial, para. 114; R-816, Amendments to the Renewable Energy Approvals Regulation (Ontario Regulation 359/09), Environmental Registry of Ontario, 11 June 2019. ↩

²⁰⁶ Memorial, para. 259. ↩

²⁰⁷ Memorial, para. 261. ↩

²⁰⁸ C-2249, Letter from David Mars (Windstream) to Minister Rickford (MEI), 26 November 2019. ↩

[Page 76]

2. stating that it would be “forced to bring a claim against the Government of Canada pursuant to [NAFTA]” if the MEI refused to do so; and

3. requesting the MEI to do the following:²⁰⁹

   1. Direct the IESO to withdraw its letter of February 20, 2018 purporting to terminate the FIT Contract;
   2. Direct the IESO not to exercise any of its termination rights under the FIT Contract, including without limitation its rights under sections 9.1(j) and 10.1(g) of the FIT Contract, for reasons relating to the Moratorium or pre-Moratorium delays caused by the Ontario Government; and
   3. Direct the IESO to take all steps necessary to ensure that the FIT Contract is "frozen" such that the Project may proceed as soon as the Moratorium is lifted, as if the Moratorium had not been imposed.

121. On 10 December 2019, Minister Rickford responded that “Ontario [had] decided not to intervene in this matter" and that “it [was] more appropriate for [the Claimant] to engage with the IESO”.²¹⁰ The next day, i.e., 11 December 2019, the Claimant wrote to IESO to reconsider its Termination Decision, but did not receive a response.²¹¹

122. On 15 January 2020, the Claimant informed the IESO of its decision to discontinue the Court Proceedings in order to pursue the Windstream II arbitration.²¹²

²⁰⁹ C-2249, Letter from David Mars (Windstream) to Minister Rickford (MEI), 26 November 2019. ↩

²¹⁰ C-2253, Letter from Minister Rickford (MEI) to David Mars (Windstream), 10 December 2019. ↩

²¹¹ Memorial, para. 287; C-2254, Letter from David Mars (Windstream) to Peter Gregg (IESO), 11 December 2019. ↩

²¹² Memorial, para. 279; Counter-Memorial, para. 115. ↩

[Page 77]

123. On 22 January 2020, the Claimant delivered its Notice of Intent to submit a claim to arbitration against the Government of Canada in the Windstream II arbitration.²¹³

124. By letter dated 18 February 2020, IESO stated that the FIT Contract was terminated as of that date, in light of the abandonment of the Court Proceedings and pursuant to the terms of the Adjournment Agreement.²¹⁴

125. Two days later, IESO directed the Claimant's bank to cancel the CAD 6 million letter of credit.²¹⁵ It is undisputed that the amount has since been returned to the benefit of the Claimant.²¹⁶

IV. PRELIMINARY ISSUES

126. In relation to jurisdiction pursuant to CUSMA (and NAFTA), the disputing parties agree that:

1. pursuant to NAFTA Articles 1116, 1117 and 1122, the Respondent as a NAFTA Contracting Party is prima facie subject to the Tribunal's jurisdiction;²¹⁷ and

2. the Claimant's investments, namely WWIS, the Project and the FIT Contract, fall within the meaning of paragraph 6 of Annex 14-C to CUSMA because:²¹⁸

   1. they were established or acquired after NAFTA came into force, and

²¹³ Counter-Memorial, para. 115. ↩

²¹⁴ C-2289, Letter from Michael Lyle (IESO) to Nancy Baines (WWIS), 18 February 2020. ↩

²¹⁵ C-2291, Letter from Darryl Yahoda (IESO) to Bank of Montreal Global Trade Operations, 20 February 2020. ↩

²¹⁶ Memorial, para. 281; Counter-Memorial, para. 117. ↩

²¹⁷ Memorial, paras. 409 to 425. ↩

²¹⁸ Memorial, paras. 441 to 442; according to the Claimant, in para. 5 of its Response to the Notice of Arbitration, the Respondent stated that "Canada's consent to arbitration is conditional upon Windstream having a 'legacy investment' as defined in CUSMA Annex 14-C.6, a matter that has yet to be established.". The Claimant addressed the Respondent's statement in its Memorial, paras. 440 to 446, expressing its view that the Respondent had not formally raised this point as a jurisdictional defence and reserving its right to address the matter in more detail, should the Respondent articulate its concern in more detail. However, following the submission of the Claimant's Memorial, the Respondent did not further raise the issue. ↩

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2. they were in existence on the date of entry into force of CUSMA.²¹⁹

127. The Respondent nevertheless makes three preliminary objections to the claims in the Windstream II arbitration:

1. that based on principles of res judicata, collateral estoppel and/or abuse of process, the claims are barred because the Claimant failed to identify any measures following the Windstream I Award that could sustain an independent cause of action under NAFTA Chapter 11;²²⁰

2. that the Claimant fails to meet the requirement of NAFTA Articles 1116(1) and 1117(1) to establish prima facie loss or damage because:

   1. it is estopped from asserting that the Project or FIT Contract has any value by virtue of its argument to the contrary in the Windstream I arbitration;
   2. a finding otherwise would require overturning the findings of the Windstream I Award; and
   3. the Claimant does not identify any “subsequent, separable, self-standing cause of action that has caused any possible loss beyond what it claimed previously”;²²¹ and

3. that NAFTA Articles 1116(2) and 1117(2) strict three-year limitation periods mean that the Tribunal does not have jurisdiction ratione temporis, (i.e., the Claimant had knowledge of the alleged breaches before the critical date for the limitation period of 22 December 2017).²²²

²¹⁹ Memorial, para. 446. ↩

²²⁰ Request for Bifurcation and Memorial on Jurisdiction, paras. 49 to 91; Counter-Memorial, paras. 120, 146, 194; Rejoinder, paras. 20 to 21. ↩

²²¹ Request for Bifurcation and Memorial on Jurisdiction, paras. 109, 92 to 133; Counter-Memorial, para. 120. ↩

²²² Counter-Memorial, para. 120; Rejoinder, para. 79. ↩

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128. The Claimant rejects all three objections.²²³

129. The Tribunal takes each objection in turn below, setting out the disputing parties' positions (and United States and/or Mexico NAFTA Article 1128 submissions where relevant), followed by the Tribunal's analysis.

A. RES JUDICATA, COLLATERAL ESTOPPEL, AND ABUSE OF PROCESS

130. The first preliminary objection is that, based on principles of res judicata, collateral estoppel and/or abuse of process, the claims are barred because the Claimant failed to identify measures sustaining an independent cause of action following the Windstream I Award.²²⁴

(i) The Respondent's Position

131. According to the Respondent, the Windstream I Award “fully and finally addressed all the issues currently put before this Tribunal”.²²⁵ Therefore, it submits, claims for alleged breaches of NAFTA Article 1110 and Article 1105(1) are barred by the doctrine of res judicata and the doctrine of collateral estoppel.²²⁶

(a) The Applicable Legal Standard

132. According to the Respondent, general principles of international law preclude the Claimant from relitigating its claim in relation to the same measures.²²⁷ It set out its submissions as to those general principles regarding res judicata, collateral

²²³ Reply, para. 178. ↩

²²⁴ Request for Bifurcation and Memorial on Jurisdiction, paras. 49 to 91; Counter-Memorial, paras. 120, 146, 194; Rejoinder, paras. 20 and 21. The claims that res judicata and collateral estoppel precludes the Claimant from bringing its claims are styled as "jurisdictional objections." Technically, res judicata and collateral estoppel are not jurisdictional in nature and are not set forth in the treaty articles conferring a tribunal jurisdiction authority to hear the matter. By contrast, res judicata and collateral estoppel addresses the finality of a prior award or decision and prevents the relitigation of a claim or issue that has already been decided. In fact, in the case of collateral estoppel, it is hard to see how issue preclusion would impact the jurisdiction of a tribunal to hear a claim. The same can be said for the doctrine of abuse of right, which similarly goes toward admissibility as opposed to being a jurisdictional question. Weinclude the discussion of the doctrines at the outset to align with the Parties pleadings. ↩

²²⁵ Request for Bifurcation and Memorial on Jurisdiction, paras. 2, 47. ↩

²²⁶ Counter-Memorial, paras. 193 to 194; Request for Bifurcation and Memorial on Jurisdiction, para. 55. ↩

²²⁷ Request for Bifurcation and Memorial on Jurisdiction, para. 47. ↩

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estoppel and abuse of process in its Request for Bifurcation, as summarised below.²²⁸

133. First, as to res judicata, the Respondent submits that the doctrine is widely accepted as a rule of international law, which:²²⁹

1. has been applied in prior awards, including under ICSID and NAFTA, as follows:²³⁰
   1. Apotex v. US (III) and Waste Management v. Mexico demonstrate that res judicata applies to NAFTA Chapter 11 disputes;²³¹
   2. Amco v. Indonesia found that “a right, question or fact distinctly put in issue and distinctly determined by a court of competent jurisdiction as a ground of recovery, cannot be disputed”;²³² and
   3. Apotex v. US (III) found that “the purpose of this doctrine is to ensure finality of decisions, encourage judicial economy and to prevent potentially divergent decisions on the same issue”;²³³ and
2. is characterised in commentary as, a “final judgment already decided between the same parties or their privies on the same question by a legally constituted court having jurisdiction is conclusive between the parties, and the issue cannot be raised again”.²³⁴

²²⁸ Request for Bifurcation and Memorial on Jurisdiction, paras. 47 to 66. ↩

²²⁹ Request for Bifurcation and Memorial on Jurisdiction, paras. 49 to 52. ↩

²³⁰ Request for Bifurcation and Memorial on Jurisdiction, para. 50. ↩

²³¹ Request for Bifurcation and Memorial on Jurisdiction, para. 51; RL-005, Apotex v. US (III), paras. 7.4 to 7.66; RL-111, Waste Management v. Mexico (II),,Decision on Preliminary Objection, para.39. ↩

²³² RL-113, Amco v. Indonesia, para. in Resubmitted Proceeding, para. 30. ↩

²³³ Request for Bifurcation and Memorial on Jurisdiction, para. 51; see RL-005, Apotex v. US (US (III),)), paras. 7.7 to 7.9. ↩

²³⁴ RL-114, Vaughan Lowe, 'Res Judicata and the Rule of Law in International Arbitration', 8 Afr. J. Int’l & Comp. L. 38 (1996), pp. 38 to 39. ↩

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134. Further, according to the Respondent, res judicata requires that there are proceedings:

1. in the same legal order (e.g., both decision-making bodies are international courts or international tribunals);
2. between the same parties; and
3. involving the same relief and grounds,²³⁵ which considers whether the same matter is being raised in the new claim, based on it being:²³⁶
   1. distinctly put in issue by the parties in the prior dispute, and
   2. distinctly decided by the tribunal in the prior dispute.²³⁷

135. It further submitted that although res judicata is a “recognized rule of international law, the breadth of its application continues to be a matter of some contention", and in particular:²³⁸

1. other prior awards suggest that “the operative part of a judgment has relevance to res judicata, even if not direct res judicata effect" (according to the Respondent: per Judge Anzilotti in Factory at Chorzów, “although the binding effect attaches only to the operative part of a judgment and not to the statement of reasons, the statement of reasons has to be referred to in

²³⁵ RL-115, CME, Challenge Legal Opinion, paras. 15, 41 to 55, 92 to 129; RL-005, Apotex v. US (III), para. 7.15; RL-116, Newchwang Case, p. 65. ↩

²³⁶ RL-117, Interim Report: 'Res Judicata and Arbitration', International Law Association, Berlin Conference (“ILA Interim Report"), 2004, pp. 20 to 21; RL-005, Apotex v. US (III), paras. 7.13 to 7.16. ↩

²³⁷ RL-113, Amco v. Indonesia, Decision on Jurisdiction in Resubmitted Proceeding, para. 30; RL-114, Vaughan Lowe, 'Res Judicata and the Rule of Law in International Arbitration', 8 Afr. J. Int’l & Comp. L. 38 (1996), p. 39. ↩

²³⁸ Request for Bifurcation and Memorial on Jurisdiction, para. 54. See also RL-112, ILA Final Report on Res Judicata and Arbitration ("ILA Final Report"), LCIA Arbitration International, Vol. 25, Issue 1, 2009, para. 56; RL-120, 'Chapter 27: Preclusion, Lis Pendens and Stare Decisis in International Arbitration', in Gary B. Born, International Commercial Arbitration (2^nd ed., Kluwer Law International 2014), p. 3776; RL-121, Silja Schaffstein, "The Doctrine of Res Judicata before International Commercial Arbitral Tribunals" (Oxford International Arbitration Series 2016), para. 6.236. ↩

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order to understand the operative part and the grounds on which a decision was based");²³⁹ and

136. Secondly, as to collateral estoppel (“also referred to as issue estoppel or issue preclusion"), the Respondent submits that, “international courts and tribunals have regularly examined under international law a prior tribunal's reasoning, and the

²³⁹ Request for Bifurcation and Memorial on Jurisdiction, para. 53; see RL-119, Chorzów Factory Case, Interpretation of Judgments Nos. 7 and 8, Dissenting Opinion by M. Anzilotti, Publications of the Permanent Court of International Justice, Collection of Advisory Opinions, Series A – No. 13, 16 December 1927, p. 24. Although this was the dissenting viewpoint in that case, it has since been recognized as a leading decision on res judicata and is often cited in academic and jurisprudence. See also RL-005, Apotex v. US (III), paras. 7.30 to 7.32. ↩

²⁴⁰ Request for Bifurcation and Memorial on Jurisdiction, para. 54. See e.g. RL-163, Tembec v. US, Opinion, outlining the distinct principles of res judicata and collateral estoppel, pp. 5 to 8: "Under the doctrine of res judicata, also known as claim preclusion, 'a judgment on the merits in a prior suit bars a second suit involving identical parties or their privies based on the same cause of action' [...] [i]n short, the doctrine embodies the principle 'that a party who once has had a chance to litigate a claim before an appropriate tribunal usually ought not to have another chance to do so.' [...] Under the doctrine of collateral estoppel, or issue preclusion, an issue of fact or law that was actually litigated and necessarily decided is conclusive in a subsequent action between the same parties or their privies. [...] Like res judicata, collateral estoppel relieves parties of the cost and vexation of multiple lawsuits, conserves judicial resources, prevents inconsistent decisions, and encourages reliance on adjudication.". See also RL-005, Apotex v. US (III), para. 7.23: "The Tribunal recognises that historical differences as to issue estoppel have existed and, to a lesser extent, still exist in national laws between certain common law and certain civil law systems. As the ILA Interim Report makes clear, however, there is no sharp divide between these two legal systems." ↩

²⁴¹ Request for Bifurcation and Memorial on Jurisdiction, para. 54; RL-122, Gavan Griffith and Isabella Seif, 'Chapter 8: Work in Progress: Res Judicata and Issue Estoppel in Investment Arbitration', in Neil Kaplan and Michael J. Moser (eds.), Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber Amicorum Michael Pryles (Kluwer Law International 2018), p. 122: "Investment tribunals also have applied mixed and confusing nomenclature within these contexts, to reach, in most matters, objectively 'correct' results to vindicate the underlying public policy for there to be finality. Some use the term res judicata without particularising that they are applying issue estoppel. Some do not apparently recognize concepts of issue estoppel as a separate exclusionary principle. Others treat res judicata and issue estoppel as entirely distinct doctrines." See e.g. CL-086, Tokios Tokelés v. Ukraine, para. 98; RL-123, British Caribbean Bank v. Belize, para. 77; RL-124, Al Tamimi v. Oman, paras. 131 and 358; RL-125, Gavazzi v. Romania, Decision on Jurisdiction, Admissibility and Liability, paras. 164 to 166. ↩

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arguments it considered, in determining the scope, and thus the preclusive effect, of the prior award's operative part".²⁴² In particular, it submits that the doctrine:²⁴³

1. “prevents parties from litigating an issue that has already been effectively decided in a previous proceeding”;²⁴⁴
2. “precludes a party from relitigating a point of law or fact that was decided by a previous tribunal and formed an essential element of deciding the dispute";
3. “can also apply when the party against whom it is asserted has had a full and fair opportunity to litigate the issue in the previous proceeding, but is now attempting to relitigate that same issue”;²⁴⁵ and
4. “[e]ven where the issue relates to a different claim, it can prevent a party from attempting to relitigate an issue that was already resolved in a previous proceeding.”²⁴⁶

137. The Respondent relies on the description of collateral estoppel in prior awards and judgments including:

1. in RSM v. Grenada as follows:²⁴⁷

   [...] a finding concerning a right, question or fact may not be re-litigated (and, thus, is binding on a subsequent tribunal), if, in a prior proceeding:

²⁴² Request for Bifurcation and Memorial on Jurisdiction, para. 60. ↩

²⁴³ Request for Bifurcation and Memorial on Jurisdiction, paras. 54 to 60. ↩

²⁴⁴ Request for Bifurcation and Memorial on Jurisdiction, para. 55. ↩

²⁴⁵ See RL-126, RSM v. Grenada, para. 7.1.2 referring to RL-113, Amco v. Indonesia, Decision on Jurisdiction in Resubmitted Proceeding, para. 30. The RSM tribunal also noted the analysis used by the mixed claims commission in the Company General of the Orinoco Case, which itself quoted the US Supreme Court's Decision in Southern Pacific Railroad Co. v. US. The latter case was of special significance to the RSM tribunal because of its holdings that the collateral estoppel rule applies in a subsequent suit "[...] between the same parties or their privies." ↩

²⁴⁶ See RL-112, ILA Final Report, para. 56; RL-120, 'Chapter 27: Preclusion, Lis Pendens and Stare Decisis in International Arbitration', in Gary B. Born, International Commercial Arbitration (2^nd ed., Kluwer Law International 2014), p. 3776; RL-121, Silja Schaffstein, "The Doctrine of Res Judicata before International Commercial Arbitral Tribunals" (Oxford International Arbitration Series 2016), para. 6.236. ↩

²⁴⁷ RL-126, RSM v. Grenada, para. 7.1.1. ↩

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(a) it was distinctly put in issue; (b) the court or tribunal actually decided it; and (c) the resolution of the question was necessary to resolving the claims before that court or tribunal.

138. The Respondent further noted that collateral estoppel was endorsed by the International Law Association (“ILA”) Recommendation as “a more extensive notion of res judicata, which is also followed in public international law, under

²⁴⁸ RL-127, Southern Pacific Railroad Co. v. US, 168 U.S. 1, 18 October 1897, pp. 48 to 49. ↩

²⁴⁹ Request for Bifurcation and Memorial on Jurisdiction, para. 58; RL-005, Apotex v. US (III), paras. 7.18, 7.23, 7.59 citing Jackson H. Ralston and W. T. Sherman Doyle, Claim of Company General of the Orinoco Case, Report of French-Venezuelan Mixed Claims Commission of 1902 (Washington, Government Printing Office, 1906), pp. 186, 276 and RL-114, Vaughan Lowe, 'Res Judicata and the Rule of Law in International Arbitration', 8 Afr. J. Int’l & Comp. L. 38 (1996), p. 42. ↩

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which res judicata not only is to be read from the dispositive part of an award but also from its underlying reasoning”,²⁵⁰ with Recommendation No. 4 providing that “[a]n arbitral award has conclusive and preclusive effects in the further arbitral proceedings as to [...] issues of fact or law which have actually been arbitrated and determined by it, provided any such determination was essential or fundamental to the dispositive part of the arbitral award.”²⁵¹

139. Thirdly, as to abuse of process, according to the Respondent, “[a] number of international arbitral tribunals have relied on the related doctrines of collateral estoppel and abuse of process when dealing with the initiation of multiple and successive claims against the same party”,²⁵² including by reference to abuse of process, submitting as follows:²⁵³

1. “[a]s a legal doctrine, abuse of process is a recognized principle of public international law that prohibits the exercise of a procedural right in contravention of the purpose for which that right was established";²⁵⁴
2. “[t]he principle that every legitimate procedural right must be exercised in good faith forms the foundation of the abuse of process doctrine in public international law"; and
3. its purpose is “to prevent the misuse of procedure in the face of unfairness to another party (even though a party's conduct may not be inconsistent

²⁵⁰ RL-112, ILA Final Report, para. 52 [Footnotes omitted]. While the Report applies only to international commercial arbitration (para. 17), "[its] Recommendations may still have some indirect relevance for BIT arbitrations" (para. 36). ↩

²⁵¹ RL-164, Annex 2: Recommendations on Res Judicata and Arbitration, 'International Commercial Arbitration', 72nd Conference of the International Law Association, Resolution No. 1/2006, 4-8 June 2006, p. 5. ↩

²⁵² See e.g. RL-128, Eskosol v. Italy, Rule 41(5) Decision, para. 167; RL-126, RSM v. Grenada, para. 7.1.1. See also e.g. RL-195, Caratube v. Kazakhstan, para. 376; RL-130, Orascom v. Algeria, paras. 546 to 548; RL-131, Ampal v. Egypt, Decision on Jurisdiction, para. 331. ↩

²⁵³ Request for Bifurcation and Memorial on Jurisdiction, paras. 61 to 66. ↩

²⁵⁴ See RL-132, Abaclat v. Argentina, para. 646. See also World Trade Organization, Report of the Appellate Body, 'United States - Import Prohibition of Certain Shrimp and Shrimp Products', WT/DS58/AB/R, 12 October 1998, para. 158. "The chapeau of Article XX is, in fact, but one expression of the principle of good faith. This principle, at once a general principle of law, controls the exercise of rights by states. One application of this general principle, the application widely known as the doctrine of abus de droit, prohibits the abusive exercise of a state's rights and enjoins that whenever the assertion of a right 'impinges on the field covered by [a] treaty obligation, it must be exercised bona fide, that is to say, reasonably." ↩

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with the literal application of the procedural rules), or to avoid the risk that the administration of justice might be brought into disrepute among right-thinking people”.²⁵⁵

140. As to prior awards according to the Respondent, these “have begun to employ abuse of process to contend with multiple and successive arbitrations against the same party in relation to the same circumstances and financial harm”,²⁵⁶ including:

1. in RSM v. Grenada, to prevent an “attempt to re-litigate and overturn the findings of another ICSID tribunal” (based on information already known to it or that ought to have been raised before the prior tribunal),²⁵⁷ and “the tribunal concluded that the second arbitration was an abusive attempt to circumvent the ‘binding' nature of the first ICSID decision”;²⁵⁸
2. in Ampal v. Egypt, to prevent “a complex web of parallel proceedings",²⁵⁹ on the basis that “it would crystallize in an abuse of process” if “the same claim is to be pursued on the merits before two tribunals”;²⁶⁰ and
3. in Orascom v. Algeria,²⁶¹ to prevent multiple proceedings “in relation to the same investment, the same measures and the same harm”.²⁶²

141. Having set out the Respondent's submissions as to the applicable legal standard(s), the Tribunal summarises below its position as to their application to the facts.

²⁵⁵ RL-117, ILA Interim Report, p. 8. ↩

²⁵⁶ Request for Bifurcation and Memorial on Jurisdiction, para. 64. ↩

²⁵⁷ RL-126, RSM v. Grenada, paras. 7.3.1 to 7.3.7. ↩

²⁵⁸ Request for Bifurcation and Memorial on Jurisdiction, para. 64; see RL-126, RSM v. Grenada, para. 7.3.7. ↩

²⁵⁹ Request for Bifurcation and Memorial on Jurisdiction, para. 65; see RL-131, Ampal v. Egypt, Decision on Jurisdiction, paras. 312 to 317. ↩

²⁶⁰ RL-131, Ampal v. Egypt, Decision on Jurisdiction, para. 331. ↩

²⁶¹ RL-130, Orascom v. Algeria, paras. 540 to 543. ↩

²⁶² RL-130, Orascom v. Algeria, para. 542. ↩

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(b) Application to the Facts

142. The Respondent's three primary points arising out of the effect of res judicata, collateral estoppel or abuse of process on the facts in Windstream II are that, following the Windstream I Award findings, the Claimant:

1. has identified no new measure that forms any basis for a new cause of action for NAFTA breach based on:
   1. the continued imposition of the Moratorium following the Windstream I Award; and
   2. the termination of the FIT Contract;
2. is barred from reopening the determination that its CAD 6 million security deposit constituted a substantial portion of the value of its investment; and
3. is barred from seeking additional damages based on a valuation of its investments contrary to the value determined in the Windstream I Award.

143. As to absence of any new cause of action, the Respondent summarises the alleged six measures that the Claimant relies on post-Windstream I Award as follow:²⁶³

1. Ontario's failure to complete the work necessary to lift the Moratorium;
2. Ontario's continued application of the Moratorium;
3. Ontario's failure to direct IESO not to terminate the FIT Contract;
4. Ontario's failure to direct IESO to amend the FIT Contract to defer the project;
5. IESO's decision to terminate the FIT Contract; and

²⁶³ Memorial, para. 428. ↩

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6. IESO's failure to amend the FIT Contract to ensure the Project would be deferred.

144. According to the Respondent, these measures culminate in an alleged NAFTA breach based on: (i) continued application of the Moratorium; and (ii) termination of the FIT Contract, as opposed to its deferral or amendment. It submits that, “[a]t their core, these complaints reflect the same claim that was the subject of the Windstream I arbitration commenced in 2013, by the same investor and for the exact same investment".²⁶⁴ In particular, the Respondent submits that:

1. the Claimant has failed to identify any measure post-dating the Windstream I Award to support its claims because complaints based on the offshore wind Moratorium and FIT Contract termination complaints reflect the subject of the Windstream I arbitration;²⁶⁵
2. the Claimant attempts artificially to distinguish the claims in this arbitration, based on termination of the FIT Contract only after the Windstream I Award;²⁶⁶
3. “it does not matter that all of the facts are not exactly the same, but whether the 'substance of the actions, not their form' gives rise to the same cause of action";²⁶⁷ and
4. the post-Windstream I Award acts are not new measures, but rather “continued application of Ontario's acts and omissions, which were all challenged in Windstream I.”²⁶⁸

²⁶⁴ Request for Bifurcation and Memorial on Jurisdiction, para. 68 referring to Notice of Arbitration. ↩

²⁶⁵ Request for Bifurcation and Memorial on Jurisdiction, paras. 3, 48, 68; Rejoinder, para. 29. ↩

²⁶⁶ Rejoinder, paras. 32 to 38. ↩

²⁶⁷ Rejoinder, para. 32; R-837, Citibank, N.A. v. Data Lease Financial Corp., 904 F.2d 1498 (11^th Cir. 1990), 5 July 1990, p. 1503. ↩

²⁶⁸ Rejoinder, para. 39. ↩

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145. Further and specifically regarding continued imposition of the Moratorium, the Respondent raises five additional points regarding the Windstream I Award:²⁶⁹

1. the Claimant fails to explain how continued imposition of the Moratorium,²⁷⁰ “can amount to a breach without reopening the Windstream I Tribunal's final and binding determination that the implementation of ‘a moratorium on offshore wind development [was not] wrongful’”;²⁷¹
2. the tribunal "did not just consider Ontario's decision to impose the moratorium; it was also faced with the moratorium's continued imposition”, (i.e., it had been in place nearly six years by the date of the Windstream I Award, and "over 4 years had passed since Windstream's Project became impossible to finance");
3. the breach of NAFTA Article 1105 “was the result of the Government not taking the necessary steps to bring clarity to that regulatory uncertainty and to the status and the development of the Project ‘within a reasonable period of time after the imposition of the moratorium’";²⁷²
4. the Claimant was compensated and the period of “regulatory and contractual limbo” occurring “in the years following the imposition of the moratorium” was over;²⁷³ and
5. the tribunal "was seized with the continuing imposition of the moratorium, specifically determining that the regulatory framework for offshore wind development remained incomplete and fully compensating the Claimant because its Project had no path forward”.²⁷⁴

²⁶⁹ Request for Bifurcation and Memorial on Jurisdiction, paras. 71 to 74. ↩

²⁷⁰ Memorial, paras. 303 and 331. ↩

²⁷¹ Windstream I Award, para. 376. ↩

²⁷² Windstream I Award, para. 380. ↩

²⁷³ Windstream I Award, para. 380. ↩

²⁷⁴ Request for Bifurcation and Memorial on Jurisdiction, para. 74. ↩

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146. On that basis, the Respondent submits that the Claimant is “barred from relitigating the continued imposition of the moratorium, as it does not give rise to an independent cause of action under the NAFTA”.²⁷⁵

147. Further and specifically regarding the FIT Contract termination, the Respondent raises five additional points regarding the Windstream I Award:²⁷⁶

1. the Claimant argues that it was only “as of February 20, 2020, when the Termination Decision took effect", when there was “no longer any possibility for the Project to move forward or to be built as planned" and “no longer any possibility for WWIS to sell electricity to the IESO at an indexed fixed price over a 20-year period”,²⁷⁷ that its claim arose, but the Claimant lost any opportunities over a decade ago, as:²⁷⁸
   1. by late 2010, the FIT Contract was in force majeure;
   2. by May 2012, “it was clear that the Project could no longer be completed by [MCOD]”;²⁷⁹
   3. as the Claimant noted in Windstream I, “this [termination] right will inevitably arise when the Project fails to achieve commercial operation two years after the Project's MCOD, i.e. by 4 May 2017";²⁸⁰ and
   4. the Claimant already argued in Windstream I that the FIT Contract had been effectively cancelled;²⁸¹
2. the Windstream I Award accordingly:

²⁷⁵ Request for Bifurcation and Memorial on Jurisdiction, para. 74. ↩

²⁷⁶ Request for Bifurcation and Memorial on Jurisdiction, paras. 75 to 81. ↩

²⁷⁷ Memorial, para. 288. ↩

²⁷⁸ Windstream I Award, para. 374. ↩

²⁷⁹ Request for Bifurcation and Memorial on Jurisdiction, para. 76. ↩

²⁸⁰ Windstream I Award, para. 189 (paraphrasing Windstream I Reply, para. 405). ↩

²⁸¹ Windstream I Award, para. 189 (paraphrasing Windstream I Reply, para. 399). ↩

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1. found that "absent reactivation or renegotiation, the FIT Contract could no longer be completed by the MCOD”;²⁸² and
2. awarded damages on this basis;²⁸³

²⁸² Request for Bifurcation and Memorial on Jurisdiction, para. 77; see Windstream I Award, para. 290. ↩

²⁸³ See Windstream I Award, para. 483. ↩

²⁸⁴ See Memorial, paras. 10, 18; Windstream I Award, paras. 185, 218. ↩

²⁸⁵ See Windstream I Award, paras. 379, 473. ↩

²⁸⁶ See R-662, Letter from Michael Killeavy (IESO) to Nancy Baines (Windstream), 9 February 2017. ↩

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3. the Claimant's awareness that IESO could exercise its FIT Contract s.10.1(g) termination right is evidenced by WWIS':²⁸⁷
   1. “notice of application to the Ontario SCJ, requesting an order restraining IESO from exercising any of its termination rights [...]"; and
   2. “concurrent letter to IESO requesting that it abstain from exercising its termination decision until after the application [...]";

148. Further and specifically as to the determination in the Windstream I Award concerning the CAD 6 million security deposit, the Respondent argued that:²⁸⁹

²⁸⁷ See R-660, OSCJ - Notice of Application, 27 March 2017; R-663, Letter from John Terry (Torys LLP) to John Rattray and Michael Boll (IESO), 27 March 2017; Windstream I Award, para. 189 (paraphrasing Windstream I Reply, para. 399); Memorial, para. 14. ↩

²⁸⁸ Request for Bifurcation and Memorial on Jurisdiction, para. 81. ↩

²⁸⁹ Request for Bifurcation and Memorial on Jurisdiction, paras. 82 to 85. ↩

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1. the Claimant's submission that “the FIT Contract has been unilaterally terminated as a consequence of the conduct of the Ontario Government, and all the value remaining in Windstream's investments has been taken”,²⁹⁰ requires the Tribunal to “reopen[] matters conclusively determined by [] Windstream I", i.e., that:
   1. the "Claimant had not been substantially deprived of its investment because its CAN$6 million security deposit had not been taken”;²⁹¹
   2. “[e]ither the parties could reactivate and, as appropriate, renegotiate the FIT Contract and put the security deposit to use, or the security deposit would be returned to the Claimant at the time of the termination of the FIT Contract”;²⁹²
   3. “the security deposit constituted a substantial portion of the value of the Claimant's FIT Contract";
2. accordingly, if returned to the Claimant upon termination, “there could be no finding that Windstream has been substantially deprived of its investment";
3. the “Claimant is barred from relitigating this determination"; and
4. “as its security deposit has [...] been returned”, the Claimant is unable to “claim that it has been substantially deprived of its investment".

149. Further and specifically as to the Windstream I Award valuation of the investment, the Respondent argued that the Claimant is barred from seeking additional damages based on the FIT Contract having substantial potential value,²⁹³ or the Project

²⁹⁰ Memorial, para. 457. ↩

²⁹¹ See Windstream I Award, para. 290: "Consequently, the Respondent cannot terminate, and indeed confirmed at the hearing that it would not be able to terminate, the FIT Contract pursuant to Article 10.1(g) without returning the security. It therefore cannot be said that the Claimant has been substantially deprived of its investment." ↩

²⁹² See Windstream I Award, para. 290. ↩

²⁹³ See Memorial, para. 224. ↩

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having "a lot of value”,²⁹⁴ because the Windstream I Award made “clear and conclusive determinations [...] in this respect”, including that:²⁹⁵

1. the Project was valued at CAD 31 million at the time,²⁹⁶ awarding that amount of damages "less the CAN$6 million security deposit which remained available to the Claimant, constituted the award of damages which was furnished in order to make it whole again",²⁹⁷ thus barring the Claimant from asserting additional value “unless such value was created subsequent to the Award”;
2. “the FIT Contract was valueless at the time”, and it was necessary for both disputing parties “to act together in order to create value in a contract that was determined to otherwise have no value”, which did not happen (“failed attempts to renegotiate the FIT Contract and to drum up interest in its Project [...] merely demonstrate that its Project continued to have no path forward and consequently, no value"), thus barring the Claimant from relitigating value:²⁹⁸

   [A]lthough the FIT Contract could have been reactivated and renegotiated by the Parties at any time during the period from 11 February 2011 until the date of this award, as a matter of fact this has not happened and consequently, as at the date of this award, the FIT Contract cannot be considered to have any value. (It is another matter that the Parties can create such value by reactivating and renegotiating the FIT Contract after the award, which option is still open to them.)

3. the DCF method of valuation was inappropriate given the Project's “early development stage and the related risks and uncertainties”,²⁹⁹ and was not further developed (with no financial closure (i.e., no financing, crown land

²⁹⁴ Memorial, para. 229; CWS-Mars-3, para. 16. ↩

²⁹⁵ Request for Bifurcation and Memorial on Jurisdiction, paras. 86 to 91. ↩

²⁹⁶ Windstream I Award, para. 485. ↩

²⁹⁷ See Windstream I Award, para. 484. ↩

²⁹⁸ Windstream I Award, para. 483. ↩

²⁹⁹ Windstream I Award, para. 475. ↩

[Page 95]

access, permits or approvals)) and “remains an early stage project for which a DCF analysis is inappropriate”.

(ii) The Claimant's Position

150. The Claimant accepts that the findings of the Windstream I Award are “final and binding, and are res judicata in this proceeding", and submits that it “is not seeking to re-litigate any of the issues that were determined by that tribunal, nor is it open to Canada to do so".³⁰⁰

151. According to the Claimant, res judicata, collateral estoppel and abuse of process are established rules of international law,³⁰¹ but their requirements are not met because (i) the “matters at issue in this arbitration have not been determined by the Windstream I tribunal”; and (ii) “the measures raised in this arbitration could not have been raised in the Windstream I proceedings, since they all took place after the issuance of the Windstream I Award". In particular:

1. the Windstream I Award found “there was no expropriation because the FIT Contract remained in place and had not been terminated”, and therefore “declined to award [the Claimant] compensation for the loss of its investment, and instead awarded [it] damages for the harm to its investment";³⁰²
2. the FIT Contract has now been terminated, a new measure taking effect in February 2020;
3. the Respondent's liability under NAFTA for the FIT Contract termination “was not and could not have been determined by the Windstream I tribunal, nor has the question of what damages flow from that new measure";

³⁰⁰ Memorial, para. 195; see also Response to Request for Bifurcation, para. 31. ↩

³⁰¹ Reply, paras. 179 to 193; RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 177. ↩

³⁰² See Windstream I Award, paras. 290, 483. ↩

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4. the Respondent “bears the burden of establishing that the requirements of res judicata, collateral estoppel, and abuse of process are made out” and “[t]he threshold is high”;³⁰³ and
5. it is the Respondent that seeks “to re-litigate issues decided in Windstream I".

(a) The Applicable Legal Standard

152. As to the applicable legal standard, the Claimant set out its position as to the principles applicable to establishing res judicata, or collateral estoppel including as to the high burden on the Respondent.

153. As to res judicata, the Claimant submits that it:

1. “is a well-established principle of international law that applies to a Chapter 11 NAFTA dispute”;
2. “prevents the relitigation of matters where ‘a right, question or fact [was] distinctly put in issue and directly determined by a court of competent jurisdiction’";³⁰⁴
3. divides into two branches:
   1. cause of action estoppel, which “bars the effect of bringing a second claim where the triple identity test (identity of persons, cause of action, and object) is met”; and
   2. collateral estoppel, which “prevents the relitigation of specific issues that were decided upon by a previous tribunal”; and

³⁰³ See CL-183, Chevron & TexPet v. Ecuador (I), Interim Award, paras.139, 143: "[i]t is only in very exceptional circumstances that a holder of a right can nevertheless not raise and enforce the resulting claim." ↩

³⁰⁴ Reply, para. 185 citing RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 188 [Emphasis added by the Claimant]. ↩

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4. does not operate to treat collateral estoppel (or issue estoppel), as “a separate doctrine from res judicata",³⁰⁵ (as “[the Respondent] previously recognized in the Mobil v. Canada II proceeding").³⁰⁶

154. According to the Claimant, cause of action estoppel requires two steps:

1. the triple identity test, requiring identity of the:
   1. parties: (“prior award must have been rendered between the same parties as the parties in the further arbitration proceedings");
   2. cause of action: (claims “must be based on the same cause of action as in the prior arbitration proceedings (i.e., the same legal arguments are relied upon)"); and
   3. object: (“same relief must be sought”);³⁰⁷ and
2. assessment as to what was actually determined³⁰⁸ (i.e., “to ascertain the content of the decision, and not just look at what the parties argued in the earlier proceeding”), as explained by the ICJ:³⁰⁹

   59. It is not sufficient, for the application of res judicata, to identify the case at issue, characterized by the same parties, object and legal ground; it is also necessary to ascertain the content of the decision, the finality of which is to be guaranteed. The Court cannot be satisfied merely by an identity between requests successfully submitted to it by the same Parties; it must determine whether and to what extent the first claim has already been definitively settled.

³⁰⁵ See Request for Bifurcation and Memorial on Jurisdiction, paras. 49, 54. ↩

³⁰⁶ See RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 177. ↩

³⁰⁷ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 191. ↩

³⁰⁸ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, paras. 191 to 193. As accepted in the Request for Bifurcation and Memorial on Jurisdiction, para. 52 (“Res judicata will bar a legal issue from being reconsidered by a new tribunal if that legal issue was (i) distinctly put in issue by the parties in the prior dispute and (ii) distinctly decided by the tribunal in the prior dispute.") [Emphasis added]. ↩

³⁰⁹ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 189 citing Nicaragua v. Colombia, p. 126 [Emphasis added by the Claimant]. ↩

[Page 98]

60. The Court underlined in its Judgment of 26 February 2007, rendered in the case concerning the Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), that "[i]f a matter has not in fact been determined, expressly or by necessary implication, then no force of res judicata attaches to it; and a general finding may have to be read in context in order to ascertain whether a particular matter is or is not contained in iť" [...].

155. As to collateral (or issue) estoppel, according to the Claimant it may apply, “[i]f the ‘triple identity test' is not satisfied”, whereby “it is still possible that specific issues that have been determined by a prior tribunal are res judicata”, in relation to which the Claimant agrees with the Respondent that:

1. “in the event of a subsequent arbitration claim between the same parties or privies of those parties, the test for establishing issue estoppel is [as set out] in RSM Production Corporation and others v. Gr[e]nada":
2. “a finding [of a prior competent tribunal] concerning a right, question or fact, may not be re-litigated (and, thus, is binding on a subsequent tribunal), if, in a prior proceeding":³¹¹
   1. “it was distinctly put in issue”;
   2. “the court or tribunal actually decided it”; and
   3. “the resolution of the question was necessary to resolve the claims before that court or tribunal” (i.e., “it does not apply to statements made by tribunal in obiter dicta").

³¹⁰ See RL-110, Mobil Investments v. Canada (II), para. 193; RL-113, Amco v. Indonesia, Decision on Jurisdiction in Resubmitted Proceeding, para. 30; RL-126, RSM v. Grenada; RL-111, Waste Management v. US (II), Decision on Preliminary Objection, para. 45; RL-005, Apotex v. US (III), para. 7.20. ↩

³¹¹ Request for Bifurcation and Memorial on Jurisdiction, paras. 56 to 57 citing RL-126, RSM v. Grenada, para. 7.1.1 [Emphasis added]. See also CL-192, Victor Pey Casado v. Chile, para. 219. ↩

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156. Finally, as to the applicable standard, according to the Claimant, under both cause of action and collateral (or issue) estoppel, a necessary element is that “the issue in question must actually have been decided by the prior tribunal”.

(b) Application to the Facts

157. The Claimant submits that the issues raised in Windstream II were not decided in the Windstream I Award, meaning the Respondent “failed to meet the high burden of showing the issues raised in [Windstream II] are res judicata", based on either cause of action estoppel or collateral estoppel.³¹² It submits that there can be no res judicata effect, because the measures forming the basis of its claims in Windstream II, “arose after the Windstream I arbitration”.³¹³

i. Cause of action estoppel

158. For cause of action estoppel in particular, according to the Claimant,³¹⁴ the triple identity test must be met to establish: (a) same parties, (b) same cause of action and (c) same relief, i.e., that "[t]he same matters must not just have been raised in both proceedings, but actually determined in the first proceeding.”. The triple identity test is not met, it submits, for the reasons set out below.

159. First, as to identity of parties, it is undisputed that the disputing parties in Windstream I and Windstream II are the same.³¹⁵

160. Secondly, as to identity of cause of action, according to the Claimant,³¹⁶ the Respondent must, and cannot, “demonstrate that the two proceedings are based on the same cause of action” because:³¹⁷

³¹² Reply, para. 193. ↩

³¹³ Memorial, para. 448 [Emphasis in original]; see also Response to Request for Bifurcation, paras. 2, 23. ↩

³¹⁴ Reply, paras. 194 to 227. ↩

³¹⁵ Reply, para. 195. ↩

³¹⁶ Reply, paras. 196 to 213. ↩

³¹⁷ See CL-190, Malicorp v. Egypt, para. 103; RL-195, Caratube v. Kazakhstan, para. 494. ↩

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1. the prior decision must concern “the same claims based on the same factual and legal bases,"³¹⁸ which the ILA Report defined as "all facts and circumstances arising from a single event and relying on the same evidence which are necessary to give rise to a right of relief”,³¹⁹ (i.e., “the prior decision must relate to the same claims arising from the same measures and set of facts");
2. in this case the “measures and legal grounds in the two arbitrations are distinct", with measures and grounds in Windstream II all arising "after the Windstream I arbitration”, which “cannot be res judicata, as they did not exist at the time the Windstream I award was issued";
3. in particular, in Windstream I, the two relevant measures occurred in and around 2011 to 2012, being the Ontario Government's:³²⁰
   1. imposition of the Moratorium on 11 February 2011; and
   2. failure, (or alternatively failure of its State enterprise OPA), “to comply with the commitment made by the Government, through MEI, to [the Claimant] to take steps to ensure that [its] investments would not be impacted negatively by the Moratorium”.

161. In the Windstream I arbitration, the Claimant argued:

1. breach of NAFTA Articles 1110 (expropriation) and 1105 (fair and equitable treatment) based on the two measures rendering “WWIS, the Project, and the FIT Contract substantially worthless because there was no prospect of the Project reaching commercial operation by May 4, 2017”,³²¹ and

³¹⁸ See CL-190, Malicorp v. Egypt, para.103; RL-195, Caratube v. Kazakhstan, para. 494. ↩

³¹⁹ RL-112, ILA Final Report, p. 76, fn. 18. ↩

³²⁰ Reply, paras. 199. ↩

³²¹ See Memorial, paras. 555 to 560. ↩

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2. that those measures included that “the imposition of the Moratorium, and the failure to freeze the FIT Contract to account for the Moratorium”, which was “politically motivated and was a stark reversal of Ontario's repeated commitment to offshore wind and the representations made to Windstream".³²²

162. According to the Claimant, the Windstream I Award:

1. determined that there was no NAFTA Article 1110 expropriation because:³²³
   1. the “FIT Contract [was] still formally in force and ha[d] not been unilaterally terminated by the Government of Ontario”; and it “continue[d] to remain open for the Parties to re-activate and, as appropriate, renegotiate the FIT Contract to adjust its terms to the moratorium";
   2. “the $6 million security deposit was still in place and had not been taken or rendered worthless”,³²⁴ and
   3. thus rejecting the Claimant's argument that the FIT Contract and investments were “substantially worthless";
2. determined that there was a NAFTA Article 1105(1) fair and equitable treatment breach based on the findings that:
   1. the Moratorium “was not only driven by the lack of scientific research on the issue but was also politically motivated";
   2. its imposition itself was not “wrongful and a breach of Article 1105";³²⁵

³²² See Memorial, paras. 604 to 607, 616 to 622; Windstream I Award, para. 235. ↩

³²³ Reply, para. 202. ↩

³²⁴ See Windstream I Award, para. 290. ↩

³²⁵ See Windstream I Award, paras. 376 to 377. ↩

[Page 102]

3. the conduct of the Respondent vis-à-vis the Claimant “during the period following the imposition of the moratorium” violated Article 1105,³²⁶ because:
   1. the Respondent “did little to address the scientific uncertainty surrounding offshore wind that it had relied upon as the main publicly cited reason" for the Moratorium, and “the legal and contractual limbo in which [the Claimant] found itself after [its] imposition";
   2. the regulatory framework “continued to envisage offshore wind, but additional and more detailed regulations governing offshore wind were never developed"; and
   3. the Respondent “let the OPA conduct the negotiations with [the Claimant] even though ‘the decision on the moratorium had been taken by the Government and not by the OPA’”, and “without providing any direction to the OPA for the negotiations although it had the authority to do so [...]”;³²⁷

³²⁶ Windstream I Award, para. 379. ↩

³²⁷ Windstream I Award, paras. 378 to 379. ↩

³²⁸ Windstream I Award, para. 380. ↩

³²⁹ Windstream I Award, para. 379. ↩

[Page 103]

5. found that the FIT Contract “remained in force and it was open to the parties to re-activate and renegotiate the terms of the FIT Contract to adjust it to the terms of the Moratorium”.

163. The Windstream II arbitration, according to the Claimant, by contrast deals with “the post-Award conduct relating to the subsequent termination of the FIT Contract", namely:

1. the Respondent's failure “to complete in a timely manner the work it considered necessary in order to lift the Moratorium”;
2. the Respondent's “continued application of the Moratorium to WWIS, [...], despite its knowledge that the continued application of the Moratorium to WWIS would create the conditions necessary to allow the IESO to terminate the FIT Contract";
3. the Respondent's failure "to direct the IESO not to terminate the FIT Contract";
4. the Respondent's failure “to direct the IESO to amend the FIT Contract to ensure that the Project would be 'deferred', 'frozen,' and 'on hold' for the duration of the Moratorium";
5. the decision of the IESO, a State enterprise exercising delegated governmental authority, “to terminate the FIT Contract”; and
6. IESO's failure “to amend the FIT Contract to ensure that the Project would be 'deferred', 'frozen' and ‘on hold' for the duration of the moratorium, contrary to the Ontario's Government promise to Windstream and WWIS."³³⁰

164. In response to the Respondent's argument that the six aforementioned measures “boil down to two complaints of a NAFTA breach: (i) the continued application of the moratorium; and (ii) the termination of the FIT Contract, as opposed to its

³³⁰ Memorial, para. 428. ↩

[Page 104]

deferral or amendment”, which reflect the same claim as in Windstream I,³³¹ the Claimant submits that its complaint in Windstream II is that:

1. arises instead out of “failure to lift and the continued application of the Moratorium to WWIS created the conditions necessary to allow the IESO to terminate the FIT Contract";
2. concerns “measures, and the resulting termination of the FIT Contract, [which] violate Articles 1110 and 1105 of the NAFTA”;³³² and
3. is a “cause of action [that] was not determined by the Windstream I tribunal, most obviously because the FIT Contract remained in place at the time”;
4. arises out of the actual FIT Contract terminations, as opposed to the Claimant's de facto cancellation argument in Windstream I (“because it could no longer be brought into commercial operation by the MCOD date”) which differs from actual unilateral termination (with Windstream I finding no termination at that time);³³³ and
5. now that the FIT Contract has been terminated, “that is the basis of this second arbitral proceeding”, (i.e., “new facts and measures that were not – and could not have been – before the Windstream I tribunal").

165. The Claimant relies on the prior award in Caratube v. Kazakhstan II, which it submits found no res judicata even though the “facts underlying the two cases on which the claim to ICSID jurisdiction is based are identical” and claimant chose not to bring them together, where:³³⁴

1. the first award dismissed claims pursuant to the Kazakhstan-United States BIT, and the second arbitration was brought in contract and pursuant to

³³¹ Request for Bifurcation and Memorial on Jurisdiction, para. 68. ↩

³³² See RL-195, Caratube v. Kazakhstan, paras. 491 to 495. ↩

³³³ See Windstream I Award, para. 290. ↩

³³⁴ RL-195, Caratube v. Kazakhstan, para. 336. ↩

[Page 105]

Kazakhstan's Foreign Investment Law, based on the same facts and measures (but different legal instruments);

166. Thirdly, as to identity of object, according to the Claimant the relevant question is “whether the relief sought and determined in both proceedings is identical”,³³⁶ and it submits it was not because in Windstream I:

1. the Claimant "argued" the same relief in Windstream II, seeking “compensation for the loss of the full value of its investment, in other words for the loss of the Project";
2. but the tribunal rejected that argument and “instead awarded Windstream compensation for the damage to its investment, and not the full value of its investment, because the FIT Contract was still in force”;
3. instead, in determining damages flowing from breach of NAFTA Article 1105, the tribunal:
   1. sought to make the Claimant “whole” only with a specific context:³³⁷

      [...] keeping in mind the Tribunal's determination that [Windstream] ha[d] not lost the entire value of its investment as the

³³⁵ See RL-195, Caratube v. Kazakhstan, paras. 470 to 475, 491 to 495. ↩

³³⁶ Reply, paras. 214 to 227 [Emphasis in original]; see RL-195, Caratube v. Kazakhstan, para. 492. ↩

³³⁷ Windstream I Award, para. 473 [Emphasis added]. ↩

[Page 106]

FIT Contract [was] still formally in force (albeit under an extended force majeure) and, accordingly, as the CAD 6 million letter of credit [was] still available to [Windstream] and ha[d] not been lost or taken by the Government.

³³⁸ Windstream I Award, para. 473 [Emphasis added]. ↩

³³⁹ Reply, para. 216. ↩

³⁴⁰ Windstream I Award, paras. 474, 482, 484. ↩

³⁴¹ Windstream I Award, para. 483 [Emphasis added]. ↩

[Page 107]

7. noted that it was “another matter that the Parties [could] create such value by reactivating and renegotiating the FIT Contract after the award, which option [was] still open to them”.³⁴²

167. In response to the argument that it "fails to acknowledge that it was compensated for the full value of its investment less the CAN$6 million security deposit",³⁴³ the Claimant submits that the Respondent:

1. relies heavily on the Windstream I Award finding that the FIT Contract, as at the date of the Award, had no value;³⁴⁴
2. ignores the Windstream I Award relief granting “compensation for the damage to its investment rather than the full value of the investment";
3. suggests that the claim arises from a “misleading interpretation” of the Windstream I Award,³⁴⁵ but such interpretation aligns with MEI emails (i.e., the Windstream I Award “did not consider the value of the contract, only the specific damages to Windstream's project that [the] company incurred as a result of the moratorium”, “determined that the Claimant hasn't lost the entire value of its investment (i.e., its project) as there was no expropriation: the contract is still in force”, and “noted that the purpose of damages is to make the Claimant ‘whole,' keeping in mind that the contract is still in force”);³⁴⁶ and
4. conducted itself “consistent with the interpretation of the Windstream I Award circulated within the Ontario Government just after it was issued",

³⁴² Windstream I Award, para. 483. ↩

³⁴³ Request for Bifurcation and Memorial on Jurisdiction, para. 27. ↩

³⁴⁴ Request for Bifurcation and Memorial on Jurisdiction, paras. 33 to 34. ↩

³⁴⁵ Request for Bifurcation and Memorial on Jurisdiction, para. 12. ↩

³⁴⁶ C-2652, Email from Erin Thompson to Jennifer Kacaba, 26 October 2016. See also C-2643, IESO Issues Note: Windstream NAFTA Claim, 6 October 2016; C-2667, Email from Adam Hendy to Dan Moulton and others, 13 January 2017. See also C-2641, MNRF House Note Issue: Windstream Energy Offshore Wind Power NAFTA Claim, 30 September 2016; C-2649, Email from Katrina Xavier to Richard Blackwell, 20 October 2016. ↩

[Page 108]

with IESO not returning the CAD 6 million letter of credit “until after the FIT Contract was terminated in February 2020”.

168. Further in response to the Respondent's argument that the Windstream I Award had already "compensated Windstream fully for not being able to proceed with the development of the Project”, including “[having] determined that the FIT Contract was worthless and would only obtain value if the parties decided to reactivate it",³⁴⁷ the Claimant argues that the Award:

1. “recognized that there was value beyond what was awarded that could be created if the FIT Contract was renegotiated”, which “unlocked value was taken when the FIT Contract was terminated” (but further that this is in any event is “a merits-based argument, not a jurisdictional one");³⁴⁸ and
2. “never determined the value of the Project in the context of the termination of the FIT Contract", and any “delta between what was awarded in Windstream I and what the value is in 2020” is “a matter of quantum, not a matter of jurisdiction”, which has not been determined.

169. In this regard, the Claimant relies on the prior award in Mobil Investments v. Canada (II), which it submits concerned a claim in Mobil Investments v. Canada (I) for damages sustained between 2012-2015 based on future losses and a claim in Mobil Investments v. Canada (II) for damages already incurred, where the Mobil Investments v. Canada (I) Award did not award damages for future losses as “not ripe for determination”³⁴⁹.

1. rejected that the Claimant was precluded from seeking damages in Mobil Investments v. Canada (II), because Mobil Investments v. Canada (I) “did

³⁴⁷ Request for Bifurcation and Memorial on Jurisdiction, para. 32. ↩

³⁴⁸ See Request for Bifurcation and Memorial on Jurisdiction, paras. 33 to 34. ↩

³⁴⁹ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 183. See e.g. Memorial, para. 467. ↩

[Page 109]

not decide the question of damages for the period 2012 to 2015", meaning no res judicata;³⁵⁰

170. According to the Claimant, similarly here, the Windstream I Award “did not determine what relief should be awarded as a result of the termination of the FIT Contract (not could it have, since it found that the FIT Contract had not been terminated)", so any argument as to a “delta between the amount awarded by the tribunal in Windstream I and the damage [the Claimant] has suffered to its investment is a matter that goes to quantum, not to jurisdiction”.³⁵³

ii. Collateral (or issue) estoppel

171. For collateral (or issue) estoppel, according to the Claimant, the agreed test is that it applies where:³⁵⁴

[...] a finding [of a prior competent tribunal] concerning a right, question or fact, may not be relitigated (and, thus, is binding on a subsequent tribunal), if, in a prior proceeding: (a) it was distinctly put in issue; (b) the court or tribunal actually decided it; and (c) the resolution of the question was necessary to resolve the claims before that court or tribunal.

³⁵⁰ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 183. ↩

³⁵¹ See RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 196. ↩

³⁵² See RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 197. ↩

³⁵³ See CER-Secretariat, Independent Expert Report of Chris Milburn, Edward Tobis, and Pierre-Antoine Tetard, para. 2.40; CER-Secretariat-2, Second Expert Report of Secretariat, paras. 2.7, 4.44. ↩

³⁵⁴ Request for Bifurcation and Memorial on Jurisdiction, paras. 56 to 57 citing RL-126, RSM v. Grenada, para. 7.1.1. ↩

[Page 110]

172. The Claimant deals with each of the four issues that the Respondent claims it is “barred from re-litigating",³⁵⁵ namely:

1. challenging the continued imposition of the Moratorium;
2. challenging the termination of the FIT Contract;
3. arguing it has been substantially deprived of its investment; and
4. seeking compensation for damages flowing from the FIT Contract termination.

173. First, as to challenging the Respondent's alleged failure, following the Windstream I Award, “to complete in a timely manner the work it considered necessary to lift" the Moratorium,³⁵⁶ the Claimant submits that the Respondent mischaracterises its position as it “is not seeking to re-argue the issue of whether the decision to impose the Moratorium was wrongful”, which the Windstream I Award “found it was not”.

174. Instead, according to the Claimant, it is arguing “that keeping the Moratorium in place after the Windstream I Award was issued and failing to do any of the research required to lift [it] breaches the NAFTA, “in combination with the other impugned measures,” as it created the conditions that led to the termination of the FIT Contract", in that:

1. for expropriation, following the Windstream I Award, the Respondent:
   1. “announced that the research required to lift the Moratorium was being 'finalized’”;³⁵⁷

³⁵⁵ See Request for Bifurcation and Memorial on Jurisdiction, paras. 70 to 91. ↩

³⁵⁶ See Request for Bifurcation and Memorial on Jurisdiction, para. 71. ↩

³⁵⁷ See Memorial, para. 199; C-2471, Exhibit 78, Official Report of Debates (Hansard) Transcript - English, Legislative Assembly of Ontario, 17 October 2016; C-2045, Legislative Assembly of Ontario – Official Report of Debate (Hansard) Standing Committee on Estimates, 26 October 2016, p. E-159. ↩

[Page 111]

2. “then decided to stop conducting any of the scientific studies that were the stated preten[c]e for applying the Moratorium”, with “no credible basis";³⁵⁸
3. “continued to apply the Moratorium to WWIS knowing that this would create the conditions that would allow the IESO to terminate the FIT Contract, in direct contradiction of its promise to protect the Project from the effects of the Moratorium”;
4. "made the deliberate decision 'not to intervene in this matter' and refused to direct the IESO not to terminate the FIT Contract or to amend the FIT contract to fulfil the promise the Project would be 'frozen'";³⁵⁹
5. IESO's termination right “arose because of th[ose] actions"; and
6. the Respondent “sought to use the Moratorium delays as a pretext to terminate a Project it no longer wanted for political reasons”;³⁶⁰

³⁵⁸ See also Memorial, paras. 295 to 302. ↩

³⁵⁹ See Memorial, para. 335. ↩

³⁶⁰ See Memorial, paras. 458 to 459. ↩

³⁶¹ Memorial, para. 484. ↩

[Page 112]

4. the Respondent “failed to conduct the scientific studies which were the purported premise of the moratorium, which remains in effect to this day";³⁶²

175. According to the Claimant, the Respondent mischaracterises the Windstream I Award as finding that the decision to impose the Moratorium and its continued imposition breached NAFTA,³⁶³ whereas the findings were that the:

1. the “decision to impose a moratorium on offshore wind development, or the process that led to it, were [not] in themselves wrongful”;
2. the Respondent “on the whole did relatively little to address the scientific uncertainty surrounding offshore wind that it had relied upon as the main publicly cited reason for the moratorium”;³⁶⁴
3. NAFTA Article 1105 was breached by the Respondent's failure to take necessary measures “within a reasonable period of time after the imposition of the moratorium to bring clarity to the regulatory uncertainty surrounding

³⁶² Memorial, para. 487. ↩

³⁶³ See Request for Bifurcation and Memorial on Jurisdiction, paras. 72 to 74. ↩

³⁶⁴ Windstream I Award, paras. 376, 378. ↩

[Page 113]

the status and the development of the Project created by the moratorium”;³⁶⁵ and

176. However, the Windstream I Award:³⁶⁶

1. “did not address whether the continued application of the Moratorium to the Project after September 27, 2016 was wrongful";
2. “did not determine whether the continued application of the Moratorium is one of the composite measures that led to the wrongful termination of the FIT Contract"; and
3. could not do so as “all of these facts arose after the Windstream I Award”.

177. Secondly, as to challenging the FIT Contract termination following the Windstream I Award, the Claimant submits that:

1. the FIT Contract was not terminated until 20 February 2020, so no findings arising out of its termination could have been made in Windstream I, as:³⁶⁷
   1. the Claimant had argued that effective termination was May 2012, because the Project could not meet MCOD (4 May 2017), but this was rejected; and
   2. the Windstream I Award found that “in the absence of any further amendments to the FIT Contract to address the suspension, as of

³⁶⁵ Windstream I Award, para. 380. ↩

³⁶⁶ Reply, para. 235 [Emphasis in original]. ↩

³⁶⁷ Request for Bifurcation and Memorial on Jurisdiction, para. 75. ↩

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[4 May 2012] the Project effectively became non-financeable”,³⁶⁸ but did not award damages for cancellation of the FIT Contract;³⁶⁹

178. According to the Claimant, the Respondent relies on collateral estoppel over arguments, not findings, as follows:

1. the Windstream I Award accepted the Respondent's “position in the arbitration that the FIT Contract was only 'frozen,' the Project could proceed, and the Moratorium was just a temporary measure";
2. the “issue that was determined and is res judicata is the tribunal's finding that the FIT Contract has not been terminated and is in force”;³⁷²

³⁶⁸ Windstream I Award, para. 374. ↩

³⁶⁹ Request for Bifurcation and Memorial on Jurisdiction, paras. 77, 81. ↩

³⁷⁰ Windstream I Award, para. 290. ↩

³⁷¹ Windstream I Award, para. 290. ↩

³⁷² Reply, para. 239 [Emphasis in original]. ↩

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3. “it remained open for the parties to re-activate and renegotiate the FIT Contract to adjust its terms to the Moratorium"; and
4. the issue whether or not the FIT Contract termination breaches NAFTA was therefore not considered and is not res judicata;

179. Moreover, according to the Claimant, the Respondent's arguments are in any event merit-based damages arguments in that:

1. they arise out of the Claimant's compensation in the Windstream I Award;
2. that compensation was based on the finding that the FIT Contract could not be completed by the MCOD;³⁷³ and
3. there was no compensation “for the full value of the Project” (i.e., damages flowing from the FIT Contract termination);

180. Further in response to the Respondent's argument that the Claimant “resurrects” the promises “that the Project would be 'frozen' from the impacts of the Moratorium and that [it] is barred from relying on these representations", according to the Claimant, the Respondent:

1. merely asserts that such representations “cannot be divorced from the compensation ‘it has already received to make it whole again’”, with no prior awards cited in support;”³⁷⁴ and
2. does not take into account the fact of the undisputed promises, reiterated throughout Windstream I and the Windstream I Award relying on them in finding the Respondent liable for breach of NAFTA Article 1105 “does not make the subsequent actions by Canada or Ontario that breach these promises res judicata".

³⁷³ See Windstream I Award, para. 290. ↩

³⁷⁴ Request for Bifurcation and Memorial on Jurisdiction, paras. 77 to 79. ↩

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181. The Claimant therefore argues that this Tribunal must determine “how these background facts contribute to the allegations that the new measures, which post-date the Windstream I Award, breach the NAFTA”.

182. The Claimant proceeds to submit that, following the Windstream I Award:

1. it “formed the expectation that the Project could go ahead and that the original promise made in 2011 could be fulfilled";
2. its “expectation was not based on the 2011 promises alone, but on new facts", which included the:
   1. Windstream I Award “finding that the FIT Contract was in force and able to be renegotiated";
   2. Windstream I Award finding that the Respondent's “conduct in failing to fulfil the promise, and failing to direct the IESO, amounted to a breach of the NAFTA”;
   3. the Respondent's representations “in Windstream I that the Project was 'frozen' and could proceed once the temporary Moratorium was lifted";
   4. the Respondent's public statements following the Windstream I Award "that offshore wind research would soon be ‘finalized' and a statement that the Government could let the Project be built”; and
   5. IESO not (immediately) returning the CAD 6 million security deposit; and
3. it did not expect the Respondent “to continue the very conduct that was already found to breach the NAFTA”, but to “work with [it] to implement the promises made”.³⁷⁵

³⁷⁵ See CWS-N. Baines, Witness Statement of Nancy Baines, para. 16. ↩

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183. Therefore, the Claimant argues, the Windstream I Award could not determine “[w]hether or not this new conduct, and the termination of the FIT Contract, violates the NAFTA”.

184. Thirdly, as to substantial deprivation of its investment following the Windstream I Award, the Claimant submits that:³⁷⁶

1. it has now been substantially deprived of the value of its investments due to the FIT Contract termination;³⁷⁷
2. regarding the Respondent's argument that it is barred from making this argument because the Windstream I Award found that CAD 6 million security deposit “constituted a substantial portion of the value of the FIT Contract",³⁷⁸ the Windstream I Award in fact:
   1. determined the value of the Project in 2016, the date of the Award;
   2. concluded that the CAD 6 million security deposit was a substantial portion of the value of the investment;
   3. did not determine the value lost as a result of the 2020 FIT Contract termination; and
   4. made “no determination of whether [the Claimant] has been substantially deprived from the loss of that value”, taking into account that it has subsequently received its CAD 6 million security deposit.

185. Fourth, as to seeking compensation for damages flowing from the FIT Contract termination following the Windstream I Award, the Claimant submits that it is not barred from seeking compensation for the damages flowing from FIT Contract termination.

³⁷⁶ Reply, paras. 246 to 247. ↩

³⁷⁷ See Memorial, paras. 456 to 457. ↩

³⁷⁸ See Request for Bifurcation and Memorial on Jurisdiction, paras. 82 to 85. ↩

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186. In response to the Respondent's arguments otherwise,³⁷⁹ the Claimant submits as follows:

1. regarding its argument that the Windstream I Award valued the Project at CAD 31 million, as damages “to make it whole again”, meaning it cannot claim additional damages “unless such value was created subsequent to the Award",³⁸⁰ the Claimant says:
   1. it was “not awarded compensation for the full value of the investment, but for damages to its investment", and
   2. that left a "new question” as to “the value of the Project as of the 2020 valuation date, less the amount already awarded";
2. regarding its argument that the Windstream I Award determined that the FIT Contract had no value and was not renegotiated so no further value was created,³⁸¹ the Claimant says:
   1. the tribunal "recognized that had the FIT Contract been renegotiated, there was additional value [...] that could be created”, which “was not available to [the Claimant] at the time of the Windstream I Award without renegotiating the contract";
   2. therefore “the tribunal did not consider that value in compensating [it]", and
   3. "now that the FIT Contract has been terminated, that additional value had the FIT Contract been renegotiated is gone", due to the Respondent's “failure to do anything in response to [the Claimant's]

³⁷⁹ See Request for Bifurcation and Memorial on Jurisdiction, para. 86. ↩

³⁸⁰ Request for Bifurcation and Memorial on Jurisdiction, para. 87. ↩

³⁸¹ See Request for Bifurcation and Memorial on Jurisdiction, paras. 88 to 89. ↩

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efforts to engage with it, including directing the IESO not to terminate the FIT Contract and to renegotiate the FIT Contract";³⁸²

187. For abuse of process, according to the Claimant, the doctrine is inapplicable, because this:³⁸⁵

1. is a “recognized principle of public international law and that it is a tool used to weed out abusive claims”;³⁸⁶
2. “is not intended to be a tool for parties that are unable to meet the test for establishing res judicata";³⁸⁷
3. according to the ILA Report, in international law it is recognised “but it is extremely rarely applied";³⁸⁸

³⁸² A party cannot rely on its own breaches to escape liability; see CL-052, Gemplus. v. Mexico, para. 13-92. ↩

³⁸³ Request for Bifurcation and Memorial on Jurisdiction, para. 91 [Footnote omitted]. ↩

³⁸⁴ See RL-126, RSM v. Grenada, para. 7.1.1. See also CL-192, Victor Pey Casado v. Chile, para. 219. ↩

³⁸⁵ See Reply, paras. 254 to 260; Request for Bifurcation and Memorial on Jurisdiction, paras. 61 to 66. ↩

³⁸⁶ See RL-195, Caratube v. Kazakhstan, para. 372. ↩

³⁸⁷ See e.g. RL-130, Orascom v. Algeria. ↩

³⁸⁸ RL-117, ILA Interim Report,, p. 22. See also RL-195, Caratube v. Kazakhstan, para. 377. ↩

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d. carries a high burden, given “the seriousness of a charge of bad faith amounting to abuse of process”,³⁸⁹ with the prior award in Chevron v. Ecuador (I) recognising it as an “extraordinary remedy”, which is used only in “very exceptional circumstances”;³⁹⁰

e. “often arises in the context of corporate restructuring, where an investor manipulates its corporate structure to gain jurisdiction under an investment treaty after a dispute has become foreseeable";

f. “has also been invoked where a claimant concurrently commences multiple proceedings in different forums to resolve the same dispute in order to maximize its chances of success", such as in:

i. Orascom v. Algeria: three arbitration proceedings, all “concern[ing] the same measures or events” taken by Algeria, and “effectively one and the same",³⁹¹ where the second arbitration after the first settled was found to be an abuse of process, because res judicata could not apply absent any reasoned final award, different claimants and treaties but "duplicative relief in relation to the same investment, the same measures, and the same harm”;³⁹²

ii. Ampal v. Egypt: different shareholders initiated two arbitration proceedings under separate investment treaties and the tribunal “held that the claimant had to cure the abuse by choosing one forum”;³⁹³

iii. Caratube II: rejected an abuse of process, taking a “cautious approach",³⁹⁴ recognising that claimants could have raised the claims in Caratube I but “was not persuaded they deliberately omitted to do

³⁸⁹ CL-183, Chevron & TexPet v. Ecuador ((I), Interim Award, para. 143. ↩

³⁹⁰ CL-183, Chevron & TexPet v. Ecuador (I), Interim Award, paras. 143, 146. See also CL-193, Levy v. Peru, para. 186. ↩

³⁹¹ RL-130, Orascom v. Algeria, paras. 485, 486, 488. ↩

³⁹² See RL-130, Orascom v. Algeria, paras. 543, 545. ↩

³⁹³ See RL-131, Ampal v. Egypt, Decision on Jurisdiction, paras. 331 to 339. ↩

³⁹⁴ RL-195, Caratube v. Kazakhstan, para. 379. ↩

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so 'in a bad faith attempt to preserve such claims for further arbitration proceedings' should the Caratube I arbitration not go in their favour and to misuse the arbitration ‘to get a second bite at the cherry "";³⁹⁵ and

g. none of which supports using the abuse of process doctrine as a back-up to res judicata,³⁹⁶ and according to the Claimant, the Respondent “has not proven that the abuse of process doctrine applies to this proceeding, nor could it", as the matters at issue here “were never determined by the Windstream I tribunal”, and abuse of process “is inapplicable”.

(iii) The Tribunal's Analysis

188. The Tribunal has relied on the entire record before it, including the disputing parties' written submissions and oral pleadings, concerning the Respondent's res judicata (or cause of action estoppel), collateral estoppel and abuse of process objections. To the extent that some arguments are not reproduced in this Award, they have been considered and subsumed in the Tribunal's analysis.

189. By way of summary, both causes of action in Windstream II arise out of the Windstream I Award (in particular paragraphs 290, 291 and 483) and the Respondent's alleged conduct thereafter. All three preliminary objections (and the substantive claims) primarily emanate from the Windstream I Award findings that (i) the Claimant's investment continued, at least in part, in the form of the security deposit and FIT Contract, and (ii) the FIT Contract was capable of reactivation and renegotiation by the disputing parties. According to the Claimant, the Respondent's conduct towards it and its continuing investment following the Windstream I Award, culminating in the FIT Contract termination, gives rise to fresh NAFTA breaches. According to the Respondent, it is undisputed that the security deposit was returned and that IESO terminated the FIT Contract within its express terms

³⁹⁵ See RL-195, Caratube v. Kazakhstan, paras. 381, 383. ↩

³⁹⁶ See Request for Bifurcation and Memorial on Jurisdiction, paras. 65 to 66. ↩

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(as set out in the Factual Background Section above),³⁹⁷ thus ending the investment lawfully, in circumstances in which it was under no legal obligation to reactivate or renegotiate the FIT Contract.

(a) The Applicable Legal Standard

190. The applicable legal standards for res judicata (or cause of action estoppel), collateral estoppel and abuse of process are broadly agreed. The main disagreement lies in taxonomy rather than legal principle or standards.

191. The Respondent characterises res judicata as equivalent to cause of action estoppel, i.e., the bar on repeating a claim that has been subject to final decision by a competent court or tribunal. It approached collateral estoppel and abuse of process as separate doctrines. The Claimant appears to characterise res judicata as the overarching principle, which in turn divides into sub-categories of cause of action estoppel (concerning claims) and issue estoppel (concerning issues of fact or law), as well as abuse of process.

192. The Tribunal accepts that the use of the term res judicata in prior awards has been inconsistent. The literal meaning of the Latin term is “a matter judged” or “the thing has been judged”. The Latin phrase alone does not distinguish whether the matter or thing judged be a cause of action, or may also include an issue. For the purpose of this Award, the Tribunal broadly adopts the Respondent's approach that res judicata and collateral estoppel are separate doctrines. For the avoidance of doubt, this Award proceeds on the basis that res judicata encompasses claim preclusion (i.e., the claim has been fully and finally determined) and collateral estoppel deals with issue preclusion. The two doctrines are therefore treated as related but separate. The Tribunal acknowledges that, in some common law jurisdictions, res judicata is often seen as preventing parties from relitigating claims that have already been adjudicated as well as claims that could have been raised in

³⁹⁷ See C-245, OPA Feed-In Tariff Contract (FIT Contract) Schedule 1, General Terms and Conditions, Version 1.3.0, 4 May 2010, Section 10.1(a) and Section 10.1(g), pp. 31 to 32; Windstream I Award, para. 102. ↩

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a prior proceeding, and that there is no precise uniformity across national legal systems.

193. For the purpose of these arbitration proceedings, both disputing parties agree that the foundation for res judicata (cause of action estoppel) and collateral estoppel is the principle of finality of arbitral awards. This principle is enshrined in NAFTA Chapter 11 at Article 1136:

Article 1136: Finality and Enforcement of an Award

1. An award made by a Tribunal shall have no binding force except between the disputing parties and in respect of the particular case.

2. Subject to paragraph 3 and the applicable review procedure for an interim award, a disputing party shall abide by and comply with an award without delay.

3. A disputing party may not seek enforcement of a final award until:

[...]

(b) in the case of a final award under [...] the UNCITRAL Arbitration Rules

(i) three months have elapsed from the date the award was rendered and no disputing party has commenced a proceeding to revise, set aside or annul the award, or

(ii) a court has dismissed or allowed an application to revise, set aside or annul the award and there is no further appeal.

4. Each Party shall provide for the enforcement of an award in its territory.

[...]

6. A disputing investor may seek enforcement of an arbitration award under the ICSID Convention, the New York Convention or the Inter-American Convention regardless of whether proceedings have been taken under paragraph 5.

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7. A claim that is submitted to arbitration under this Section shall be considered to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention and Article I of the Inter-American Convention.

194. As the disputing parties' respective submissions set out, finality is not a unique feature of NAFTA arbitration, or indeed arbitration generally. The finality of decisions in any judicial (or quasi-judicial) system is to encourage judicial economy and prevent potentially divergent decisions on the same issue.³⁹⁸ Development of estoppel principles in various legal jurisdictions has contributed to treatment of the concept in international investment law disputes.³⁹⁹

195. There is considerable common ground between the disputing parties as to the legal requirements for res judicata and collateral estoppel. The Tribunal takes each in turn below.

i. Res judicata

196. For res judicata (characterised by the Claimant as cause of action estoppel), both the Respondent and the Claimant agree that three criteria must be satisfied (which the Claimant characterises as a “triple identity” test, i.e., “identity of persons, cause of action, and object”), as follow:⁴⁰⁰

³⁹⁸ See RL-005, Apotex v. US (III), paras. 7.7 to 7.9. ↩

³⁹⁹ See RL-122, Gavan Griffith and Isabella Seif, 'Chapter 8: Work in Progress: Res Judicata and Issue Estoppel in Investment Arbitration', in Neil Kaplan and Michael J. Moser (eds.), Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber Amicorum Michael Pryles (Kluwer Law International 2018), p. 122: "Investment tribunals also have applied mixed and confusing nomenclature within these contexts, to reach, in most matters, objectively 'correct' results to vindicate the underlying public policy for there to be finality. Some use the term res judicata without particularising that they are applying issue estoppel. Some do not apparently recognise concepts of issue estoppel as a separate exclusionary principle. Others treat res judicata and issue estoppel as entirely distinct doctrines." See also CL-086, Tokios Tokelés v. Ukraine, para. 98; RL-123, British Caribbean Bank v. Belize, para. 77; RL-124, Al Tamimi v. Oman, paras. 131, 358; RL-125, Gavazzi v. Romania, Decision on Jurisdiction, Admissibility and Liability, paras. 164 to 166; Request for Bifurcation and Memorial on Jurisdiction, para. 54; RL-112, ILA Final Report, para. 56; RL-120, 'Chapter 27: Preclusion, Lis Pendens and Stare Decisis in International Arbitration', in Gary B. Born, International Commercial Arbitration (2nd ed., Kluwer Law International 2014), pp. 3732 to 3827, 3776; RL-121, Silja Schaffstein, "The Doctrine of Res Judicata before International Commercial Arbitral Tribunals" (Oxford International Arbitration Series 2016), para. 6.236. ↩

⁴⁰⁰ Request for Bifurcation and Memorial on Jurisdiction, para. 52; Reply, paras. 187 to 188. ↩

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a. proceedings before in the same legal order (e.g., both decision-making bodies are international courts or international tribunals);

b. between the same parties (i.e., the prior award must have been rendered between the same parties as the parties in the further arbitration proceedings); and

с. involving the same relief and grounds,⁴⁰¹ which considers whether the same matter is being raised in the new claim, based on it being:⁴⁰²

i. distinctly put in issue by the parties in the prior dispute as a cause of action, which the Claimant further distinguished as requiring both:

1. claims based on the same cause of action in both arbitration proceedings (i.e., the same legal arguments are relied upon); and

2. the same object: (“same relief must be sought”);⁴⁰³ and

ii. distinctly decided by the tribunal in the prior dispute.⁴⁰⁴

197. The underlying purpose is to prevent “relitigation of matters where ‘a right, question or fact [was] distinctly put in issue and directly determined by a court of competent jurisdiction”’.⁴⁰⁵ The Tribunal accepts that, for res judicata, as opposed to collateral estoppel, the cause of action must have been both put and determined, and must therefore appear in the operative part of the award.⁴⁰⁶

⁴⁰¹ See e.g. RL-115, CME v. Czech Republic, Challenge Legal Opinion, para. 15; RL-005, Apotex v. US (III), para. 7.15; RL-116, Newchwang Case, p. 65. ↩

⁴⁰² See RL-117, ILA Interim Report, pp. 20 to 21; RL-005, Apotex v. US (III), paras. 7.13 to 7.16. ↩

⁴⁰³ See RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 176.. ↩

⁴⁰⁴ See RL-118, Amco v. Indonesia, Award in Resubmitted Proceeding, para. 30; RL-114, Vaughan Lowe, 'Res Judicata and the Rule of Law in International Arbitration', 8 Afr. J. Int'l & Comp. L. 38 (1996), p. 39. ↩

⁴⁰⁵ RL-110, Mobil Investments v. Canada (II), para. 188; RL-113, Amco v. Indonesia, Decision on Jurisdiction in Resubmitted Proceeding, para. 30; RL-114, Vaughan Lowe, 'Res Judicata and the Rule of Law in International Arbitration', 8 Afr. J. Int'l & Comp. L. 38 (1996), p. 39. ↩

⁴⁰⁶ RL-119, Chorzów Factory Case, Interpretation of Judgments Nos. 7 and 8, Dissenting Opinion by M. Anzilotti, Publications of the Permanent Court of International Justice, Collection of Advisory Opinions, Series A - No. 13, ↩

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198. In this regard, the ICJ in Nicaragua v. Columbia judgment characterised the standard as follows, with which the Tribunal agrees:⁴⁰⁷

59. It is not sufficient, for the application of res judicata, to identify the case at issue, characterized by the same parties, object and legal ground; it is also necessary to ascertain the content of the decision, the finality of which is to be guaranteed. The Court cannot be satisfied merely by an identity between requests successfully submitted to it by the same Parties; it must determine whether and to what extent the first claim has already been definitively settled.

60. The Court underlined in its Judgment of 26 February 2007, rendered in the case concerning the Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), that "[i]f a matter has not in fact been determined, expressly or by necessary implication, then no force of res judicata attaches to it; and a general finding may have to be read in context in order to ascertain whether a particular matter is or is not contained in it" [...].

199. As discussed below in the application of this legal standard to the facts, the Claimant considers that the requirement for the issue to have been determined by the prior tribunal to be decisive in this case.

ii. Collateral estoppel

200. For collateral estoppel, also referred to as issue estoppel or issue preclusion, the disputing parties both accept that this may bind a subsequent tribunal to an earlier tribunal's determination of an issue in subsequent proceedings. In this respect, there is no "triple identity test", and both disputing parties accepted the standard is

16 December 1927, p. 24. Although this was the dissenting viewpoint in that case, it has since been recognized as a leading decision on res judicata and is often cited in academic and jurisprudence. See also RL-005, Apotex v. US (III), paras. 7.30 to 7.32.

⁴⁰⁷ RL-110, Mobil Investments v. Canada (II), para. 191 citing Nicaragua v. Colombia, p. 126. ↩

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as set out in the prior award in RSM Production Corporation and others v. Grenada, as follows:⁴⁰⁸

[...] a finding concerning a right, question or fact may not be re-litigated (and, thus, is binding on a subsequent tribunal), if, in a prior proceeding: (a) it was distinctly put in issue; (b) the court or tribunal actually decided it; and (c) the resolution of the question was necessary to resolving the claims before that court or tribunal.

201. Therefore, the test provides that:

a. if a competent tribunal has made “a finding concerning a right, question or fact",

b. such finding “may not be re-litigated (and, thus, is binding on a subsequent tribunal)",

c. provided that in the prior proceeding the finding:⁴⁰⁹

i. was distinctly put in issue,

ii. the court or tribunal actually decided it, and

iii. the resolution of the question was necessary to resolve the claims before that court or tribunal (i. e., “it does not apply to statements made by tribunal in obiter dicta").

⁴⁰⁸ RL-126, RSM v. Grenada, para. 7.1.1. This test was relied on in the US Supreme Court in RL-127, Southern Pacific Railroad Company v. US, Judgment, pp. 48 to 49 ("The general principle announced in numerous cases is that a right, question, or fact distinctly put in issue and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and even if the second suit is for a different cause of action, the right, question, or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified."). The principle is also recognized in RL-005, Apotex v. US (III), paras. 7.18, 7.23, 7.59 citing Jackson H. Ralston and W. T. Sherman Doyle, Claim of Company General of the Orinoco Case, Report of French-Venezuelan Mixed Claims Commission of 1902 (Washington, Government Printing Office, 1906), p. 355 and RL-114, Vaughan Lowe, 'Res Judicata and the Rule of Law in International Arbitration', 8 Afr. J. Int'l & Comp. L. 38 (1996), p. 42. ↩

⁴⁰⁹ See Request for Bifurcation and Memorial on Jurisdiction, paras. 56 to 57 citing RL-126, RSM v. Grenada, para. 7.1.1. See also CL-192, Victor Pey Casado v. Chile. ↩

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202. As pointed out by the Respondent in this regard, “international courts and tribunals have regularly examined under international law a prior tribunal's reasoning, and the arguments it considered, in determining the scope, and thus the preclusive effect, of the prior award's operative part”.⁴¹⁰ This Tribunal is thus permitted, and indeed required, to take the same approach.

iii. Abuse of process

203. For abuse of process in the context of multiple proceedings, ultimately both disputing parties appear to accept that this arises where the strict criteria for cause of action estoppel, or, if relevant, issue estoppel, have not been met on the facts but, nevertheless, the court or tribunal feels compelled to act.

204. The Tribunal acknowledges that, in appropriate cases of multiple proceedings, it remains open to an arbitral tribunal to find that the subsequent proceedings may constitute an abuse of process. It takes guidance from commentary by Sir Hersch Lauterpacht, that “[t]here is no legal right, however well established, which could not, in some circumstances, be refused recognition on the ground that it has been abused" ⁴¹¹

205. However, the Tribunal considers that in this context abuse of process is an extraordinary remedy that “is extremely rarely applied”.⁴¹² As such, its application carries a high burden, involving bad faith or an intention wrongful act on the part of a party. ⁴¹³

(b) Application to the Facts

206. As explained above, each of the doctrines of res judicata (cause of action estoppel), collateral estoppel and abuse of process, as considered in this Windstream II arbitration, concern findings in the earlier proceedings between the disputing parties

⁴¹⁰ Request for Bifurcation and Memorial on Jurisdiction, para. 60. ↩

⁴¹¹ RL-134, Hersch Lauterpacht, 'The Development of International Law by the International Court' (1958), p. 164, also cited in RL-130, Orascom v. Algeria, para. 541. ↩

⁴¹² RL-117, ILA Interim Report, p. 22. See also RL-195, Caratube v. Kazakhstan, para. 377. ↩

⁴¹³ See CL-183, Chevron & TexPet v. Ecuador (I), Interim Award, paras. 143, 146. See also CL-193, Levy v. Peru, para. 186. ↩

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in the Windstream I Award. The Tribunal accepts, and neither Party appears seriously to refute, that it is not for this Tribunal to seek to determine that which was already determined in the Windstream I Award. That goes both to any cause of action and any issue relied upon in the Windstream I Award reasoning to reach the final decision.

i. Res Judicata (cause of action estoppel)

207. As to cause of action estoppel, it is common ground that the first two criteria are met. In particular, the Windstream I and Windstream II arbitration proceedings are:

a. before the same legal order, and although the constitution of each arbitral tribunal is different (and CUSMA has since entered into force), they are both NAFTA Chapter 11 international arbitration tribunals; and

b. between the same disputing parties (some prior awards referred to by the disputing parties involved a different named claimant (i.e., a shareholder or legal entity within an investor's organisational structure), requiring careful consideration as to effective identity), but that is not the case here.

208. The dispute arises out of the third criteria for cause of action estoppel: same grounds and relief.

209. As to the same grounds, it is undisputed that at least some of the grounds that the Claimant relied on for its NAFTA Articles 1110 and 1105 claims in Windstream I are repeated and relied upon in Windstream II, including, in particular, the imposition and continuation of the Moratorium and the circumstances surrounding it. In Windstream I, the Claimant argued that the Moratorium resulted in the constructive or effective termination of the FIT Contract. The Windstream I Award did not accept that, finding instead that the FIT Contract remained in force (i.е., there had been no constructive or effective termination). In Windstream II therefore, the Claimant either relies on the elements of its original causes of action with the additional element of actual termination, and/or it relies on a new course of conduct following the Windstream I Award, which subsequently resulted in termination.

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210. In both scenarios, leaving aside the merits of the arguments, it is clear that there are new elements to the Windstream II NAFTA Article 1110 and 1105 causes of action. For expropriation, the FIT Contract that the Windstream I Award found to remain in place in 2016, has now been terminated; the unsuccessful claim for breach arising out of constructive termination is now a claim for breach arising out of actual termination. For fair and equitable treatment, the breach found in the Windstream I Award arose out of measures occurring prior the Windstream I Award; the Claimant now relies on conduct post-dating the Award for its new fair and equitable treatment breach claim.

211. At least one critical element for each cause of action had not occurred at the date of the Windstream I Award and, therefore, the grounds for the claims in the two arbitrations cannot be said to be the same. This approach arises solely because the Windstream I Award found that the Claimant's investment (at least in part) continued at the date of that Award.

212. As to the same relief, it is also undisputed that the Claimant sought compensatory damages based on the full value of the Project in Windstream I and now seeks compensatory damages based on the full value of the Project in Windstream II. Its expert evidence as to the quantum of that full value is different: among other things, the valuation date and some of the assumptions in its valuation methodology have changed. But the premise of full reparation of the value of its entire Project is what the Claimant sought or seeks in both proceedings.

213. As is clear from the Windstream I Award, paragraph 483, the Claimant did not recover the full value of its Project, on the basis that it had not been deprived of that full value. Accordingly, issues as to the existence and value of its continuing investments identified in the Windstream I Award and the existence and quantum of any additional value in respect of those investments are new issues in Windstream II. Therefore, it cannot be said that the same relief exists in both proceedings.

214. Consequently, on the basis that the same grounds and same relief criteria for cause of action estoppel have not been met, the Tribunal rejects the Respondent's

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objection to the claims on the grounds of res judicata (cause of action estoppel). This is explained further below, in relation to each cause of action.

(i) Expropriation Cause of Action

215. In finding that there had been no expropriation of the Claimant's investment on the grounds that both (i) “the Claimant's FIT Contract is still formally in force and has not been unilaterally terminated by the Government of Ontario", and (ii) “the Claimant's CAD 6 million security deposit is still in place and has not been taken or rendered otherwise worthless as a result of any action taken by the Government of Ontario", the Windstream I Award determined that the Claimant retained investment assets at that date,⁴¹⁴ which in turn retained value.⁴¹⁵

216. As to the value of the retained investment assets at the date of the Windstream I Award, the tribunal deducted from its quantification of compensatory damages the sum of CAD 6 million security deposit. It attributed no additional value to the FIT Contract and made no reduction to the awarded compensatory damages in relation to it.

217. Therefore, the Windstream I Award determined that the Claimant retained two investment assets, but only one of those had a quantifiable value at the date of the Award. It is possible that the Windstream I Award intended to treat the FIT Contract and security deposit as coalescent, with the retained value of the security deposit representing the entire collective value of both assets. However, this is not how these two investment assets were characterized in the Windstream I Award. Instead, the Award clearly differentiated two extant investment assets, but attributed value only to one.

218. For res judicata to apply, to the NAFTA Article 1110 expropriation cause of action in Windstream II, the Respondent would need to show that all elements of the Claimant's current expropriation claim were in place at the time of the Windstream I Award. That is clearly not the case. Rather, at the time of the Windstream I

⁴¹⁴ Windstream I Award, para. 290. ↩

⁴¹⁵ Windstream I Award, para. 291. ↩

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Award, the Tribunal clearly determined that the Claimant retained two assets, at least one of which had significant value. This meant, in the Windstream I Award finding, that there could be no expropriation.

219. The Respondent relied on the Claimant's argument in the Windstream I arbitration that, at that time, the FIT Contract had been de facto terminated. The Claimant was unsuccessful in that argument. The Tribunal found that the FIT Contract was not de facto terminated and, instead, that it continued in effect. It did so, at least in part, based on the representations by the Respondent in the Windstream I arbitration that there had indeed been no de facto determination and that the FIT Contract did indeed continue to remain in place with full effect.

220. A claim for expropriation based on the taking of the investment in a Project, which included a disputed (and rejected) claim for de facto taking of the FIT Contract, is different to a claim for expropriation following the actual termination of the FIT Contract, return of the security deposit and conclusive and unequivocal end of the Project. This is particularly so, when the Tribunal in the earlier arbitration has expressly determined that “the Claimant's FIT Contract is still formally in force and has not been unilaterally terminated by the Government of Ontario” and that “it continues to remain open for the Parties to re-activate and, as appropriate, renegotiate the FIT Contract to adjust its terms to the moratorium”.⁴¹⁶ The key fact, factor and element in the cause of action in Windstream II, which is different to the cause of action in Windstream I, is that the FIT Contract had previously remained in place (together with the security deposit) and that is no longer the case.

221. As to the Respondent's separate argument that the FIT Contract in any event was found by the Tribunal in the Windstream I arbitration to have no value, it is correct that the Windstream I Award found that it did not as at the date of the Award stating that it was not:⁴¹⁷

[...] appropriate or necessary to make any further adjustments to reflect the fact that the FIT Contract is still formally in place; although the FIT Contract could

⁴¹⁶ Windstream I Award, para. 290. ↩

⁴¹⁷ Windstream I Award, para. 483 [Emphasis added]. ↩

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have been reactivated and renegotiated by the Parties at any time during the period from 11 February 2011 until the date of this award, as a matter of fact this has not happened and consequently, as at the date of this award, the FIT Contract cannot be considered to have any value.

222. However, the Windstream I Award noted further, in parenthesis at the end of the aforementioned paragraph in its damages analysis, that “[i]t is another matter that the Parties can create such value by reactivating and renegotiating the FIT Contract after the award, which option is still open to them".⁴¹⁸ Consequently, while the finding of no expropriation in the Windstream I Award, on the basis that the FIT Contract and security deposit both remained in place at that time, is res judicata, there is an open issue for these proceedings as to whether or not subsequent events have given rise to expropriation thereafter.

(ii) FET Cause of Action

223. As regards the cause of action pursuant to NAFTA Article 1105(1), breach of the fair and equitable treatment standards, the Tribunal also considers that the Windstream I Award did not determine, and indeed could not determine, whether or not the conduct of the Respondent following the issuance of the Windstream I Award gave rise to new breaches of NAFTA. This would not arise but for the Windstream I tribunal finding that the Claimant did indeed retain an investment (i.e., its entire investment had not been expropriated), and accordingly that the continuing investment was entitled to continuing investment protection.

(iii) Conclusion

224. The Tribunal therefore concludes that the Claimant's causes of action pursuant to both NAFTA Articles 1110 and 1105(1) in Windstream II are not barred by res judicata (cause of action estoppel). That is, those causes of action were not determined in the Windstream I Award. In so far as causes of action in these Windstream II proceedings arise out of conduct that post-dated the Windstream I Award and relate to investment assets that the Windstream I Award expressly found to have been retained as at the date of that Award, they are not barred by res

⁴¹⁸ Windstream I Award, para. 483. ↩

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judicata. The Tribunal accepts that the Claimant's claims in this Windstream II arbitration are challenging and give rise to genuine procedural concerns on the part of the Respondent. However, the Windstream I Award unequivocally found that there had been no expropriation of the Claimant's investment at the date of that Award based on facts that existed at that time but no longer exist now, and, therefore, the Claimant may assert its claims. Similarly, for its fair and equitable treatment claim, the finding of breach related to the events up to the date of Windstream I Award and loss suffered as at that time.

225. If the claims in this Windstream II arbitration were simply a resurrection of the claims run and partly won and partly lost in Windstream I, this Tribunal would treat those as precluded on the basis of res judicata. But it does not consider that to be the case.

226. Causes of action arising pursuant to NAFTA or any other investment treaties do not differ from other causes of action in so far as a past breach does not immunise the wrongdoer from consequences of future breach. Therefore, as long as the legal relationship continues – and here that is as long as there was a protected investment – the obligation to comply with the NAFTA standards of protection continue.

227. Therefore, the Tribunal finds that the claims for breach of NAFTA Articles 1105 and 1110 in this Windstream II arbitration, in so far as they arise out of events occurring after the Windstream I Award, are new claims that were not put in issue in Windstream I and were not decided by the Windstream I Award.

i. Collateral estoppel

228. Having rejected the Respondent's position on res judicata (cause of action estoppel) on the basis that the Windstream I Award found that the Claimant's investment (in part) still existed and that the claims in Windstream II arise out of events that post-date the Windstream I Award, the Tribunal turns to the more nuanced issue of the findings in the Windstream I Award that inform or determine necessary elements relied on by the Claimant in its new claims. That is, the question of collateral (or issue) estoppel.

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229. In order for the Claimant to establish that the FIT Contract termination gave rise to any basis for a claim for breach of fair and equitable treatment in Windstream II, the Claimant needs to present it against the backdrop of the Moratorium. Otherwise, IESO's termination of the FIT Contract based on its express terms cannot give rise to any wrongdoing by the Respondent or its agencies, in contract or pursuant to NAFTA protections.

230. The Windstream I Award made an important number of factual and legal findings concerning the Moratorium, including that:

a. its imposition was not in breach of NAFTA protections;

b. its continuation for the period leading up to the Windstream I Award was a breach of the fair and equitable treatment standard of protection;

с. although its continuation (in breach) gave rise to IESO's contractual right to terminate the FIT Contract, it had not (yet) done so; and

d. it remained open to the disputing parties at the time of and following the Windstream I Award to renegotiate and reactivate the terms of the FIT Contract and for the Claimant to proceed with the Project.

231. The Tribunal considers it important to acknowledge that these findings, and in particular, the finding that the FIT Contract could be renegotiated and reactivated, were not made in a vacuum. They derived from consistent representations by the Respondent that the Moratorium was temporary. As such, the possibility of reactivation or revival of the Project and renegotiation of the FIT Contract was represented as being a distinct possibility.

232. It may well be that this was a tactical decision by the Respondent in the Windstream I arbitration, in order best to defend the position that there was no expropriation. If it was, then it paid off in so far as the Windstream I Award found that there was indeed no expropriation, including because the FIT Contract remained afoot and the Moratorium subject to being lifted.

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233. As to the Claimant's case that these representations, among other things, gave rise to a positive obligation on the Respondent subsequently to lift the Moratorium and to revive or reactivate the Projects and renegotiate the FIT Contract terms, that is a matter for the merits as below.

234. But for its part, it is not open to the Respondent successfully to 'hold the line' on the continuing existence of an investment (in the form of the FIT Contract) in order to defend an expropriation claim in Windstream I, and then to argue that the Claimant is estopped from subsequently claiming expropriation when the same FIT Contract is later terminated.

235. That said, the Tribunal considers it equally important to recognise that the Windstream I Award found that, although there was no expropriation including because the FIT Contract was still formally in force and had not been unilaterally terminated, it could be terminated upon return of the security deposit. Any breach of the fair and equitable treatment standard that gave rise to the legal right to terminate (with return of the security deposit) was fully compensated in the Windstream I Award. In other words, the conduct of the Respondent in continuing the Moratorium was found to breach the fair and equitable treatment shown in Windstream I, and that conduct led to the contractual right to terminate the FIT Contract accruing. That conduct was subject to compensation in the Windstream I Award.

236. This Tribunal considers itself to be bound by the findings of fact in the Windstream I Award. In order for the Claimant to succeed in a new cause of action, for expropriation or breach of fair and equitable treatment, it needs to show steps taken after the Windstream I Award that led to a new breach and, given the return of the CAD 6 million second deposit, some new expectation of value. Unilateral termination of the FIT Contract in accordance with its terms is not enough; in so far as the Respondent's breach of fair and equitable treatment caused the “contractual limbo" that gave rise to IESO's unilateral right to terminate, that loss was compensated for in the Windstream I Award.

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237. Collateral estoppel does not preclude the Windstream II Tribunal from proceeding and determining any new causes of action in Windstream II. It must, however, follow any relevant determination of issues from the Windstream I Award. Therefore, the most efficacious approach is to deal with the relevant Windstream I Award findings that apply to this Windstream II arbitration as they arise in the course of this Award.

ii. Abuse of process

238. As to abuse of process, given the findings of the Windstream I Award, in particular that there was no expropriation because the Claimant had not (at the time) lost its security deposit or the FIT Contract, and that the damages assessment was adjusted down to account for the former, it was not necessarily abusive for the Claimant to revisit that finding when it ultimately did lose the FIT Contract.

239. In particular, the language adopted in the Windstream I Award did leave open ambiguity as to whether or not the Project (or any part of it, including a reactivated or renegotiated FIT Contract and/or security deposit) could be expropriated in the future.

240. Therefore, a second arbitration proceeding in the circumstances cannot be said to be abusive. In so far as the claims in these second proceedings present challenges for the Claimant, particularly given that the asset that it ultimately lost had not been attributed any value in the Windstream I Award, the Claimant proceeds at its own costs risk. Any prejudice caused by ultimately unsuccessful claims may be addressed in a costs award.

B. FAILURE TO ESTABLISH PRIMA FACIE LOSS OR DAMAGE

241. The Respondent's second preliminary objection is that the Claimant has not met the requirement in NAFTA Articles 1116(1) and 1117(1) to set out a prima facie case on damage.⁴¹⁹

⁴¹⁹ See Request for Bifurcation and Memorial on Jurisdiction, para. 96; CL-88, UPS v. Canada, para. 37. ↩

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242. NAFTA Article 1116(1) provides as follows:⁴²⁰

Article 1116: Claim by an Investor of a Party on Its Own Behalf

1. An investor of a Party may submit to arbitration under this Section a claim that another Party has breached an obligation under:

(a) Section A or Article 1503(2) (State Enterprises), or

(b) Article 1502(3)(a) (Monopolies and State Enterprises) where the monopoly has acted in a manner inconsistent with the Party's obligations under Section A,

and that the investor has incurred loss or damage by reason of, or arising out of, that breach.

243. NAFTA Article 1117(1) provides as follows:⁴²¹

Article 1117: Claim by an Investor of a Party on Behalf of an Enterprise

1. An investor of a Party, on behalf of an enterprise of another Party that is a juridical person that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim that the other Party has breached an obligation under:

(a) Section A or Article 1503(2) (State Enterprises), or

(b) Article 1502(3)(a) (Monopolies and State Enterprises) where the monopoly has acted in a manner inconsistent with the Party's obligations under Section A, and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.

244. Unlike its res judicata, collateral estoppel and abuse of process objections, the NAFTA Article 1116(1) and 1117(1) objections are based on the qualifying requirements for a claim within the applicable NAFTA language, i.e., that the

⁴²⁰ [Emphasis added]. ↩

⁴²¹ [Emphasis added]. ↩

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Claimant is not entitled to submit a claim under NAFTA Chapter 11 unless it has established a cause of action that could cause possible loss or damage.

(i) The Respondent's Position

245. In a nutshell, this second preliminary objection is that, based on NAFTA Articles 1116(1) and 1117(1), the Claimant failed to meet the requirement of to establish prima facie loss or damage because: (i) it is estopped from asserting that the Project or FIT Contract had any value by virtue of Windstream I, (ii) finding otherwise would require overturning the findings of the Windstream I Award, and (iii) the Claimant does not identify any “subsequent, separable, self-standing cause of action that has caused any possible loss beyond what it claimed previously”.⁴²²

246. Preliminarily, the Respondent submits that the Claimant has the burden of proof for a NAFTA Chapter 11 claim, relying on prior awards as follow:⁴²³

a. Mesa v. Canada: “[i]t is for the Claimant to establish the factual elements necessary to sustain the Tribunal's [] jurisdiction over the challenged measures”, ⁴²⁴ (following Apotex v. United States, Methanex v. United States, Bayview v. Mexico, Grand River v. United States, and Gallo ν. Canada);⁴²⁵

⁴²² Request for Bifurcation and Memorial on Jurisdiction, paras. 109, 92 to 133; see also Counter-Memorial, para. 120. ↩

⁴²³ Request for Bifurcation and Memorial on Jurisdiction, paras. 92 to 94. ↩

⁴²⁴ CL-163, Mesa v. Canada, para. 236. ↩

⁴²⁵ RL-006, Apotex v. US, para. 150 citing RL-135, Phoenix v. Czech Republic, paras. 58 to 64 (summarizing previous decisions, and concluding that "if jurisdiction rests on the existence of certain facts, they have to be proven [rather than merely established prima facie] at the jurisdictional phase."); RL-009, Bayview v. Mexico, paras. 63, 122 (finding that the "Claimants have not demonstrated that their claims fall within the scope and coverage of NAFTA Chapter Eleven" and rejecting claimant's submission that the "Respondent bears the burden of demonstrating that the Tribunal should not hear the claim"); CL-054, Grand River v. US, Award, para. 122 (holding that the "Claimants must [...] establish an investment that falls within one or more of the categories established by [...] Article [1139]"); RL-136, Gallo v. Canada, para. 328 (stating that "[i]nvestment arbitration tribunals have unanimously found that they do not have jurisdiction unless the claimant can establish that the investment was owned or controlled by the investor at the time when the challenged measure was adopted."). ↩

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b. Resolute Forest v. Canada:⁴²⁶

Article 24(1) of the UNCITRAL Rules, which are applicable here by virtue of Article 1120(1) of NAFTA, imposes on the relevant party 'the burden of proving the facts relied on to support [its] claim or defence'. The Tribunal does not see any reason to limit Article 24(1) to matters of substance, and the facts necessary to establish that a claim has been brought in accordance with Section B of Chapter Eleven are, in its view, facts relied on in support of the claim.

с. Spence International Investments v. Costa Rica:⁴²⁷

[I]t is for a party advancing a proposition to adduce evidence in support of its case. This applies to questions of jurisdiction as it applies to the merits of a claim, notably insofar as it applies to the factual basis of an assertion of jurisdiction that must be proved as part-and-parcel of a claimant's case. The burden is therefore on the Claimants to prove the facts necessary to establish the Tribunal's jurisdiction.

247. In order to establish prima facie loss or damage “by reason of, or arising out of” an alleged breach,⁴²⁸ the Respondent submits that the Claimant must set out a prima facie case of damage pursuant to NAFTA Articles 1116(1) and 1117(1),⁴²⁹ referring to the prior awards in:

⁴²⁶ RL-137, Resolute Forest v. Canada, Decision on Jurisdiction and Admissibility, para. 84. See e.g. RL-053, Tulip v. Turkey, Decision on Jurisdiction, para. 48 ("As a party bears the burden of proving the facts it asserts, it is for Claimant to satisfy the burden of proof required at the jurisdictional phase."); RL-008, Bayindir v. Pakistan, Decision on Jurisdiction, para. 192 ("[The Claimant] has the burden of demonstrating that its claims fall within the Tribunal's jurisdiction."); RL-028, ICS v. Argentina (I), para. 280: ("[A] State's consent to arbitration shall not be presumed in the face of ambiguity. Consent to the jurisdiction of a judicial or quasi-judicial body under international law is either proven or not according to the general rules of international law governing the interpretation of treaties. The burden of proof for the issue of consent falls squarely on a given claimant who invokes it against a given respondent. Where a claimant fails to prove consent with sufficient certainty, jurisdiction will be declined."). ↩

⁴²⁷ RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 239 [Emphasis added]. ↩

⁴²⁸ Request for Bifurcation and Memorial on Jurisdiction, paras. 96 to 97. ↩

⁴²⁹ For example, the Tribunal in UPS v. Canada held that a claimant is required to "state a prima facie case of damage" at the jurisdictional stage. See CL-088, UPS v. Canada, para. 37. ↩

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a. Methanex v. United States, where the award required that loss “originates in the measure adopted or maintained by the NAFTA Party”;⁴³⁰ and

b. Westmoreland v. Canada, where the award found that the claimant had "not identified any subsequent act of Canada which has caused any such possible loss and it has claimed precisely the same loss as that claimed” in the previous claim.⁴³¹

248. As to the Respondent's argument that the Claimant is estopped from asserting that the Project or the FIT Contract had any value by virtue of the Windstream I Award findings, it submits that:

a. the Windstream I Award determined that “the Project had a value of CAN$31,162,000 and the FIT Contract was worthless”;⁴³²

b. the Claimant argued in Windstream I that:

i. "[t]he moratorium and Ontario's related actions have had devastating and drastic effects on [its] investments in Ontario, which are now effectively worthless and have no prospect of recovering in value even if the moratorium is lifted";⁴³³

ii. “[e]ven if the OPA now relieved [the Claimant] from its deadlines under the FIT Contract, [its] investments would not recover in value”;⁴³⁴

iii. in response to the argument that the Project was frozen not cancelled, that:

⁴³⁰ CL-063, Methanex v. US, Award, para. 26. ↩

⁴³¹ RL-139, Westmoreland v. Canada, paras. 235, 237. ↩

⁴³² Request for Bifurcation and Memorial on Jurisdiction, para. 98. ↩

⁴³³ Memorial, para. 2. ↩

⁴³⁴ Memorial, para. 15; see also the Windstream I Tribunal's summary of the Claimant's position in Windstream I Award, paras. 192, 235, 239, 303, 423, 431. ↩

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1. "[b]y the time [the Windstream I] arbitration is heard, five years will have passed since the moratorium was announced",

2. “[t]here is not (nor has there ever been) an end in sight",

3. its “investments in Ontario – the Project, the FIT Contract and WWIS became worthless in May 2012 when it became impossible for [it] to bring the Project into commercial operation without triggering the OPA's termination rights under the FIT Contract",

4. "[t]he Project is not ‘frozen' at all”, and

5. “[i]t has been de facto cancelled by the severe delays to which the Ontario Government has subjected it”;⁴³⁵

с. the Windstream I Award noted that the “Claimant contends that, as a direct consequence of the moratorium and the Respondent's failure to effectively 'freeze' the Project as promised, its investments in the Project and the FIT Contract are now substantially worthless”;⁴³⁶

d. the Windstream I Award granted CAD 25,162,000 to the Claimant, stating that “by May 2012 the Project had [] reached a point at which it was no longer financeable”,⁴³⁷ and that “as at the date of this award, the FIT Contract cannot be considered to have any value”;⁴³⁸

e. the Claimant's reliance on the Windstream I Award finding that "it continues to remain open for the Parties to re-activate and, as appropriate, renegotiate the FIT Contract to adjust its terms to the moratorium",⁴³⁹ must

⁴³⁵ Windstream I Reply, para. 24. ↩

⁴³⁶ Windstream I Award, para. 239. See Windstream I Memorial, paras. 560, 563; Windstream I Reply, paras. 367 to 371, 407 to 408, 532. ↩

⁴³⁷ Windstream I Award, para. 379. ↩

⁴³⁸ Windstream I Award, para. 483. ↩

⁴³⁹ Windstream I Award, para. 290; see Memorial, paras. 20, 177, 186, 231, 303. ↩

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be taken in the context that no renegotiation or reactivation has occurred;⁴⁴⁰ and

f. the Claimant is barred from bringing a new claim that the FIT Contract had a “future and substantial potential value” and the Project had "a lot of value",⁴⁴¹ because it is:

i. “barred from advancing a claim that directly contradicts its previously held position that its FIT Contract, the Project and enterprise are worthless, and that also defies the Tribunal findings"; and

ii. “unable to show that its investments have any value, and therefore, unable to present a prima facie damage claim”.

249. As to the Respondent's argument that finding otherwise would require overturning the findings of the Windstream I Award, the Respondent submits that, even if not estopped:

a. the Claimant would need to overcome determinations of the Windstream I Tribunal, which constitute issue estoppel and would require reopening matters that were determined, including that: ⁴⁴²

i. the Claimant was made whole by the Windstream I Award;

ii. the FIT Contract had no value at the time of the Award; and

iii. the FIT Contract and Project would only obtain value if the disputing parties jointly opted to renegotiate and reactivate the contract and Project; ⁴⁴³

⁴⁴⁰ See Memorial, section XV, paras. 231 to 252 including "XV.A. MEI Refuses to Meet with Windstream and Refuses to Discuss the Path Forward for the Project” and “XV.B. The IESO Refuses to Renegotiate the FIT Contract". ↩

⁴⁴¹ Memorial, para. 229; CWS-Mars-3, Third Witness Statement of David Mars, para. 16. ↩

⁴⁴² Request for Bifurcation and Memorial on Jurisdiction, paras. 104 to 105. ↩

⁴⁴³ See Request for Bifurcation and Memorial on Jurisdiction, para. 105 and Sections II.A.4 and III.E. ↩

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b. this would require overturning the “clear and indisputable determination that the Project was no longer financeable”;⁴⁴⁴

с. its damages claim would require overturning determinations that “WWIS Project is an early stage project and that a DCF method of evaluation is unavailable to early stage projects”;⁴⁴⁵

d. the Tribunal has no power to so overturn and is “bound by the Windstream I Tribunal's rejection of the DCF analysis as an appropriate means to calculate damages"; and

e. as the Claimant was made whole and the FIT Contract was found not to “have any value”,⁴⁴⁶ absent reactivation or renegotiation to create new value, “its termination could not have resulted in any loss to the Claimant”, meaning failure to make a prima facie damages claim.

250. As to the Respondent's argument that the Claimant does not identify any “subsequent, separable, self-standing cause of action that has caused any possible loss beyond what it claimed previously”, the Respondent submits that:

a. no such action originated from measures prior to 4 May 2012;

b. reasoning in prior awards regarding the requirement for loss within three-years, pursuant to NAFTA Articles 1116(2), are also relevant to prima facie loss including:

i. UPS v. Canada: “[i]t is incumbent on claimants to establish the damages associated with asserted breaches, and for continuing conduct that must include a showing of damages not from the inception of the course of conduct but only from the conduct occurring within the period allowed by article 1116(2)”, ⁴⁴⁷ and in

⁴⁴⁴ See Request for Bifurcation and Memorial on Jurisdiction, paras. 16, 20, 81, 106. ↩

⁴⁴⁵ See Request for Bifurcation and Memorial on Jurisdiction, Sections II.A.4 and III.E. ↩

⁴⁴⁶ Windstream I Award, para. 483. ↩

⁴⁴⁷ CL-088, UPS v. Canada, para. 30. ↩

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“circumstances in which a series of associated actions may be divided up", ⁴⁴⁸ the claim must rest on a breach occurring within the time limit, and “rest on a breach that gives rise to a self- standing cause of action", ⁴⁴⁹ which “must be separately actionable, i.e., it must constitute a cause of action, a claim, in its own right”;⁴⁵⁰ and

ii. Spence v. Costa Rica: “its jurisdiction to award damages will be necessarily linked to and constrained by the breach of which it is sei[z]ed and over which it has jurisdiction”,⁴⁵¹ and the breach would “necessarily confine the damages that may be awarded to what is due in consequence of that particular breach”;⁴⁵² and

с. the Claimant identified no breach capable of meeting this standard, i.e., a breach “constituting a subsequent act capable of causing loss", in that:

i. it seeks damages to eliminate consequences of breach based on six measures,⁴⁵³ with no subsequent act or omission amounting to any self-standing cause of action that can be separated from the causes of action in Windstream I;⁴⁵⁴

ii. its submission that the six measures were not determined has no merit as these "effectively boil down to two complaints: that the continued application of the moratorium breaches NAFTA and that the termination of the FIT Contract, as opposed to its deferral or amendment, breaches NAFTA”, ⁴⁵⁵ neither of which “stands on its

⁴⁴⁸ RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 211. ↩

⁴⁴⁹ RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 210. ↩

⁴⁵⁰ RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 210. ↩

⁴⁵¹ RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 211. ↩

⁴⁵² RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 212; see also RL-140, Infinito Gold v. Costa Rica, Award, para. 221 ("the loss or damage must flow from the alleged breach"). ↩

⁴⁵³ See Memorial, para. 428. ↩

⁴⁵⁴ See Windstream I Memorial, paras. 14, 539, 542, 563, 623. ↩

⁴⁵⁵ Memorial, para. 448. ↩

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own or is divorceable from the measures that it put in issue in Windstream I";

iii. the Claimant already argued in Windstream I that:

1. failure to lift the Moratorium is no different to its adoption and continuation;

2. the FIT Contract s.10.1(g) termination right was challenged, even though actual termination had not yet occurred, with the Claimant using "de facto", "effective” or “indirect” cancellation or termination terms;⁴⁵⁶

3. it was “no longer able to attract financing for the Project because the FIT Contract – which would be the key element to securing financing – is now at risk of being terminated by the OPA"; ⁴⁵⁷ and

⁴⁵⁶ Windstream I Memorial, para. 14 "[...] the Project cannot be developed in time to meet the May 4, 2017 deadline. It is no longer financeable. As a result, the Project has effectively been cancelled and is now substantially worthless, as are Windstream's investments in WWIS and the FIT Contract."; para. 477 "Windstream has lost the entire value of its Project as a result of Ontario's cancellation of its Project."; para. 564 "Ontario allowed the moratorium to cause delays in the Project so drastic that the Project can now not be developed in time to meet the deadlines in the FIT Contract that Ontario refused to remove. Ontario did that with full knowledge that, without removing the deadlines in the FIT Contract, moratorium-related delays would crystallize into an effective cancellation of the Project - a de facto cancellation, if not a formal one."; para. 574 "Ontario has failed to conduct itself in accordance with its obligation of due process." Indeed, it indirectly cancelled the Project"; para. 611 "The moratorium, which has now crystallized into an effective cancellation, is a repudiation of Ontario's commitments to Windstream and amounts to a breach of Article 1105."; and para. 626 "As is now apparent, Ontario also chose to cancel Windstream's Project for political reasons [...]"; Windstream I Reply, para. 24 "The Project is not 'frozen' at all. It has been de facto cancelled by the severe delays to which the Ontario Government has subjected it."; para. 399 [Emphasis in original] "While the FIT Contract may formally still be under force majeure, in effect, it and the Project have been cancelled."; para. 474 "Thus, even if the moratorium was lifted and the Project allowed to proceed, the Project could not continue. It has been de facto cancelled. The moratorium therefore has deprived Windstream of the value of its investments."; para. 480 "Even if the moratorium is ever lifted (of which there is no indication), the Project can no longer continue. It has thus been de facto cancelled"; para. 609 "A decision to effectively terminate Windstream's project also appears to have been made [...]"; and para. 618 "Windstream's Project was de facto cancelled as a result of the indefinite-term moratorium, a decision made to 'kill' offshore wind projects". ↩

⁴⁵⁷ Windstream I Memorial, para. 558. ↩

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4. without financing, it “could not build the Project and bring it into commercial operation by its deadline under the FIT Contract even if the moratorium were to be lifted”;⁴⁵⁸ and

iv. the Windstream I Award duly acknowledged that:⁴⁵⁹

The Claimant contends that, while the Project is currently under force majeure, there is no longer any realistic prospect that the Project can reach commercial operation by 4 May 2017. Consequently, the Project is no longer financeable and has effectively lost all of its value. This is the case even if the OPA were to waive its right to terminate the FIT Contract as the conduct of the Ontario Government has created such uncertainty around the offshore wind industry in Ontario that no potential investor would be prepared to invest in the Project.

251. In Windstream II, the Claimant now relies on actual termination. However, the Respondent submits that this “changes nothing” because “[t]he Project has never been able to proceed”, as the Claimant argued and the tribunal acknowledged in Windstream I, (i.e., even if IESO waived its right to terminate, the Project was “unable to secure the necessary financing”, “had no prospect of proceeding and was therefore worthless”). Moreover, the ability to return the security deposit upon termination was the reason the Windstream I Award found no substantial deprivation. It pointed out that, had the security deposit not been returned, or the FIT Contract "reactivated and thwarted a second time after further development", then “perhaps the Claimant could point to a subsequent act giving rise to separately actionable damage." Its firm position on the evidence is that this was not the case.⁴⁶⁰ Instead, the Claimant's damages claim again rests on “the complete frustration' of its investment on account of ‘the moratorium, combined with Ontario's failure to fulfill its promises to keep Windstream whole. ””⁴⁶¹

⁴⁵⁸ Windstream I Memorial, para. 558. ↩

⁴⁵⁹ Windstream I Award, para. 288. ↩

⁴⁶⁰ See Memorial, paras. 250 to 251, 281. ↩

⁴⁶¹ Request for Bifurcation and Memorial on Jurisdiction, para 124 citing Windstream I Memorial, para. 661. ↩

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252. According to the Respondent, the Claimant also sought the same losses in Windstream I as it seeks in Windstream II, similar to the claimant in the prior award in Westmoreland v. Canada in that:

a. its claim for damages in its Windstream II Memorial, paragraphs 535 to 538 “are a near copy and paste” of its Windstream I Memorial, paragraphs 672 to 675;

b. it relied on evidence that allegedly “the Project would have obtained its environmental permitting, its Crown land tenure and its financing, and it would have met the commercial operation deadlines laid out in the FIT Contract";

с. it concluded with the “exact same claim for damages", i.e., Windstream II Memorial, paragraph 538 and Windstream I Memorial, paragraph 675, both state: "[a]ccordingly, the DCF method provides the most reliable and accurate measure of Windstream's losses resulting from Canada's breaches of Articles 1110, 1105(1) and 1102 of NAFTA”;⁴⁶² and

d. “no matter what post-Award value the Claimant professes exists in its investment, its claim for damage makes abundantly clear that the damage it seeks in 2022 is the same damage it sought in 2015".

253. The Respondent relies on the prior award in Westmoreland v. Canada, which it alleges "held that there was no need to proceed to an evidentiary hearing on quantum of loss, because ‘the point is that [the claimant] has not identified any subsequent act of Canada which has caused any such possible loss and it has claimed precisely the same loss as [the previous claim] "”.⁴⁶³ It went on to suggest that:

a. evidence does not help the Claimant because:

⁴⁶² The Respondent noted that the Claimant failed to amend the correct NAFTA provisions following CUSMA. ↩

⁴⁶³ RL-139, Westmoreland v. Canada, para. 235. ↩

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i. "[t]he damage it points to originates out of [the Claimant's] inability to finance and advance its project as of May 2012”, not “Ontario’s continued application of the moratorium or IESO's decision to terminate the FIT Contract"; and

ii. "[t]he Project had already been prevented from proceeding at that point" and "[t]he damage was done”, so “continued application of the moratorium and termination decision were not capable of causing any new losses beyond what the Windstream I Tribunal addressed"; and

b. the Windstream I Award “simply does not contemplate future damages based on the continued application of the measures”, ⁴⁶⁴ instead making “the Claimant whole”, leaving it “no access to a new damage claim arising out of that Award".

(ii) The Claimant's Position

254. According to the Claimant, the issue whether or not it incurred prima facie damages is not a jurisdictional matter and should be resolved as a matter of merits, because (i) it meets the low threshold requirement,⁴⁶⁵ and (ii) the objection “is premised on the same mischaracterizations raised as part of [the Respondent's] res judicata objection" and should fail for the same reasons.⁴⁶⁶

255. As to the applicable standard, the Claimant points out that there is a low threshold for establishing a prima facie case, the question being whether or not “the alleged facts, taken as true, are capable of breaching the NAFTA and may have caused a loss".⁴⁶⁷ It submits that this threshold is met because it “pleads that the measures

⁴⁶⁴ In this regard, the Windstream I Award bears no statement similar to the one made by the tribunal in Mobil Investments v. Canada (I), at para. 478 "Given that the implementation of the 2004 Guidelines is a continuing breach, the Claimants can claim compensation in new NAFTA arbitration proceedings for losses which have accrued but are not actual in the current proceedings." See RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 75. ↩

⁴⁶⁵ Reply, paras. 261 to 278. ↩

⁴⁶⁶ Reply, para. 261. ↩

⁴⁶⁷ Reply, para. 262. ↩

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all of which arose after the Windstream I Award – caused it loss beyond what it was compensated for by Windstream I”.⁴⁶⁸

256. In this regard, the Claimant submits further that:

a. compliance with NAFTA Articles 1116(1) and 1117(1) “constitute[s] a jurisdictional requirement in respect of which [it] bears the burden of proof"; ⁴⁶⁹

b. “[i]t is not disputed that the other requirements of Article 1116(1) and 1117(1) have been met in this case”;⁴⁷⁰

с. the “low threshold” question is whether or not “the facts, as alleged, may constitute a loss";⁴⁷¹

d. prior awards “have recognized this threshold as a low bar”,⁴⁷² including:

i. Tennant Energy v. Canada: “[t]he Claimant need not prove the extent of such loss or damage suffered, given that these facts necessarily relate to the Claimant's case on the merits”;⁴⁷³

ii. UPS v. Canada: “Canada mistakes as well the nature of the demonstration that the claimant must make under article 1116", and “[e]valuation of the damage actually incurred is not, however, apposite to disposition of Canada's objection here”;⁴⁷⁴

⁴⁶⁸ Reply, para. 262. ↩

⁴⁶⁹ Reply, para. 263; CL-197, Tennant Energy v. Canada, para. 349. ↩

⁴⁷⁰ Reply, para. 264. ↩

⁴⁷¹ Reply, para. 265. ↩

⁴⁷² Reply, para. 265; CL-197, Tennant Energy v. Canada, para. 357; CL-088, UPS v. Canada, paras. 37 to 38; CL-178, Infinito Gold v. Costa Rica, Decision on Jurisdiction, para. 255; see also RL-030, Impregilo v. Pakistan, Decision on Jurisdiction, paras. 237, 254; CL-184, Chevron & TexPet v. Ecuador, Third Interim Award on Jurisdiction, para. 4.11; CL-195, Siemens v. Argentina, Decision on Jurisdiction, para. 180; RL-008, Bayindir v. Pakistan, Decision on Jurisdiction, para. 197. ↩

⁴⁷³ CL-197, Tennant Energy v. Canada, para. 357. ↩

⁴⁷⁴ CL-088, UPS v. Canada, paras. 37 to 38. ↩

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iii. Infinito v. Costa Rica: according to the Claimant, the tribunal held that “what matters for the purposes of a prima facie test on damages is that the facts as alleged may constitute a loss”, and “[w]hat act may constitute a breach, if any, and whether that act can have caused the damages claimed are different questions which exceed the limited scope of the prima facie test and must be dealt with at the merits stage";⁴⁷⁵ and

iv. Westmoreland v. Canada: relied on by the Respondent which, ⁴⁷⁶ according to the Claimant, “is entirely different from the present case" in so far as “the claimant was not in existence at the time of the challenged measures” and “the losses were incurred by a different entity", and according to the Claimant, the tribunal held that “the claimant must be the entity that owned or controlled the investment at the time of the alleged breach, and that the claimant was not the legal successor of that entity”.⁴⁷⁷

257. According to the Claimant, “the challenged measures in this case all arose after Windstream I", and it “has pleaded facts and measures that post-date Windstream I and has pleaded that it has suffered damages that are distinct from what the Windstream I tribunal awarded”, so as to “establish a prima face case”.⁴⁷⁸

258. As to the Respondent's arguments that: (i) it is barred from asserting its investments have value, (ii) it was made whole in Windstream I and (iii) damages in Windstream II originate from the same measures as Windstream I, the Claimant asserts that each “is premised on the same mischaracterization of [its] claim and the Windstream I Award as it asserts on the res judicata objection”. ⁴⁷⁹ The Claimant submits that:

⁴⁷⁵ CL-178, Infinito Gold v. Costa Rica, Decision on Jurisdiction, para. 255. ↩

⁴⁷⁶ See Request for Bifurcation and Memorial on Jurisdiction, para. 97. ↩

⁴⁷⁷ See RL-139, Westmoreland v. Canada, paras. 194, 212, 230 to 237. ↩

⁴⁷⁸ Reply, para. 269; see CL-088, UPS v. Canada, para. 37. ↩

⁴⁷⁹ Reply, para. 271. ↩

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a. as to being barred from asserting that its investments have any value, ⁴⁸⁰ it “is not estopped from arguing the Project had value that was taken by the termination of the FIT Contract”, after the Windstream I Award, and the “subsequent question of what value was taken [...] is a merits-based determination"; ⁴⁸¹

b. as to the Windstream I Award making the Claimant whole, ⁴⁸² the Claimant submits that the Windstream I Award:⁴⁸³

i. “recognized that there could be further value created in the FIT Contracť" (and the Respondent subsequently “deprived [the Claimant] of that additional value by its continued wrongful conduct and the termination of the FIT Contract”);⁴⁸⁴

ii. "did not find that additional value could only be obtained if the FIT Contract was renegotiated and reactivated, nor did it find that the parties had to jointly opt' to do so”;⁴⁸⁵

iii. “recognized that the parties could create value ‘by reactivating and renegotiating the FIT Contract after the award, which option is still open to them "",⁴⁸⁶

iv. “recognized that, through renegotiating the FIT Contract, there was additional value that could be created," but “did not award [the Claimant] that value because, in 2016, that value had yet to be unlocked";⁴⁸⁷

⁴⁸⁰ See Request for Bifurcation and Memorial on Jurisdiction, paras. 98 to 103. ↩

⁴⁸¹ Reply, para. 272. ↩

⁴⁸² Reply, para. 273. ↩

⁴⁸³ Reply, para. 274. ↩

⁴⁸⁴ Reply, para. 274; see Request for Bifurcation and Memorial on Jurisdiction, paras. 104 to 108. ↩

⁴⁸⁵ Reply, para. 275; see Request for Bifurcation and Memorial on Jurisdiction, paras. 104 to 108. ↩

⁴⁸⁶ Reply, para. 275; Windstream I Award, paras. 290, 483. ↩

⁴⁸⁷ Reply, para. 276. ↩

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v. means that "when the FIT Contract was terminated in 2020, that value was taken"; and

vi. further means that the Respondent's “reliance on the fact that the FIT Contract was not renegotiated to argue there was no additional value created relies on the very wrongdoing that is alleged to breach the NAFTA", ⁴⁸⁸

с. following the Windstream I Award, in order “to comply with [the Respondent's] ongoing obligations under the NAFTA, Ontario was obligated to renegotiate the FIT Contract to implement the promises made to [the Claimant], consistent with the promises it made to [it] when it implemented the Moratorium, the representations made in the Windstream I arbitration, and the findings of the Windstream I tribunal”,⁴⁸⁹ and its failure to do so “is an issue for this Tribunal to determine”;⁴⁹⁰

d. as to damages originating from the same measures,⁴⁹¹ it submits further that: ⁴⁹²

i. the FIT Contract was terminated after the Windstream I Award, and the “question of what loss flows from that breach is a merits-based determination";

ii. the Windstream I tribunal “did not award [the Claimant] the losses for the full value of its investment”; and

iii. the heart of this jurisdictional objection is the following question:

Did the Windstream I Award make [the Claimant] whole for the loss of the Project, as [the Respondent] claims, or did the Award only

⁴⁸⁸ See CL-052, Gemplus v. Mexico, para. 13-92. ↩

⁴⁸⁹ Reply, para. 275. ↩

⁴⁹⁰ Reply, para. 275. ↩

⁴⁹¹ Request for Bifurcation and Memorial on Jurisdiction, para. 109. ↩

⁴⁹² Reply, paras. 277, 278. ↩

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provide [it] damages for the harm to its investment as of the date of the Windstream I Award, as [the Claimant] claims? If it did not make [it] whole, then it necessarily follows that [the Claimant] has prima facie damages flowing from the termination of the FIT Contract.

259. According to the Claimant, “loss of the value of the Project that was taken and was not awarded by the Windstream I tribunal” is the loss or damage incurred that forms the basis of its claims in Windstream II.⁴⁹³

(iii) The Tribunal's Analysis

260. The Tribunal has relied on the entire record before it, including the disputing parties' written submissions and oral pleadings, concerning the objection arising out of alleged failure to prima facie loss or damage. To the extent that some arguments are not reproduced in this Award, they have been considered and are subsumed in the Tribunal's analysis.

261. The relevant language of NAFTA Article 1116(1) and 1117(1) are set out above at paragraphs 242 and 243.

262. As to the applicable standard, the disputing parties agree that the threshold for showing prima facie loss for damage is a low one, relying on various statements in prior awards. In the manner of summary disposition, the inquiry for the purpose of Articles 1116(1) and 1117(1) is whether or not the alleged facts, if accepted, could constitute a loss. The threshold question does not permit the Tribunal to interrogate the alleged facts; it simply assumes them to be true for the purpose of identifying prima facie loss or damage.⁴⁹⁴

263. Further as to the applicable standard, the Tribunal accepts the Claimant's characterisation, reflected in prior NAFTA awards in Tennant and UPS (and in

⁴⁹³ Reply, para. 278. ↩

⁴⁹⁴ Reply, para. 265; CL-197, Tennant Energy v. Canada, para. 357; CL-088, UPS v. Canada, paras. 37 to 38; CL-178, Infinito Gold v. Costa Rica, Decision on Jurisdiction, para. 255; see also RL-030, Impregilo v. Pakistan, Decision on Jurisdiction, paras. 237, 254; CL-184, Chevron & TexPet v. Ecuador, Third Interim Award on Jurisdiction, para. 4.11; CL-195, Siemens v. Argentina, Decision on Jurisdiction, para. 180; RL-008, Bayindir v. Pakistan, Decision on Jurisdiction, para. 197. ↩

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Infinito),⁴⁹⁵ that the amount of loss and damage is a question for merits. The threshold question requiring prima facie loss and damages requires showing possible loss or damage.

264. The Tribunal applies that standard (i.e., the threshold nature of prima facie loss or damage and the appropriate time for quantum being merits phase) to the facts of this case.

265. This is a serious objection in the context of this Windstream II arbitration. NAFTA claims appear to have a disproportionate number of cases involving multiple proceedings in respect of the same investments compared to other bilateral and multilateral investment treaties. ⁴⁹⁶ These multiple proceedings under NAFTA occur despite a prerequisite to any claim being that the investor has incurred loss or damage by reason of, or arising out of, the alleged breach.

266. For the four reasons set out below, this Tribunal has determined that the NAFTA Articles 1116(1) and 1117(1) thresholds are met.

267. First, the threshold is, as both disputing parties pointed out in their submissions, low. A prima facie case for possible loss or damage is all that is required. The alleged facts, if accepted, conceivably could form the basis for breach, and loss may have ensued. The purpose of the precondition appears to be to weed out claims that do not arise out of genuine investment that is capable of being harmed by the alleged measure.

268. For multiple proceedings in respect of the same investment, it will ultimately come down to a question of fact whether or not the remaining investment retained (or obtained) any additional value over and above what was compensated for in the

⁴⁹⁵ CL-197, Tennant Energy v. Canada, para. 357; CL-088, UPS v. Canada, paras. 37 to 38; CL-178, Infinito Gold v. Costa Rica, Decision on Jurisdiction, para. 255. ↩

⁴⁹⁶ See e.g. Apotex v. US (I), (II) and (III), Mobil Investments v. Canada (I) and (II), Waste Management v. US (I) and (II), Westmoreland v. Canada (I), (II) and (III), Windstream v. Canada (I) and (II), TransCanada v. US (I) and (II), ES Holdings and Libre v. Mexico (1) and (II) and First Majestic v. Mexico (I) and (II). Multiple proceedings pursuant to NAFTA appear in almost 10% of awards, whereas pursuant to other investment agreements this proportion is lower. ↩

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first proceedings. Given the low prima facie threshold for that question, provided there is a case to be answered, it is met.

269. In these circumstances, it is difficult to conclude that there is no prima facie case for retained (or obtained) value in the asset by the date of Windstream II.

270. Secondly and relatedly, the valuation questions are complex. The Claimant has asked the Tribunal in Windstream II to adopt a different valuation date, valuation methodology and assumptions, including as to the stage of development of the Project, than those determined to be appropriate in the Windstream I Award. The approach to valuing any investment, loss and or damage deserves the Tribunal's full and considered attention and, given the complexity, does not warrant summary disposition. As noted in prior awards, the quantum of damages is for merits, not for jurisdiction.

271. Thirdly, the alleged loss or damage in Windstream II arises out of full deprivation of the investment (both for the purpose of expropriation and fair and equitable treatment), which is different to the cause of action ultimately compensated in the Windstream I Award. Although both fair and equitable treatment and expropriation were causes of action in Windstream I (as well as Windstream II), the harm compensated in the Windstream I Award was the damage to the investment arising out of breach of the fair and equitable treatment standard, but not for complete loss or deprivation of that investment. Although the Claimant alleges both causes of action again for events following the Windstream I Award, a key factual difference is that then the FIT Contract is no longer in place and the associated security deposit has been returned to the Claimant.

272. The Windstream I Award clearly determined that expropriation had not taken place at that time because “the Claimant's FIT Contract is still formally in force and has not been unilaterally terminated by the Government of Ontario”,⁴⁹⁷ and “the Claimant has not been substantially deprived of its investment”.⁴⁹⁸ The question is

⁴⁹⁷ Windstream I Award, para. 290. ↩

⁴⁹⁸ Windstream I Award, para. 291. ↩

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open to this Tribunal to determine is whether or not expropriation (or new breach of fair and equitable treatment) has now occurred following termination of the FIT Contract - despite the return of the CAD 6 million deposit – and, if so, the value of the finally extinguished entire investment. It is for the Claimant to prove, on the facts, that new value has accrued subsequent to the Windstream I Award.

273. Fourthly and finally, the NAFTA Article 1116(1) and 1117(1) requirement is for loss or damage. Conceivably, the claim for loss to an investment may be non-pecuniary, although that is not the case here. However, the Tribunal simply notes that, in theory at least, an investor may suffer loss to an investment that has no monetary value but provides strategic or other non-monetary value to its investment in the host State. Remedies other than compensatory damages may be sought, such as specific performance, nominal damages or even moral damages.

274. Therefore, the Tribunal rejects the Respondent's second jurisdictional objection.

C. LIMITATION PERIOD ARGUMENT

275. The third and final objection to jurisdiction or admissibility is that NAFTA Article 1116(2) and 1117(2) strict three-year limitation periods mean that the Tribunal does not have jurisdiction ratione temporis, (i.e., the Claimant had knowledge of the alleged breaches before the critical date for the limitation period of 22 December 2017).⁴⁹⁹

276. In this regard, NAFTA Articles 1116(2) and 1117(2) prescribe a three-year limitation period for claims.

277. NAFTA Article 1116(2) provides:⁵⁰⁰

⁴⁹⁹ Counter-Memorial, para. 120; Rejoinder, para. 79. ("In accordance with the Procedural Order No. 1, [the Respondent] did not raise its objection to the Tribunal's jurisdiction ratione tem[]poris for bifurcation purposes, leaving it to be argued as part of this Counter-Memorial.") ↩

⁵⁰⁰ [Emphasis added]. ↩

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An investor may not make a claim if more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage.

278. NAFTA Article 1117(2) provides:⁵⁰¹

An investor may not make a claim on behalf of an enterprise described in paragraph 1 if more than three years have elapsed from the date on which the enterprise first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the enterprise has incurred loss or damage.

279. As the Claimant filed its Notice of Arbitration on 22 December 2020, the disputing parties agree that the critical date in this arbitration for the limitation period is three years before that date, i.e., 22 December 2017.⁵⁰²

(i) The Respondent's Position ⁵⁰³

280. According to the Respondent, the Claimant has “completely ignored the preclusive effect of the strict three-year limitation periods under Articles 1116(2) and 1117(2) of the NAFTA, which also serves as a prerequisite to engaging Canada's consent to arbitrate under Article 1122(1)”. ⁵⁰⁴ It submits that the Tribunal has no jurisdiction ratione temporis under NAFTA Articles 1116(2) and 1117(2) because the Notice of Arbitration was not submitted within the three-year limitation period, based on five main points:

a. NAFTA Articles 1116 and 1117 impose a strict three-year time limitation period for submitting a claim to arbitration;

b. the limitation period begins on the date the claimant first acquires (or should have acquired) knowledge of alleged breach loss or damage incurred;

⁵⁰¹ [Emphasis added]. ↩

⁵⁰² Counter-Memorial, para. 122; Reply, para. 281. ↩

⁵⁰³ Counter-Memorial, paras. 120 to 145. ↩

⁵⁰⁴ Counter-Memorial, para. 120; see Request for Bifurcation and Memorial on Jurisdiction, paras. 47 to 133. ↩

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c. knowledge of the full extent of the loss or damage incurred is not required to start the time limitation in Articles 1116(2) and 1117(2);

d. the Claimant knew of the alleged breach of Articles 1105 and 1110 prior to 22 December 2017; and

e. the Claimant knew of the alleged loss or damage prior to 22 December 2017.

281. Prior to summarising the Respondent's case on each of those points, the Tribunal notes the Respondent's preliminary arguments that,⁵⁰⁵ “[a]n investor bringing a claim under NAFTA Chapter 11 bears the burden of proving that it has satisfied the conditions precedent to commence arbitration and that the tribunal has jurisdiction over the dispute”,⁵⁰⁶ and that the Articles 1116(1) and 1117(1) time limits are "[o]ne such pre-condition”. ⁵⁰⁷ In support of these arguments, the Respondent cites Resolute, Apotex, Mesa, Bayview, Methanex, Grand River, and

⁵⁰⁵ Request for Bifurcation and Memorial on Jurisdiction. ↩

⁵⁰⁶ Counter-Memorial, fn. 214: "[t]he corollary of a finding that Article 1116(1) constitutes a jurisdictional requirement is that, unless all conditions under Article 1116(1) are satisfied to the requisite standard of proof, the Tribunal has no jurisdiction to hear the present claim. This fundamental principle was also confirmed in Mesa v. Canada where the tribunal held that '[i]t is for the Claimant to establish the factual elements necessary to sustain the Tribunal's jurisdiction over the challenged measures.' In so holding, the Mesa tribunal followed earlier NAFTA tribunals, including those in Apotex v. United States, Methanex v. United States, Bayview v. Mexico, Grand River v. United States, and Gallo v. Canada, which have consistently affirmed that it is for the claimant to establish that its claims fall within the scope and coverage of NAFTA Chapter Eleven and within the tribunal's jurisdiction." RL-006, Apotex v. US, para. 150 citing RL-135, Phoenix v. Czech Republic, paras. 58 to 64 (summarizing previous decisions, and concluding that "if jurisdiction rests on the existence of certain facts, they have to be proven [rather than merely established prima facie] at the jurisdictional phase."); RL-009, Bayview v. Mexico, paras. 63, 122 (finding that the "Claimants have not demonstrated that their claims fall within the scope and coverage of NAFTA Chapter Eleven" and rejecting the Claimant's submission that the "Respondent bears the burden of demonstrating that the Tribunal should not hear the claim"); CL-054, Grand River v. US, Award, para. 122 (holding that the 'Claimants must [...] establish an investment that falls within one or more of the categories established by that Article [1139]'); RL-136, Gallo v. Canada, Award, para. 328 (stating that '[i]nvestment arbitration tribunals have unanimously found that they do not have jurisdiction unless the claimant can establish that the investment was owned or controlled by the investor at the time when the challenged measure was adopted')". ↩

⁵⁰⁷ See RL-024, Feldman v. Mexico, paras. 46 to 47 (Counter-Memorial, fn. 215 "In its Award, the Feldman tribunal noted that it identified five 'preliminary jurisdictional questions' on which the parties were to submit written pleadings, including '[w]hether the Respondent was entitled to raise any defense on the basis of the time limitation set forth in NAFTA Article 1117(2)'.") ↩

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Gallo (where tribunals found the investor bears the burden of proving that its claims are timely).⁵⁰⁸

282. The Tribunal notes the Respondent's further preliminary argument that the limitation period “begins to run when a claimant first acquires knowledge of the alleged breach and loss or damage arising out of that breach”,⁵⁰⁹ submitting that here:

1. it is undisputed that the dispute was submitted to arbitration on 22 December 2020, making 22 December 2017 the critical date;⁵¹⁰
2. the Claimant failed to demonstrate it first acquired knowledge after 22 December 2017;

⁵⁰⁸ See Resolute CL-153, Mesa v Canada, para. 236; RL-006, Apotex v. US, para. 150; RL-135, Phoenix v. Czech Republic, paras. 58 to 64 (summarizing previous decisions, and concluding that "if jurisdiction rests on the existence of certain facts, they have to be proven [rather than merely established prima facie] at the jurisdictional phase."); RL- 009, Bayview v. Mexico, paras. 63, 122: (finding that the "Claimants have not demonstrated that their claims fall within the scope and coverage of NAFTA Chapter Eleven" and rejecting claimant's submission that the "Respondent bears the burden of demonstrating that the Tribunal should not hear the claim"); CL-054, Grand River v. US, para. 122 (holding that the "Claimants must [...] establish an investment that falls within one or more of the categories established by that Article [1139]"); RL-136, Gallo v. Canada, para. 328 (stating that "[i]nvestment arbitration tribunals have unanimously found that they do not have jurisdiction unless the claimant can establish that the investment was owned or controlled by the investor at the time when the challenged measure was adopted."). See also Windstream I Counter- Memorial, para. 60 and fns. 135, 136, where it affirms that the principle that a claimant bears the burden of proving all facts necessary to establish a tribunal's jurisdiction is well established in international investment arbitration more generally and cites to numerous cases where this principle has been recognized. ↩

⁵⁰⁹ Counter-Memorial, para. 121. ↩

⁵¹⁰ See also RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 245: ("In the face of this extensive pre- 1 January 2009, pre-10 June 2010 conduct, the Tribunal considers that Claimants have failed to show [...] that they first acquired, or must be deemed to have first acquired, knowledge of the breaches and losses that they now allege only after 10 June 2010. The appreciations that lie at the core of every allegation that the Claimants advance can be traced back to pre-10 June 2010 conduct, and indeed to pre-1 January 2009 conduct, by the Respondent. The claims thus fall at the first acquisition of knowledge requirement of Article 10.18.1."); RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 147: ("the Tribunal accepts Canada's argument that the fact that the limitation period begins to run when a would-be claimant first acquires (or should first have acquired) the requisite knowledge is significant; as Canada points out, an investor cannot first acquire knowledge of the same matter on more than one occasion"). ↩

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3. the Claimant is challenging “a series of measures which all occurred after the Windstream I Award”,⁵¹¹ each of which was “adopted more than three years prior to” 22 December 2017,⁵¹² including Ontario's:⁵¹³
   1. decision to continue to apply the Moratorium;
   2. failure to complete the work necessary to lift the Moratorium; and
   3. failure to direct the IESO to amend the FIT Contract to ensure that the Project would be “deferred”, “frozen” and “on hold” for the duration of the Moratorium;
4. the Claimant's reference to the FIT Contract termination “as a measure within the meaning of Article 1101 of the NAFTA”,⁵¹⁴ does not “challenge the decision of the IESO as a breach of either Article 1105 or 1110", or “crystalize” damages based on it;⁵¹⁵
5. each of the measures “had already been put before the Windstream I tribunal as early as 2012", which demonstrates the “Claimant's actual knowledge of the alleged breaches and loss or damage arising out of those breaches, well before the critical date”; and
6. “continued application of these measures following the Windstream I Award does not re-set the limitation periods, nor does it cure the clear jurisdictional defects of the claim”.

283. Turning to the first of its five points on limitation, the Respondent submits that NAFTA Articles 1116(2) and 1117(2) impose “a strict limitation period that forms one of the fundamental bases of [its] consent to arbitration disputes under NAFTA

⁵¹¹ As noted by the Tribunal in Procedural Order No. 2, para. 45; Response to Request for Bifurcation, para. 2. ↩

⁵¹² See Memorial, para. 458. ↩

⁵¹³ See Memorial, paras. 7, 10, 18, 428; Notice of Arbitration. ↩

⁵¹⁴ See Memorial, para. 428. ↩

⁵¹⁵ According to the Respondent, "[a]s the Claimant itself argued in the Windstream I proceedings, its damages had already crystalized at the time of the Windstream I proceedings". See Windstream I Reply, para. 483 and Windstream I Memorial, para. 318. ↩

[Page 162]

Chapter [11]",⁵¹⁶ to “provide legal predictability and certainty”,⁵¹⁷ and to ensure that any allegation of a breach “will be addressed promptly rather than allowed to linger", creating “certainty and stability for both NAFTA Parties and their investors".⁵¹⁸

284. In this regard, the Respondent relied on prior awards in:

1. Feldman v. Mexico: describing the three-year limitation period as a “clear and rigid”, and “not subject to any suspension, prolongation or other qualification";⁵¹⁹
2. Resolute Forest v. Canada: “this time limit is strict, not flexible. There is no provision for the Tribunal to extend the limitation period”;⁵²⁰
3. Mobil Investments v. Canada (II): made “clear the importance which [the NAFTA Parties] attach to that guarantee while the awards themselves highlight that the limitation period is ‘clear and rigid”’;⁵²¹ and

⁵¹⁶ See RL-024, Feldman v. Mexico, para. 63 ("[T]he Arbitral Tribunal stresses that, like many other legal systems, NAFTA Articles 1117(2) and 1116(2) introduce a clear and rigid limitation defense which, as such, is not subject to any suspension [...], prolongation or other qualification. Thus the NAFTA legal system limits the availability of arbitration within the clear-cut period of three years [...]"). See also RL-137, Resolute Forest v. Canada, Decision on Jurisdiction and Admissibility, para. 153 (the Resolute tribunal stating when referring to Article 1116(2), "this time limit is strict, not flexible. There is no provision for the Tribunal to extend the limitation period [...]"); see also RL- 166, Grand River v. US, Decision on Jurisdiction, para. 29; RL-006, Apotex v. US, para. 327. ↩

⁵¹⁷ This is consistent with one of the NAFTA's objectives, i.e., to create effective procedures for the resolution of disputes. See NAFTA, Article 102(1)(e). ↩

⁵¹⁸ See RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 146. See also RL- 167, Renco v. Peru (II), para. 226 (where the tribunal, in discussing the equivalent limitation period provision in the United States-Peru Trade Promotion Agreement, remarked: "The Parties seem to agree, as does this Tribunal, that one of the objectives of the Treaty is to provide a predictable legal framework, and that Article 10.18.1 in particular aims at providing legal predictability by protecting State respondents against late claims, not least to ensure that claims will be resolved when evidence is reasonably available and fresh."). ↩

⁵¹⁹ RL-024, Feldman v. Mexico [Emphasis added and citation omitted]. See also RL-168, Corona v. Dominican Republic, paras. 192,199 citing Feldman v. Mexico with approval in interpreting equivalent the three-year limitations period in the DR-CAFTA as "strict" and not susceptible to suspension or tolling. ↩

⁵²⁰ RL-137, Resolute Forest v. Canada, Decision on Jurisdiction and Admissibility, paras. 153, 83: (“Although the time limit specified in Articles 1116(2) and 1117(2) is not itself a procedure, compliance with it is required for the bringing of a claim, which is certainly a procedure. This is enough to justify the conclusion that compliance with the time limit goes to jurisdiction."). ↩

⁵²¹ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 146. ↩

[Page 163]

4. Grand River v. US: dismissed claims on the basis of the Claimant's failure to comply with this strict three-year limitation period.⁵²²

285. As to its second point, that the limitation period begins on the date the Claimant first acquires (or should have acquired) knowledge of breach and loss or damage incurred, the Respondent submits that:⁵²³

1. a claimant cannot merely assert when it “first acquires” knowledge;
2. acquisition is a question of fact, and sufficient evidence must be provided;
3. the Tribunal must “determine based on the evidence provided whether the Claimant has met its burden";
4. if it “first acquired” or “should have first acquired” knowledge of the breach and loss prior to 22 December 2017, “the Tribunal must conclude that the Claimant's [Notice of Arbitration] was submitted after the expiration of the limitation period and that it has no jurisdiction to hear the claim”;⁵²⁴
5. the limitation period runs from when a claimant “has acquired either actual or constructive knowledge of both the alleged breach and the loss or damage";⁵²⁵

⁵²² See RL-166, Grand River v. US, Decision on Jurisdiction, paras. 103 to 104. The only claim the tribunal reserved for consideration on the merits was one based on separate and distinct legislation adopted by individual States after 12 March 2001 (i.e., within the applicable three-year limitation period); see also RL-006, Apotex v US, paras. 314 to 335; CL-134, Bilcon v. Canada, Award, paras. 258 to 282; CL-066, Mondev v. US, para. 87. ↩

⁵²³ Counter-Memorial, para. 128 [Emphasis omitted] and fn. 235. ↩

⁵²⁴ See RL-166, Grand River v. US, Decision on Jurisdiction, para. 54 ("This is foremost a question of fact."). With the exception of constructive knowledge, which is imputed; RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 163: ("If the Claimants cannot establish, to an objective standard, that they first acquired knowledge of the breaches and losses that they allege in the period after 10 June 2010, they fall at the first hurdle. To surmount this obstacle, each claimant must show, in respect of each property claim, that they have a cause of action, a distinct and legally significant event that is capable of founding a claim in its own right, of which they first became aware in the period after 10 June 2010."). See also paras. 166, 239; RL-170, Pac Rim v. El Salvador, Decision on Jurisdiction, para. 2.9. ↩

⁵²⁵ See RL-166, Grand River v. US, Decision on Jurisdiction, paras. 53, 58; CL-134, Bilcon v. Canada, Award, para. 273. See also RL-168, Corona v. Dominican Republic, paras. 193, 217; RL-138, Spence v. Costa Rica, Corrected Interim Award, para. 170. ↩

[Page 164]

6. “[t]he notion of actual knowledge accounts for what an investor subjectively knew";⁵²⁶ and
7. “the notion of constructive knowledge accounts for what an investor objectively ought to have known".

286. The Respondent relied on definitions, commentary and prior awards, as follows:

1. the term “first” means “earliest in occurrence, existence”;⁵²⁷
2. Professor Michael Reisman: it “takes great effort to misunderstand” the ordinary meaning of Article 1116(2), and “the challenge of the compatibility of the measure must be made within three years of first acquiring (i) knowledge of the measure and (ii) that the measure carries economic cost for those subject to it. If the challenge is not made within those three years, it is time-barred”;⁵²⁸
3. Mobil Investments v. Canada (II): “the fact that the limitation period begins to run when a would-be claimant first acquires (or should first have acquired) the requisite knowledge is significant; as Canada points out, an investor cannot first acquire knowledge of the same matter on more than one occasion”;⁵²⁹
4. Nissan Motor v. India: “[b]earing these provisions in mind, the Tribunal agrees with India on a threshold proposition: that once an investor has knowledge that it has been harmed by a particular State act alleged to breach a CEPA obligation, additional conduct relating to the same underlying harm ‘cannot without more renew the limitation period' for the

⁵²⁶ See e.g. RL-168, Corona v. Dominican Republic, para. 217 (“As already noted above, DR-CAFTA Article 10.18.1 contemplates two forms of knowledge of breach and loss or damage: actual knowledge – what the Claimant did in fact know at a given time – and constructive knowledge – what the Claimant should have known at a given time.") The tribunal in Grand River qualified the existence of actual knowledge as a question of fact (RL-166, Grand River v. US, Decision on Jurisdiction, para. 54). ↩

⁵²⁷ Shorter Oxford English Dictionary (5^th ed., New York: Oxford University Press, 2002), p. 965. ↩

⁵²⁸ RL-171, Merrill & Ring v. Canada, Opinion, para. 28 [Emphasis in original]. ↩

⁵²⁹ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 147 [Emphasis in original]. ↩

[Page 165]

filing [sic] a claim seeking redress. If the three years have elapsed from first knowledge, then that particular investment dispute cannot be revived”;⁵³⁰

5. Bilcon v. Canada: a NAFTA tribunal must determine the specific date that a claimant first acquired, or should have first acquired, knowledge of the alleged breach and knowledge of incurred loss or damage arising out of that breach;⁵³¹ and
6. Spence v. Costa Rica: similar approach by tribunals interpreting equivalent provisions in CAFTA-DR.⁵³²

287. As to continuing measures, according to the Respondent:

1. “regardless of whether a measure is continuing or not, a NAFTA claim must be brought within three years of the claimant having first acquired

⁵³⁰ RL-172, Nissan Motor v. India, Decision on Jurisdiction, para. 325 [Emphasis in original]. ↩

⁵³¹ See CL-134, Bilcon v. Canada, Award, para. 281 (establishing that the three-year cut-off date is 17 June 2005); RL- 006, Apotex v. US, para. 315 (establishing that the three-year cut-off date is 5 June 2006); RL-166, Grand River v. US, Decision on Jurisdiction, para. 53 (establishing that the three-year cut-off date is 12 March 2001); RL-173, Merrill & Ring v. Canada, US Submission, para. 5 ("An investor first acquires knowledge of an alleged breach and loss at a particular moment in time: under Article 1116(2), that knowledge is acquired on a particular ‘date.” Such knowledge cannot first be acquired on multiple dates, nor can such knowledge first be acquired on a recurring basis." [Emphasis in original]); RL-174, Detroit International v. Canada, Mexico 1128 Submission, para. 22 ("As Canada has demonstrated, all three NAFTA Parties have agreed that the term 'first acquired' means that the time limitation starts when an investor first acquires knowledge of an alleged breach and loss at a particular moment in time."); RL-175, Detroit International v. Canada, Canada 1128 Reply, para. 33 ("The NAFTA three-year time limitation provision exists to ensure claims are brought within a finite period of time from the moment an investor first acquired knowledge of the breach and loss."). ↩

⁵³² See RL-138, Spence v. Costa Rica, Corrected Interim Award, paras. 208, 299. The interpretation and approach was also affirmed by the CAFTA tribunal in Corona v. Dominican Republic. See RL-168, Corona v. Dominican Republic, para. 200: ("Article 10.18.1 requires the Tribunal to determine the date on which the Claimant 'first acquired, or should have first acquired, knowledge of the breach alleged under Article 10.16.1 and knowledge that the claimant (for claims brought under Article 10.16.1(a)) or the enterprise (for claims brought under Article 10.16.1(b)[)] has incurred loss or damage.' A comparison of that date with the 'critical date' will then enable the Tribunal to decide whether it is competent to hear the claims in this proceeding: Should the date on which the Claimant acquired actual or constructive knowledge of the alleged breach and of the corresponding damage be earlier than the critical date, the Tribunal would have to conclude that the Claimant's Request for Arbitration was submitted after the expiration of the limitation date and, as a consequence, the Tribunal would have no jurisdiction to hear the Claimant's claims."). ↩

[Page 166]

knowledge of breach and loss", as affirmed in several prior awards including Bilcon v. Canada,⁵³³ Mercer v. Canada,⁵³⁴ Eli Lilly v. Canada;⁵³⁵

2. the prior award in Grand River v. United States further noted:⁵³⁶

   [T]his analysis seems to render the limitations provisions ineffective in any situation involving a series of similar and related actions by a respondent state, since a claimant would be free to base its claim on the most recent transgression, even if it had knowledge of earlier breaches and injuries.

3. the prior award in Apotex v. United States also noted: “nothing in the text or jurisprudence of NAFTA Chapter Eleven suggests that a party can evade NAFTA's limitation period” by asserting that the measure at issue was ““part of a‘continuing breach' by the United States, or ‘part of the same single, continuous action””;⁵³⁷ and
4. therefore, knowledge starts at first acquisition of knowledge, “even if the effects of that measure continue on past that moment in time”.

288. As to its third point, that knowledge of the full extent of loss or damage incurred is not required to start the time limit in Articles 1116(2) and 1117(2), the Respondent submits that:

⁵³³ See RL-199, Bilcon v. Canada, US 1128 Submission, para. 12. In the footnote following this paragraph (fn. 16), the United States noted: ("The United States' views on the interpretation of NAFTA Articles 1116(2) and 1117(2) are reflected in the attached non-disputing Party submission of July 14, 2008 in the NAFTA Chapter Eleven case Merrill & Ring Forestry, L.P. v. Canada."). ↩

⁵³⁴ See RL-186, Mercer v. Canada, US 1128 Submission, para. 5; RL-200, Mercer v. Canada, Canada Rejoinder, paras. 223 to 228. ↩

⁵³⁵ See RL-165, Eli Lilly v. Canada, US 1128 Submission, para. 4; RL-197, Eli Lilly v. Canada, Mexico 1128 Submission, paras. 7 to 8; RL-198, Eli Lilly v. Canada, Canada 1128 Reply. ↩

⁵³⁶ RL-166, Grand River v. US, Decision on Jurisdiction, para. 81. ↩

⁵³⁷ RL-006, Apotex v. US, paras. 325 to 326. ↩

[Page 167]

1. NAFTA tribunals have “consistently held that concrete knowledge of the actual amount of loss or damage incurred is not a pre-requisite to the running of the limitations period under NAFTA Chapter [11]”;⁵³⁸ and
2. “simple knowledge that loss or damage has been caused, even if its extent or quantification is still unclear, is sufficient to trigger the limitation period".⁵³⁹

289. As to its fourth point, that the Claimant knew of the alleged breach of Articles 1105 and 1110 prior to 22 December 2017, the Respondent submits that:⁵⁴⁰

1. the Claimant's “entire claim is based on the Ontario government's":
   1. “decision to continue to apply the moratorium”,
   2. “continued failure to complete the work necessary to lift the moratorium"; and
   3. “continued refusal to direct the IESO to ‘to amend the FIT Contract to ensure that the Project would be ‘deferred', 'frozen' and ‘on hold’ for the duration of the moratorium"";
2. alleged new measures after the Windstream I Award,⁵⁴¹ “are the continued application of the measures first known to the Claimant at the time of the Windstream I arbitration";

⁵³⁸ See CL-066, Mondev v. US, para. 87; RL-166, Grand River v. US, Decision on Jurisdiction, paras. 77 to 78; RL-006, Apotex v. US, para. 303; CL-134, Bilcon v. Canada, Award, para. 275. ↩

⁵³⁹ See CL-066, Mondev v. US, para. 87; RL-166, Grand River v. US, Decision on Jurisdiction, paras. 77 to 78; CL-134, Bilcon v. Canada, Award, paras. 271 to 275 (tribunal "agree[d] with the reasoning of its predecessors" that "[t]he plain language of Article 1116(2) does not require full or precise knowledge of loss or damage"); RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 155; RL-006, Apotex v. US, paras. 303, 318 to 320, 324 to 325; RL-176, Rusoro v. Venezuela, paras. 204 to 205, interpreting Article XII.3(d) of the Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments, para. 217 ("what is required is simple knowledge that loss or damage has been caused, even if the extent and quantification are still unclear"). ↩

⁵⁴⁰ Counter-Memorial, paras. 136 to 141. ↩

⁵⁴¹ As noted by the Tribunal in Procedural Order No. 2, para. 45; Response to Request for Bifurcation, para. 2. ↩

[Page 168]

3. the “Claimant cannot ‘first acquire' knowledge of these measures simply because they continue to exist, and the continued application of these measures does not toll the three-year limitation period set out in NAFTA Articles 1116(2) and 1117(2)";
4. the Claimant “first acquired" knowledge of the Moratorium in February 2011, including that its imposition created conditions⁵⁴² to allow IESO to terminate the FIT Contract,⁵⁴³ because:
   1. on 11 February 2011, “Ontario announced that the Province would not proceed with offshore wind development until further science, regulatory work, and coordination with US partners was complete";⁵⁴⁴
   2. the Moratorium “was already continuing for five years on the date of the Windstream I Award”, with the Claimant arguing in Windstream I that “the moratorium on its Project was for an ‘Indefinite-Term””,⁵⁴⁵ and "no evidence that the Ontario Government was contemplating lifting [it]";⁵⁴⁶
   3. Ontario never gave “any indication as to when – and indeed whether – the moratorium might be lifted”;⁵⁴⁷
   4. its continued application “cannot change the fact that the Claimant 'first acquired' knowledge of the measure well before” 22 December 2017;

⁵⁴² See Memorial, para. 7. ↩

⁵⁴³ See Memorial, para. 293. See also Windstream I Memorial, para. 560. ↩

⁵⁴⁴ See C-0481, Announcement (OPA), Offshore Windpower Not Proceeding, 11 February 2011, as cited in Windstream I Memorial, para. 268. ↩

⁵⁴⁵ Windstream I Reply, para. 257 ("The policy decision that MOE announced on February 11, 2011 is best described as an indefinite-term moratorium on offshore wind development."); para. 369 ("It was therefore important to Windstream that any negotiated solution reflect that the moratorium did not have a defined term.") ↩

⁵⁴⁶ See Windstream I Reply, para. 411. ↩

⁵⁴⁷ See Reply, para. 357. ↩

[Page 169]

5. as to Ontario's alleged "continued refusal to complete the work necessary to lift the moratorium following the Windstream I Award",⁵⁴⁸ the Claimant both:
   1. “fails to establish how a continued failure to complete this work following the Windstream I Award constitutes a breach of the NAFTA"; and
   2. “neglects to indicate how it ‘first acquired' knowledge of this as a breaching measure within the strict three-year time limit” as it was "the very measure that the Windstream I tribunal found was a breach of Article 1105”;⁵⁴⁹ and

5. the Claimant cannot rely on Ontario's “failure to direct the IESO to amend the FIT Contract to ensure that the Project would be deferred, frozen, or on hold following the Windstream I Award”,⁵⁵⁰ as the Claimant had “already put before the Tribunal alleged promises by Ontario that [its] Project would be allowed to continue”,⁵⁵¹ and “that Ontario should have taken steps to ensure that the Claimant was not penalized as a result of the moratorium”;⁵⁵² and

⁵⁴⁸ See Memorial, para. 7. ↩

⁵⁴⁹ According to the Respondent, Ontario's "alleged failure to complete the work, including the research and studies it had identified as necessary to lift the moratorium, was a core measure put forward by the Claimant in that arbitration", including "allegations that the Ontario Government has conducted very little research since announcing the moratorium, that it had failed to meet the timelines in every research plan it has developed, that the studies it has disclosed were either irrelevant to the Project or minimally relevant to the stated rationale for the moratorium. The Claimant repeatedly raised the lack of progress in completing this work before the Windstream I tribunal, and highlighted its role in delaying the lifting of the moratorium. The Claimant had submitted to the Windstream I tribunal that MOE had failed to complete 'this research in the four years and four months since issuing the policy decision', and that it was clear that 'MOE considered that any research it conducted during the indefinite-term moratorium would have no or limited application to Windstream's Project." See Windstream I Reply, paras. 261, 409 to 426. ↩

⁵⁵⁰ See Memorial, para. 7. ↩

⁵⁵¹ Windstream I Award, paras. 149 to 160. ↩

⁵⁵² See Windstream I Memorial, paras. 563 to 564 ("Ontario could have fulfilled its promises and taken steps to ensure that Windstream was not penalized as a result of the moratorium. For example, pending the lifting of the moratorium, the MEI could have directed the OPA to remove the force majeure limitation that kept the clock running on Windstream's deadline to bring the Project into commercial operation, constrained the OPA's termination rights for the Project, and returned Windstream's security in the meantime. That would have had the effect of "freezing" the ↩

[Page 170]

6. the Windstream I record “makes abundantly clear that the Claimant 'first acquired' knowledge of these breaching measures well before" 22 December 2017.⁵⁵³

290. As to its fifth and final point on the limitation period, that the Claimant knew of the alleged loss or damage prior to 22 December 2017, the Respondent submits that:

1. the Claimant's submissions in Windstream I confirm such knowledge:⁵⁵⁴

   There is no indication on the record that the Ontario Government truly intends to lift the moratorium in the near future, or at all. It has never provided even an approximate "end date" for the moratorium [...]. The fact is that the moratorium may never be lifted. But even if the moratorium is not permanent, Windstream's loss is.

2. the Claimant expressly argued at the time of Windstream I that:
   1. the Moratorium had the effect of "permanently depriv[ing] Windstream of the value of its investments”;⁵⁵⁵
   2. even if lifted, “[i]n light of the period that would be required to re- start the Project, confirm regulatory requirements, obtain the required approvals, complete development work and build the Project, as of May 4, 2012 it was no longer feasible to expect that the Project could achieve that commercial operation date”;⁵⁵⁶
   3. it has been “permanently deprived” of the value of its investment:⁵⁵⁷

Project, as Ontario had promised to do. Or Ontario could have replaced the Project with an alternative, equivalent project as Windstream proposed on many occasions and as Ontario did for TransCanada after the government made a political decision to cancel TransCanada's Oakville gas plant. The OPA could have taken those steps even without direction from the MEI."); see also Windstream I Award, para. 185.

⁵⁵³ See Request for Bifurcation and Memorial on Jurisdiction, para. 130. ↩

⁵⁵⁴ Windstream I Reply, para. 485. ↩

⁵⁵⁵ Windstream I Reply, para. 483. ↩

⁵⁵⁶ Windstream I Memorial, para. 318. ↩

⁵⁵⁷ Windstream I Memorial, para. 14. ↩

[Page 171]

[Ontario] allowed the moratorium to cause delays so drastic that the Project cannot be developed in time to meet the May 4, 2017 deadline. It is no longer financeable. As a result, the Project has effectively been cancelled and is now substantially worthless, as are Windstream's investments in WWIS and the FIT Contract.

3. the Claimant's Windstream I witness testimony stated that “our entire investment in WWIS, the Project and the FIT Contract is now substantially worthless” and the “damage irreparable”;⁵⁵⁸
4. the Claimant's knowledge of loss or damage arising out of the alleged breach “can sufficiently be established by the Claimant's own assertions that its Project was ‘substantially worthless', 'de facto cancelled' and 'deprived [...] of the value” following the Moratorium;⁵⁵⁹ and
5. accordingly, by the time of Windstream I, the “Claimant had ‘first acquired' the requisite knowledge of both the alleged breach and the alleged loss or damage arising out of it”.

(ii) The Claimant's Position

291. According to the Claimant, the limitation point comes down to three questions,⁵⁶⁰ based on the claim as pleaded:⁵⁶¹

⁵⁵⁸ CWS-Mars-1, Witness Statement of David Mars, paras. 106 to 107. Windstream I Memorial, para. 560: "As a direct consequence of the moratorium, Windstream's investments in WWIS, the Project and the FIT Contract are now substantially worthless"; "of the moratorium, Windstream has lost the entire value of investments [...] so that it could [not] meet its deadlines under the FIT Contract." ↩

⁵⁵⁹ See Windstream I Reply, para. 473 ("Windstream's investments in WWIS, the FIT Contract and the Project are now substantially worthless. As a result of the drastic delays caused by the moratorium, the Project no longer has any hope of achieving commercial operation by the deadlines set out in the FIT Contract. Under the FIT Contract, the OPA has the right to terminate the FIT Contract if it does not achieve commercial operation by May 4, 2017, even though the FIT Contract is currently under force majeure. The OPA refused to waive this right, and has on the contrary gone so far as to reserve all of its right under the FIT Contract. This has rendered the Project unfinanceable. Thus, even if the moratorium was lifted and the Project allowed to proceed, the Project could not continue. It has been de facto cancelled. The moratorium therefore has deprived Windstream of the value of its investments.") ↩

⁵⁶⁰ See Reply, paras. 279 to 301; CL-178, Infinito Gold v. Costa Rica, Decision on Jurisdiction, para. 330. ↩

⁵⁶¹ See CL-178, Infinito Gold v. Costa Rica, Decision on Jurisdiction, para. 332. ↩

[Page 172]

1. what is the cut-off date for the three-year limitation period (undisputedly 22 December 2017);⁵⁶²
2. did the Claimant first know, or should it have known, about the breaches before the cut-off date; and
3. did the Claimant first know, or should it have known, that it incurred loss or damage before the cut-off date?

292. As to the two disputed questions, the Claimant submits that it first knew that the Respondent had breached NAFTA, and that it suffered damages, no earlier than February 2018.⁵⁶³

293. As to expropriation, the Claimant submits that it “first acquired” knowledge of:⁵⁶⁴

1. breach when the FIT Contract was terminated (i.e., “IESO's termination right arose because of the actions of Ontario and it was only with the termination of the FIT Contract that Windstream was deprived of the value of its investments"),⁵⁶⁵ which:
   1. was the "point of time that the expropriation occurred”, which the Claimant was first informed of on 20 February 2018;⁵⁶⁶
   2. took effect 18 February 2020 once the Ontario Application was discontinued;⁵⁶⁷

⁵⁶² Counter-Memorial, para. 122. Windstream filed its Notice of Arbitration on 2 November 2020. Canada raised issues with respect to that NOA and a supplementary one was filed on 22 December 2020. Windstream does not agree that its original NOA was not valid. However, nothing turns on the difference between 2 November 2020 and 22 December 2020, and a resulting cut-off date of either 2 November 2017 or 22 December 2017. ↩

⁵⁶³ See CL-178, Infinito Gold v. Costa Rica, Decision on Jurisdiction, para. 330; RL-140, Infinito Gold v. Costa Rica, Award, paras. 221, 223; RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 148. ↩

⁵⁶⁴ See Reply, paras. 285 to 286. ↩

⁵⁶⁵ Memorial, paras. 458 to 462. ↩

⁵⁶⁶ See C-2477, Letter from Michael Lyle (IESO) to Nancy Baines (WWIS), 20 February 2018. ↩

⁵⁶⁷ See C-2289, Letter from Michael Lyle (IESO) to Nancy Baines (WWIS), 18 February 2020. ↩

[Page 173]

3. is after the cut-off date of 22 December 2017; and

2. its losses on 18 February 2020, when the FIT Contract termination took effect, as that was when:
   1. there was “no longer any possibility for the Project to move forward or for WWIS to sell electricity to the IESO at an indexed fixed price over a 20-year period";
   2. it “lost the full value of its investment in WWIS, the Project and the FIT Contract and was not compensated for that loss”; and
   3. the potential loss that ii was aware of on 18 February 2018 “crystallized”.

294. According to the Claimant:

1. prior awards demonstrate that “the limitation period does not run simply because a loss and breach is foreseeable”;⁵⁶⁸
2. breach and losses here only crystallized when the termination took effect on 18 February 2020;
3. as to the Respondent's argument that the Claimant “should have anticipated” that Ontario would permit the FIT Contract termination, and IESO would terminate, it submits that, “in addition to being false, these suppositions are not enough to trigger the limitation period"; and
4. in any event, 20 February 2018 and 18 February 2020 are both “within the limitation period".

⁵⁶⁸ See RL-184, Eli Lilly v. Canada, paras. 167, 170 ("An investor cannot be obliged or deemed to know of a breach before it occurs." In that case, the limitation period did not begin to run until the Supreme Court of Canada, the country's highest appellate court, denied Eli Lilly leave to appeal. The potential losses were known with the lower court decision but did not crystallize until the decision took effect). ↩

[Page 174]

295. As to fair and equitable treatment, the Claimant submits that it "first acquired" knowledge of:⁵⁶⁹

1. breach “based on the composite effect of the challenged Measures”,⁵⁷⁰ as:
   1. "crystalliz[ing] with the termination of the FIT Contract and the alleged breach arises from that event";
   2. “based on the failure of the Ontario Government to take any steps to prevent the termination of the FIT Contract and/or to require the IESO to renegotiate the FIT Contract in a manner consistent with the promises made";
   3. in light of “MEI refus[ing] to meet with [the Claimant] and ma[king] the deliberate decision to not intervene in this matter”, “creating the conditions that led to the termination of the FIT Contract, including by failing to intervene with the IESO and failing to conduct any studies to lift the Moratorium”; and
   4. constituting "unfair, inequitable, arbitrary, discriminatory and in breach of representations reasonably relied on by Windstream”;⁵⁷¹ and
2. its losses only arose “upon the termination of the FIT Contract”, because “[t]he termination of the FIT Contract – and Windstream's loss of its investment – is the direct result of that deliberate and unfair inaction”, and the Respondent “through the actions of the Ontario Government which are attributable to it, failed to accord Windstream's investments [FET], contrary to Article 1105(1)”.⁵⁷²

⁵⁶⁹ Reply, paras. 287 to 288. ↩

⁵⁷⁰ Memorial, para. 484. ↩

⁵⁷¹ Memorial, paras. 485 to 492. ↩

⁵⁷² Memorial, paras. 491 to 492. ↩

[Page 175]

296. Further in relation to the limitation period, the Claimant submits that there is no basis to accept the Respondent's “recharacterization of [the Claimant's] claim”.⁵⁷³ According to the Claimant, this is a factual question as to when it “first became aware of the alleged breaches and claimed losses”, in relation to which:

1. the Respondent ignores the alleged breach,⁵⁷⁴ which:
   1. is not the continued application of the Moratorium imposed in February 2011 and failure to complete the work necessary to lift it;⁵⁷⁵
   2. is instead "Ontario [having] created the circumstances that allowed the IESO to terminate the FIT Contract";
   3. is supported by prior awards in:
      1. Infinito v. Costa Rica, where the tribunal required “knowledge of the alleged breach, and not to knowledge of the facts that make up the alleged breach”, or “[i]n other words, the limitations period only starts to run once the breach (as a legal notion) has occurred”;⁵⁷⁶
      2. ECE v. Czech Republic:⁵⁷⁷

         [I]t is for the investor to allege and formulate its claims of breach of the relevant treaty standards as it sees fit. It is not the place of the respondent State to recast those claims in a different manner of its own choosing and the Claimants' claims accordingly fall to be assessed on the basis of which they are pleaded.

⁵⁷³ Reply, paras. 289 to 301. ↩

⁵⁷⁴ See Counter-Memorial, paras. 137 to 140. ↩

⁵⁷⁵ See Counter-Memorial, para. 140. ↩

⁵⁷⁶ RL-140, Infinito v. Costa Rica, Award, para. 220. (underlining added) (italics in original). ↩

⁵⁷⁷ CL-185, ECE v. Czech Republic, para. 4.743. See also CL-178, Infinito v. Costa Rica, Decision on Jurisdiction, para. 185; RL-184, Eli Lilly v. Canada, Award, paras. 162 to 165; CL-198, Urbaser v. Argentina, Decision on Jurisdiction, paras. 235 to 237; RL-140, Infinito v. Costa Rica, Award, para. 231. ↩

[Page 176]

1. Mobil Investments v. Canada (II): where in Mobil (I), the tribunal found breached Article 1106 arising out of implementation and enforcement of guidelines in 2004, and Mobil (II) arose out of continued enforcement of the 2004 guidelines,⁵⁷⁸ rejecting the argument that the breach was a “continuing” one,⁵⁷⁹ holding that the respondent “misunderst[ood] the nature of the breach on which Mobil's claim is based",⁵⁸⁰ and “was obliged to cease enforcing them against Mobil", and failure to do so was “was a fresh breach”;⁵⁸¹

2. the Respondent ignores the alleged loss,⁵⁸² which:
   1. was not compensated by the Windstream I Award;
   2. only arose "upon learning that the IESO intended to exercise its termination right – on February 20, 2018” and due to the ongoing Court Proceedings, “did not take effect until [it] was discontinued in January 2020”, with the FIT Contract termination becoming effective on 18 February 2020;
   3. arose in circumstances where the Claimant did not “always kn[o]w that the FIT Contract would be terminated",⁵⁸³ with WWIS bringing the Court Proceedings in March 2017 “to preserve its rights under the FIT Contract and to prevent the breach that is being addressed in these proceedings from occurring”;⁵⁸⁴

⁵⁷⁸ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, paras. 6, 162. ↩

⁵⁷⁹ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, paras. 100 to 101. ↩

⁵⁸⁰ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, para. 150. ↩

⁵⁸¹ RL-110, Mobil Investments v. Canada (II), Decision on Jurisdiction and Admissibility, paras. 162, 172. ↩

⁵⁸² Counter-Memorial, paras. 142 to 145. ↩