Québec's Bill 18, titled "An Act to Limit Oil and Gas Activities",
was passed by the Québec National Assembly in June, 2011,
and had the effect of revoking rights which had already been
granted to explore and produce oil and gas in the St. Lawrence
River basin west of longitude 64°31'27" (roughly the
entire area upstream of the western tip of Anticosti Island).
The further grant of exploration rights was also prohibited.
Bill 18 also explicitly stated that no compensation was payable
by Québec as a result of the revocation.
Lone Pine Resources Inc. has now given notice that it intends to sue
the Canadian government under the provisions of Article 11 of
NAFTA, which protects investors against arbitrary expropriation and
expropriation without compensation by the NAFTA member
states. Lone Pine alleges that its leases totalling 33,460
acres were revoked as a result of Bill 18, and is claiming $250
million in compensation.
While NAFTA Article 11 claims resulting out of a regulatory
change do not often result in any recovery for the compaining party
(the right of each state to pass regulations to protect the
environment not being considered an expropriation), a claim such as
this (with existing licenses explicitly cancelled without
compensation) may well have have a better chance of success, and
may also result in claims by other producers whose rights were
cancelled without compensation as a result of Bill 18.
No Party may directly or indirectly nationalize or expropriate
an investment of an investor of another Party in its territory or
take a measure tantamount to nationalization or expropriation of
such an investment ("expropriation"), except:
for a public purpose;
on a non-discriminatory basis;
in accordance with due process of law and Article 1105(1);
on payment of compensation in accordance with paragraphs 2
Compensation shall be equivalent to the fair market value of
the expropriated investment immediately before the expropriation
took place ("date of expropriation"), and shall not
reflect any change in value occurring because the intended
expropriation had become known earlier. Valuation criteria shall
include going concern value, asset value including declared tax
value of tangible property, and other criteria, as appropriate, to
determine fair market value.
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about your specific circumstances.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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