U.S. Department of State

The Tribunal had been constituted on January 11, 2001. The President noted the parties' agreement that it had been duly constituted in accordance with the Additional Facility Arbitration Rules, and that the Claimant had supplied correspondence on behalf of itself and of ADF International Inc. agreeing to the appointment of each individual member of the Tribunal under NAFTA Article 1125. It was noted that the parties had received from the Secretariat copies of the declarations, and of their respective attached statements, signed by each arbitrator pursuant to Additional Facility Arbitration Rule 14.

It was noted that the Claimant is represented by the persons listed in the Claimant's letter to the Secretariat of January 26, 2001, and that all notifications and communications addressed to the Claimant in connection with the proceeding are to be sent to:

Mtre. Peter E. Kirby
Fasken Martineau Du Moulin LLP
Stock Exchange Tower
Suite 3400
800 Place Victoria
Montreal (Québec)
Canada H4Z 1E9

It was noted that the Respondent is represented by the persons listed in the Respondent's letter to the Secretariat of January 11, 2001, and that all notifications and communications addressed to the Respondent in connection with the proceeding are to be sent to:

Mr. Barton Legum
United States Department of State
Office of the Legal Adviser
2430 E Street, N.W.
Suite 203, South Building
Washington, D.C. 20037-2800

The President noted the parties' agreement that the ICSID Additional Facility Arbitration Rules govern the proceeding, which was instituted under the provisions of Chapter Eleven of NAFTA. The President noted that the parties are attempting to reach agreement regarding any additional rules to address document production, the testimony of witnesses and experts, the submission of evidence and treatment of claimed confidential business information. If necessary, the parties were to make submissions with their proposals on such matters within the time periods set forth in section 14 below.

It was noted that, in addition to receiving reimbursement for any direct expenses reasonably incurred, each member of the Tribunal would receive:

It was recalled that the Centre had, on January 22, 2001, requested each party to pay an amount of US$40,000 to defray the costs of the proceeding during its first three to six months. The parties confirmed that they had made arrangements to make the initial advance payments requested of them by the Centre. Such payments were subsequently received by the Center in due course.

The President noted the parties' agreement that, in accordance with Article 59 of the Additional Facility Arbitration Rules, the parties would defray the expenses of the proceeding in equal parts, without prejudice to the final decision of the Tribunal as to costs.

The President noted the parties' agreement that an audio or video recording shall be made of procedural hearings, and that a verbatim transcript of substantive hearings shall be made. In addition, the parties agreed that either party may decide in its sole discretion whether a hearing is substantive for this purpose. The Secretary is to keep minutes in summary form under Article 44 of the Additional Facility Arbitration Rules. 

It was noted that all communications by a party to the Tribunal or any of its members shall be made through ICSID. The Tribunal took note of the parties' agreement that delivery of pleadings to ICSID shall be made by overnight courier service to arrive on or before the date that the submission is due. For submissions other than pleadings, the parties agreed that delivery may be made by facsimile on or before the date the submission is due, followed by hard copy sent by mail or courier service.

It was agreed that all written submissions would be introduced by a party into the proceeding by sending the original and five copies to the Centre, which would arrange for the appropriate distribution of copies. In addition, each party agreed to serve two copies of all submissions directly on the other party.

The President noted the parties' agreement that the quorum for all sittings of the Tribunal would be constituted by all three of its members, unless the parties otherwise agreed.

The President noted the parties' agreement that the language of the proceeding would be English. In addition, the parties agreed that the foregoing is without prejudice to either party's ability to rely upon, and to provide the Tribunal with copies of, legal authorities rendered in other languages. A party relying on legal authority in a language other than English, French or Spanish shall, within a reasonable time after the date it submits such legal authority, provide to the Tribunal and the other party a translation of the portion or portions of the legal authority upon which the party relies.

The parties agreed that they would make further submissions on the question of the place of arbitration, as indicated in their joint letter of February 2, 2001.

The President noted the parties' agreement on the following schedule: The Claimant's submission on place of arbitration shall be filed by February 26, 2001, and the Respondent's submission on place of arbitration shall be filed by March 19, 2001. If the Claimant deems it necessary, it may file a response to the Respondent's submission by April 2, 2001, and the Respondent may file observations on the Claimant's response by April 16, 2001.

The parties agreed that it will not be necessary to hold a hearing on this issue and requested, if necessary, that the Tribunal render its decision based on the written argument. 

The President noted the parties' agreement that, notwithstanding paragraphs 2 and 4 of Article 46 of the Additional Facility Arbitration Rules, there shall be a single written proceeding that addresses both the question of liability and any defenses that might be characterized as objections to the competence of the Tribunal. After completion of the written procedure, the parties agree that there shall be a hearing to address both legal and factual issues pertaining to competence and liability. The parties agree to bifurcate the issue of liability from that of damages.

The President noted the parties' agreement that the written procedure for the phase of the proceeding concerning competence and liability shall consist of the Claimant's memorial, the Respondent's counter-memorial, the Claimant's reply and the Respondent's rejoinder. The parties recognize that the Governments of Canada and Mexico have the right to make written and oral submissions pursuant to NAFTA Article 1128.

The parties agreed to make written submissions to the Tribunal on the matter of the schedule for their respective pleadings, setting forth their respective positions within the following timeframe: the Claimant shall make its submission regarding the schedule on or before February 12, 2001, and the Respondent shall make its submission regarding the schedule on or before February 20, 2001.

The parties stated that they were attempting to reach agreement on a proposal to the Tribunal regarding subsequent sessions. The President noted that the parties could submit their respective positions on this matter, if necessary, simultaneously with their submissions regarding the schedule of the proceeding, mentioned at section 14 above. It was noted that Ms. Lamm and Professor de Mestral would provide the Secretary with the dates on which they were currently unavailable for holding subsequent sessions, and that the Secretary would transmit those dates to the parties for their information. This was subsequently done by the Secretary's letter to the parties of February 13, 2001. 

The Tribunal took note of the parties' agreement that, subject to a party's right to designate confidential business information that is not to be disclosed, all documents issued by the Tribunal (including minutes and orders) and all documents submitted by the parties to the Tribunal may be made public by either party at any time. It was noted that nothing in the foregoing agreement shall be construed to prevent any party from making such disclosures as may be required by law. As regards the identification and treatment of confidential business information, the parties referred to the arrangements described above at section 3.

The Claimant requested that the Tribunal confirm that the correspondence exchanged between the Centre and the parties, copies of which had been transmitted by the Centre to each member of the Tribunal upon its constitution, as mentioned in the Secretariat's letter to the parties of January 11, 2001, formed part of the official record of the proceeding. The Respondent stated that it had no objection to such correspondence being considered as part of the record of the proceeding, on condition that any silence of the United States in any response to any correspondence from the Claimant should not be interpreted as an agreement with the characterizations contained in such prior correspondence. The Tribunal confirmed that the correspondence mentioned in the Secretariat's letter to the parties of January 11, 2001 was to be regarded as part of the record of the proceeding. For greater certainty, the Tribunal requested the Secretary to provide the parties with a list of such correspondence. That list was provided to the parties and the Tribunal under cover of the Secretariat's letter to the parties of February 6, 2001.

There being no further business, the President adjourned the session at 11:00 a.m.