Arbitrations Involving Renewable Energy
Recent years have seen a dramatic increase in the amount of electricity generated from renewable resources, principally wind and solar. Figures from the US Federal Energy Regulatory Commission indicate that renewables now account for 17 per cent of operating generating capacity in the United States but over 65 per cent of new capacity. Goals and mandates for renewable energy continue to grow. The goal is 100 per cent in Hawaii by 2045; 75 per cent in Vermont by 2032; and 50 per cent in California by 2030. Elsewhere, Germany has set itself a target of 80 per cent by 2050.
Investment in wind and solar energy has been driven by government incentive programmes. In Canada, this was largely undertaken by the province of Ontario, which established a widespread feed-in tariff (FIT) programme under the Green Energy and Green Economy Act, 2009.Under the FIT contracts, the government offered a 20-year supply contract at prices substantially above market value. To further complicate matters, the Ontario programme had a substantial minimum domestic content requirement. That requirement was successfully challenged by Japan and Europe in WTO cases requiring amendments to the programme.
Another challenge was the action taken by many governments to cancel some of these programmes. Ontario discovered there was excess capacity on the network at night when there was less demand for the energy and the wind generally blows harder. As a result, the province ended up paying American customers to take energy off the grid. The 2011 cancellation of all offshore wind projects and the 2009 decision to drop the rates for ground mounted solar from 80 cents to 59 cents per kilowatt hour led to further disputes.
In both the UK and Canada investors have challenged changes to the solar incentive programmes in the local courts. In the UK that has been successful,in Canada less so.
Most of the litigation has occurred in Europe, particularly Spain, where 40 investment treaty arbitrations have been filed, along with seven cases against the Czech Republic and nine cases against Italy. Most of those are under the Energy Charter Treaty (ECT).
Renewable energy projects are now shifting away from Europe. In the UK the amount of solar power installed in 2016 fell from the previous year as a result of the drastic cuts in incentives that the government initiated, including the end of subsidies for large-scale solar farms. However, the UK still led Europe in solar growth with 29 per cent of new capacity followed by Germany with 21 per cent and France with 8.3 per cent. Across Europe the total amount of solar now exceeds 100 gigawatts.
Attention in world solar markets is shifting to the United States, which in 2016 nearly doubled its annual installation rate to 15,000 megawatts (MW) of solar compared to less than half that in 2015. For the first time solar ranks as the number one source of new electricity generating capacity United States accounting for 35 per cent of new capacity additions across all fuel types.
The American market, unlike the UK, Canada and Europe, is less dependent on FIT contracts and has relied to a greater degree on solar investment tax credits. Since their introduction in 2006, these credits have been relatively stable. In the last decade solar in the United States has experienced an annual compound growth rate of more than 60 per cent. Particularly interesting in the United States is the increased dominance of utility-scale solar, which now represents two-thirds of the market.
The changing market dynamics will influence the world of dispute resolution. In the past, disputes involving renewable energy have centred on FIT contracts and other incentive schemes that governments designed to develop the market. Today, subsidies are becoming less and less necessary.
The cost of large-scale solar projects continues to rapidly decline falling by 11 per cent in 2016 and 85 per cent since 2009. This makes new solar projects competitive with natural gas power plants in many regions of the US, even before federal investment tax credits. In many United States markets wind projects are the lowest-cost option among all energy technologies. The cost of rooftop residential solar technology is down almost 26 per cent and the median cost of electricity through offshore wind generation has declined approximately 22 per cent.
The first three awards in international arbitrations dealing with government decisions to cut back incentive programmes established to increase investments in renewable energy were handed down in 2016. The first was Charannein January 2016, a claim against Spain under the ECT. This was followed by Mesa Power in May of 2016 and Windstream Energy in December 2016, both of which were arbitrations under NAFTA against Canada.
The NAFTA claims involved amendments to renewable energy incentive programmes adopted by the province of Ontario under the province’s Green Energy Act. In both Charanne and Mesa Power the complainants were unsuccessful although there was a dissent in both cases. In the last case, Windstream Energy, the complainant was successful and received an award of C$25 million, the largest Canadian NAFTA award to date.
The Spanish decisions
To date, 40 claims have been made against Spain. Spain won in Charranne and Isolux, but lost in Eisner Infrastructure (€128 million), Novenergia (€55 million) and Masdar Solar (€64 million).
The first decision involving solar incentives in Europe was Charanne, where the majority dismissed entirely the claims of a Dutch company and Luxembourg company that had jointly invested in solar generation based on an incentive programme established by the Spanish government. As in Ontario, the Spanish programme consisted of feed-in tariffs for a 25-year period. Aside from the attractive rate for the power, the programme allowed the claimants to distribute all of the energy produced to the grid. Subsequently the Spanish government amended the programme to limit the amount of electricity that could be supplied and added a new charge for grid access.
The claimants argued that the amendments reduced their return on investment and expropriated part of the value of their investment in breach of Article 13 of the ECT. They also argued that the amendments violated the standard of fair and equitable treatment and denied their legitimate expectations as investors contrary to ECT Article 10(1) and (12).
A majority dismissed all of the claims. The claim for indirect expropriation was dismissed on the ground that the claimants had failed to show that the investor had been deprived of all or part of its investment. This claim failed because the programme remained in place, as did the contracts, although the rate of return was reduced.
The majority also held that the government actions did not breach the investor’s legitimate expectations because the claimants had not received any specific promises or commitments from Spain. The programme did not create commitments to specific individuals and investors. The tribunal found that a commitment to a group of investors did not amount to a commitment to an individual investor, noting that to find otherwise would amount to an excessive limitation on the power of the state to regulate the economy in accordance with the public interest.
In support of this conclusion, the tribunal also noted that the materials provided to the investors in 2007 did not say that the feed-in tariff would stay in place for the regulatory lives of the solar plants. To decide otherwise, the tribunal stated, would mean that any modification of the tariff would be a violation of international law, a principle the tribunal was not prepared to accept.
There is another rationale to the decision that might find its way into other decisions. The majority concluded that to exercise the right of legitimate expectations the claimants must show that they had first made a diligent analysis of the legal framework for the investment. The tribunal found that if the claimant had done that, it would have discovered that amendments to the feed-in tariff programme were permitted under established Spanish domestic law.
But is domestic law the right test? The dissenting arbitrator disagreed with the majority concluding that legitimate expectations can arise where states grant incentives to a specific category of persons in exchange for their investment. The dissenting arbitrator found that regardless of the state’s regulatory power under domestic law, a breach of an investor’s legitimate expectations should result in compensation.
Spain was not as fortunate in the second decision relating to Spanish renewable energy incentives. On 5 May 2017 an ICSID panel in the unanimous decision ordered Spain to pay €128 million to Eiser Infrastructure Limited and its affiliate Energía Solar Luxembourg. The panel ruled that the Spanish government had violated Article 10 of the Energy Charter Treaty, depriving the company of fair and equitable treatment. The original claim, which was filed in 2013, was for €300 million. Nonetheless the decision was a major setback for Spain, which is now facing dozens of similar cases.
Eiser partnered with Elecnor in Spain, and engineering firm Aries. Together the three partners invested over €935 million in 2007 in three thermal solar plants in Spain. The Eiser case differs materially from the Charanne case discussed above. Charanne, which was decided two years earlier, related to amendments to the incentive programme Spain first introduced in 2010 to the feed-in tariff regime. Eiser relates to the later reforms made between 2012 and 2013 to address a €26 billion electricity tariff deficit the government was then facing.
In Eiser the panel ruled that Spain must pay €128 million to British-based Eiser Infrastructure Limited and its affiliates. Spain defeated a third ECT claim in Isolux the following year.
In November 2018 the tribunal in Novenergiaruled that Spain had radically altered the essential characteristics of the legislation in a manner that violated FET standards. The tribunal found that the object of the Spanish legislation was to ensure Spain achieve its renewable energy targets and create a very favourable investment climate for renewable energy investors.
The tribunal concluded that the investors had legitimate expectations that Spain would not make radical and fundamental changes to the legislation. It agreed that investors could not expect no changes to the legislation but were protected from radical and unexpected changes that would transform the legal and business environment under which the investment was made.
Spain also lost in Masdar Solarin May 2018 when the tribunal again concluded that the 2013 electricity reform was a decisive turning point in Spain’s energy regulation regime that violated the expectations of investors to obtain stable returns on their investment. The tribunal’s findings that specific commitments had been made to the claimants was significant. Spain also lost the June 2018 Fondo Antin decision when an ICSID tribunal ruled in favour of the applicants and ordered the Spain to pay compensation of €112 million plus 60 per cent of the costs.
The Italian decisions
There have been nine arbitrations filed against Italian renewable programmes to date. In the first, Blusun,a €187 billion claim, Italy was successful in its defence. The panel in this case also considered a non-disputing party submission from the European Commission that challenged jurisdiction on the basis that the ECT did not apply between two parties from EU member states. The tribunal rejected the intra-EU objection, concluding that EU membership of the ECT did not mean its member states lack confidence to enter inter se obligations in the treaty and that these obligations had not been modified or superseded by later European law.
On the lack of fair and equitable treatment argument, the panel held that Italy had made no special commitment to Blusun with respect to the expansion or operation of the feed-in tariffs, nor did it specifically undertake that the relevant Italian laws would remain unchanged.
The tribunal concluded that Blusun had failed to establish that the states’ measures were the cause of the project’s failure, concluding that the company’s operational decisions and failure to attract investment deserved far greater weight. However, a dissenting arbitrator found that the state actually engaged in expropriation by changing the zoning requirements for the use of agricultural land, which prevented construction. The dissenting arbitrator found that land use had a substantial impact on the project’s failure. Blusun subsequently filed for annulment.
The Canadian decisions
In Canada, investors challenged reductions in support programmes in two widely publicised NAFTA proceedings.One of those resulted in a substantial victory for the investors. In the other, the investor lost. A few years later the Ontario government cancelled close to 500 solar contracts by paying the costs incurred to date while denying any lost profit. A month later the government cancelled the entire Green Energy Act outright.
In October 2012, Windstream Energy filed a claim against the government of Canada in the amount of C$475 million. Following a 10-day hearing in February 2016, a panel of three arbitrators issued an award of C$26 million,resulting from Ontario’s decision in 2011 to suspend all offshore wind development.
The panel accepted Windstream’s argument that the government’s decision frustrated Windstream’s ability to obtain the benefits of the 2010 contract it had signed with the Ontario Power Authority.
In November 2009, Windstream had submitted 11 FIT applications for wind power projects, including an application for a 300MW 130 turbine offshore wind project near Wolfe Island in Lake Ontario. The Ontario Power Authority (OPA) offered Windstream a FIT contract in May 2010, which Windstream signed in August of that year. Under the contract, the OPA would pay Windstream a fixed price for power for 20 years. In total, the contract was worth C$5.2 billion.
During this period, the Ontario government was conducting a policy review to develop the regulatory framework for offshore wind projects, including a proposed 5 kilometre shoreline exclusion zone. The policy review ceased on 11 February 2011, when the government of Ontario decided to suspend all offshore wind development until further research was completed.
The main ground for the Windstream claim was that the Ontario decision was arbitrary and was based on political concerns that the wind contracts would increase electricity rates. Windstream argued that the government really had no intention of pursuing scientific research. Canada, in response, said that Ontario was entitled to proceed with caution on offshore wind development and that NAFTA does not prohibit reasonable regulatory delays.
Windstream made a number of claims under the NAFTA. The most important (and the only one that succeeded) was a breach of Article 1105(1) (the minimum-standard-of-treatment provision), which reads: ‘Each Party shall accord to investments of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.’
In finding that there was a breach, the tribunal questioned whether the real rationale for the moratorium was the need for more scientific research. Just as important was the tribunal finding that Ontario made little, if any, efforts to accommodate Windstream, and seemed to deliberately keep Windstream in the dark. This is best set out in the decision at paragraphs 366 and 367:
The Tribunal notes that following the signing of the FIT Contract on 20 August 2010, the position of the Government of Ontario grew gradually more ambiguous towards the development of offshore wind. Thus, while the Government appears to have envisaged still in August 2010 that the relevant regulatory framework, including the setback requirements, would be in place possibly . . . its position started changing in the fall of 2010. This change appears to have coincided with the receipt and analysis of the information generated through the EBR posting of 25 June 2010, which indicated an increasing resistance to the development of offshore wind. . . . It does not appear from the evidence that the various options that were being considered and the related concerns were communicated to Windstream, either at the meetings between the government officials and Windstream representatives or otherwise. On 10 December 2010, Windstream delivered a force majeure notice to the OPA, effective from 22 November 2010, stating that MNR’s failure to proceed with the permitting process, in particular the site release process, and MOE’s failure to take steps to implement its policy proposal to create an exclusion zone, had prevented Windstream from progressing the Project in accordance with the FIT Contract.
The tribunal concluded at paragraph 380:
The Tribunal concludes that the failure of the Government of Ontario to take the necessary measures, including when necessary by way of directing the OPA, within a reasonable period of time after the imposition of the moratorium to bring clarity to the regulatory uncertainty surrounding the status and the development of the Project created by the moratorium, constitutes a breach of Article 1105(1) of NAFTA It was indeed the Government of Ontario that imposed the moratorium, not the OPA, so it cannot be said that the resulting regulatory and contractual limbo was a result of the Claimant’s own failure to negotiate a reasonable settlement with the OPA. The regulatory and contractual limbo in which the Claimant found itself in the years following the imposition of the moratorium was a result of acts and omissions of the Government of Ontario, and as such is attributable to the Respondent. The Tribunal therefore need not consider whether the conduct of the OPA during the relevant period must also be considered attributable to the Respondent.
There was a further claim by Windstream that Ontario had violated Article 1102 of NAFTA by granting Windstream less favourable treatment than was accorded to other entities in similar circumstances. It was argued that the treatment of Windstream was less favourable than the treatment Ontario granted to TransCanada.
Both TransCanada and Windstream were parties to power purchase agreements with the OPA that guaranteed a fixed price for electricity. Both contracts were terminated. However, when Ontario terminated the TransCanada contract, Ontario awarded TransCanada a new project and compensated it for the costs of the cancellation. In contrast, Ontario failed to do the same for Windstream following the offshore moratorium.
The tribunal rejected Windstream’s argument, noting that Article 1102 deals with national treatment and most-favoured nation treatment. However, the tribunal concluded that TransCanada was not in like circumstances. Unlike TransCanada, Windstream had a FIT contract for offshore wind.
There is no question that the TransCanada project was different from the Windstream project. TransCanada had a contract with the OPA to build a gas generation plant in Mississauga, near Toronto. The local residents were not happy with this, and the Liberal government cancelled the project in the heat of the provincial election. To keep TransCanada happy, the OPA negotiated an agreement that reimbursed them for their costs and gave them a new contract in another area.
The circumstances were different and so was the government’s response. In TransCanada there was extensive negotiation, whereas in Windstream there was none. The tribunal concluded that the two projects were totally different and, therefore, did not result in like circumstances. TransCanada does not even provide renewable energy, which is the basis of all FIT contracts.
Accordingly, the tribunal ruled that the moratorium and related measures did not apply to TransCanada in the first place. TransCanada was not affected by the moratorium on offshore wind. Moreover, the tribunal ruled that the moratorium was not applied in a discriminatory manner because it resulted in the cancellation of all offshore wind projects. Windstream had the only contract for offshore wind and the tribunal therefore concluded that it could not agree that Windstream had been treated less favourably than other developers of offshore wind.
The decision of the NAFTA panel in Mesa Power was very different to that in Windstream Energy. It also involved claims under Article 1105 of the NAFTA.
On 24 September 2009 the Ontario Minister of Energy directed the Ontario Power Authority to create the FIT programme including the FIT rules, which established the eligibility criteria as well as the criteria for evaluating applications, the deadlines for commercial operation and the domestic content requirements. Those were originally set at 25 per cent but increase later to 50 per cent. The domestic content requirements were subsequently challenged under another regulatory regime.
The FIT programme offered 20- or 40-year power purchase agreements with the OPA, under which the generator was a guaranteed a fixed price per kilowatt hour for electricity delivered to the Ontario grid. Contracts were available for projects located in Ontario that generated electricity exclusively from renewable energy. Applicants also had to establish that the project could be connected to the electricity grid through a distribution system or transmission system. That proved to be a particular problem for Mesa Power.
In 2011, Mesa Power Group, a US corporation owned by Texas oil tycoon T Boone Pickens, filed a C$775 million claim against Canada relating to the province of Ontario’s policy of awarding power purchase agreements under the Ontario feed-in tariff programme for the supply renewable energy.
Mesa claimed that Canada adopted discriminatory measures, imposed minimum domestic content requirements and failed to provide Mesa with the minimum standard treatment, in violation of NAFTA’s investment provisions. In the end, the tribunal dismissed all of Mesa’s claims and ordered Mesa to bear the cost of the arbitration as well as a portion of Canada’s legal costs of nearly C$3 million.
Mesa argued that the reason it did not receive any FIT contracts was that the programme was mismanaged and Mesa was discriminated against when Ontario granted unwarranted preferences to two other applicants. Windstream really turned on the legitimacy of the moratorium issued by Ontario to defer all offshore wind generation and the conduct of the Ontario government following the announcement of that moratorium.
The OPA launched the FIT programme in October 2009. During the first round of contacts, it reviewed 337 applications and granted 184 contracts for a total of 2,500MW of capacity. The second round of contracts took place in February 2011. Forty FIT contracts for a total of 872MW were issued. The third round of contracting took place in July 2011, resulting in 14 contracts totalling 749MW.
Mesa Power filed six applications under the FIT programme but was unsuccessful in all three rounds of contracting. The problem was that all the MESA projects were located in Bruce County. To obtain a contract all applicants had to demonstrate that they had the right to connect to the transmission system. Mesa was unable to obtain transmission connection because of the transmission constraints in Bruce County.
Mesa argued that the failure to acquire transmission access was because of flaws in the contracting process and preferences granted to two other parties, namely Next ERA Energy (an affiliate of Florida Light and Power) and the Korean Consortium led by Samsung.
Mesa argued that this conduct amounted to a breach of Article 1105(1) of NAFTA.
Before the tribunal could determine if Canada had failed to grant Mesa Power fair and equitable treatment, the tribunal had to define that term. The panel relied on the often quoted standard set out in Waste Management:
the minimum standard of treatment of fair and equitable treatment is infringed by conduct attributable to the State and harmful to the claimant if the conduct is arbitrary, grossly unfair, unjust or idiosyncratic, is discriminatory and exposes the claimant to sectional or racial prejudice, or involves a lack of due process leading to an outcome which offends judicial propriety – as might be the case with a manifest failure of natural justice in judicial proceedings or a complete lack of transparency and candour in an administrative process. In applying this standard it is relevant that the treatment is in breach of representations made by the host State which were reasonably relied on by the claimant.
The tribunal in Mesa Power went on to state:
On this basis, the Tribunal considers that the following components can be said to form part of Article 1105: arbitrariness; ‘gross’ unfairness; discrimination; ‘complete’ lack of transparency and candor in an administrative process; lack of due process ‘leading to an outcome which offends judicial propriety’; and ‘manifest failure’ of natural justice in judicial proceedings. Further, the Tribunal shares the view held by a majority of NAFTA tribunals that the failure to respect an investor’s legitimate expectations in and of itself does not constitute a breach of Article 1105, but is an element to take into account when assessing whether other components of the standard are breached.
The tribunal rejected all three claims that Mesa made that Canada had breached the fair and equitable treatment provisions of Article 1105 of NAFTA.
The tribunal rejected the allegation that the OPA had mismanaged the programme and did not treat all applicants fairly, noting that the OPA had retained an independent monitor to administer the FIT programme.
The tribunal also discounted the charge that NextEra had met with government officials, noting that this was common practice in the industry and there was no evidence of any preference. NextEra was given access to transmission facilities in Bruce County at one point, but apparently Mesa was also offered the opportunity.
The most contentious part of the Mesa allegations related to the Korean Consortium agreement. Mesa had argued that the agreement between Ontario and the Korean Consortium
unfairly diminished the prospects for other investors including Mesa that were already participating in the renewable energy programme by setting aside transmission capacity for the Korean Consortium that was intended for FIT applicants.
Mesa also argued that Ontario was less than transparent in negotiating the agreement, and issued inaccurate and incomplete information. Canada responded that there was nothing manifestly arbitrary or unfair when a government enters into an investment agreement that grants advantages to an investor in exchange for investment commitments.
There were two points of dissent in Mesa made by the Honourable Charles N Brower. Canada had argued that its obligations under NAFTA Articles 1102 and 1106 did not apply because the investment under the FIT programme was procurement under Article 1108. The majority concluded that the FIT programme did constitute procurement and dismissed the claims under Article 1102. Judge Brower dissented from the finding that the FIT agreement constituted procurement.
Judge Brower did agree with the majority that any breach of Article 1105 should be defined by the test in Waste Management,which required a finding of gross unfairness, complete lack of transparency, and lack of due process leading to an outcome that offends judicial propriety. The majority, however, did not believe that the evidence supported that conclusion. In addition, the majority found that states should be given a high level of deference in deciding how to regulate their affairs. Judge Brower dissented from that finding, stating that Canada had breached Article 1105 by the grotesque preference given to the Korean Consortium:
The nub of what I see as Ontario’s, hence Canada’s, violation of Article 1105 is that it torpedoed the Feed-In Tariff (‘FIT’) program as offered at large, including in relation to Claimant’s Arran and TTD projects, to the extent of the 500 megawatts (‘MW’) committed to the Korean Consortium on 17 September 2010 in implementation of the Green Energy Investment Agreement . . . . Up until then Claimant’s projects, as well as all other FIT applicants, had been competing for capacity that had been 500 MW or greater. Moreover, – and this can only be characterized as grotesque – as it actually happened, the Korean Consortium was thereby enabled to acquire low-ranked FIT applicants in order to fill its allotted 500 MW, thereby jumping clear losers in the FIT Program over higher-ranked, but ultimately unsuccessful FIT applicants, due to the reduced available megawattage. This effectively stood the FIT Program on its head, turned it upside down. Thus the Government of Ontario acted arbitrarily, grossly unfairly, unjustly, idiosyncratically, discriminated against the FIT applicants and in favor of the Korean Consortium, and acted with a complete lack of transparency and candor.
Widespread contract cancellations
On 5 July 2018, the new Ontario government cancelled 758 solar and wind contracts, claiming that the savings would yield C$790 million in savings to Ontario taxpayers. Two of those contracts were wind contracts. The first was a 15MW wind project. The second was a 57MW project in Eastern Ontario. The rest of the contracts were smaller solar contracts, with the result that wind accounted for about 25 per cent of the cancellation capacity.
All of these contracts were contracts where the government had not issued a notice to proceed (NTP). That meant that on cancellation, the amount of compensation payable by the government could be calculated by the formulas set out in the contracts without additional penalties.
However, there was a third wind contract. This was the White Pines 18.5MW wind project. Unlike the other wind contracts, this was a FIT 1 contract that had already received its NTP. The only way this contract could be cancelled was to create special legislation designed to do that. This is exactly what the new government did when they enacted the White Pines Project Termination Act.
All of the Ontario wind contracts cancelled had one thing in common – they were strongly opposed by the community in which they were located. However, White Pines had a special feature. The NTP had been granted by the previous government during the writ period. The new government argued that this was exceptional and unauthorised. The standard practice was that, during the writ period, the existing government should not enter into new contracts or make significant regulatory decisions that could bind the conduct of a future government.
While there was a great deal of publicity regarding these cancellations, it is evident that they represent a small percentage of the capacity that the Independent Electricity System Operator (IESO) has contracted for under the FIT programme. Today, the total wind capacity contracted for by the IESO is 4,500MW. The cancelled wind only amounts to 29MW less than 1 per cent of the total. In the case of solar, the total megawatts contracted for by the IESO by the end of 2017 was 1,659MW. The cancelled solar was only 333MW or 20 per cent. The number of contracts was large but the volume was small.
The next question is what compensation are parties entitled to when the government cancels a long-term contract? There is no doubt that the legislature has the power to cancel contracts subject to constitutional limitations. In the case of renewable energy contracts, those contracts are clearly within the constitutional jurisdiction of the provincial government. A very helpful reporton this topic was recently prepared by Bruce Pardy of the Queens University faculty of law. It is worth reading.
These principles apply to actions in the local courts. However, where the projects are owned by foreigners, those investors may have rights under investment treaties with Canada. That is a different situation. We saw this in Windstream Energy, where the complaint was successful in a NAFTA arbitration held in Toronto and received an award of C$25 million. That claim resulted from the Province of Ontario’s decision to terminate the offshore wind programme. In the case of White Pines, the owner is German, not American, and would not qualify for NAFTA protection. However, there may be protection for that investor under the recently agreed-to CETA trade agreement with the European Union.However, the legislation Ontario enacted to deal with White Pines has enough flexibility to allow the province to strike the appropriate agreement with the White Pines project.
In Ontario, all FIT contracts contain a mutual ‘termination for convenience’ provision in Section 2.4. This can only be exercised before the IESO issues an NTP. Where the IESO exercises this right it is required to pay the supplier’s preconstruction development costs. Those must be substantiated by the supplier and are subject to the preconstruction liability limits contained in the contract. These limits are based on a fixed lump sum plus an amount per kilowatt of contract capacity.
Later, FIT contracts such as FIT 4 and FIT 5 and the large renewable procurement (LRP) contracts also have a pre-NTP termination right called a keystone development milestone. This right is also mutual. In addition, they have a post-NTP termination for convenience right, which the IESO calls an optional termination. The IESO, however, cannot exercise this right after the commercial operation date. Section 9.6 of the LRP contract contains a detailed formula to calculate the termination compensation. FIT 4 and FIT 5 contracts, which were launched after LRP, contain a similar formula. The one good thing that can be said about the Ontario FIT contracts is that they contain well-thought-out provisions for termination at different construction stages and detailed formulas to calculate the compensation. This is something that most European contracts missed.
The White Pines contract was a special case. White Pines was a FIT 1 contract. In those contracts there is no Section 2.4 provision. There was originally, but on 2 August 2011, just before the fall election of that year, the OPA was directed by the government to waive its Section 2.4 termination rights in those contracts. As a result, the government was forced to introduce special legislation called the White Pines Wind Project Termination Actto deal with this project.
That legislation terminated the FIT contract that had been awarded to White Pines. Section 5 of the Act also extinguished any cause of action White Pines might have against the Crown, current or former members of the Executive Council, or any current or former employee agent of the Crown. No proceeding under any statute may be brought against those persons, even if the proceeding was commenced before the Act comes into force.
In terms of compensation, the Act provides that no person is entitled to any compensation except that provided under Section 6 of the Act. Section 6 sets out the formula to determine compensation and provides that White Pines can only recover its expenses incurred to date to develop the project. No recovery is allowed for lost profits. The Act expenses cannot exceed fair market value. The Act also provides that any dispute under this legislation must be determined by arbitration under the Ontario Arbitration Act.
The new legislation allowed the Ontario government complete flexibility in determining a settlement, including the ability to pass further legislation establishing the maximum amounts payable or the method of determining that maximum amount.
The contracts established by the previous administration in Ontario had a number of deficiencies. First, in the early days the government placed no limitations on the total quantity of power to be purchased under the programme. The situation the province faces today is that it has committed to purchase power that it cannot use. The contracted supply far exceeds the demand.
There were only three solutions to this problem. First, the IESO could direct the suppliers to reduce the output from the contracted level. This happens regularly with respect to wind that blows at night when the power is not needed. Generally speaking, wind generators are only generating approximately 35 per cent of their capacity. However, the FIT contracts force the government to purchase nearly 100 per cent of the capacity. These are essentially take-or-pay contracts. This, in effect, increases the costs per MW to customers significantly. If you purchase 35 per cent but pay for 100 per cent, your cost per MW is three times what you thought it was going to be.
This lack of a capacity adjustment clause was a real problem. The IESO could either pay for power not transmitted or pay US customers to take the excess power off the grid. The IESO has also been forced to do this. Excess power has to be removed from the grid. That means selling the power at negative prices. In recent years, the cost of negative price sales had been significant.
The contracts also provided no adjustment for increased efficiency. The contract prices were set on the costs before the date the contracts were signed. However, the industry has encountered significant cost reductions in both wind and solar technology. These cost reductions fall directly to the supplier’s bottom line, increasing the contract rate of return significantly. If we assume that a fair rate of return is set by the Ontario Energy Board for Ontario electricity distributors twice a year, the excess profits on most FIT contracts are substantial.
The contract terms were criticised, but the real problem may have been the contracting process. The contracts were standard offer contracts awarded on a first come, first served basis. When the contract windows opened, the applications rolled in fast. Most were accepted.
The early FIT contracting process in Ontario also discouraged community involvement. The contracts required only basic feasibility evidence. Developers competed with each other for leases. This meant that they signed leases on a confidential basis without the community knowing. The rules also allowed developers to flip leases and contracts with few restrictions. It was the Wild West. Ultimately, greater community involvement was mandated, but in many cases it was too late.
A much more prudent process would have involved competitive bidding, as the province of Alberta recently chose to do. The prices that Alberta obtained in its most recent bid were a fraction of the Ontario prices. It is true that costs have fallen significantly since the first Ontario contracts were awarded, but the lack of a competitive process did promote excessive costs. The Alberta prices are half of the most recent Ontario contracts.
Some very reasoned analysis went into the solution. The new government decided to leave the FIT 1 contracts alone. It is true that this was where most of the capacity was – certainly in the case of wind, which was the biggest problem. But that was also where the greatest litigation risk was.
Many of the FIT 1 contracts were owned by Americans and cancellation could lead to a NAFTA claim. Given the experience in Windstream, that could be an expensive process with a costly result. The ability to deal with the FIT 1 contracts was also compromised by the former government’s decision before the most recent election to remove the Section 2.4 termination rights.
In theory, the Ontario government could have passed special legislation to deal with other FIT 1 contracts, as they did with White Pines. White Pines, however, was a special case. The NTP had been granted in the final days of the previous government. Most of the other contracts were long past the NTP stage in any event. Some are already connected to the grid and others were close. Investors had sunk large amounts of money into the projects. Henvey Inlet, for example, which is 300MW, had raised C$1 billion from foreign investors in early 2018.
Cancelling before NTP was entirely permissible under the contract, and the damages were set out in it. Investors understood that when they invested. In the end, the concern that the cancellations by the new government will compromise foreign investment in Ontario energy projects is likely overstated.
The right to regulate
Much of the analysis in NAFTA cases centres on the rights of the investor, the definitions of legitimate expectations and indirect expropriation. These issues were canvassed in the previous section. But what about the state’s right to regulate?
The state must have a right to regulate; it certainly has responsibilities to regulate. The
difference is that the scope of this right is greater in the case of domestic investors than for foreign investors protected by NAFTA.
One thing is clear: NAFTA states cannot discriminate against foreign investors. They must be treated the same as domestic investors. That means the law must be general in application and there must be a level playing field. Once legislation targets specific parties, there is a problem. That problem exists even in the case of domestic investors. It is also widely recognised that the new regulations and legislation cannot be arbitrary or developed without due process. That principle applies to domestic investors as well.
There is nothing wrong with states giving additional protections to foreign investors compared to domestic investors. That goes to the heart of investor–state treaties. The purpose of the treaty is to attract investment.
It is generally recognised that the states enjoy police powers to provide essential services necessary to protect the public interest. These would include matters relating to security, the environment and public health.
Few would object to states exercising this jurisdiction provided the states act in good faith, and do not discriminate or expropriate private property without fair compensation. The NAFTA decisions in Methanexand Chemtura seem to support this proposition.
In Chemtura, a US manufacturer of lindane, an agricultural insecticide moderately hazardous to human health and the environment, claimed a breach of NAFTA by Canada’s prohibition of its sale. The tribunal rejected the claim, stating:
Irrespective of the existence of a contractual deprivation, the Tribunal considers in any event that the measures challenged by the Claimant constituted a valid exercise of the Respondent’s police powers. As discussed in detail in connection with Article 1105 of NAFTA, the PMRA took measures within its mandate, in a non-discriminatory manner, motivated by the increasing awareness of the dangers presented by lindane for human health and the environment. A measure adopted under such circumstances is a valid exercise of the State’s police powers and, as a result, does not constitute an expropriation.
A state runs into problems under NAFTA where a specific promise is made to a specific investor, the investor relies on the promised undertakings as a condition of making the investment, and then the state rescinds the promise. However, to qualify for this rule, the promise must usually be made to a specific investor.
Legislation is always changing. Very few pieces of legislation have sunset clauses that declare when they end, and no legislation or set of regulations lasts forever. Laws necessarily change with changing circumstances.
These concepts are not unique to NAFTA. Set out below are a number of decisions under different treaties that set out these same principles.
In Continental Casualtythe tribunal stated:
It would be unconscionable for a country to promise not to change its legislation as time and needs change, or even more to tie its hands by such a kind of stipulation in case of crisis of any type or origin arose. Such an implication as to stability in the BIT’s Preamble would be contrary to an effective interpretation of the Treaty; reliance on such an implication by a foreign investor would be misplaced and, indeed, unreasonable.
Similarly in EDF v. Romaniathe tribunal held:
The idea that legitimate expectations, and therefore FET, imply the stability of the legal and business framework, may not be correct if stated in an overly-broad and unqualified formulation. The FET might mean the virtual freezing of the legal regulation of economic activities, in contrast with the State’s normal regulatory power and the evolutionary character of economic life. Except where specific promises or representation are made by the State to the investor, the latter may not rely on a bilateral investment treaty as a kind of insurance policy against the risk of any changes in the host State’s legal and economic framework. Such expectation would be neither legitimate nor reasonable.
In Total v. Argentinathe tribunal stated:
In the absence of some ‘promise’ by the host State or a specific provision in the bilateral investment treaty itself, the legal regime in force in the host country at the time of making the investment is not automatically subject to a ‘guarantee’ of stability merely because the host country entered into a bilateral investment treaty with the country of the foreign investor.
And in El Paso v. Argentinathe tribunal reminded us that:
Under a FET clause, a foreign investor can expect that the rules will not be changed without justification of an economic, social or other nature. Conversely, it is unthinkable that a State could make a general commitment to all foreign investors never to change its legislation whatever the circumstances and it would be unreasonable for an investor to rely on such a freeze.
The problem is that, ultimately, these things may come down to what is fair or reasonable. There is no bright-line but arbitrators will look for red flags; for example, giving undertakings that investors rely on and later rescinding them, obvious breaches of due process or situations where states claim that the new regulatory policies are for one purpose, such as the need for more scientific research, when that is not the real purpose. That situation has emerged in the renewable energy cases discussed in the concluding section of this chapter.
Deference to legislators
Deference is an important concept. In Canada and the United States courts routinely grant
deference to both arbitrators and regulators. In investor–state arbitrations, arbitrators grant deference to governments, particularly where those governments are carrying out a regulatory function where the public interest is the dominant test.
In Mesa Powerthe tribunal pointed to the deference that NAFTA Chapter 11 tribunals usually grant to governments when it comes to assessing how governments regulate and manage their affairs. The tribunal stated:
In reviewing this alleged breach, the Tribunal must bear in mind the deference which NAFTA Chapter 11 tribunals owe a state when it comes to assessing how to regulate and manage its affairs. This deference notably applies to the decision to enter into investment agreements. As noted by the S.D. Myers tribunal, ‘[w]hen interpreting and applying the “minimum standard”, a Chapter Eleven tribunal does not have an open-ended mandate to second-guess government decision-making.’ The tribunal in Bilcon, a case which the Claimant has cited with approval, also held that ‘[t]he imprudent exercise of discretion or even outright mistakes do not, as a rule, lead to a breach of the international minimum standard.’
In addition to the references in SD Myers and Bilcon pointed out by the Mesa Power tribunal, we can add the tribunal’s comments in Thunderbird at paragraph 127 that the state ‘has a wide discretion with respect to how it carries out such policies by regulation and administrative conduct.’
There are two subcategories of the deference principle when it comes to international arbitration. First, tribunals have taken the position that they should defer to scientific findings states make on a non-discriminatory and non-arbitrary basis in accordance with due process. The conflict between the rights of investors and states often arises in the context of environmental issues. A number of those cases have been referred to in this chapter. Environmental cases invariably turn on scientific evidence.
In Chemtura, the tribunal noted that ‘[i]t is not within the scope of its task to second-guess the correctness of the science-based decision-making of highly specialised national regulatory agencies.’This is identical to the principle that US and Canadian courts apply when they defer to government regulators.
The second subcategory of the deference principle is a long-standing international law principle called ‘police powers’. The principle is that certain state action is beyond compensation for expropriation under international law because states enjoy wide latitude to regulate within the realm of their police powers.
Police powers are often defined to include municipal planning, safety, health and environmental issues, as well as areas involving serious fines and penalties. In Chemtura the tribunal held that Canada’s regulations phasing out the use of lindane constituted a valid exercise of Canada’s police powers and did not constitute expropriation.In summary, the deference principle routinely used by NAFTA arbitrators is not unique. It parallels the deference courts use in deferring to regulators. Deference is particularly appropriate where the regulatory agency is a specialised one with particular expertise in dealing with complex evidence of a scientific nature. However, it goes without saying that both courts and arbitrators will wade into the fight if there is an abuse of process.
What about domestic investors?
Consider the cases involving the Ontario ban on wind generation. An American company, Windstream, obtained a C$25 million judgment from a NAFTA panel when Ontario cancelled the programme. Trillium Power, a Canadian company with the same complaint, was out of luck in the Ontario courts.The same thing happened in SkyPower. There the judge remarked: ‘While it may seem unfair when rules are changed in the middle of a game, but that is the nature of the game when one is dealing with government programs.’
Trillium Power Wind Corporation, a Toronto-based developer building offshore wind turbines in Lake Ontario, had applied to lease provincial land under Ontario’s wind power policy and had been granted applicant-of-record status by the Ministry of Natural Resources. That status gave Trillium three years to test the wind power. After that, the company could proceed with an environmental assessment and obtain authorisation to operate the wind farm.
Trillium subsequently notified the Ontario Ministry of Natural Resources that the company intended to close a C$26 million financing for the project. On the same day the government of Ontario issued a moratorium on offshore wind development, including by developers like Trillium that had applicant-of-record status. The government issued a press release stating that the projects were cancelled pending further scientific research.
Trillium brought a number of claims against the Ontario government seeking C$2 billion in damages. The claims included breach of contract, unjust enrichment, negligent misrepresentation, misfeasance in public office and intentional infliction of economic harm.
The province brought a motion to strike the Trillium statement of claim on the basis that it did not disclose a reasonable cause of action. The motion was successful. The motion judge found that the government decision to close the wind farms was a policy decision and therefore immune from suit.
The motion judge also found that the fact that Trillium had been granted applicant-of-record status did not amount to a contractual relationship between Trillium and the government. The motion judge concluded that the claim should be struck because it was plain and obvious that the claim could not succeed at trial.
Trillium appealed on two grounds: first, misfeasance in public office was a tenable claim as a matter of law; and second, the claim had been adequately pleaded. The Ontario Court of Appeal agreed. It was not clear that the claim of misfeasance in public office would necessarily fail. Moreover, Trillium had properly pleaded that the province’s actions were taken in bad faith for improper purpose. The Court also found that the government’s decision was made to harm Trillium specifically. While the Court of Appeal did agree with the motions judge that a government decision involving political factors was immune, there was an exception for irrational acts of bad faith.
The facts in this case were unique. It was clear that Trillium’s announcement disclosing new financing triggered the government action. And, as the court concluded, the government specifically targeted Trillium.
This is an important case for wind developers. Government contracting for wind is now common. And it is not unusual for governments to change these programmes. Nor is it unusual for developers to incur substantial costs in processing their applications. Successful claims against governments that cancel projects are rare but may increase.
This is the first time the tort of misfeasance in public office has found its way into the energy sector. The principle was not clearly defined until the House of Lords decision in Three Rivers District Council v Bank of England in 2000.The tort came to Canada in 1959 in Roncarelli v Duplessis but was rarely used until the Supreme Court of Canada decision in Odhavji Estate v. Woodhouse in 2003.
Two recent decisions in 2008, one by the Federal Courtand the other by the Ontario Court of Appeal, suggest the tort may be successful where a tort of negligence would fail. In addition, malice and reckless indifference are difficult concepts, making it hard to strike out these claims at the pleading stage.
In O’Dwyer, the Ontario Court of Appeal found that liability could exist where officials are ‘recklessly indifferent or wilfully blind as to the illegality of their actions and their potential to harm the plaintiff.’ This is a broad principle that places a real constraint on questionable government action. The Trillium Power case is still before the Canadian courts. A number of investor cases have also come before the Spanish courts. None of them have been successful, however, as summarised by Professor Carmen Otero.
To summarise, both the Supreme and the Constitutional Courts, in their respective spheres of action, have considered that cuts to the incentives do not entail any violation of the
constitutional principles of legal certainty, legitimate expectations, and the prohibition on retroactivity. They have ruled that cuts respond to a public interest duly justified by the legislator and, in particular, that the cuts constituted the public authority’s reaction to the renewable energies technology evolution and were required to fight the tariff deficit and guarantee sustainability of the electricity system. Therefore, the measures could not be considered an arbitrary use of public power.
Investors have been more successful in English courts, however. In Friends of the Earthinvestors challenged the restrictions the UK government made in the incentives under the FIT programme created to encourage solar energy.
The government reduced both the tariff term and the rate but in addition provided that the lower rate would be effective prior to the enactment of the new regulations. The plaintiffs attacked that provision on the ground that it was retroactive.
The High Court granted the challenge stating that the legislation had on its terms no retroactive intent and that without a specific provision the new regulation was invalid. The Court of Appeal upheld the decisionand the Supreme Court denied leave to hear any further appeal.
This is an important distinction between the UK case and the Spanish cases. Charanne did not involve any claim of retroactivity. There are, however, Spanish cases currently before arbitrators that do involve retroactivity. The result may be different in those cases.
Retroactivity is also an important concept in North America. Virtually all of the renewable energy companies are regulated by regulatory agencies. All prohibit retroactive rates. This is true in both Canadaand the United States. Domestic investors in North America will likely have a remedy if the incentive schemes are modified in a fashion that has retroactive effect without specific authorisation in the statute.
Over the past decade, governments around the world have increased their efforts to transition towards a low carbon economy. A major initiative in this effort has been the introduction of FIT contracts to promote renewable energy. Ten countries and five US states led this initiative. Ontario was the first in North America and invested more capital than any other jurisdiction, with the possible exception of Spain.
FITs were first developed in Europe starting with Germany in 2004 and followed by the Czech Republic in 2005, Italy in 2007, Spain in 2008 and the United Kingdom in 2010.
In North America, Ontario was the leader when it first introduced FITs in 2006 followed by a substantial revision in 2009 through the Green Energy Act.Ontario was followed by California in 2008, Vermont and Maine in 2009, and New York in 2012. The federal government of the United States relied mainly on tax credits, which proved to be a very effective tool without some of the liabilities of FITs.
The concept behind FITs was the same in all jurisdictions. They were long-term contracts for renewable energy at attractive prices. In some jurisdictions, the contracts guarded against future changes with price adjustment clauses or amendments to volume commitments. Some, such as Ontario, had few adjustments except for price increases.
In most jurisdictions, a common problem developed. Governments for different reasons changed the incentive programmes either by reducing the incentives or eliminating them entirely. Most countries discovered that this new renewable energy was very expensive power. The cost often exceeded what utilities could charge for it. In Spain, this ‘electricity tariff deficit’, as it came to be known, reached €26 billion. No estimate is made of the Ontario deficit but it was significant. And customers objected. It turned out that wind, in particular, was expensive power. It was often located in remote locations with significant transmission costs to bring it to market.
If we try to determine the general principles established by the European and Canadian cases it would be this: these decisions are about ‘incentive’ programmes. Government incentive programmes can create legitimate expectations on the part of investors.
Legitimate expectations are a key component of fair and equitable treatment, a concept that runs throughout most international investment treaties.
The general rule is that governments can introduce new legislation that changes incentive programmes, provided they do not target or discriminate against a specific investor, contravene a promise to a specific investor, or introduce retroactive measures. Some European cases also distinguish between radical changes and minor ones. And they usually point out that investors cannot expect no changes to legislation. There is, as we mention above, usually a ‘right to regulate’.
There are few bright lines in these decisions. Never before have we seen so many international arbitration decisions dealing with the same issue in such a short time frame.
The Achmea challenge
By the end of 2018, close to 100 arbitrations involving renewable energy disputes will have been registered. To date, decisions have been rendered in 15 cases. This process recently faced a new challenge.
On 6 March 2018, the Court of Justice of the European Union (CJEU) issued its judgment in Slovak Republic v. Achmea,concluding that the European Treaty or TFEU precluded a provision in a bilateral investment treaty between two member states of the European Union authorising investor–state arbitration.
Before the Achmea decision, the European Commission attempted to intervene in a number of arbitrations to voice concern with the growing use of arbitration provisions in intra-EU BITs. The Commission’s concern was based on the principle that members are required to use the judicial system established by the European Union and settling disputes through private arbitration would circumvent the jurisdiction of Europe’s highest court and prevent the uniform application of European law.
In those interventions the tribunals had rejected the Commission’s concerns and concluded that they had jurisdiction. However, following the European court decision in Achmea, the rubber hit the road.
The first decision dealing with this issue following Achmea was Masdar Solar, a claim against Spain relating to significant changes being made in its FITs relating to solar projects. Spain lost and paid the claimants €64 million because it had made very specific commitments to Masdar.
Spain raised Achmea as a defence in Masdar Solar. The tribunal responded that Achmea had no bearing on the case, stating that the decision cannot be applied to multilateral treaties such as the Energy Charter Treaty.
The Masdar Solar decision was made in May 2018. It was followed by the decision in Vattenfalla few months later. That case concerned a claim by the Swedish Vattenfall Group against Germany regarding the German decision to shut down the country’s nuclear power plants and replace them with green energy. The claim was that this violated certain provisions of the Energy Charter Treaty.
As in Masdar Solar, the tribunal said that Achmea related to bilateral investment pleasantries between EU member states and did not address multilateral pleasantries such as the Energy Charter Treaty. The tribunal noted that there was no indication that the signatories in the Energy Charter Treaty intended to carve out certain disputes from the dispute resolution clause in Article 26 of the treaty.
Of even greater scope is the more recent decision in the CD Holdingscase. Here the tribunal decided not to allow the Commission to intervene because an application had been made too late in the hearing.
More importantly, the tribunal noted that the arbitration in CD Holdings, which was against Hungary, differed significantly from Achmea, where the arbitration was seated in Germany and governed by German law. The real issue was that under Articles 53 and 54 of the ICSID Convention, Hungary was expressly bound by the award and no option of appeal exists outside the ICSID regime. The award is a binding obligation as if it was a final judgment of a court in Hungary.
The tribunal in CD Holdings noted that the Achmea decision contains no reference to the ICSID Convention nor supports an argument that by accession to the EU Hungary is no longer bound by the ICSID Convention. The tribunal also refused to find that accession to the EU amounted to withdrawal from the Convention.
In the end, Achmea may not be the giant killer we thought it was. It may not apply to multilateral treaties like the Energy Charted Treaty, which is the basis for many energy arbitrations. And, Achmea may not apply to any ICSID arbitrations.
 Gordon E Kaiser is an arbitrator at JAMS, Toronto and Washington, DC.
 Green Energy and Green Economy Act, 2009, SO 2009, c12, Sched A.
 Trillium Power Wind Corp v. Ontario, 2013 ONCA 6083; Capital Solar Power Corp v. Ontario Power Generation, 2015 ONSC 2116; Carhoun and Sons v. Canada, 2015 BCCA 163.
 Secretary of State for Energy and Climate Change v. Friends of the Earth et al  EWHC 3575.
 2013 ONCA 683, 117, OR (3d) 721; SkyPower v. Ministry of Energy,  OJ No. 4458 at para 84.
 Charanne B.V. and Construction Investments v. Spain, SCC Arb. No.062/2012.
 Mesa Power Group LLC v. Government of Canada, PCA Case No. 2012-17, 24 March 2016.
 Windstream Energy LLC v. Government of Canada, PCA Case No. 2013-22, 27 September 2016.
 Novenergia II – Energy & Environment v. The Kingdom of Spain, SCC.
 Masdar Solar & Wind v. Kingdom of Spain, ICSID Case No. ARB/14/1/. Award, 16 May 2018.
 Blusun SA Jean-Paul Lecorcier and Michael Stein v. Italy, Case No. ARB/14/3.
 Mesa Power Group LLC v. Government of Canada, PCA Case No. 2012-17, 24 March 2016; Windstream Energy LLC v. Government of Canada, PCA Case No. 2013-22, 27 September 2016.
 Windstream Energy LLC v. Government of Canada, PCA Case No. 2013-22, 27 September 2016.
 That requirement was successfully challenged by Japan and Europe in WTO cases reporting amendments to the programme. WTO, Canada – Measures relating to the Feed-In Tariff Program (WT/DS 426/AB/R).
 Waste Management Inc v. United Mexican States, ICSID No. ARB(AF)00/3, Award, 30 April 2004, at section 99.
 Mesa Power Group LLC v. Government of Canada, PCA Case No. 2012-17, 24 March 2016, at paragraph 502.
 See, for instance, Waste Management Inc v. United Mexican States (ICSID No. ARB(AF)00/3), Award, 30 April 2004 at section 96; Cargill, supra note 13 at section 296.
 Mesa Power Group LLC v. Government of Canada, PCA Case No. 2012-17, 24 March 2016. Concurring and dissenting opinion of Judge Charles N. Brower at paragraph 4.
 Bruce Pardy, ‘Fit to be Untied: How a new provincial government can unravel Feed-In Tariff electricity contracts’, Commentary, CCRE Commentary, April 2018, online: www.thinkingpower.ca/PDFs/Commentary/CCRE%20Commentary%20-%20FIT%20to%20be%20Untied%20by%20Bruce%20Pardy%20-%20April%202018.pdf.
 The Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada was signed 20 October 2016 but the Investment Court System (ICS) is still not in force.
 White Pines Wind Project Termination Act, 2018, SO 2018, c 10, schedule 2.
 ibid, s 5.
 ibid., s 6.
 Methanex Corp v. United States, Decision on Amici Curiae 15 January 2001; UPS v. Canada, Decision on Amici Curiae, 17 October 2001.
 Chemtura Corporation v. Canada, Award, (UNCITRAL, 2 August 2010).
 Id. at paragraph 266.
 Continental Casualty v. Argentine Republic, ICSID Case No. ARB/03/9, Award (5 September 2008) paragraph 258.
 EDF (Services) Limited v. Romania, ICSID Case No. ARB/05/13, Award (8 October 2009) paragraph 217.
 Total SA v. Argentine Republic, ICSID Case No. ARB/04/01, Decision on Liability (27 December 2010) paragraphs 128–30.
 El Paso Energy International Company v. Argentine Republic, ICSID Case No. ARB/03/15, Award (31 October 2011) paragraph 372.
 Moses H Cane Memorial Hospital v. Mercury Construction, 460 US 1(1983) at 24; Dell Computer Corp v. Union des consommateurs, 2007 SCC 34,  2 SCR 801; Ontario Hydro v. Dominion Mines Ltd, (1992 OJ 2848).
 Mclean v. British Columbia Securities Commission, 2013 SCC 67,  3 SCR 895; Chevron v. Natural Resource Def Council, 467 US 837; Walton v. Alberta Securities Commission, 2014 ABCA 273 at paragraph 17.
 Mesa Power Group LLC v. Government of Canada, PCA Case No. 2012-17, 24 March, 2016.
 Id. at paragraph 553 (footnote omitted).
 International Thunderbird Gaming Corp v. United Mexican States, at paragraph 127, Award, (UNCITRAL 26 January 2006).
 Cemtura Corp v. Canada, at paragraph 134, Award, (UNCITRAL 2 August 2010).
Mclean v. British Columbia Securities Commission, 2013 SCC 67,  3 SCR 895; Chevron v. Natural Resource Def Council,467 US 837; Walton v. Alberta Securities Commission, 2014 ABCA 273 at paragraph 17.
 Mclean v. British Columbia Securities Commission, 2013 SCC 67,  3 SCR 895; Chevron v. Natural Resource Def Council,467 US 837; Walton v. Alberta Securities Commission, 2014 ABCA 273 at paragraph 17.
 Cemtura Corp v. Canada, at paragraph 266, Award, (UNCITRAL 2 August 2010).
 2013 ONCA 683, 117, OR (3d) 721.
 SkyPower v. Ministry of Energy,  OJ No. 4458 at paragraph 84.
 Three Rivers District Council v Bank of England  2 WLR 1220 (HL).
 Roncarelli v. Duplessis,  SCR121.
 Odhavji Estate v. Woodhouse (2003) SCJ No. 74.
 McMaster v. The Queen 2009 FC 937.
 O’Dwyer v. Ontario Racing Commission (2008) 293 DLR (4th) 559 (Ont CA) at paragraph 42.
 Carmen Otero Garcia-Castrillon, ‘Spain and Investment Arbitration: The Renewable Energy Explosion’, November 2016, Centre for International Governance Innovation (CIGI).
 Id. at page 10.
 Secretary of State for Energy and Climate Change v. Friends of the Earth et al  EWHC 3575.
  EWCA 28.
 Northwestern Utilities Ltd. v. Edmonton, 1 SCR 684; Bell Canada v. Canada Radio Television and Telecommunications Commission,  SCJ No.68 at 708.
 Associated Gas Distributors v. FERC, 898 F2d 809 (DC Circuit.1990); San Diego Gas and Electric v. Sellers of Energy, 127 FERC 61,037 (2009).
 Green Energy and Green Economy Act, 2009, SO 2009, c 12, schedule A.
 Judgment of 6 March 2018, Slovak Republic v. Achmea BV, Case No. C-284/16, EU: C, 2018, 158.
 Vattenfall AB v. Germany, (ISCID Case No. ARB /12/12).
 UP and CD Holdings International v. Hungary, (ISCID Case No. ARB /13/35).