The Glamis regulatory takings claim and compensation under NAFTA

摘要

Chapter 11 of the North American Free Trade Agreement (NAFTA) provides an opportunity for mineral developers as foreign 'investors' to pursue compensation for a regulatory taking in arbitration proceedings. A Canadian company is currently pursuing the first such claim for a mineral property in the United States. There are important differences in the criteria to be satisfied to qualify for compensation under NAFTA and US domestic law. NAFTA allows developers to rely on customary international law to secure compensation and it may facilitate a stronger negotiating position with a government for compensation. Under NAFTA, the fair market value of the mineral property is the standard for compensation as in US domestic law. Regulatory takings claims under NAFTA afford several advantages for the mineral developer including a broad definition of investment, substantial uncertainty regarding the outcome of the alleged regulatory taking, no judicial review of a NAFTA tribunal decision on its merits, the unavailability of an injunction as a remedy and other substantive and procedural advantages.