Methanex Corp. v. United States
UNCITRAL (NAFTA Chapter 11 Arbitral Tribunal)
Partial Award (August 7, 2002)
- Written by Whitney Waldenberg, JD
Facts
Methanex Corporation (plaintiff), a Canadian manufacturer of methanol—an ingredient used for making methyl tert-butyl ether (MTBE), which is an additive for gasoline—supplied methanol to the American market. The government of California banned the use of MTBE as a gasoline additive because it was polluting the environment. Methanex claimed that California actually imposed the ban due to a political deal with a rival company that made ethanol, an alternative gasoline additive. Methanex commenced arbitration proceedings against the United States government (defendant), alleging a breach in the protections of foreign investors under Chapter 11 of the North American Free Trade Agreement (NAFTA) in favor of United States ethanol producers. The United States argued that (1) the tribunal was without jurisdiction because Methanex’s claims fell outside of Article 1101(1) of NAFTA, and (2) Methanex’s claims were inadmissible in that even if the facts were assumed to be true, the facts would not constitute a breach of NAFTA provisions.
Rule of Law
Issue
Holding and Reasoning (Veeder, J.)
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