Following up on the post yesterday regarding U.S. government documents relating to the Loewen NAFTA case, turns out there was a lot of repetition in those documents. The main substantive issue was whether court rulings constitute "measures," and how the U.S. should approach this issue as a jurisdictional argument. To me, it seems clear and obvious that courts rulings are measures, but that was a different time, and investment arbitration is not WTO law, so maybe the debate made more sense back then.
I've plucked out a couple interesting passages from the second document:
Negotiating History (p. 17)
Although both sides point to the NAFTA's drafting history in support of their views, what remains of the negotiating history is unfortunately sparse and inconclusive.
Fear of Losing Case (p. 17)
None of the agencies thinks that we are in a strong position with respect to the merits of the case. Justice, in particular, believes that we face a serious possibility of·losing if the case is heard on the merits. Although State and USTR assert that we have credible answers to each of Loewen's charges, they concede that only Justice has comprehensively analyzed the merits. Justice points out that the Mississippi judgments were widely viewed in both Canada and the U.S. (including Mississippi) as a miscarriage of justice. Professors Laurence Tribe and Charles Fried of Harvard Law School, and Sir Robert Jennings, former President of the International Court of Justice, all submitted testimony that the judgments were a "travesty." Justice does not deny that we have some credible defenses, but it is very concerned that the magnitude of the punitive damages awarded and Loewen's alleged inability to appeal from the jury award could lead an international tribunal to conclude that even our highly regarded, constitutionally based judicial system failed in this case to satisfy the NAFTA's "minimum standard of treatment." With respect to the question of damages, all of the agencies agree that the tribunal is unlikely to assess all of the damages claimed by Loewen, but it is not unreasonable to expect an award of at least $50 million plus millions more in attorneys' fees and costs.
Dangers of Losing the Case (p.18)
Finally, Justice believes a Joss is likely to generate a great deal of political hostility toward the NAFTA, particularly if the NAFTA is construed to effect a waiver of sovereignty that would permit an international tribunal effectively to sit in review of decisions of United States courts at the election of foreign investors. Justice has noted that the case already has received significant media attention and fears that the possible headline ''NAFTA Panel Overturns Mississippi State Court Ruling, U.S. to Pay Millions" may threaten the continued existence of the NAFTA.
Clarity of NAFTA Provisions (p. 127)
State has previously advised us that the international standards of treatment incorporated in the NAFTA are largely untested and suffer from a severe lack of precision.
