printable banner

U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

NAFTA Tribunal Rejects Grand River Claim


Media Note
Washington, DC
January 15, 2011

Share

On January 12, 2011, a three-member NAFTA arbitration tribunal rejected a claim against the United States filed by Grand River Enterprises Six Nations, Ltd., a Canadian corporation, and Jerry Montour, Kenneth Hill and Arthur Montour Jr., members of Canadian First Nations, challenging certain legislative measures taken by various states related to the landmark 1998 Master Settlement Agreement (“MSA”) between multiple states and major U.S. tobacco companies. Claimants had sought as much as $664 million in damages. The Office of the Legal Adviser of the Department of State represented the United States in the case.

The Claimants submitted their claim to arbitration in 2004, alleging that certain legislative measures taken by states relating to the MSA caused them material harm and substantially impaired the value of their investment in violation of NAFTA investment protections. The Tribunal unanimously rejected the claim, and ruled in favor of the United States.

Background

The Grand River case concerns the Claimants’ distribution and sale of tobacco products in the United States. Claimants, a Canadian corporation and members of Canadian First Nations, alleged that various state legislative measures related to the MSA imposed discriminatory payment burdens, altered the regulatory framework under which they had made their investment, and infringed upon their rights as First Nations members, causing them material harm and substantially impairing the value of their investment.

The United States maintained that Grand River Enterprises Six Nations, Ltd., Jerry Montour and Kenneth Hill did not have an investment in the United States and did not qualify for NAFTA Chapter Eleven investment protections. The United States also maintained that the legislative measures were reasonable, were supported by the legitimate public policy goal of protecting the public health, and did not violate the NAFTA.

In an award dated January 12, 2011, the Tribunal rejected the claim in its entirety. The Tribunal held that it did not have jurisdiction over the claims of Grand River Enterprises Six Nations, Ltd., Jerry Montour and Kenneth Hill because these Claimants did not have an investment in the United States. With regard to the claims of Arthur Montour Jr., the Tribunal held that the legislative measures in question were not discriminatory, did not violate the minimum standard of treatment provision of the NAFTA, and did not constitute an expropriation of his investment.

The Department of State coordinated closely in the defense of this case with other federal agencies, as well as with key states and the National Association of Attorneys General.

The members of the Tribunal are Fali S. Nariman, James Anaya, and John R. Crook.

The full text of the award will be available on the State Department’s website at http://www.state.gov/s/l/c11935.htm once the parties make any required redactions of confidential information. Party submissions, amicus curiae submissions, hearing transcripts, and other arbitration documents in the Grand River case are also available on this website, subject to redactions of confidential information.

###



PRN: 2011/065



Back to Top
Sign-in

Do you already have an account on one of these sites? Click the logo to sign in and create your own customized State Department page. Want to learn more? Check out our FAQ!

OpenID is a service that allows you to sign in to many different websites using a single identity. Find out more about OpenID and how to get an OpenID-enabled account.