Kenex Ltd. ("Kenex"), a Canadian company that manufactures, markets and distributes industrial products made from the cannabis plant, has submitted a notice of arbitration under the UNCITRAL rules.
Kenex seeks damages for alleged injuries resulting from the Drug Enforcement Administration's interpretation of the Controlled Substances Act as prohibiting the sale of products that cause THC to enter the human body. THC is the psychoactive ingredient in the cannabis plant and is a controlled substance. The Drug Enforcement Administration confirmed its interpretation in a series of rules published in the Federal Register in October 2001.
Kenex claims that DEA's actions violate the national treatment obligation under Article 1102; the most-favored-nation treatment obligation under Article 1103; the obligation to provide the better of national or most-favored-nation treatment under Article 1104; and, under Article 1105(1), the obligation to provide treatment in accordance with international law. Kenex seeks damages of $20 million.
The United States intends to defend this claim vigorously.
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