Case of the Day: Mesa Power Group v. Canada

The case of the day is Mesa Power Group, LLC v. Government of Canada (D.D.C. 2017). The underlying case was a NAFTA arbitration, which took place in Miami. I’ve previously covered some 1782 applications that arose out of it (here, here, and here). Here were the facts: Ontario launched a renewable energy program called the Feed-in Tariff Program. Mesa invested in renewable energy in Ontario with the hope of being awarded a contract under the program. But Ontario awarded the contract to another contractor, which was not participating in the program. Mesa believed Ontario had promised to award all renewable energy contracts through the program and thus that Ontario had not accorded it fair and equitable treatment as required under NAFTA.

With one arbitrator dissenting, the tribunal rejected Mesa’s argument and issued an award in favor of Canada. Mesa sought to vacate the award in Washington. The interesting issue was choice of law. Canada claimed that because the seat of the arbitration was Miami, the law of the Eleventh Circuit should govern. Mesa argued that the law of the DC Circuit should governed. This mattered because the Eleventh Circuit holds that the grounds in § 10 of the FAA for vacatur do not apply to international arbitral awards, and there is no “manifest disregard of law” doctrine. The court rejected Canada’s argument. There is one federal law, and the issues that arise in diversity jurisdiction cases (which take account of the fact that each state has its own law) don’t apply. This seems correct to me.

Although Canada lost the choice of law argument, it won on the merits. The court rejected the claim that the tribunal was guilty of manifest disregard of the law (assuming without deciding that the doctrine survives in DC).

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