By Elizabeth Whitsitt
May 11, 2010
A Notice of Intent forwarded to Canada earlier this year by US owner and operator of the Ambassador Bridge contends that the Canadian government has violated its obligations under Chapter 11.
Facilitating a significant amount of trade between the US and Canada, the Ambassador Bridge is an international toll bridge that connects the cities of Windsor, Ontario and Detroit, Michigan.
Michigan firm, Detroit International Bridge Company (DIBC) is the successor to the American Transit Company which acquired rights “to construct, maintain and operate a bridge…across the Detroit River…” in 1921. In addition, DIBC owns shares in the Canadian Transit Company (CTC), a company created by Canada’s federal parliament that owns that section of the Ambassador Bridge located on Canadian soil.
In its Notice of Intent, DIBC claims that legislation passed by Canada in 2007 deprives it of certain rights established by the Boundary Waters Treaty Act of 1909 and the Ambassador Bridge Treaty. According to DIBC, the latter treaty, made pursuant to Boundary Waters Treaty, was created by reciprocal legislation passed in the US and Canada and vested it with rights to construct, own and operate the Ambassador Bridge.
In DIBC’s view Canada’s recently enacted International Bridges and Tunnels Act (ITBA) interferes with those rights by giving the Canadian government authority over the construction, operation, and ownership of international bridges.
DIBC’s claim against the Canadian government comes in the wake of competing attempts by DIBC owner Manuel Moroun and the Canadian government to build new bridges in close proximity to the 81 year old Detroit River crossing.
According to reports, the Canadian government along with the Michigan Department of Transportation, US Federal Highway Administration and Ontario’s provincial transportation agency are leading the charge to construct a new state-funded bridge that would connect southwest Detroit with Windsor. While proponents of the new Detroit River International Crossing reportedly argue that the bridge is needed to create jobs, improve traffic flow and help guard against terrorist attacks by creating redundancy capacity, the proposal has been challenged by DIBC owner Mr. Moroun, among others.
For its part, Mr. Moroun’s company is reportedly committed to “twinning” the current Detroit River crossing; a project that would involve construction of a second span adjacent to the Ambassador Bridge.
With the prospect of increased competition for tolls and other revenue-generating business associated with these proposals, an onslaught of litigation between DIBC and the Canadian and US governments has recently ensued.
According to its Notice of Intent filed earlier this year, Canada has sought a declaration from an Ontario Superior Court regarding the application of Canada’s ITBA to DIBC and its Canadian counterpart, CTC.
Should the ITBA be interpreted and applied to the Ambassador Bridge, DIBC alleges that Canada will have violated its obligations to investors under NAFTA Articles 1102 (national treatment), 1105 (minimum standard of treatment) and 1110 (expropriation).
A press release issued by the company on April 30, 2010 confirms that since filing its Notice of Intent in January 2010, DIBC filed a claim of arbitration in accordance with NAFTA Article 1120 on March 23, 2010 and is seeking some US$ 3.5 billion.
The April 30th press release also reveals that DIBC “…is preparing to file a [second] claim under [NAFTA] against the Canadian government.” This second claim is reportedly related to Canada’s offer to provide some $550 million to the state of Michigan for a proposed new border crossing.
As noted by DIBC’s corporate counsel in the company’s press release, “[b]y offering to increase its financial participation in the [proposed] project and give Michigan $550 million, Canada is intentionally undermining a U.S. citizen’s right to own and operate a business in Canada.”
“DIBC to file $550 million NAFTA claim against Canada,” Ambassador Bridge/Detroit International Bridge Company Press Release (April 30, 2010).
“Bridge battle brought to boil,” By Tom Greenwood, The Detroit News (April 17, 2010).
“Ambassador Bridge owner Matty Moroun files suit against U.S. and Canadian government,” By Dave Battagello, The Windsor Star (March 25, 2010).
A copy of the Notice of Intent under Section B of Chapter 11 of NAFTA between Detroit International Bridge Company v. Government of Canada is available here: