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Apotex Inc. v. United States: Award on Jurisdiction and Admissibility (NAFTA Arb.)

Published online by Cambridge University Press:  20 January 2017

Ronald J. Bettauer
Ronald J. Bettauer*
Affiliation:
George Washington University Law School
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Extract

The North American Free Trade Agreement between Canada, Mexico, and the United States (NAFTA) entered into force on January 1, 1994. Chapter Eleven of NAFTA contains provisions governing investment protection and investor-state arbitration. In general, NAFTA provides investors of one of the parties protections for their investments in another NAFTA party, guaranteeing: treatment at least as good as that of host or third country investors (NAFTA articles 1102-1104); treatment in accordance with the minimum standards of customary international law (NAFTA article 1105); and compensation for expropriation (NAFTA article 1110). NAFTA article 1139 defines “investment” broadly but excludes contracts for the sale of goods or services. After meeting specified threshold requirements, such an investor has the right to international arbitration against the host state to vindicate these protections.

Type
International Legal Documents
Information
International Legal Materials , Volume 52 , Issue 4 , August 2013 , pp. 905 - 965
Copyright
Copyright © American Society of International Law 2013

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References

1 North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17, 1992, 32 I.L.M. 289 (1993)Google Scholar.

2 U.N. Conference on Trade and Dev. (UNCTAD), Recent Developments in Investor-State Dispute Settlement (ISDS) (2013), http://unctad.org/en/PublicationsLibrary/webdiaepcb 2013d3_en.pdf; see also UNCTAD, Full List of Bilateral Investment Agreements Concluded, June 1, 2013, http://tcc.export.gov/Trade_Agreements/Bilateral_Investment_Treaties/index.asp. An extensive body of literature addresses the issues raised in these arbitration proceedings. See, e.g., UNCTAD, Issues in International Investment Agreements—“ Pink Series” and its Sequels (2013), http://unctad.org/en/pages/DIAE/International%20Investment%20Agreements%20%28IIA%29/UNCTAD-Series-on-issues-oninternational-investment-agreements.aspx.

3 See U.S. Dep’t of state, cases filed against the united states of america (2013)Google Scholar, http://www.state.gov/s/l/c3741.htm. Three softwood lumber cases were eventually consolidated and, except for cost issues with respect to one of the claimants, settled. Three other cases in which a notice of arbitration was served were not pursued further. A new, restructured case has been brought by Apotex Holding Inc. and Apotex Inc. against the United States and is currently pending (ICSID Case. No. ARB(AF)/12/1). See U.S. dep’t of state, apotex holdings inc. and apotex inc. v. united states of america (2013)Google Scholar, http://www.state.gov/s/l/c50826.htm. See also International centre for settlement of investment disputes, search ICSID cases (2013)Google Scholar, https://icsid.worldbank.org/ICSID/FrontServlet?requestType_CasesRH&reqFrom_Main&actionVal_ViewAllCases (listing relevant ICSID awards).

4 See U.S. Dep’t of State, Apotex Inc. v. United States of America (2013)Google Scholar (listing the pleadings, orders, hearing transcripts and award in one case), http://www.state.gov/s/l/c27648.htm; U.S. Dep’t of State, Apotex Inc. v. United States of America (2013)Google Scholar (listing the pleadings, orders, hearing transcripts and award in the other case), http://www.state.gov/s/l/c31326.htm; see also Investment Treaty Arbitration, Apotex Inc. v. The Government of the United States of America, UNCITRAL (2013)Google Scholar, http://italaw.com/cases/documents/1807; Investment Treaty Arbitration, Apotex Inc. v. The Government of the United States of America, UNCITRAL (2013)Google Scholar, http://italaw.com/cases/documents/1689.

5 Since the Apotex claims were brought under the UNCITRAL Rules and were not subject to the ICSID Arbitration Rules or to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, the tribunal did not also have to address the often controversial issue of whether there was an “investment” for the purposes of article 25 of the Washington Convention. Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Mar. 18, 1965, 17 U.S.T. 1270, T.I.A.S. 6090, 575 U.N.T.S. 159.

6 Bayview Irrigation District v. Mexico, ICSID Case No. ARB(AF)/05/01, Award, ¶ 104 (June 19, 2007).

7 Grand River Enterprises Six Nations, LTD, et al. v. United States, Award, ¶ 5 (Jan. 12, 2011), http://www.state.gov/s/l/c11935.htm.

8 Canadian Cattlemen for Fair Trade v. the United States, Award, § K(1) (Jan. 28, 2008), http://www.state.gov/documents/organization/99954.pdf.

9 Mondev Int’l Ltd. v. United States, ICSID Case No. ARB(AF)/99/2, Award, ¶ 126 (Oct. 11, 2002); Azinian v. United Mexican States, ICSID Case No. ARB(AF)/97/2, ¶ 99, Award (Nov. 1, 1999); Waste Management Inc. v. United Mexican States, ICSID Case No. ARB(AF)/00/3, ¶ 129, Award (Apr. 30, 2004); The Loewen Group, Inc. and Raymond L. Loewen v. United States of America, ICSID Case No. ARB(AF)/98/3, ¶ 156, Award (June 26, 2003).

10 See Mondev Int’l Ltd., supra note 9, ¶ 29; Grand River, supra note 7, ¶¶ 78, 81.

11 See supra note 2 and accompanying text.

12 Teinver S.A. v. Argentina, ICSID Case No. ARB/09/1, ¶¶ 129, 135, Decision on Jurisdiction (Dec. 21, 2012).

13 Urbaser S.A. v. Argentina, ICSID Case No. ARB/07/26, ¶ 202, Decision on Jurisdiction (Dec. 19, 2012).

14 Abaclat v. Argentina, ICSID Case No. ARB/07/5, ¶¶ 583-84, Decision on Jurisdiction and Admissibility (Aug. 4, 2011).

15 Ambiente v. Argentina, ICSID Case No. ARB/08/9, ¶ 620, Decision on Jurisdiction and Admissibility (Feb. 8, 2013).

16 Murphy Exploration and Production Co. Int’l v. Ecuador, ICSID Case No. ARB/08/4, ¶ 157, Award on Jurisdiction (Dec. 15, 2010).

17 Kılıç İnşaat İthalat İhracat Sanayi ve Ticaret Anonim Şirketi v. Turkmenistan, ICSID Case No. ARB/10/1, ¶ 6.2.9, Award (July 2, 2013); Ömer Dede and Serdar Elhüseyni v. Romania, ICSID Case No. ARB/10/22, Award (Sep. 5, 2013),http://italaw.com/sites/default/files/case-documents/italaw5010.pdf.

18 ICS Inspection and Services v. Argentina, PCA Case No. 2010-9, Award on Jurisdiction (Feb. 10, 2012), http://italaw. com/sites/default/files/case-documents/ita0415.pdf.

19 By the end of 2012, there were more than 3,196 international investment agreements. See UNCTAD, Contributions to the World Investment Report (2013), http://unctad.org/en/Pages/DIAE/International%20Investment%20Agreements%20(IIA)/IIA-WIR.aspx. In addition to NAFTA, the United States has entered into the Dominican Republic-Central America-United States Free Trade Agreement (DRCAFTA), free trade agreements with twelve other countries and some 40 BITs. Office of the U.S. Trade Representative, Trade Agreements (2013)Google Scholar, http://www.ustr.gov/trade-agreements.

1 The MMA also amended Title 35 of the U.S. Code, which governs patents more generally, specifically 35 U.S.C. § 271 (“Section 271”).

2 Teva Pharms. Indus. v. Crawford , 410 F.3d 51, 54 (D.C. Cir. 2005) [R68]; see also H.R. Rep. No. 98-857 pt. 1 at 30 (Judiciary Committee), noting that the goal of the Hatch-Waxman Amendments was to “balance the need to stimulate innovation against the goal of furthering the public interest” [R43].

3 The other certification options are: paragraph I, where the applicant certifies that no patent information has been filed, and paragraph II, where the applicant certifies that the patent has expired.

4 See, e.g., Apotex Inc. v. FDA , 449 F.3d 1249 (D.C. Cir. 2006); David E. Korn, Erika Lietzan, Shaw, W. Scott, A New History and Discussion of 180-Day Exclusivity , 64 Food & Drug L. J. 335, 349-358 (2009)Google Scholar.

Citations to 21 U.S.C. § 355(j)(5)(B)(iv) refer to Hatch-Waxman as it existed prior to the passage of the MMA, which amended, among others, the exclusivity provisions of the statute. The changes to the 180-day exclusivity period that were implemented by the MMA were prospective only, and do not apply to either of the Sertraline or Pravastatin ANDAs, both of which were filed before 8 December 2003.

5 28 U.S.C. § 2201 provides:

“In a case of actual controversy within its jurisdiction, except with respect to Federal taxes . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.”

6 The provision, in full, is as follows:

“Where a person has filed an application described in paragraph (2) that includes a certification under subsection (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 355), and neither the owner of the patent that is the subject of the certification nor the holder of the approved application under subsection (b) of such section for the drug that is claimed by the patent or a use of which is claimed by the patent brought an action for infringement of such patent before the expiration of 45 days after the date on which the notice given under subsection (b)(3) or (j)(2)(B) of such section was received, the courts of the United States shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action brought by such person under section 2201 of title 28 for a declaratory judgment that such patent is invalid or not infringed.”

7 Witness Statement of Bernice Tao, para. 15 [C39].

8 See Apotex Inc. & Apotex Corp. v. Pfizer Inc. , 385 F. Supp. 2d 187, 190 (S.D.N.Y. 2005) [R16].

9 Apotex’s Statement of Claims, para. 45.

10 Apotex, Inc. v. Pfizer Inc ., 385 F. Supp. 2d 187, 192-94 (S.D.N.Y. 2005).

11 In particular, Apotex states the Supreme Court and Federal Circuit have both since acknowledged that the controlling test is the case or controversy standard under Article III of the Constitution, which the New York District Court refused to apply. Apotex cites, inter alia, MedImmune, Inc. v. Genentech, Inc. , 127 S.Ct. 764, 771 (2007) for the proposition that the reasonable apprehension test for subject matter jurisdiction is not and has never been the proper test.

12 Apotex, Inc. v. Pfizer Inc ., 159 F. App’x 1013, 2005 WL 3457408 (Fed. Cir. 12 Dec. 2005).

13 Apotex Inc. v. Pfizer, Inc., 127 S.Ct. 379 (2006).

14 Stipulation and Order, Apotex Inc. v. Bristol-Myers-Squibb Co. , No. 04-cv-2922 (S.D.N.Y. 23 July 2004).

15 28 June 2005 FDA letter from G. Buehler to W. Rakoczy [C24].

16 Teva Pharms. USA, Inc. v. FDA , 398 F. Supp. 2d 176, 191-92 (D.D.C. 2005).

17 Teva Pharms. USA, Inc. v. FDA , 404 F. Supp. 2d 243, 246 (D.D.C. 2005).

18 Teva Pharms USA, Inc. v. FDA , 441 F.3d 1, 5 (D.C. Cir. 2006).

19 11 April 2006 FDA letter from G. Buehler to T. McIntire [C25].

20 Apotex, Inc. v. FDA , No. Civ.A. 06-0627, 2006 WL 1030151, at *19 (D.D.C. 19 Apr. 2006).

21 Apotex, Inc. v. FDA , 449 F.3d 1249, 1254 (D.C. Cir. 2006).

22 Article 1101 has been described as the “gateway leading to the dispute resolution provisions of Chapter 11,” whose requirements limit the powers of a Chapter Eleven arbitral tribunal. See e.g., Methanex Corp. v. United States , NAFTA/UNCITRAL, First Partial Award, para. 106 (7 Aug. 2002); Bayview Irrigation District and others v. United Mexican States , ICSID Case No. ARB(AF)/05/1, Award on Jurisdiction, para. 85 (19 June 2007). For the sake of completeness, NAFTA Article 1101(1)(c) also provides for the application of Chapter Eleven to investments with respect to NAFTA Articles 1106 and 1114 (which are of no relevance here).

23 See similarly: Canadian Cattlemen for Fair Trade v. United States , NAFTA/UNCITRAL, Award on Jurisdiction, para. 126 (28 Jan. 2008); Grand River Enterprises Six Nations Ltd. v. United States , NAFTA/UNCITRAL, Award, para. 87 (12 Jan. 2011) (NAFTA Chapter Eleven is applicable “only to investors of one NAFTA Party who seek to make, are making, or have made an investment in another NAFTA Party: absent those conditions, both the substantive protection of Section A and the remedies provided in Section B of Chapter Eleven are unavailable to an investor”).

24 Citing e.g., North American Free Trade Agreement, Implementation Act, Statement of Administrative Action, H.R. Doc. No. 103-159, Vol. 1 Google Scholar, 103d Cong. 1st Sess., at 140 (“‘Investment’ is broadly defined in Article 1139, and both existing and future investments are covered”).

25 Grand River , Award, para. 82.

26 See e.g., Canadian Cattlemen , Award on Jurisdiction, para. 193 (the “remedy” for claimant’s “trade dispute” “lies not in the investor-state dispute resolution mechanism of Chapter Eleven, but in the state-to-state dispute resolution mechanism of Chapter 20 of the NAFTA”).

27 Further detail of the Respondent’s submissions is set out in the course of the Tribunal’s analysis below.

28 Further detail of Apotex’s submissions is set out in the course of the Tribunal’s analysis below.

29 See e.g., Phoenix Action, Ltd. v. Czech Republic , ICSID Case No. ARB/06/5, Award, paras. 58-64 (15 Apr. 2009) (summarising previous decisions, and concluding that “if jurisdiction rests on the existence of certain facts, they have to be proven [rather than merely established prima facie] at the jurisdictional phase”).

30 Rejoinder, para. 6.

31 Dun & Bradstreet Report on Apotex Inc. (14 April 2011) at 7-8 [R50]; GlobalData – History, Apotex, Inc. (3 Jan. 2011) [R52].

32 Dun & Bradstreet Report on Apotex Inc. (14 April 2011) at 8 [R50]; GlobalData – History, Apotex, Inc. (3 Jan. 2011) [R52].

33 Counter-Memorial, para. 50 & fn. 56 (citing Witness Statement of Bernice Tao, paras. 14, 25 (1 Aug. 2011) [C39]).

34 http://www.apotex.com/global/about/default.asp - [R46].

35 [R47].

36 GlobalData – Business Description, Apotex, Inc. (3 Jan. 2001) [R53].

37 ANDA – Sertraline (27 Oct. 2003) at: 4335 (description of manufacturing facility). See also id. at 0003 (Form FDA 356h): “TorPharm [Apotex Inc.’s former name] for the finished product) [R44].

38 ANDA – Sertraline (27 Oct. 2003) at: 0001 (Form FDA 356h); 5597 (letter designating authorised representative) [R44].

39 ANDA – Sertraline (27 Oct. 2003) at: 0113 (distributor) [R44].

40 ANDA – Sertraline (27 Oct. 2003) at 0154-55 (example of proposed container label) [R44].

41 Apotex’s previous name.

42 ANDA – Pravastatin (21 Dec. 2001) at 5370, and at p. 0003 (FDA Form 356h) noting that “TorPharm [i.e. Apotex] for the finished product R45].

43 ANDA – Pravastatin (21 Dec. 2001) at 0001 (FDA Form 356h); 6803 (letter designating authorized representative) [R45].

44 ANDA – Pravastatin (21 Dec. 2001) at 0100 (distributor) [R45].

45 ANDA – Pravastatin (21 Dec. 21) at 0117-18 (example of proposed container label) [R45].

46 Apotex’s previous name.

47 See Declaration of Dr. Bernard C. Sherman, para. 6, Apotex Inc. v. FDA , Case No. 1:06-cv-00627 (JDB) (D.D.C. 14 Apr. 2006) (Dkt. No. 17-4) (identifying a US$100 million investment in a fermentation facility for the development and production of pravastatin) [R58].

48 21 C.F.R. § 211 et seq. [C43].

49 Id. at §§ 211.80 – 211.188.

50 Id. at §§ 211.180 – 211.198.

51 Id. at §§ 211.42 – 211.72.

52 Witness Statement of Bernice Tao, paras. 9, 10 [C39]; FDA, Compliance Program Guidance Manual, Ch. 46 New Drug Evaluation § 2.1 (Prog. 7346.832) [C46].

53 Witness Statement of Bernice Tao, para. 6 [C39].

54 Witness Statement of Shashank Upadhye, Esq. para. 8 [C40].

55 Witness Statement of Bernice Tao, paras. 16, 26 [C39].

56 Id. at paras. 17, 27.

57 Id. at paras. 18, 28.

58 Id. at paras. 19, 29.

59 E.g. Counter-Memorial, para. 44.

60 Witness Statement of Shashank Upadhye, Esq., para. 10 [C40].

61 Witness Statement of Bernice Tao, paras. 11-12 [C39]; Witness Statement of Shashank Upadhye, Esq., paras. 6-19 [C40].

62 Grand River , Award, para. 88, citing Bayview , Award on Jurisdiction, paras. 98-99.

63 SGS Société Générale de Surveillance S.A. v. Republic of Philippines , ICSID Case No. ARB/02/6, Decision of the Tribunal on Objections to Jurisdiction, para. 101 (29 Jan. 2004).

64 GlobalData – Business Description, Apotex, Inc. (3 Jan. 2001) [R53] (emphasis added).

65 Statement of Claims, paras. 62, 111.

66 Also: [R113].

67 Counter-Memorial, para. 39, fn. 37 (citing Grand River , Award, para. 88).

68 Grand River , Award, para. 88 (citing with approval Bayview , Award, paras. 98-99).

69 Bayview , Award, para. 103.

70 Grand River , Award, para. 87. See similarly paras. 5-6, where the tribunal held that it did “. . . not have jurisdiction over the claims of Kenneth Hill, Jerry Montour and Grand River, because they did not have an investment in the United States,” but that it did “. . . have jurisdiction over Arthur Montour’s claim,” because “he created a substantial business in the United States, importing cigarettes manufactured by Grand River and distributing them . . . in the United States”).

71 Grand River, Award, para. 115. It may be recalled that Grand River claimed to have spent approximately US$ 29 million dollars complying with U.S. statutory and regulatory requirements for the purposes of marketing its generic cigarettes in the United States.

72 Grand River , Award, para. 115.

73 21 C.F.R. § 314.72(a).

74 Hence the MMA requires that certain agreements between two ANDA applicants, or between ANDA applicants and brand name drug manufacturers, regarding an ANDA be submitted to the Federal Trade Commission and the United States Assistant Attorney General (MMA § 1112).

75 Citing Black’s Law Dictionary 1232, “property” (9th ed. 2009). According to Apotex, whether an ANDA, and the data and information contained therein, is considered tangible or intangible property makes no difference, since the United States Supreme Court has stated that the intangible nature of certain business information does not make it any less “property” (citing McNally v. United States, 483 U.S. 350, 356 (1987)).

76 Citing 18 U.S.C. § 1905; 21 U.S.C. § 331(j); 21 C.F.R. § 314.430.

77 Witness Statement of Shashank Upadhye, Esq., paras. 6-9 [C40].

78 The Tribunal accepts Apotex’s submission that U.S. law is informative in defining “property”, because it is the law of the host State. See e.g., Rosalyn Higgins, The Taking of Property by the State: Recent Developments in International Law, 176 Recueil des Cours 263, 270 (1982) (for a definition of “property . . . [w]e necessarily draw on municipal law sources and on general principles of law”); Glamis Gold Ltd. v. United States , NAFTA/UNCITRAL, Award, para. 37 (8 June 2009), examining U.S. law to determine whether an “unpatented mining claim” constituted “property”.

79 21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA) [R3]; 21 C.F.R § 314.107(b) [R89].

80 21 C.F.R. § 314.107(b)(3)(v) [R89].

81 Ranbaxy Labs. Ltd. v. FDA , 307 F. Supp. 2d 15, 19, 21 (D.D.C. 2004) [R114].

82 FDA Tentative Approval for Sertraline Hydrochloride Tablets (25, 50, and 100 mgs) (27 Sept. 2006) [R96]; FDA Tentative Approval for Pravastatin Sodium Tablets (10, 20, and 40 mgs) (30 Sept. 2003) [R98]; FDA Tentative Approval for Pravastatin Sodium Tablets (10, 20, 40, and 80 mgs) (25 Apr. 2006) [R99]; FDA Final Approval for Pravastatin Sodium Tablets (10, 20, and 40 mgs) and Tentative Approval for Pravastatin Sodium Tablets (80 mg) (23 Oct. 2006) [R100].

83 Pre-Tentative Approval FDA Deficiency Letters for Sertraline Tablets (25, 50, and 100 mgs) dated 9 Apr. 2004 [R102]; 26 Nov. 2004 [R103]; 23 Aug. 2005 [R104]; 7 Aug. 2006 [R105]; Post-Tentative Approval Letter for Sertraline Tablets (25, 50, and 100 mgs) from Apotex Inc. to FDA (1 Dec. 2006) [R106]; Pre-Tentative Approval FDA Deficiency Letters for Pravastatin Sodium Tablets (10, 20, and 40 mgs), dated 9 July 2002) [R107]; 7 Nov. 2002 [R108]; Post-Tentative Approval FDA Deficiency Letter for Pravastatin Sodium Tablets (10, 20, 40, and 80 mgs) 27 Oct. 2004 [R109].

84 Sertraline Notice of Arbitration, paras. 55-56.

85 FDA Tentative Approval for Sertraline Hydrochloride Tablets (25, 50, and 100 mgs) dated 27 Sept. 2006 [R96]; FDA Final Approval for Sertraline Hydrochloride Tablets (25, 50, and 100 mgs) dated 6 Feb. 2007 [R97].

86 Pravastatin Notice of Arbitration, para. 31.

87 FDA Tentative Approval for Pravastatin Sodium Tablets (10, 20, and 40 mgs) dated 30 Sept. 2003 [R98]; FDA Tentative Approval for Pravastatin Sodium Tablets (10, 20, 40, and 80 mgs) dated 25 Apr. 2006 [R99]; FDA Final Approval for Pravastatin Sodium Tablets (10, 20, and 40 mgs) and Tentative Approval for Pravastatin Sodium Tablets (80 mg) dated 23 Oct. 2006 [R100]; FDA Final Approval for Pravastatin Sodium Tablets (80 mg) dated 28 Dec. 2007 [R101].

88 Transcript, Day 1, page 223.

89 E.g. Counter-Memorial, para. 37.

90 E.g. Counter-Memorial, para. 37.

91 Counter-Memorial, para. 38.

92 Counter-Memorial, para. 37.

93 Counter-Memorial, paras. 48-62.

94 Witness Statement of Bernice Tao, paras. 14, 25 [C39].

95 Witness Statement of Bernice Tao, paras. 23, 32 [C39].

96 Pravastatin ANDA § 8(2)(d) at 5262-63 [C55].

97 Witness Statement of Bernice Tao, para. 31 [C39].

98 Sertraline ANDA § 8(2)(d) at 4222-23 [C54].

99 Witness Statement of Bernice Tao, para. 21 [C39].

100 21 C.F.R. § 314.95(c)(7) [C45].

101 Witness Statement of Shashank Upadhye, Esq. paras. 13, 18 [C40].

102 Id. at paras. 14, 19.

103 SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan , ICSID Case No. ARB/01/13, Decision of the Tribunal on Objections to Jurisdiction (6 Aug. 2003).

104 Respondent’s Reply Memorial on Jurisdiction, dated 17 Oct. 2011, para. 35.

105 Rejoinder Memorial On Respondent’s Reply On Objections To Jurisdiction, dated 16 Dec. 2011, para. 33.

106 Grand River , Award, para. 85 (“The other distributor—Tobaccoville—is an independent U.S. corporation that purchases Grand River’s cigarettes and distributes them off reservation under the terms of a contract with Grand River. It is a U.S. owned and controlled entity. It is not, and could not be, claimed as part of the Claimants’ investment”).

107 SGS v. Pakistan , Decision, paras. 137, 140 (expenditures incurred in establishing and operating a liaison office in the host State constituted an investment); SGS v. Philippines , Decision, paras. 101, 103 (expenditures incurred in establishing and operating “a substantial office, employing a significant number of people,” in the host State constituted an investment).

108 Counter-Memorial, para. 50. Apotex did suggest at one point in its written submissions that its relationship with its U.S. affiliate, agent and distributor (Apotex Corp.) also independently qualified as “an interest in an enterprise that entitles the owner to share in income or profits of the enterprise” for the purposes of NAFTA Art 1139(e), and so qualified as an “investment”. This point, however, was neither developed in writing, nor mentioned in oral submissions, and the Tribunal is unpersuaded by it. There was no evidence that Apotex Corp was an “investment” of Apotex, or that Apotex had an interest in it, such as to satisfy NAFTA Chapter Eleven.

109 Bayview , Award, para. 104.

110 Grand River , Award, para. 5.

111 Further detail of the Respondent’s submissions is set out in the course of the Tribunal’s analysis below.

112 Further detail of Apotex’s submissions is set out in the course of the Tribunal’s analysis in the following section.

113 This is an assumption that has been challenged by some commentators. See e.g., McLachlan, Shore & Weiniger, , International Investment Arbitration (OUP 2007)Google Scholar, at paras. 7.87 - 7.98, who criticise the reasoning in Loewen , and argue that the customary international law rule on the exhaustion of local remedies has no role to play in the different / hybrid context of investor-State arbitration. Given both Parties’ approach in this case, and both Parties’ heavy reliance on Loewen (see below), this wider debate was not engaged here.

114 Transcript, Day 1, pages 9-14.

115 See e.g., Crawford, Pellet & Olleson, (Eds) The Law of International Responsibility (OUP 2013), at pp.1066-7 Google Scholar.

116 Transcript, Day 2, pages 322-325.

117 Teva Pharms. USA, Inc. v. FDA , 441 F.3d 1, 5 (D.C. Cir. 2006) [R29] (quoting PDK Labs., Inc. v. DEA , 362 F.3d 786, 797-98 (D.C. Cir. 2004)).

118 Complaint, Apotex Inc. v. FDA , No. Civ. A.06-0627 (D.D.C. 5 Apr. 2006) (Dkt. No. 1) [R56].

119 Motion for Temporary Restraining Order and/or Preliminary Injunction, Apotex Inc. v. FDA , No. Civ. A.06-0627 (D.D.C. 14 Apr. 2006) (Dkt. No. 17) [R57].

120 Apotex Inc. v. FDA , 2006 WL 1030151,*1, *19 (19 Apr. 2006) [R11].

121 Order, Apotex Inc. v. FDA , No. Civ. A.06-0627 (D.D.C. 20 Apr. 2006) (Dkt. No. 33) [R59].

122 Notice of Appeal and Emergency Motion, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 19 Apr. 2006) (Dkt. Nos. 963396-1 and 963398-1) [R60][R61].

123 Combined Opposition and Cross-Motion, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 20 Apr. 2006) (Dkt. Nos. 963590-1 and 963950-2) [R62].

124 Order, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 20 Apr. 2006) (Dkt. No. 963810) [R63].

125 Order, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 24 Apr. 2006) (Dkt. No. 964341) [R64].

126 Motion of Plaintiff-Appellant Apotex Inc. to Expedite Consideration of this Appeal, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 18 May 2006) (Dkt. No. 969469) [R65].

127 Apotex Inc. v. FDA , 449 F.3d 1249, 1253-54 (D.C. Cir. 6 June 2006) [R13]; Order, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 6 June 2006) (Dkt. No. 971806) [R66].

128 Petition for Rehearing en banc of Plaintiff-Appellant Apotex Inc., Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 21 July 2006) (Dkt. No. 982546-1) [R14]; Per Curiam Order, en banc, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 17 Aug. 2006) (Dkt. No. 986687) [R15].

129 Stipulation of Dismissal at 2, Apotex Inc. v. FDA , No. Civ. A.06-0627 (D.D.C. 3 Oct. 2006) (Dkt. No. 42) [R12].

130 Drugs@FDA, Teva ANDA No. 076056 (pravastatin sodium) [C56].

131 Apotex’s pravastatin ANDA was in fact approved by the FDA on 23 October 2006, as per Drugs@FDA, Apotex ANDA No. 076341 (pravastatin sodium) [C57].

132 According to the U.S. Supreme Court’s website, as cited by Apotex, “The Court receives approximately 10,000 petitions for a writ of certiorari each year. The Court grants and hears oral argument in about 75-80 cases.” Supreme Court of the United States, Frequently Asked Questions, taken from http://www.supremecourt.gov/faq.aspx [C58]. Further, Apotex cites Aaron-Andrew, P. Bruhl, The Supreme Court’s Controversial GVRS – And An Alternative , 107 Mich. L. Rev. 711, 745 (Mar. 2009)Google Scholar [C59]: “[t]he average time between a grant of certiorari and the Supreme Court’s decision is on the order of nine months, depending on the time of year.”

133 Sup. Ct. R. 15.3, 15.5 [C49].

134 Sup. Ct. R. 15.6 [C49].

135 Mondev Int’l Ltd. v. United States, NAFTA/ICSID Case No. ARB(AF)/99/2, Award (11 Oct. 2002).

136 Azinian v. United Mexican States , NAFTA/ICSID Case No. ARB(AF)/97/2, Award (1 Nov. 1999).

137 Waste Management Inc. v. United Mexican States , NAFTA/ICSID Case No. ARB(AF)/00/3, Award (30 Apr. 2004).

138 Transcript, Day 1, pages 162-3.

139 There is a live issue in the context of NAFTA as to whether the “finality” rule, or the requirement that local judicial remedies be exhausted, applies to any claim arising out of a judicial act, or merely “denial of justice” claims (or claims within the category of FET). This issue, however, was not pursued by the Parties in this case. Instead, both Parties relied upon the analysis in The Loewen Group, Inc. and Raymond L. Loewen v. United States of America, ICSID Case No. ARB(AF)/98/3, Award (26 June 2003), in which the obligation to exhaust local remedies in a case in which the alleged violation of international law is founded upon a judicial act was applied to claims under NAFTA Articles 1102 and 1110 as well as Article 1105 (see Loewen, Award, para. 165, by reference, inter alia, to The Finnish Ships Arbitration Award , 3 R. INT’L ARB. AWARDS 1480, 1495, 1503-05 (9 May 1934) and Nielsen v. Denmark [1958-1959] Y.B. EUR. COMM’N H.R. 412 at 436, 438, 440, 444).

140 Loewen , Award, para. 156. The same basic principle has a long and broader heritage. See e.g., Edwin M. Borchard, The Diplomatic Protection of Citizens Abroad 198 (1915) (“It is a fundamental principle that [with respect to acts of the judiciary] . . . only the highest court to which a case is appealable may be considered an authority involving the responsibility of the state.”); League of Nations Publications, Bases of Discussion, Vol. III Responsibility of States 41-51 (1920)Google Scholar (“It is not disputed that the courts are able to involve the State in responsibility, but the judicial decision with which it is confronted must be final and without appeal.”)

141 Counter-Memorial on Jurisdiction, 1 Aug. 2011, paras. 71-74.

142 Citing: NAFTA Art. 1101 (“This Chapter applies to measures adopted and maintained by a Party . . .”); and Loewen, Award, paras. 142-57 (26 June 2003) (“NAFTA Tribunal Award agreeing with the Respondent United States’ position that a finality requirement exists under NAFTA prior to an action being attributable to the state for which it bears responsibility”).

143 Citing: John Bassett Moore, Jennings, Laughland & Co. v. Mexico , Case No. 374, in 3 History & Digest of The Int’l Arbs. to Which The U.S. Has Been a Party 3135, 3136 (1898) [C64].

144 Citing Loewen , Award, para. 143.

145 Citing Loewen , Award, para. 154 (emphasis added by Apotex).

146 Citing Amerasinghe, C.F., Local Remedies in Int’l Law 3-4 (2nd Ed. 2004); Interhandel Case (Switz. v. U.S.), 1959 I.C.J. 6, 27 Google Scholar (21 Mar. 1959).

147 Citing Loewen , Award, para. 156.

148 Per Amerasinghe, C.F., Local Remedies in International Law 206 (2nd. ed. 2004)CrossRefGoogle Scholar.

149 It may be noted that of various formulations, the ILC, in Art 15 of its Draft Articles on Diplomatic Protection, did not adopt the stringent language of the “obvious futility” test, and instead settled upon: “no reasonable possibility of an effective redress” – but this was still described as imposing a heavy burden on claimants (see ILC Commentary to art 15, para. 3). This, of course, was in the context of the general principle as to exhaustion of local remedies in customary international law, as opposed to the more specific rule regarding judicial acts and “finality” in issue here.

150 Per Amerasinghe, C.F., Local Remedies in International Law 206 (2nd. ed. 2004)CrossRefGoogle Scholar.

151 Borchard, E., The Diplomatic Protection of Citizens Abroad 824 (1916)Google Scholar.

152 Finnish Ships Arbitration Award ( Finland v. U.K. ), R. Int’l Arb. Awards 1480, 1495, 1503-5 (9 May 1934), (quoting Professor Borchard, at 823).

153 Robert E. Brown Case ( U.S. v. U.K. ), R. Int’l Arb. Awards 120, 129 (23 Nov. 1923).

154 28 U.S.C. § 1254 provides: “Cases in the courts of appeal may be reviewed by the Supreme Court by the following methods: (1) By writ of certiorari granted upon the petition of any party to any civil or criminal case before or after rendition of judgment or decree.”

155 Counter-Memorial, para. 94.

156 Norwegian Loans (France v. Norway) , 1957 I.C.J. 9, 39, Separate Opinion of Judge Lauterpacht.

157 Counter-Memorial, para. 94.

158 Federal Practice & Procedure § 4036 (2011) (stating that, with regard to 28 U.S.C. § 1254(1), “[e]ven more dramatic illustration of the lack of technical restrictions is provided by contrasting certiorari to the courts of appeals with certiorari to state courts. The greatest opportunity for imposing technicalistic difficulties is presented by the statutory requirement that the case be “in” the court of appeals, but no genuine obstacle has in fact resulted. Beyond that starting point, there is no requirement that there be a ‘final’ decision; once a case has come to be in a court of appeals, the Supreme Court may grant certiorari to review interlocutory decisions or procedural rulings, and may even grant review before the court of appeals has taken any action at all.”) (Emphasis added) [R90].

159 Rules 22 and 23 of the Rules of the Supreme Court provide that the Court can issue stays, for example, to maintain the status quo. U.S. Sup. Ct. R. 22, 23 (2006) [R91].

160 Counter-Memorial, para. 91.

161 Id.

162 Motion of Plaintiff-Appellant Apotex, Inc. to Expedite Consideration of this Appeal, Apotex, Inc. v. FDA , No. 06-5105 (D.C. Cir. 18 May 2006) [R65].

163 Id. at 1.

164 Petition for Rehearing en banc of Plaintiff-Appellant Apotex Inc., Apotex, Inc. v. FDA , No. 06-5105 (D.C. Cir. 21 July 2006) [R14].

165 D.C. Cir. R. 35(a) (2006) (“In all cases in which the United States or an agency or officer thereof is a party, the time within which any party may seek panel rehearing or rehearing en banc is 45 days after entry of judgment or other form of decision.”) [R92].

166 Ambatielos Case ( Greece v. U.K. ), 12 R. Int’l Arb. Awards 83 (6 Mar. 1956).

167 See Apotex Inc. v. FDA , No. 06-627, Text-only Order (D.D.C. 20 Sept. 2006) [C52].

168 Id. at Dkt. No. 42, Stipulation of Dismissal (D.D.C. 3 Oct. 2006).

169 Apotex cites Local Civil Rule 7 of the United States District Court for the District of Columbia (as in effect in 2006), by which a party opposing a motion had 11 days to file an opposition brief, and Apotex would then have had five days (excluding weekends) to file a reply [C50] & [C51]; Fed. R. Civ. P. 6 (2008) [C47].

170 Counter-Memorial, para. 95.

171 28 U.S.C. § 1657(a) (“Notwithstanding any other provision of law, each court of the United States shall determine the order in which civil actions are heard and determined, except that the court shall expedite the consideration of any action brought under chapter 153 or section 1826 of this title, any action for temporary or preliminary injunctive relief, or any other action if good cause therefor is shown. For purposes of this subsection, ‘good cause’ is shown if a right under the Constitution of the United States or a Federal Statute . . . would be maintained in a factual context that indicates that a request for expedited consideration has merit.”) As the Respondent notes, under the Local Civil Rules of the D.C. District Court, Rule 16.1(a) permits the judge assigned to the case to determine the schedule accordingly [R94].

172 Stipulation of Dismissal, at 2, Apotex Inc. v. FDA , No. Civ. A.06-0627 (D.D.C. 3 Oct. 2006) [R12].

173 Hence, Apotex’s petition for rehearing en banc made clear that “the public ha[d] no access to a generic 80mg pravastatin product” at that time: Petition for Rehearing en banc of Plaintiff-Appellant Apotex Inc. at 15, Apotex Inc. v. FDA , No. 06-5105 (D.C. Cir. 21 July 2006) [R14].

174 News Release, “Ranbaxy Launches Pravastatin Sodium 80 Mg Tablets” (25 June 2007) [R112].

175 Marvin Roy Feldman Karpa v. United Mexican States , ICSID Case No. ARB(AF)/99/1, Interim Decision on Preliminary Jurisdictional Issues, para. 44 (6 Dec. 2000).

176 See Mondev, Award, para. 87 (11 Oct. 2002) (“A claimant may know that it has suffered loss or damage even if the extent or quantification of the loss or damage is still unclear.”); Grand River Enterprises Six Nations, Ltd. et al. v. United States , NAFTA/UNCITRAL, Decision on Objections to Jurisdiction, para. 78 (20 July 2006).

177 Grand River , Decision on Jurisdiction, para. 29; Feldman , Award, para. 63.

178 Sertraline Notice of Arbitration, para. 50.

179 See Respondent’s Reply on Objections to Jurisdiction of Respondent United States of America, dated 17 Oct. 2011, at paras. 8 & 40-54. The Respondent ultimately accepted that Apotex’s Sertraline Claim was not time-barred, given Apotex’s clarification in its Counter-Memorial (para. 68) that its denial of justice claim did not rest on the 3 Jan. 2005 District Court decision alone, but rather “. . . the actions of at least three U.S. federal courts, including the New York District Court, the Federal Circuit, and the Supreme Court[.]”

180 Further detail of the Respondent’s submissions is set out in the course of the Tribunal’s analysis below.

181 Pravastatin Notice of Arbitration, para. 67.

182 Further detail of Apotex’s submissions is set out in the course of the Tribunal’s analysis below.

183 Citing, inter alia, Kinnear, Bjorklund & Hannaford, , Investment Disputes Under NAFTA: An Annotated Guide to NAFTA Chapter 11 at 1116-36b (July 2009)Google Scholar (“The investor must, however, acquire knowledge of both the breach and the ensuing damage. The three-year limitation period presumably runs from the later of these events to occur in the event that the knowledge of both events is not simultaneous”).

184 U.S. Memorial, para. 61.

185 Apotex’s Statement of Claims, paras. 107-08, 112-29.

186 Transcript, Day 2, pages 313-315.

187 Pravastatin Notice of Arbitration, para. 67.

188 Pravastatin Notice of Arbitration, paras. 50, 67; also para. 30: “Apotex was prevented from obtaining approval and timely bringing its pravastatin tablets to market in April 2006, thus causing Apotex substantial injury including, but not limited to, significant lost sales and lost market share.”

189 Apotex’s Statement of Claims, para. 108.

190 Complaint, para. 10, in Apotex Inc. v. FDA , No. Civ. A.06-0627 (D.D.C. 5 Apr. 2006) (“Apotex has standing to maintain this action, pursuant to the [Administrative Procedure Act], as a legal entity that has suffered a legal wrong and has been adversely affected by final agency action and/or agency action unlawfully withheld.”) [R56].

191 Grand River , Decision on Jurisdiction, para. 29.

192 Mondev, Award, para. 87 (11 Oct. 2002).

193 Id. (emphasis added).

194 Grand River Enterprises Six Nations, Ltd. v. United States , NAFTA/UNCITRAL, Decision on Jurisdiction para. 81 (20 July 006) (Claimants “maintained that there is not one limitations period, but many”).

195 Id. para. 78 (quoting Mondev , Award, para. 87).

196 Loewen, Award, para. 143 (26 June 2003). Also: U.S. Memorial, para. 61.

197 Pravastatin Notice of Arbitration, para. 62; Counter-Memorial, para. 86.

198 As Apotex accepted in the course of its oral submissions – e.g., Transcript Day 2, pages 381-385.

199 E.g., Loewen, Award, paras. 158-64.

200 See e.g., Glamis Gold, Ltd. v. United States , NAFTA/UNCITRAL, Procedural Order No. 2, para. 19 (31 May 2005), recognising the United States’ view that claimant “of course, may refer to facts that predate [the three-year limitations period] as background for its claims. . . .”

201 Loewen , Award, para. 240 (26 June 2003): “[T]he Tribunal is of the view that the dispute raised difficult and novel questions of far-reaching importance for each party, and the Tribunal therefore makes no award of costs.”

202 The total costs of the proceeding provided by ICSID include an estimate of the courier services expenses for sending the certified copies of the Award as well as estimates for the printing and binding costs of the Award. Therefore, the total amount of the actual final costs will likely be subject to a slight variation. A financial statement will be provided by ICSID when the account for this case is financially closed and notified to the Parties within a maximum of 90 days from the dispatch of the Award to the Parties.