ADF Group Inc., a Quebec structural steel fabricator, and ADF International Inc., its wholly owned subsidiary located in Coral Springs, Florida recently filed a notice of arbitration under Chapter 11 of NAFTA—which gives NAFTA investors the right to sue a NAFTA government for damages they suffer as a result of measures imposed by the government that contravene obligations contained in Chapter 11.
By its notice of arbitration, ADF Group Inc. are challenging the “Buy America” rules of the federal Surface Transportation Assistance Act of 1982 which require that all federal-aid highway construction projects use only US origin “iron, steel and manufactured products”.
The issue arose out of the refusal of the Federal Highway Administration to ADF Group to use US-origin steel on a highway project in Virginia if any fabrication work was performed on that steel in Canada. The Springfield Interchange project is a massive highway improvement located in Virginia, just outside Washington, D.C., designed to alleviate important congestion problems in Washington’s beltway.
ADF Group contends that the “Buy America” requirement denies national treatment, ignores established US precedents in such matters and constitutes an illegal “performance requirement” in violation of the obligations contained in Chapter 11 of NAFTA. ADF Group Inc. is seeking damages, in respect of the Springfield contract and future contracts, which have been estimated at US$90 million.
The notice of Arbitration was filed by Peter E. Kirby and René Cadieux of the Montreal office at Fasken Martineau DuMoulin LLP on behalf of the ADF Group in Washington, D.C., with the International Center for the Settlement of Investment Disputes (ICSID) and the United States Department of State on July 21, 2000.
By its notice of arbitration, ADF Group Inc. are challenging the “Buy America” rules of the federal Surface Transportation Assistance Act of 1982 which require that all federal-aid highway construction projects use only US origin “iron, steel and manufactured products”.
The issue arose out of the refusal of the Federal Highway Administration to ADF Group to use US-origin steel on a highway project in Virginia if any fabrication work was performed on that steel in Canada. The Springfield Interchange project is a massive highway improvement located in Virginia, just outside Washington, D.C., designed to alleviate important congestion problems in Washington’s beltway.
ADF Group contends that the “Buy America” requirement denies national treatment, ignores established US precedents in such matters and constitutes an illegal “performance requirement” in violation of the obligations contained in Chapter 11 of NAFTA. ADF Group Inc. is seeking damages, in respect of the Springfield contract and future contracts, which have been estimated at US$90 million.
The notice of Arbitration was filed by Peter E. Kirby and René Cadieux of the Montreal office at Fasken Martineau DuMoulin LLP on behalf of the ADF Group in Washington, D.C., with the International Center for the Settlement of Investment Disputes (ICSID) and the United States Department of State on July 21, 2000.
Lawyer(s)
Peter E. Kirby
René Cadieux