Admittedly, the topic of international arbitration has failed to capture the interest of Hollywood producers or television audiences, yet the science fiction genre provides an interesting insight. In a Star Trek: The Next Generation episode entitled “The Ensigns of Command” (#40273-149, Written by H. B. Savage), the interplay of the issues of the rule of law, jurisdiction and international (more accurately, “intergalactic”) comity within the context of arbitration, were highlighted as follows:
52 INT. MAIN BRIDGE (OPTICAL)
(Troi is seated at Science One with Picard hanging over
her shoulder. Riker and Worf are at Science Two.
Pages of treaty crawl past on both screens.)
This is hopeless. Fighting would be preferable.
(A look from Riker.)
(He indicates a clause.)
I don’t follow you, sir.
Worf, get me the Sheliak.
(just heard the reprieve)
(Picard, Riker and Troi return to the command station.
The strange Sheliak scene replaces a view of the ship.)
Pursuant to paragraph one thousand two hundred and ninety I formally request third party arbitration of our dispute.
(A beat while they look it up.)
And further, pursuant to subsection D, three, I name the Grizzelas to arbitrate.
(Riker glances, puzzled, at Troi.)
(Troi quells him with a look.)
Unfortunately they are currently in their hibernation cycle, but they’ll awaken in six months, and
then we’ll get this matter settled. Now, do you want to wait… or give me my
Absurd. We carry the membership!
We can brook no delay!
Then I declare the treaty in abeyance!
Wait! Negotiation is —
(Picard gestures to Worf — cut the transmission. Worf
obeys. A long beat.)
You enjoyed that.
You’re damn right.
Captain, they are hailing us.
(Picard studies his nails. Takes a turn around the
bridge. Settles himself back in the command chair.)
The Sheliak reappear.
You may have your three weeks, Picard of the Enterprise.
(with careful enunciation)
Thank you. [bolded emphasis added]
While an unconventional example, television often mirrors the political, social and legal values of the time. “Beaming up” and departing from the fictional Star Trek universe, one may observe third-party arbitration in the real-world context. Arbitration is a preferred method of dispute resolution at the multi-state level and provides a sophisticated procedural mechanism for Canadian private parties to enforce their rights against foreign state actors. In January 1994, Canada, the United States and Mexico launched the North American Free Trade Agreement (NAFTA) and formed the world’s largest free trade zone. Canada has also entered into various bi-lateral treaties, including bi-lateral investment treaties, with a number of countries. Chapter Eleven of NAFTA contains provisions designed to protect cross-border investors and facilitate the settlement of investment disputes. For example, each NAFTA Party must accord investors from the other NAFTA Parties national (i.e. non-discriminatory) treatment and may not expropriate investments of those investors except in accordance with international law. Investors may initiate arbitration against the NAFTA Party under the UNCITRAL Rules or the ICSID Additional Facility Rules (see also NAFTA, Article 1122-Consent to Arbitration).
Some may be familiar with the ongoing Canada-U.S. Softwood Lumber dispute (Canfor Corp. v. United States of America, Terminal Forest Products Ltd. v. United States of America and Tembec Inc. et al. v. United States of America) where the U.S. refused to recognize or comply with three NAFTA Arbitral awards in Canada’s favour, ultimately leading to further rounds of negotiations and a tentative new softwood lumber deal. By contrast, in United Mexican States v. Karpa, Marvin Feldman, a U.S. citizen, submitted a claim on behalf of CEMSA, a registered foreign trading company and exporter of cigarettes from Mexico, in April 1999. CEMSA alleged that the denial of benefits of a law that allowed certain tax refunds to exporters breached Mexico’s obligations under Chapter Eleven of NAFTA. The NAFTA Arbitration Tribunal rendered its final decision on December 12, 2002, which found that Mexico had violated its national treatment obligations under NAFTA. Chilcott, J. dismissed Mexico’s application for statutory review to set aside the arbitral decision, which the Ontario Court of Appeal later affirmed.
So why in the Star Trek paradigm, did the Sheliak adopt the Mexican, rather than the American, approach to treaty-level arbitration? Perhaps party autonomy, comity, reciprocity and politico-legal factors all favoured deference to arbitration as a “legal means to a political end.” Conversely, for the United States, “final and binding” arbitration is neither “final” nor “binding” in cases involving powerful lobby interests which influence domestic policy and affect voting patterns for congressional and senatorial incumbents. More directly, the U.S. may exert economic power over both Canada and Mexico, in varying degrees, albeit it is less likely to do so in cases involving private, rather than national, interests.
Antonin I. Pribetic
(comment originally appearing in OBA Briefly Speaking, Vol. 32, No. 8 (Aug-Sept.2007)