Offshore wind company Windstream Energy LLC is claiming that for the first time in the history of the North American Free Trade Agreement (NAFTA), the government of Canada has failed to comply with the terms of a payment following an award ruling by an arbitral tribunal appointed under NAFTA.
As a result, Windstream has now filed an enforcement application with the Ontario Superior Court.
In its application to the court, Windstream requested an order recognizing and enforcing the award issued by an arbitral tribunal under Chapter 11 of NAFTA in accordance with the UNCITRAL Arbitration Rules. The tribunal’s award, which was rendered on Sept. 30, 2016, required Canada to pay Windstream C$28,095,332 within 30 days of the award.
The award began to bear interest at a rate of 2.7%, compounded annually, from Nov. 1, 2016, to the date of payment, according to Windstream.
The company is the sole owner of the Windstream Wolfe Island Shoals Wind Energy Project, a 300 MW offshore wind farm in eastern Lake Ontario. Investors are a New York City-based investment group with experience developing and operating energy infrastructure projects in both onshore and offshore environments.
Windstream says this most recent action comes after years of ongoing challenges with the Canadian and Ontario governments regarding what the company calls “mismanagement” of Windstream’s C$5.2 billion feed-in tariff contract for the offshore wind farm.
In October, an arbitral tribunal appointed under NAFTA found that Ontario treated Windstream’s investments in Canada “unfairly and inequitably” under NAFTA after the province placed a moratorium on offshore wind in 2011.
The company said this moratorium directly frustrated a contract signed with the Ontario Power Authority for the offshore wind farm.
“The Canadian government’s failure to pay the award granted to Windstream by the NAFTA tribunal is unprecedented,” comments David Mars, director of Windstream Energy LLC. “Throughout the process, we have negotiated in good faith in order to reach a fair and reasonable solution, but it has become apparent that the Canadian government has shown complete disregard for its NAFTA obligations.
“The NAFTA tribunal was clear: Windstream was treated unfairly and inequitably, and our feed-in-tariff contract is still in force,” Mars continues. “The C$28 million award to Windstream was handed down nearly five months ago. From Windstream’s perspective, this investor-settlement dispute under NAFTA raises serious concerns if the Canadian government cannot fulfill its NAFTA treaty obligations to American companies. As interest continues to accrue, we hope that Canada abides and complies with the NAFTA award without further delay.”