23 August 2009

The story that won’t go away

The seizure of assets belonging to three companies last December may have been popular but it could wind up being very costly:

According to Prof. [Russell] Williams and Vancouver-based trade expert Henri Alvarez of Fasken Martineau, Abitibi has a strong case: NAFTA’s Chapter 11 was designed explicitly to prevent these kinds of scenarios. In Prof. Williams’s [sic] view, the suit, if filed, could hit Ottawa with a big legal bill that will likely get passed on to Newfoundland.

Financial costs aren’t the only issue at stake here; there’s also the small matter of how foreign investors are likely to react. For now, government officials aren’t keen to discuss it. Williams’ government would not comment; neither would Trade Minister Stockwell Day. Department of Foreign Affairs spokesperson Laura Dalby said the fact that a notice of intent has been filed “does not establish the merits of a challenge.”