TransCanada says it will file NAFTA claim over Keystone XL denial

TransCanada says it intends to file a claim under the North American Free Trade Agreement in response to the U.S.

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government’s rejection of the proposed Keystone XL pipeline.

In a press release Wednesday afternoon, the corporation said it filed a notice of intent to initiate a claim under Chapter 11 of NAFTA on the basis that the U.S. administration’s denial of the $8-billion project was “arbitrary and unjustified.”

According to Global Affairs Canada’s website, Chapter 11 of NAFTA “establishes a framework of rules and disciplines that provides investors from NAFTA countries with a predictable, rules-based investment climate” and dispute settlement procedures.

TransCanada has also filed a lawsuit in the U.S. Federal Court in Texas, claiming that U.S. President Barack Obama’s decision to deny construction of the Keystone XL pipeline “exceeded his power under the U.S. constitution.” The Federal Court claim also said the administration’s rejection of the pipeline conflicted with Congress’ constitutional power to “regulate interstate and international commerce.”

The company’s legal actions challenge the basis of the U.S. government’s denial of the presidential border crossing permit required for the project to go forward. The press release points out that the U.S. State Department denied the pipeline as a “symbolic gesture” based on speculation about international perceptions on the administration’s leadership on climate change, rather than the merits of the project.

“The NAFTA claim asserts that TransCanada had every reason to expect its application would be granted as the application met the same criteria the U.S. State Department applied when approving applications to construct other similar cross-border pipelines,” read the press release.

TransCanada will also aim to recover more than US$15 billion in costs and damages that it says it suffered as a result of the U.S. government’s breach of its NAFTA obligations.

With files from the Canadian Press



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