Investment Arbitration Reporter

By Luke Eric Peterson

An arbitral tribunal has been selected to hear a pair of claims lodged by the Canadian generic pharmaceutical company, Apotex Inc. against the United States Government.

Apotex Inc. alleges that the U.S. is liable for breaches of foreign investment protections contained in Chapter 11 of the North American Free Trade Agreement (NAFTA).

The company contends that it finds itself in legal limbo due to a reluctance of the U.S. Courts to provide the company with certainty as to its position in several patent disputes with brand-name pharmaceutical companies. In earlier filings initiating the arbitration, the company says that the actions (and inactions) of the U.S. Federal Courts give rise to a denial of justice and other breaches of the NAFTA.

Recently, a tribunal consisting of Toby Landau QC (Chair), Clifford M. Davidson (claimant’s nominee) and the Hon. Fern Smith (U.S. nominee) was constituted to hear the case.

Mr. Landau is a familiar player in investment treaty arbitration, working as counsel and arbitrator in numerous cases. We profiled his professional activities in our April, 2009 report on the GEA v. Ukraine arbitration – where has sits as an arbitrator.** More recently, he has been selected to sit as a tribunal member in the ICSID arbitration Cambodia Power Company v. Kingdom of Cambodia and Electricité du Cambodge.***

Mr. Davidson is not known to have sat in previous investment treaty arbitration matters. He is a Partner with a New York-based boutique law firm, with a particular specialization in pharmaceuticals and intellectual property.

Judge Smith is a former U.S. Federal Court Judge in California. She currently practices as an arbitrator and mediator, including with the JAMS dispute resolution organization. She is not known to have served as arbitrator on prior investment treaty claims.

The proceeding will take place under the UNCITRAL procedural rules. The claimant is represented by the law firm Rakoczy Molino. The State Department’s in-house NAFTA claims team is representing the US Government.

Background to dispute

As we’ve previously reported, Ontario-based Apotex Inc. dispute with the U.S. Government began in 2003 when Apotex filed papers with the U.S Food and Drug Administration (FDA) setting in motion an approval process for a generic version of Pfizer Inc’s popular antidepressant medication Zoloft.

However, Apotex contends that the District Court for the Southern District of New York dismissed a request by the company for a declaratory judgment against Pfizer – a judgment which Apotex insists would have brought clarity to a muddled patent dispute.

Because the U.S. courts declined to resolve Apotex’s claim, the Canadian company complains that it was left in legal limbo, whilst a competitor firm got a head-start in producing a generic version of Zoloft.

The firm has since filed a second Notice of Arbitration for a second claim related to its efforts to produce a generic version of the prescription heart medicine pravastatin sodium (Pravachol).

Both claims will be heard by the recently-constituted arbitral tribunal.

* For our past reporting on the Apotex v. USA claims click here and here. ** See this link for more on Mr. Landau’s practice. *** For background on the Cambodia case, click here and here.

Investment Arbitration Reporter is a specialized news publication tracking developments in the area of international investment law and policy.

The publication does not offer legal or financial advice or recommendations of any kind.
 
To offer news-tips or comments, email the Editor, Luke Eric Peterson, at: editor@iareporter.com