TransCanada says it intends to file a claim under the North American Free Trade Agreement in response to the U.S. government鈥檚 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鈥檚 denial of the $8-billion project was 鈥渁rbitrary and unjustified.鈥�
, Chapter 11 of NAFTA 鈥渆stablishes a framework of rules and disciplines that provides investors from NAFTA countries with a predictable, rules-based investment climate鈥� 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鈥檚 decision to deny construction of the Keystone XL pipeline 鈥渆xceeded his power under the U.S. constitution.鈥� The Federal Court claim also said the administration鈥檚 rejection of the pipeline conflicted with Congress鈥� constitutional power to 鈥渞egulate interstate and international commerce.鈥�
The company鈥檚 legal actions challenge the basis of the U.S. government鈥檚 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 鈥渟ymbolic gesture鈥� based on speculation about international perceptions on the administration鈥檚 leadership on climate change, rather than the merits of the project.
鈥淭he 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,鈥� 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鈥檚 breach of its NAFTA obligations.
With files from the Canadian Press
