Ottawa could face lawsuit if it blocks MDA sale
The $1.33-billion sale by Vancouver-based MacDonald Dettwiler & Associates Ltd. to Minnesota-based Alliant Techsystems Inc., or ATK, has triggered fierce criticism among politicians and Canadian space luminaries. But blocking it -- which Jim Prentice, the Industry Minister, has the power to do -- could open the door for ATK to sue the federal government for loss of future revenue, said John Boscariol, head of the trade law group at McCarthy Tetrault in Toronto.
"It's a business deal potentially being blocked by the Canadian government. On its face, that is something for which an American investor can use Chapter 11 against the Canadian government," he said.
Late last week, Mr. Prentice said he will take an additional 30 days to review the sale of what is effectively the country's space company.
Using about $450-million in public funds, MDA built Radarsat-2, the recently launched surveillance satellite designed with Arctic sovereignty in mind, and the sale of that asset could result in the United States limiting Canada's access to its own technology, critics argue.
Chapter 11 is the controversial section of NAFTA that allowed, for example, UPS to sue the Canadian government for lost profits. That suit was dismissed, but ATK could potentially argue that it did not receive "fair and equitable treatment," and accuse the government of using a national security argument to protect commercial interests, said Mr. Boscariol, who is not intimately acquainted with the details of the MDA transaction.
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http://www.financialpost.com/story.html?id=402210
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