U.S. v. Canada, (London Court of International Arbitration

- 112 analysis, they included specific text to make that intent explicit” (R I, § 19; cf. §§ 15 et seq.; R II, §§ 43 et seq.; R III, §§ 28, 36).

To back up this argument Respondent firstly cites § 32 of Article XIV of the SLA which “provides for retroactive correction of unilateral measures authorized under paragraphs 26 and 27 of Article XIV”. If challenged before a Tribunal, to the extent that these measures are found to be insufficient or excessive “there must be additional adjustments to make up for the excess or insufficiency from the moment the measures were imposed” (R I, § 16; cf. R II, § 51). Respondent emphasises that the concept of retroactive rectification “is stated expressly in paragraph 32, not just by the use of the word “retroactive” in subparagraph 32(a) but with equal clarity in the chapeau of paragraph 32 and in subparagaph 32(b)” (R II, § 44). From this, Respondent draws the conclusion that “[t]here would have been no need in paragraph 32 to provide for retroactive remedies or compensation for past effects in the case of a remedial measures review if […] those concepts are embraced implicitly in the terms “cure” and “compensate”” (R I, § 17).

Respondent further notes that “[i]mportantly, Article XIV(32) does not inquire into the effects of the overshipment on the export market, nor does it consider the implications of the overshipment for the exporting industry” (R II, § 100; R III, § 29).

206. In support of its contentions, Respondent invokes four other provisions of the SLA where the term “retroactive” is explicitly mentioned, namely Article VIII(1)(b), Article XII(2)(b)(i), Article XVII(5) and Article XV(19)(c) of the SLA, “all of which relate to application of the Export Measures in situations where softwood lumber shipments have exceeded those permitted under the Agreement or where data sources on which the calculation of Export measures rely have been proven biased or unreliable”. By omitting a corresponding reference in § 22 of Article XIV, Respondent claims “it is apparent that the drafters chose not to make the “cure” and “[compensatory] adjustments” provided under that paragraph retrospective” (R I, § 19). With regard to Article XVII, Respondent states once more its opinion that the case at hand is “distinguished from a circumvention case under Article XVII […] In a circumvention case, an element of the substantive offense is whether the challenged measure or action had the effect of reducing or offsetting the export measure, whereas in this case the failure to make an adjustment to the EUSC affected the export measure directly” (R III, § 31).

207. Respondent also notes that Article IX of the SLA – which does not contain the word ‘retroactive’, but was assertedly identified

by Claimant as retroactive provision – nevertheless “adopts LCIA case 7941 Softwood Lumber USA v Canada, Award on Remedies