INTERNATIONAL TRIBUNAL UNANIMOUSLY FINDS FOR THE UNITED STATES IN NORTH AMERICAN FREE TRADE AGREEMENT CASE

WASHINGTON, D.C. - An international tribunal today unanimously found in favor of the United States in the case of The Loewen Group, Inc. v. United States of America. The Loewen Group, Inc., a Canadian company involved in the death care industry, and its former chairman and CEO, Raymond Loewen, brought arbitration claims in October 1998 against the United States under the North American Free Trade Agreement (NAFTA), contending the U.S. was liable under the NAFTA for damages that allegedly resulted from a jury verdict against the company in a Mississippi state court. The tribunal rejected Loewen’s claims in their entirety, on both substantive and procedural grounds.

Loewen’s NAFTA claims were based on a Mississippi lawsuit in which a local businessman sued the company and its U.S. subsidiary for breaching a settlement agreement and engaging in unfair competition. After a controversial trial, the jury returned a verdict of $500 million against Loewen, including $400 million in punitive damages.

Loewen appealed the verdict, but claimed that it was unable to post a bond in the amount of 125% of the judgment, as then required under Mississippi law to stay the judgment pending appeal. After the Supreme Court of Mississippi in 1996 upheld the imposition of the 125% bond requirement, Loewen settled the case.

In today's unanimous ruling, the tribunal concluded that Loewen had failed to demonstrate a violation of the NAFTA, because the company had failed to pursue other remedies available to it under U.S. law. The tribunal also rejected Loewen’s claims on jurisdictional grounds.

The members of the tribunal are Sir Anthony Mason of Australia, Lord Michael Mustill of the United Kingdom and Judge Abner J. Mikva of the United States. The Department of Justice and the Office of Legal Adviser of the Department of State represented the United States in this arbitration.

The full text of the award is available on-line at http://www.state.gov/s/l/c3755.htm

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