## Facts

- ADF Group Inc., a Canadian structural-steel company, brought a NAFTA Chapter 11 investor-state arbitration against the United States under the ICSID Additional Facility Rules.
- The dispute concerned U.S. domestic-content (“Buy America”) requirements tied to federally funded highway projects; ADF alleged breaches of NAFTA Articles 1102, 1105(1), and 1106.
- At the first session, the parties could not agree on the arbitration’s juridical place, but agreed it should be in either Canada or the United States for cost and convenience.
- The parties asked the tribunal to decide the place of arbitration after written submissions.
- ADF requested Montreal, Quebec, Canada; the United States requested Washington, D.C.
- The tribunal addressed the dispute through a procedural order limited to determining the formal place (seat) of arbitration.

## Issues

1. Under NAFTA Article 1130 and ICSID (Additional Facility) Rule 21, how should the tribunal select the place of arbitration when the parties agree it must be in Canada or the United States but dispute between Montreal and Washington, D.C.?
2. What role should practical considerations and the legal framework of the seat (including court support and neutrality) play, using the UNCITRAL Notes on Organizing Arbitral Proceedings as guidance?

## Decision

- The tribunal designated Washington, D.C., United States of America, as the place (seat) of arbitration.
- The tribunal rejected ADF’s request to designate Montreal as the seat.
- The tribunal treated both Canada and the United States as eligible seats because both are parties to the New York Convention.
- The tribunal noted that, regardless of the juridical seat, it retained authority under ICSID (AF) Rule 21 to hold meetings, inspections, and inquiries at other locations with appropriate notice.

## Legal Principles

- NAFTA Article 1130 requires the seat to be in the territory of a NAFTA Party that is a party to the New York Convention and directs that selection be made in accordance with the applicable arbitration rules.
- Under ICSID (Additional Facility) Rule 21, the arbitral tribunal determines the place of arbitration after consultation with the parties and the Secretariat; the tribunal may also conduct procedural activities elsewhere notwithstanding the seat.
- Factors identified in UNCITRAL’s Notes on Organizing Arbitral Proceedings may be used as relevant guidance for seat selection, including convenience, service availability and cost, the law of the seat, and the prospect of effective court assistance.
- Concerns that a respondent State’s legal system is categorically unsuitable as the lex arbitri require persuasive support; the tribunal may consider the international character of the proceeding and the limited supervisory role typically exercised by courts at the seat.
- Institutional and logistical considerations (including proximity to administering institutions and availability of arbitration services) may properly weigh in the discretionary choice of seat.

## Conclusion

Applying NAFTA Article 1130 and ICSID (Additional Facility) Rule 21, and guided by UNCITRAL Notes factors, the tribunal selected Washington, D.C. as the arbitration seat, finding it offered appropriate legal and practical support while preserving flexibility to hold hearings or take evidence in other locations.


ADF Grp. Inc. v. United States, Procedural Order No. 2 (ICSID Additional Facility Arb. (AF)/00/1 July 1, 2001)