In March 2017, the Tribunal in Eli Lilly v. Canada issued a unanimous final Award, dismissing all claims on the basis that the claimant ‘failed to establish the factual premise of its case’. Despite finding against Eli Lilly on the facts, the Lilly decision appears to have opened the door (at least slightly) for investors on two novel points of law. First, the Tribunal suggested that a judicial decision which does not constitute a denial of justice may nonetheless qualify as a breach of the North American Free Trade Agreement's (NAFTA's) minimum standard of treatment (Article 1105) and/or protection against expropriation (Article 1110). Second, the Tribunal did not reject – and indeed appeared willing to consider – the proposition that an investor may support its investment arbitration claims by relying on a host state’s international commitments on the treatment of intellectual property rights. Given the potential importance of these issues in future arbitrations, this article first provides an overview of the Lilly decision. It then explores in greater depth the two legal issues raised above, examining the arguments put forward by the parties, the view expressed by the Tribunal and the potential effect on the development of international investment law, with a particular focus on how these issues may come into play in any future claims arising from the issuance of a compulsory license.
Journal of International Arbitration