Mercer International Files Arbitration Request Under NAFTA Seeking $250M in Damages From the Government of Canada

Mercer International Inc.

today announced it has served a Request for Arbitration on the Government of Canada for breaches by it of its obligations under the North American Free Trade Agreement . Mercer's NAFTA claim arises from the treatment of its Celgar Pulp Mill's energy generation assets and operations by the Province of British Columbia, both directly and through the actions of British Columbia Hydro and Power Authority, a Provincially-owned and controlled enterprise, and the British Columbia Utilities Commission, a Provincial Government regulatory agency. Mercer's Claim is against Canada, rather than the Province of British Columbia as, under NAFTA, Canada is responsible for the actions of its Provinces. Under NAFTA, Mercer's investments in Canada are required to be accorded treatment that is no less favorable than the most favorable treatment accorded to Canadian investors. The Celgar Mill, BC's largest and most modern, has been placed at a competitive disadvantage as a result of discriminatory treatment by BC Hydro and the uneven application of BC energy policy.