US Steel applies for a stay of ICA enforcement proceeding
On July 6, 2010, United States Steel Corporation (USS) filed a notice of motion with the Federal Court of Appeal seeking a stay of the Attorney General of Canada’s (AGC) enforcement proceeding under s. 40 of the Investment Canada Act (ICA), pending determination of the appeal brought to the court by USS in respect of a decision upholding the constitutional validity of s. 40. The Federal Court issued its decision upholding the constitutionality of section 40 of the ICA on June 14, 2010, and USS filed its notice of appeal on June 24, 2010.
The AGC’s enforcement proceeding seeks the enforcement of undertakings given in 2007 by USS under the ICA in relation to its acquisition of Stelco as well as the imposition of a fine of $10,000 for each day of alleged non-compliance. The undertakings in question relate to Canadian employment and production levels. The United Steelworkers and Lakeside Steel have intervened in the AGC’s proceeding to seek damages for lost wages and the divestiture of the former Stelco operations.
USS argues that the possibility of a forced divestiture puts in jeopardy USS’s entire investment in Canada (despite the fact that the Minister has not sought this remedy). It also argues that if a stay is not granted the hearing of the AGC’s enforcement proceeding will be nearly or fully completed such that USS will be deprived of its right to appeal the order upholding the constitutionality of s. 40. USS argues that the AGC’s proceeding is fundamentally a retrospective effort in light of the fact that the undertakings are due to expire in October, 2010 and that there would therefore be no prejudice to the AGC if a stay is granted.
