Mesa Power Group, LLC v. Government of Canada, 255 F. Supp. 3d 175

Background

Mesa Power (U.S. investor) brought a NAFTA Chapter 11 arbitration challenging Ontario’s Feed‑in‑Tariff (FIT) program and a separate Green Energy Investment Agreement (GEIA) that reserved grid capacity for a Korean consortium, alleging violations of NAFTA Articles 1102, 1103, 1105, and 1106.
A three‑member UNCITRAL tribunal (seat in Miami) held extensive hearings, issued a final award finding FIT/GEIA constituted government “procurement” under NAFTA Article 1108 (so Articles 1102/1103/1106 did not apply), rejected Mesa’s Article 1105 fair‑and‑equitable‑treatment claim, and awarded costs to Canada.
One arbitrator (Judge Brower) dissented in part, arguing the FIT program is not procurement and that Canada violated Article 1105 by favoring the Korean consortium.
Mesa petitioned in D.C. federal court to vacate the award under FAA § 10 (arguing arbitrators exceeded their powers, engaged in misconduct, and acted in manifest disregard of the law); Canada filed to confirm the award under the New York Convention and sought attorney’s fees for frivolous litigation.
The district court applied the FAA/Convention review framework, assumed (without deciding) D.C. Circuit law governed, and conducted the narrow judicial review applicable to arbitral awards.

Issues

Issue	Plaintiff's Argument (Mesa)	Defendant's Argument (Canada)	Held
Whether the tribunal exceeded its powers by treating FIT/GEIA as "procurement" under NAFTA Art. 1108	The tribunal misread/ignored NAFTA text (esp. Art.1001(5)(a) definition of procurement) and thus abandoned the treaty language	Tribunal reasonably and exhaustively interpreted text, context, precedent; its interpretation was an arguable construction and within authority	Court: tribunal’s procurement interpretation was a text‑based, reasoned construction; not beyond authority — no vacatur.
Whether the tribunal unlawfully deferred to Ontario (denying Mesa a fair hearing / changing standard)	Tribunal granted excessive deference to government policy, effectively lowering Mesa’s burden and prejudicing equal treatment rules	Tribunal made de novo factual findings, carefully analyzed Article 1105, and merely recognized that states have policy space; no change in burden or denial of fair hearing	Court: alleged "deference" was lawful contextual interpretation; no §10(a)(3) misconduct or §10(a)(4) excess of power; no vacatur.
Whether the award is vacatable for "manifest disregard of the law"	Tribunal ignored well‑defined legal principles on procurement and fair‑and‑equitable treatment	There is conflicting authority; tribunal stated and applied governing principles; no clear, explicit law ignored	Court: assuming manifest‑disregard survives, Mesa failed to show arbitrators knew and willfully ignored a clearly applicable legal rule.
Whether Canada is entitled to attorney’s fees for frivolous/bad‑faith litigation	N/A (Canada sought fees)	Mesa’s vacatur petition was meritless and fees are warranted	Court: Mesa’s arguments, though unsuccessful, were nonfrivolous and within bargained‑for review; fees denied.

Key Cases Cited

Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) (arbitral awards can be vacated only in very unusual circumstances; review is narrow)
Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576 (2008) (FAA §§10 and 11 provide exclusive expedited vacatur/modification grounds)
E. Associated Coal Corp. v. United Mine Workers of Am., 531 U.S. 57 (2000) (arbitrator’s arguably-construing‑the‑contract standard limits judicial review)
TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928 (D.C. Cir. 2007) (distinguishing review regimes for awards set aside where made vs. where enforcement is sought)
LaPrade v. Kidder, Peabody & Co., 246 F.3d 702 (D.C. Cir. 2001) (discussing manifest‑disregard doctrine in D.C. Circuit)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (arbitration review is limited; courts defer to arbitrators’ factual and legal constructions)