The Canadian Press reported that the federal government's first prosecution of a foreign multinational under the Investment Canada Act remained in limbo after a judge reserved her decision on whether Ottawa's move is legal.
Lawyers for the government and workers at US Steel's Canadian operations had hoped for a same day ruling that would have cleared up whether Ottawa can go ahead and sue the steel company for failing to live up to its promises on Canadian jobs and output.
The United Steelworkers lawyer argued that speed is important in the case because employee and production levels remain well below what US Steel agreed to when it got Investment Canada approval to buy the former Stelco Inc for more than USD 1 billion three years ago.
But Federal Court of Appeals justice Ms Carolyn Layden Stevenson rose from the court after arguments with regrets that she could not render a decision. There was no estimate on when she will decide whether the government's lawsuit can proceed.
Delay and dispute about the constitutionality of Ottawa's suit against the US steelmaker have been the hallmark of the unique case since July 2009, when Industry Minister Mr Tony Clement announced he was taking the industrial giant to court.
It was the first time a foreign company has been taken to court for breaching the conditions under the Investment Canada Act, and legal experts believe the case could eventually wind up before the Supreme Court.
Pittsburgh based US Steel Corporation, was charged after shutting down its Hamilton and Nanticoke plants in March 2009 after the North American recession and auto industry restructuring battered continental steel demand. If convicted, US Steel faces fines of up to USD 10,000 a day and could also be forced to sell its Canadian plants.
Ms Paula Turtle, the counsel for the United Steelworkers union at the plants, said that even though operations resumed this spring, US Steel remains in non compliance because employment levels are still about 1,000 below the promised level. She added that "They came into Canada buying up significant valuable assets under the conditions they meet certain employment and production levels and they haven't done that."
In defense, US Steel has maintained it was forced to cut production because of the recession, but the workers say the company chose to redirect Canadian production to its US plants. In arguments, US Steel lawyer Mr Michael Barrack urged the court to stay the proceedings until a court of appeal can rule on its argument that the prosecution is unconstitutional because of a flawed legal procedure.
Mr Barrack said that under the rules that currently exist, U.S. Steel would have to file its defense before it knew all the case against it, which he said contravened fundamental justice.
The United Steelworkers union and Lakeside Steel Inc have both been named interveners in the case. Lakeside Steel has expressed interest in buying US Steel's Canadian assets if the US company is forced to sell them, while the union wants compensation for all affected workers.
(Sourced from www.thecanadianpress.com)
