U.S. Steel Case Decision in Canada May Have Broader Ramifications

On June 14, in The Attorney General of Canada v. United States Steel Corporation and U.S. Steel Canada Inc., the Federal Court of Canada upheld the constitutional validity of the process and penalties for enforcing Canada's foreign investment review statute, the Investment Canada Act (ICA).

In July 2009, the Attorney General of Canada filed an application seeking an order directing U.S. Steel to comply with undertakings it gave when it obtained approval to acquire Stelco Inc. in 2007. The Attorney General also sought an "administrative monetary penalty" (AMP) of $10,000 per day for breach of the undertakings (see our July 20, 2009 M&A Bulletin for further details). U.S. Steel responded to the application by claiming that the enforcement proceedings violated its rights under the Canadian Charter of Rights and Freedoms and the Canadian Bill of Rights.