First In Class And Going Back To Basics – Eli Lilly v Canada NAFTA Dispute

Eli Lilly v Canada¹ is the first final patent law decision in international investment arbitration brought under Chapter 11 of the North American Free Trade Agreement ("NAFTA"). In this regard, it provides insight into likely approaches to future arbitrations seeking to challenge national jurisprudence under NAFTA or other trade agreements.

The Tribunal has demonstrated that it will take a conservative approach in adjudicating disputes under the investor-state settlement provisions of NAFTA, according significant deference to the decisions of national courts. Perhaps most notably, in its decision, the Tribunal seems to be guided by the view that, so long as a decision is not entirely inconsistent with the preceding jurisprudence, it cannot be considered a dramatic change from the existing law. This likely means that, at least for countries having common law systems, national court decisions or doctrinal developments will be overturned in only the rarest of cases.