BETWEEN: DOW AGRO SCIENCES LLC. a limited liability company organized under the laws of the State of Delaware, having its principal place of business at Indianapolis. Indiana;
AND: HER MAJESTY THE QUEEN IN RIGHT OF CANADA
IN THE MATTER OF AN ARBITRATION UNDER CHAPTER II OF THE NORTH
AMERICAN FREE TRADE AGREEMENT AND THE UNCITRAL ARBITRATION RULES
WHEREAS the Claimant served a Notice of Arbitration to the Respondent on March 31, 2009 (the
"Notice of Arbitration") pursuant to Article 3 of the Arbitration Rules of the United Nations Commission
on International Trade Law and Articles 1\ 16, 1117 and 1120 of tho North American Free Trade
Agreement ("NAFT A', on ils own behalf and on behalf of its subsidiary, Dow AgroSciences Canada Inc.
("DASCI"), a company incorporated under the laws of Canada.
WHEREAS Article 1118 of the NAFT A provides that the disputing parties should first attempt to settle a
claim through consultation or negotiation.
WHEREAS the parties to this agreement wish to finally and irrevocably settle the dispute between them.
WHEREAS the Government of Quebec has assented to the signature of this agreement by the parties, as
appears from Order in Council bearing number 409-20 II and dated April 13, 20 II approving an
agreement in the form of an exchange of letters between the Government of Quebec and the Govenunent
of Canada relating to a settlement agreement between Dow AgroSciences LLC and the Governmnent of
THE PARTIES AGREE AS FOLLOWS:
I· UPHOLDING OF THE DISPUTED MEASURES
The measures adopted by the Govenunent of Quebec relating to certain uses of herbicides containing the
active ingredient 2,4-D that have been challenged by the Claimant in its Notice of Arbitration ("the
Measures") are maintained and are not modified by the terms of this settlement agreement.
2- WITHDRAWAL OF THE NOTICE OF ARBITRATION
The Claimant, for itself and for its subsidiaries, affiliates, parents, predecessors, successors, and
assigns, including DASCI, hereby irrevocably and permanently withdraws its Notice of Arbitration.
The Claimant and the Respondent (the "Disputing Parties") waive any and all claims for Costs.,
including attorney's fees, arising out of or related in any way to the Notice of Arbitration.
3- AGREED PRINCIPLES
In consideration of this full and final settlement of all disputes and claims directly or indireclly made
by the Claimant or capable of arising out of the Measures, the Claimant and DASCI, for themselves
and for their subsidiaries, affiliates, parents, predecessors, successors, and assigns, and the Government
of Quebec acknowledge that:
a) Where the Pest Control Products Act (S.C., 2002, c. 28) ('"PCP A") defines acceptable risk as
risk for which there is reasonable certainty that no harm to human heallh, future generations or
the envirorunent will result from exposure to or use of the product, taking into account its
conditions or proposed conditions of registration, the Government of Quebec agrees that
products containing 2,4-D do not pose an unacceptable risk to human health or the
environment, provided that the instructions on their label are followed, as concluded by Health
Canada's Pest Management Regulatory Agency ("PMRA") in its May 16,2008, decision on the
re-evaluation of 2,4-D;
b) Whereas Canada's provinces and territories may regulate in their jurisdictions the sale, use,
storage, transportation and disposal of pesticides registered under Ihe PCPA in a way that can
aver to be more restrictive compared to the conditions established under the PCPA, the
Claimant and DASCI, for themselves and for their subsidiaries, affiliates, parents, predecessors,
successors, and assigns, acknowledge that the Govenunent of Quebec may impose such
conditions as those in the Pesticides Management Code, to prohibit the sale and use of
pesticides. even those lawfully registered by PMRA.
c) The Claimant and DASCI, for themselves and for their subsidiaries, affiliates, parents.,
predecessors, successors, and assigns, also acknowledge that, subject to applicable law,
municipalities in Quebec may adopt or maintain regulations or other standards-related measures
that govern the use of pesticides, notably by adding more restrictive conditions to their use than
those set by PMRA or by the Government of Quebec.
4- NO COMPENSATION
No consideration, monetary or otherwise, is provided to the Claimant or to DASCI, for themselves, for
their subsidiaries, affiliates, parents, predecessors, successors, and assigns.
Pursuant to this settlemenl agreement, the Claimant and DASCI, for themselves and for their
subsidiaries, affiliates, parents, predecessors, successors, and assigns, hereby release and forever
discharge the Respondent and the Government of Quebec from any and all claims, demands. losses,
damages, suits, and causes of action of any nature relating to the Measures.
In consideration of paragraph 3 (a), the Claimant and DASCI, for themselves and for their subsidiaries,
affiliates, parents, predecessors, successors, and assigns, shall not, directly, or indirectly, individually,
or in conjunction with others at any time, pursue any legal action or arbitral or court proceedings or
otherwise make any claim whatsoever against the Respondent or the Government of Quebec in
connection with the Measures.
In consideration of paragraph 3 (a), the Claimant, for itself and for its subsidiaries, affiliates, parents,
predecessors, successors, and assigns, including DASCI, shall indemnify and hold harmless the
Respondent and the Govenunent of Quebec against any claim, action or proceeding described in
paragraph' 5 and 6 that the Claimant, its subsidiaries, affiliates, parents, predecessors, successors, and
assigns, including DASCI, may initiate against the Respondent or the Government of Quebec arising
out of the Measures.
This settlement agreement is entered into for the sole purpose of settling the dispute at issue in the
Notice of Arbitration. This settlement agreement shall not be used except for the sole purpose of giving
effect to its terms, and docs not prejudice or affect other rights or the Disputing Partes, the
Government of Quebec, or the rights of any other person or entity in other cases.
This settlement agreement will be made public.
10. ENTRY INTO FORCE
This settlement agreement enters into force by the date of its signature by both Disputing Parties.
II· APPLICABLE LAW
This settlement agreement is governed exclusively by the applicable law in Quebec. Should a dispute
arise, the tribunals of Quebec will have sole jurisdiction to hear any claim referring to it, to the exclusion
of any arbitral tribunal.
The Disputing Parties acknowledge and agree that this settlement agreement has been made and executed
in English and French and that both versions are equally authoritative.
The term "affiliate" means entities that are owned and controlled by the Claimant or DASCI.
IN WITNESS HEREOF, TIlE PARTIES HAVE SIGNED THIS SETTLEMENT AGREEMENT
IN FOUR IDENTICAL COPIES, TWO IN FRENCH, TWO IN ENGLISH DOW AGROSCIENCES LLC duly represented by iu authorized signing officer, Mr. William W. Wales, Vice-President, Secretary and General Counsel acting in pursuance of his appointment of authorized signing officer under the companies Authorization Plan.
Per: William Wales Date: May 25, 2011
HER MAJESTY THE QUEEN IN RIGHT OF CANADA, duly represented by the Deputy Minister of
International Trade Mr. Louise Levesque: