March 30, 2007
No. 51
The Honourable Peter MacKay, Minister of Foreign Affairs and Minister of the Atlantic
Canada Opportunities Agency, today introduced a bill in the House of Commons as a
first step toward implementation of the Convention on the Settlement of Investment
Disputes between States and Nationals of Other States (ICSID Convention).
“This government is committed to protecting Canadian investment abroad,” said
Minister MacKay. “By implementing this Convention, which has been adopted by 143
other countries, the Government is taking the necessary steps to provide Canadian
investors with an additional tool to settle investment disputes efficiently.”
The ICSID Convention is a World Bank-sponsored instrument that facilitates the free
flow of international investment. Administered by the International Centre for Settlement
of Investment Disputes, it is an internationally recognized, efficient and reliable
mechanism for the settlement of investment disputes between states and investors
from other states that are party to the Convention.
“Investment is a key element of international commerce,” said the Honourable David
Emerson, Minister of International Trade. “The ICSID Convention will contribute to
Canada’s prosperity by providing additional protection to Canadian investors and
reinforcing Canada’s investment-friendly image abroad.”
Canada signed the ICSID Convention on December 15, 2006. Today’s bill, the
Settlement of International Investment Disputes Act, will ensure that ICSID awards are
recognized and enforced in Canada. It also provides necessary immunities to the
International Centre for Settlement of Investment Disputes and its representatives to
fulfill their mandates. The adoption of this bill is required prior to ratification. British
Columbia, Newfoundland and Labrador, Nunavut, Ontario and Saskatchewan have
already adopted legislation for the ICSID Convention. The federal government will
continue to seek provincial and territorial support prior to ratification.
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For further information, media representatives may contact:
Foreign Affairs Media Relations Office
Foreign Affairs and International Trade Canada
613-995-1874
http://www.international.gc.ca
Backgrounder
AN ACT TO IMPLEMENT THE CONVENTION ON THE SETTLEMENT OF
INVESTMENT DISPUTES BETWEEN STATES AND NATIONALS OF
OTHER STATES
The ICSID Convention is an international instrument sponsored by the World Bank to
facilitate and increase the flow of cross-border investment. The Convention establishes
a mechanism to resolve investment disputes between foreign investors and the host
state in which they have made their investment.
The ICSID Convention entered into force on October 14, 1966. As of January 2007,
143 states had ratified the Convention, making it one of the most ratified instruments in
the world. The majority of Canada’s trading partners are party to the Convention.
Investment disputes brought under the Convention are administered by the
International Centre for the Settlement of Investment Disputes, located in Washington,
D.C. In the last few years, the activity of the Centre has soared due to increased flows
of cross-border investment and the number of investment treaties that refer to ICSID
arbitration. While the Centre handled 110 arbitrations in total during the first 40 years of
its existence, there are currently 105 proceedings under way. Since its inception, the
Centre has established itself as a reliable and effective organization for resolving
investment disputes.
Once ratified, the Convention will provide additional protections to Canadian investors
abroad by allowing them to include in their contracts with foreign states the option of
arbitration under the ICSID Convention. In addition, Canadian investors doing business
in a country with which Canada has a Foreign Investment Promotion and Protection
Agreement will have recourse to ICSID arbitration for violations of the agreement.
Becoming a party to the ICSID Convention will also make Canada a more attractive
destination for international investors.
The most significant advantage of the Convention is the enforcement of arbitral awards.
Unlike awards issued by other arbitral institutions, domestic courts cannot refuse to
enforce decisions issued under the ICSID Convention. Rather, such awards are
enforceable in any country that has ratified the Convention as if they were final
judgments of the courts in that state.
Canada signed the ICSID Convention on December 15, 2006. The adoption of today’s
bill is a necessary step for ratification of the Convention. British Columbia,
Newfoundland and Labrador, Nunavut, Ontario and Saskatchewan have already
adopted their own implementing legislation.
