Greater predictability and stability will help create new jobs and new opportunities for Canadian businesses and investors in global markets
November 1, 2013 - The Honourable Ed Fast, Minister of International Trade, today announced that Canada has ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, known as the ICSID Convention. This means Canadian investors will have access to an impartial, less expensive and more effective dispute-resolution mechanism to resolve investment disputes with host states.
“Our government is committed to helping protect Canadian investments around the world,” said Minister Fast. “Ratifying this investment treaty is an important step toward further ensuring predictability and stability for Canadian investors operating abroad. This is the latest example of how our pro-trade, pro-investment plan to help our businesses grow and succeed abroad continues to get results for our exporters, workers, investors and businesses.”
ICSID stands for the International Centre for Settlement of Investments Disputes, which is the leading international arbitration institution devoted to investor-state dispute settlement. The internationally recognized rules and effective dispute-resolution mechanisms of the ICSID will help Canadian businesses invest with greater confidence in global markets.
“Our government understands that setting the conditions for greater two-way investment creates new jobs and new opportunities for all Canadians,” added Minister Fast. “As part of the most ambitious trade expansion and investment attraction plan in our history, we will continue to deliver for our world-class Canadian businesses and the workers and families they support.”
The treaty will enter into force 30 days after Canada notifies the International Bank for Reconstruction and Development, which manages the treaty. Currently 147 states, including all other G-8 countries, have ratified the ICSID Convention.
For more information, please visit International Centre for Settlement of Investment Disputes.
A backgrounder follows.
- 30 -
For further information, media representatives may contact:
Rudy Husny
Press Secretary
Office of the Honourable Ed Fast
Minister of International Trade and Minister for the Asia-Pacific Gateway
613-992-7332
rudy.husny@international.gc.ca
Media Relations Office
Foreign Affairs, Trade and Development Canada
613-995-1874
media@international.gc.ca
Follow us on Twitter: @Canada_Trade
The ICSID Convention was sponsored by the World Bank to facilitate and increase the flow of international investment. It establishes rules under which investment disputes between states and nationals of other states may be solved by means of conciliation or arbitration.
Canada signed the ICSID Convention on December 15, 2006, and passed implementing legislation on March 13, 2008. The ratification by Canada of the ICSID Convention means that Canadian investors abroad will have the option to bring investment disputes to the ICSID for arbitration. NAFTA and most of our bilateral free trade agreements (FTAs) and foreign investment promotion and protection agreements (FIPAs) provide the ICSID as a dispute-settlement option, which an investor can choose if both the investor’s state and the host state of the investment are party to ICSID. Once the parties have consented to arbitration under the ICSID Convention, neither can unilaterally withdraw its consent.
In ICSID member states where Canada does not have a FIPA or an FTA, the ICSID Convention will allow Canadian investors to provide for ICSID arbitration in their contracts with foreign governments and access independent international arbitration in the event of a contractual dispute with the ICSID member state.
Compared to other arbitration mechanisms available for investment disputes, the ICSID regime provides for better guarantees regarding enforcement of awards and more limited local court intervention. In addition, all ICSID contracting states, whether or not parties to the dispute, are required by the convention to recognize and enforce ICSID arbitral awards.
Any arbitral award rendered under the auspices of ICSID is binding, and any resulting financial obligation must be enforced as if the award were a final domestic court judgment.
The International Centre for Settlement of Investments Disputes (ICSID) was created in 1966 by the ICSID Convention as an impartial international forum providing facilities for the resolution of legal disputes between eligible parties, through conciliation or arbitration procedures. Today, the ICSID is considered to be the leading international arbitration institution devoted to investor-state dispute settlement, a form of resolution of disputes between foreign investors and host states.
