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Exchange of Notes between the Government of Canada and the Government of St Vincent constituting an Agreement relating to Canadian Investments in St. Vincent insured by the Government of Canada through its Agent, the Export Development Corporation [1972] CATSer 8 (8 May 1972)

E101504 - CTS 1972 No. 18

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF ST. VINCENT CONSTITUTING AN AGREEMENT RELATING TO CANADIAN INVESTMENTS IN ST. VINCENT INSURED BY THE GOVERNMENT OF CANADA THROUGH ITS AGENT, THE EXPORT DEVELOPMENT CORPORATION

I

The High Commissioner for Canada to the Premier of St. Vincent

PORT OF SPAIN, April 27, 1972

The Honourable J. F. Mitchell,
Premier of St. Vincent,
Kingstown, St. Vincent, W.I.

Excellency,

I have the honour to refer to conversations which have recently taken place between the Government of Canada (the Insuring Government) and the Government of St. Vincent, British West Indies (the Host Government) with a view to promoting the development of economic relations between the two countries.

The particular facility under consideration has been foreign investment insurance by the Insuring Government, through its agent the Export Develop­ment Corporation. The purpose of such facility is to promote investments in other countries by Canadian nationals whether individuals or corporations (including non-Canadian subsidiaries), by providing protection against specif­ic risks to investments in St. Vincent.

The specific risks against which the Insuring Government offers protec­tion are:

(a) war, riot, insurrection, revolution or rebellion;

(b) expropriation, confiscation or deprivation of any property right by a government or an agency thereof;

(c) inconvertibility of foreign exchange.

On the basis of the conversations held, I have the honour to confirm the understanding between the Government of St. Vincent, British West Indies and the Government of Canada as follows:

1. Subject to paragraph 2, when an investment suffers a loss by reason of a cause for which the Insuring Government has assumed the risks, the Host Government shall authorize the Insuring Government to exercise the rights having devolved on it by law or having been assigned to it by the predecessor in title;

2. To the extent that the laws of the Host Country partially or wholly invalidate the acquisition by the Insuring Government of any interests in any property within its national territory, the Host Government shall permit the investor and the Insuring Government to make appropriate arrangements pursuant to which such interests are transferred to an entity permitted to own such interests under the laws of the Host Country;

3. The Insuring Government shall assert no greater rights than those of the transferring investor under the laws of the Host Country with respect to any interest transferred or succeeded to as contemplated in paragraphs 1 and 2;

4. If the Insuring Government makes payment to any investor under an insurance contract made pursuant to the present agreement, the Host Government shall, subject to the provisions of paragraph 2, recognize the transfer to the Insuring Government of any currency, credits, assets, or investment on account of which payment under such an insurance con­tract is made;

5. Should the Insuring Government acquire amounts and credits of the lawful currency of the Host Country under investment insurance contracts, made pursuant to the present agreement, the Host Government shall accord to those funds treatment no different than that which it would accord if such funds were to remain with the investor; it shall make such amounts and credits freely available to the Insuring Government to meet its expenditures in the national territory of the Host Country.

6. Differences between the two governments concerning the interpre­tation and application of provisions of this agreement or any claim arising out of investments insured in accordance with this agreement, against either of the two governments, which in the opinion of the other presents a question of public international law shall be settled, insofar as possible, through negotiations between the governments. If such differences cannot be resolved within a period of three months following the request for such negotiations, it shall be submitted, at the request of either government, to an ad hoc tribunal for settlement in accordance with applicable principles and rules of public international law. The tribunal shall consist of three members and shall be established as follows: each government shall appoint one arbitrator; a third member, who shall act as Chairman, shall be appointed by the other two members. The Chairman shall not be a national of either country. The arbitrators shall be appointed within two months and the Chairman within three months of the date of receipt of either government's request for arbitration. If the foregoing time limits are not met, either government may, in the absence of any other agree­ment, request the President of the International Court of Justice to make the necessary appointment or appointments and both governments agree to accept such appointment or appointments. The tribunal shall decide by majority vote. Its decision shall be binding and definitive. Each of the governments shall pay the expense of its member and its representation in the proceedings before the tribunal; expenses of the Chairman and the other costs shall be paid in equal parts by the two Governments. The tribunal may adopt other regulations concerning costs. In all other mat­ters, the tribunal shall regulate its own procedures. Only the respective governments may request arbitration procedure and participate in it.

7. I have the honour to propose that, if the foregoing is acceptable to your Government, this Note, which is authentic in English and French and your reply to that effect shall constitute an agreement between our two Governments which shall enter into force on the date of your reply. This agreement shall continue in force until terminated by either Govern­ment on six month's notice in writing to the other. In the event of termination, the provisions of the agreement shall continue to apply in respect of insurance contracts issued by either Government while the agreement was in force for the duration of these contracts; provided that in no case shall the agreement continue to apply to such contracts for a period longer than fifteen years after termination of this agreement.

Accept, Excellency, renewed assurance of my highest consideration.

G. A. Rau

High Commissioner for Canada

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The Premier of St. Vincent to the High Commissioner for Canada

May 8, 1972

His Excellency Mr. G. A. Rau,
High Commissioner for Canada,
P.O. Box 1246
Port-of-Spain, Trinidad

Your Excellency:

I have the honour to refer to your Note of April 27, 1972 relating to investments in St. Vincent which would further the development of economic relations between St. Vincent and Canada, and to guarantees of such invest­ments by the Government of Canada, through its agent, the Export Develop­ment Corporation.

I have the honour to confirm that the arrangements governing the guaran­tee of Canadian investment in St. Vincent as contained in your Note meet with the approval of my Government.

Authority to accede to this Agreement has been delegated to the Govern­ment of St. Vincent by Her Majesty's Government of the United Kingdom, subject to the condition that the United Kingdom Government should not be under any liability whatsoever in respect of the fulfilment of the provisions of the Agreement by the Government of St. Vincent.

I therefore agree to your proposal that Your Excellency's Note and this reply shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

Yours sincerely,

J. F. Mitchell,

Premier