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Exchange of Notes between the Government of Canada and of the Republic of Malta constituting an Agreement relating to Foreign Investment Insurance [1982] CATSer 10 (24 May 1982)

E101494 - CTS 1982 No. 19

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF MALTA CONSTITUTING AN AGREEMENT RELATING TO FOREIGN INVESTMENT INSURANCE (WITH ARRANGEMENT)

I

The High Commissioner of Canada to the Acting Secretary of Foreign Affairs of Malta

VALLETTA, May 24, 1982

Edwin A. Causon,
Acting Secretary, Ministry of Foreign Affairs,
Valletta

Sir,

I have the honour to refer to discussions which have recently taken place between representatives of our two Governments relating to investments in the Republic of Malta which would further the development of economic relations between Canada and the Republic of Malta, and to insurance of such investments by the Government of Canada, through its agent the Export Development Corporation. I also have the honour to confirm the following understandings reached as a result of those discussions.

1. In the event of a payment by the Export Development Corporation under a contract of insurance for any loss by reason of:

(a) war, riot, insurrection, revolution or rebellion in the Republic of Malta;

(b) the arbitrary seizure, expropriation, confiscation or deprivation of use of any property by a Government, or an agency thereof, in the Republic of Malta;

(c) any action by a Government, or an agency thereof, in the Republic of Malta other than action of the kind described in sub-paragraph (b) that deprives the investor of any rights in, or in connection with, an investment; and

(d) any action by a Government, or an agency thereof, in the Republic of Malta that prohibits or restricts the transfer of any money or the removal of any property from that country;

the said Corporation, hereinafter called the "Insuring Agency" shall be authorized by the Government of the Republic of Malta to exercise the rights having devolved on it by law or having been assigned to it by the predecessor in title.

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

3. The Insuring Agency shall assert no greater rights than those of the transferring investor under the laws of the Republic of Malta with respect to any interest transferred or succeeded to as contemplated in paragraph 1. The Government of Canada, does, however, reserve its right to assert a claim in its sovereign capacity in the event of a denial of justice or other question of state responsibility as defined in international law.

4. Should the said Insuring Agency acquire, under investment insurance contracts, amounts and credits of the lawful currency of the Government of the Republic of Malta, the said Government of the Republic of Malta shall accord to those funds treatment no different than that which it would accord if such funds were to remain with the investor, and such funds shall be freely available to the Government of Canada to meet its expenditures in the national territory of the Republic of Malta.

5. This Agreement shall apply only with respect to insured investments in projects or activities which are permitted by the Government of the Republic of Malta.

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, present 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, they 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 arbitral 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. If the President of the International Court of Justice is prevented from carrying out the said function or if he is a national of either country, the appointment or appointments shall be made by the Vice-President, and if the latter is prevented from carrying out the said function or if he is a national of either country, the appointment or appointments shall be made by the next senior judge of this Court who is not a national of either country. The arbitral tribunal shall decide by a majority vote. Its decision shall be final and binding on both Governments. Each of the Governments shall pay the expenses of its member and its representation in the proceedings before the arbitral tribunal; expenses of the Chairman and other costs shall be paid in equal parts by the two Governments. The arbitral tribunal may adopt other regulations concerning costs. In all other matters, the arbitral tribunal shall regulate its own procedures. Only the respective Governments may request arbitral procedure and participate in it.

7. (a) If either Government considers it desirable to modify the provisions of this Agreement, this procedure may be carried out through a request for consultation and/or by correspondence and shall begin not later than sixty (60) days from the date of the request.

(b) The modification of the Agreement agreed between the two Governments shall enter into force upon their confirmation on a date which shall be mutually agreed upon by an exchange of notes.

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 months' 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 the Government of Canada 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 15 years after the termination of this Agreement.

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

Ghislain Hardy

High Commissioner

II

The Acting Secretary of Foreign Affairs of Malta to the High Commissioner of Canada

VALLETTA, May 24, 1982

J. E. G. Hardy,
High Commissioner for Canada,
Rome

Sir,

I have the honour to acknowledge receipt of your Note of today's date, the English text of which reads as follows:

"(See Canadian Note dated May 24, 1982)"

I wish to confirm that the foregoing is acceptable to the Government of Malta and that your Note together with this reply constitute an Agreement between our two Governments in this matter.

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

Edwin A. Causon

Acting Secretary, Ministry of Foreign Affairs

III

The High Commissioner of Canada to the Acting Secretary of Foreign Affairs of Malta

VALLETTA, May 24, 1982

Mr. Edwin A. Causon
Acting Secretary, Ministry of Foreign Affairs
Valletta

Sir,

On the occasion of the signature of the Foreign Investment Insurance Agreement between Canada and Malta, I wish to assure you that in the event that the Government of Malta is authorized by its laws to issue insurance coverage under a program similar to the Foreign Investment Insurance Program of the Export Development Corporation, the Government of Canada is prepared to enter into negotiations with the Government of Malta concerning an agreement providing for reciprocal treatment with regard to insured investments made by nationals and corporations of Malta in Canada in accordance with the Canadian laws and regulations, on the understanding that provincial concurrence and, if appropriate, legislation will be required in respect of matters which, under Canadian law, fall within the legislative jurisdiction of the provinces.

The Government of Canada undertakes to bring the bilateral Foreign Investment Insurance Agreement to the attention of Canadian companies in the expectation that they will view positively investment opportunities in the Republic of Malta to the benefit of both countries.

If the above is acceptable to the Government of Malta, I have the honour to propose that this letter, which is authentic in English and French, and your reply in English to that effect, will constitute an Understanding between our two Governments.

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

Ghislain Hardy

High Commissioner

IV

The Acting Secretary of Foreign Affairs of Malta to the High Commissioner of Canada

VALLETTA, May 24, 1982

J. E.G. Hardy
High Commissioner for Canada
Rome

Sir,

I have the honour to acknowledge receipt of your letter of today's date reading as follows:

"(See Canadian Letter dated May 24, 1982)"

I confirm herewith that the above represents the understanding reached between our two Governments.

Please accept, Sir, the assurances of my highest consideration.

Edwin A. Causon

Acting Secretary, Ministry of Foreign Affairs