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Exchange of Notes (May 6 and 31, 1982) between Canada and Papua New Guinea constituting an Agreement relating to Investment Insurance [1982] CATSer 13 (10 June 1982)

E101498 - CTS 1982 No. 20

EXCHANGE OF NOTES BETWEEN CANADA AND PAPUA NEW GUINEA CONSTITUTING AN AGREEMENT RELATING TO INVESTMENT INSURANCE

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The High Commissioner of Canada to the Minister for Foreign Affairs and Trade of Papua New Guinea

CANBERRA, May 6, 1982

No. 1021

The Honourable W. Noel Levi, M.P.,
Minister for Foreign Affairs and Trade,
Port Moresby,
Papua New Guinea

Sir,

I have the honour to refer to discussions which have recently taken place between representatives of our two Governments relating to investments in Papua New Guinea which would further the development of economic relations between Papua New Guinea and Canada, 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 Papua New Guinea;

(b) the arbitrary seizure, expropriation, confiscation or substantive deprivation of use of any property by a Government, or an agency thereof, in Papua New Guinea;

(c) any action by a Government, or an agency thereof, in Papua New Guinea 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 Papua New Guinea 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 Papua New Guinea 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 Papua New Guinea partially or wholly invalidate the acquisition of any interests in any property within its national territory by the Insuring Agency, Papua New Guinea 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 Papua New Guinea.

3. The Insuring Agency shall assert no greater rights than those of the transferring investor under the laws of Papua New Guinea with respect of 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 Papua New Guinea, the said Government of Papua New Guinea 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 Papua New Guinea.

5. This Agreement shall apply only with respect to investments in projects or activities approved by the Government of Papua New Guinea and in respect of which insurance by the Export Development Corporation has been issued.

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, it may request consultations for that purpose. Such consultations shall begin not later than sixty (60) days from the date of the request.

(b) Any modifications of the Agreement agreed between the two Governments shall enter into force 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 the Note by which the Government of Papua New Guinea communicates to the Government of Canada its approval of the Agreement in accordance with its constitutional requirements, 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.

Raymond C. Anderson

High Commissioner

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The Minister for Foreign Affairs and Trade of Papua New Guinea to the High Commissioner of Canada

PAPUA NEW GUINEA

PORT MORESBY, 31 May 1982

His Excellency Raymond C. Anderson,
Canadian High Commissioner to Papua New Guinea,
Canberra

Excellency,

I have the honour to acknowledge receipt of your Note No. 1021 of 6 May 1982, the English text of which reads as follows:

“(See Canadian Note dated May 6, 1982)”

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

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

W. Noel Levi

Minister for Foreign Affairs and Trade

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The Department of Foreign Affairs and Trade to the Canadian High Commission

WAIGANI, June 10, 1982

Note No. 357/82

The Department of Foreign Affairs and Trade presents its compliments to the Canadian High Commission and has the honour to refer to the Exchange of Notes constituting an Investment Insurance Agreement between Papua New Guinea and Canada.

The Department has the honour to acknowledge receipt of the High Commission’s Note of 6th May, 1982, signed by His Excellency, Raymond C. Anderson, Canadian High Commissioner to Papua New Guinea.

The Department would advise that the Government of Papua New Guinea’s confirmatory Note herewith enclosed, was signed by the Minister for Foreign Affairs and Trade, the Honourable W. Noel Levi, on 31st May, 1982.

Further, the Department has the honour to confirm that Papua New Guinea’s constitutional formalities in respect of the said Agreement were fulfilled on 10 December, 1981. In accordance with its provisions, the Agreement shall enter into force between our two Governments on the date of this note, that is 10th June, 1982.

The Department of Foreign Affairs and Trade avails itself of this opportunity to renew to the Canadian High Commission the assurances of its highest consideration.