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Exchange of Notes constituting an Agreement between the Government of Canada and the Government of the Kingdom of Thailand relating to Canadian Investments in the Kingdom of Thailand [1983] CATSer 2 (5 January 1983)

E103410 - CTS 1983 No. 3

EXCHANGE OF NOTES CONSTITUTING AN AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE KINGDOM OF THAILAND RELATING TO CANADIAN INVESTMENTS IN THE KINGDOM OF THAILAND

I

The Ambassador of Canada to the Minister of Foreign Affairs of Thailand

BANGKOK, January 5, 1983

Note No. 114

His Excellency Air Chief Marshal Siddhi Savetsila
Minister of Foreign Affairs
Bangkok

Excellency,

I have the honour to refer to discussions which have recently taken place between officials of our two Governments relating to Canadian investments in the Kingdom of Thailand and to insurance of such investments by the Government of Canada, through its agent the Export Development Corporation, which would encourage additional Canadian investment in Thailand and thus further the development of economic relations between Canada and the Kingdom of Thailand. I also have the honour to confirm the following understandings reached as a result of those discussions:

1. The Government of Canada shall take necessary measures to encourage Canadian investment in the Kingdom of Thailand.

2. In the event that the Export Development Corporation, hereinafter called "the Insuring Agency" makes payment under a contract of investment insurance to a Canadian investor for any loss which arises from:

(a) war, riot, insurrection, revolution or armed conflict in the Kingdom of Thailand;

(b) nationalization or expropriation, or any action by the Government, or an agency thereof, in the Kingdom of Thailand that deprives the investor of any rights granted under an investment;

(c) any action by the Government of the Kingdom of Thailand or an agency thereof that prohibits or restricts any legal right to transfer any money or remove any property from the Kingdom of Thailand; the Insuring Agency shall be authorized by the Government of the Kingdom of Thailand to exercise the legal rights having devolved upon it by law or having been assigned to it by its predecessor in title.

3. The Insuring Agency shall assert no greater rights than those of the transferring investor accorded by the laws of the Kingdom of Thailand with respect to any interest transferred or succeeded to as contemplated in paragraph 2.

4. To the extent that the laws of the Kingdom of Thailand partially or wholly prevent or invalidate the acquisition of any interests in any property in connection with investment within its national territory by the Insuring Agency, the Government of the Kingdom of Thailand 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 Kingdom of Thailand.

5. Should the said Insuring Agency acquire, under investment insurance contracts, amounts and credits of the lawful currency of the Government of the Kingdom of Thailand, the said Government of the Kingdom of Thailand 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 Kingdom of Thailand.

6. This Agreement shall apply only with respect to investments in projects or activities which are approved in writing by the competent authority of the Government of the Kingdom of Thailand. The Government of the Kingdom of Thailand shall notify the Government of Canada of the name of the competent authority from time to time.

7. (a) 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, they shall be submitted, at the request of either Government, to an ad hoc arbitral tribunal for settlement in accordance with applicable principles and rules of public international law.

(b) 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.

(c) 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.

(d) 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.

(e) 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.

8. (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 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, Excellency, the renewed assurances of my highest consideration.

Fred Bild

Ambassador

II

The Minister of Foreign Affairs of Thailand to the Ambassador of Canada

(Translation)

BANGKOK, January 5, 1983

His Excellency Mr. Fred Bild
Ambassador of Canada to the Kingdom of Thailand
Bangkok

Excellency,

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

"I have the honour to refer to discussions which have recently taken place between officials of our two Governments relating to Canadian investments in the Kingdom of Thailand and to insurance of such investments by the Government of Canada, through its agent the Export Development Corporation, which would encourage additional Canadian investment in Thailand and thus further the development of economic relations between Canada and the Kingdom of Thailand. I also have the honour to confirm the following understandings reached as a result of those discussions:

1. The Government of Canada shall take necessary measures to encourage Canadian investment in the Kingdom of Thailand.

2. In the event that the Export Development Corporation, hereinafter called "the Insuring Agency" makes payment under a contract of investment insurance to a Canadian investor for any loss which arises from:

(a) war, riot, insurrection, revolution or armed conflict in the Kingdom of Thailand;

(b) nationalization or expropriation, or any action by the Government, or an agency thereof, in the Kingdom of Thailand that deprives the investor of any rights granted under an investment;

(c) any action by the Government of the Kingdom of Thailand or an agency thereof that prohibits or restricts any legal right to transfer any money or remove any property from the Kingdom of Thailand; the Insuring Agency shall be authorized by the Government of the Kingdom of Thailand to exercise the legal rights having devolved upon it by law or having been assigned to it by its predecessor in title.

3. The Insuring Agency shall assert no greater rights than those of the transferring investor accorded by the laws of the Kingdom of Thailand with respect to any interest transferred or succeeded to as contemplated in paragraph 2.

4. To the extent that the laws of the Kingdom of Thailand partially or wholly prevent or invalidate the acquisition of any interests in any property in connection with investment within its national territory by the Insuring Agency, the Government of the Kingdom of Thailand 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 Kingdom of Thailand.

5. Should the said Insuring Agency acquire, under investment insurance contracts, amounts and credits of the lawful currency of the Government of the Kingdom of Thailand, the said Government of the Kingdom of Thailand 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 Kingdom of Thailand.

6. This Agreement shall apply only with respect to investments in projects or activities which are approved in writing by the competent authority of the Government of the Kingdom of Thailand. The Government of the Kingdom of Thailand shall notify the Government of Canada of the name of the competent authority from time to time.

7. (a) 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, they shall be submitted, at the request of either Government, to an ad hoc arbitral tribunal for settlement in accordance with applicable principles and rules of public international law.

(b) 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.

(c) 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.

(d) 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.

(e) 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.

8. (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 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."

I have the honour to inform you that these proposals are acceptable to the Government of the Kingdom of Thailand and to confirm that your Note and this reply will constitute an Agreement between our two Governments, the English, French and Thai versions being equally authentic.

Accept, Excellency, the assurances of my highest consideration.

Siddhi Savetsila

Minister of Foreign Affairs