Canada: The International Centre For Settlement Of Investment Disputes – Its Time Has Come

Last Updated: June 17 2013

Article by , [1]

Canada's ratification of the Convention on the Settlement of Investment Disputes between States and Nationals of other States (the "Convention") has been a long time coming. Since signing the Convention in 2006 and passing implementing legislation in 2008 that has yet to come into force, Canada has made no further progress towards ensuring that the International Centre for Settlement of Investment Disputes (ICSID) is an enforceable option for Canadian businesses investing abroad.

Why is the ICSID important?

When Bill C-53, the predecessor to Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States was introduced, the Minister of International Trade said that "The ICSID Convention will contribute to Canada's prosperity by providing additional protection to Canadian investors and reinforcing Canada's investment-friendly image abroad". [2]  So how is this accomplished?

The purpose of ICSID itself, as set out in the Convention:

To provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States in accordance with the provisions of this Convention.

There are numerous reasons to support Canada's adherence to this particular convention. In point of fact, Alan H. Kessel, Legal Advisor to the Department of Foreign Affairs and International Trade, stated before the Standing Committee on Foreign Affairs and International Development on November 22, 2007, the following:

"It would contribute to enforcing Canada's image as an investment friendly country. It would provide additional protection to Canadian investors abroad by allowing them to have recourse to ICSID arbitration in their contracts and foreign states. And thirdly, it would allow investors of Canada and foreign investors in Canada to bring investment claims under its arbitral rules."

Furthermore, ratifying the ICSID Convention would bring Canadian policy into line with other OECD countries.

The provision of facilities is innocuous enough; the Convention does not force anyone to use them. ICSID provides a neutral place and a roster of qualified arbitrators with expertise in international investments, appointed by the nation states that have ratified the Convention. ICSID's decisions are final. The decisions are enforced by the combined pressure of the nation states that have committed to upholding them and the World Bank, under whose umbrella ICSID sits.

ICSID is a procedural being. It offers speed, expertise, neutrality and finality of decision making to foreign investors and host countries, but the Convention does not create substantive rights. The substantive rights that ICSID can enforce come from bilateral investment treaties, or Foreign Investment Promotion and Protection Agreements (FIPAs) in Canada. Both NAFTA and Canada's 26 FIPAs [3] provide the rights that may be pursued through arbitration at ICSID, once Canada ratifies the Convention. Without a FIPA, investors are likely to have to rely on host country legal protections. Until Canada ratifies the Convention the enforcement of these rights and protections must be pursued through other avenues, such as ad-hoc UNCITRAL arbitrations, or through national judicial systems, neither of which can offer the speed, expertise, neutrality or finality of an ICSID panel. Furthermore, as more and more disputes are arbitrated by ICSID, a large body of case law is developing. While previous orders are not legally binding on future decisions of the panel, they do add a large measure of predictability.

What is taking Canada so long?

The final text of the Convention was approved by the Executive Directors of the World Bank on March 18, 1965 and it came into force with 20 signatures on October 14, 1966. [4] In its first fifteen years, ICSID saw only eleven disputes and issued only six awards. [5] The advent of bilateral investment treaties filled two gaps in the Convention, namely that both parties need to consent to arbitration and that in the absence of agreement, ICSID is to apply the law of the host state and applicable international law. [6] Many bilateral investment treaties provide nation state consent to arbitration and provide the agreement, outlining the substantive rights to be enforced. Canada's first FIPA wasn't signed until 1989 and didn't come into force until 1991 [7] and NAFTA didn't come into force until 1994. [8] With these two gaps filled, investors have the assurance that those nations that have ratified the Convention will meet them at the arbitration tribunal with previously agreed upon protections and rules. With that assurance, use of ICSID as a dispute settlement option has exploded. According to ICSID, there are currently 200 concluded cases and 124 pending. [9]

Canada signed the Convention on December 15, 2006. Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States received Royal Assent on March 13, 2008, but still awaits an order of the Governor in Council to come into force. [10]

Four provinces and two territories have passed implementing legislation. [11] Ontario passed implementing legislation in 1999. British Columbia, Saskatchewan, Newfoundland and Labrador and Nunavut passed such legislation in 2006. The best explanation for the remaining provinces and Yukon is that in face of such a non-controversial issue, the issue keeps falling to the legislative backburner. With the eyes of the public so rarely trained on issues like international investment, a golden opportunity was missed at the G-8 and G-20 to bring ratification of the Convention to the foreground. Canada's ratification is glaringly obvious to the international community, especially with the election of Meg Kinnear as Secretary-General of ICSID in 2009, formerly the Director General of the Trade Law Bureau of Canada. [12] The upcoming International Bar Association Conference in Vancouver in October will offer another opportunity to focus the mind on Canadian lawmakers on the importance of ratifying the Convention and bringing the Act into force.

There are still holdouts to the Convention. Brazil, one of Canada's major trading partners has still not signed on to the Convention, having voiced concerns at the origin of the Convention that it would infringe on the Brazilian judiciary's administration of justice and violate the equality of law by granting a privileged position to foreign investors. [13]  Also, both Bolivia and Ecuador have denounced the Convention. However, with 155 signatories, the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States offers the most comprehension investment dispute settlement option for foreign investment in Canada and Canadian investment abroad.

Perhaps Quebec's Senator Pierre Claude Nolin has summarized it best when he stated:

"The tremendous growth in investment and investor state disputes has made Canada's failure to ratify ICSID the focus of attention by Canadian business, the Canadian legal community and our trading partners."

Originally published September 22, 2013

[1] David C. Dingwall, P.C., Q.C., Counsel, Affleck Greene McMurtry LLP, Toronto, Ontario; Counsel, Sampson McDougall, Sydney, Nova Scotia; Credit is also given to Brigid Wilkinson, summer student at Affleck Greene McMurtry LLP, for her very helpful assistance in this article.

[2] Elizabeth Kuruvila, LS-570 E, Legislative Summary, Bill C-9: Settlement of International Investment Disputes Act,, last accessed August 18, 2010.

[3] Two have yet to come into force: El Savador and South Africa. Foreign Affairs and International Trade Canada. Last accessed August 17, 2010.

[4] Christophe Schreuer, The ICSID Convention: a commentary, Cambridge: Cambridge University Press, 2001 at 4. The first 20 signatures

[5] Andreas F. Lowenfeld, "The ICSID Convention: Origins and Transformation", 38:47 GA. J. Int'l & Comp. L. 55.

[6] Articles 25 and 42.

[7] The Russian Federation (now Russia). Supra note 1.

[8] NAFTA Secretariat. Last accessed August 17, 2010.

[9] ICSID, List of ICSID Cases. Last accessed August 18, 2010.

[10] LEGISinfo, Library of Parliament. Last accessed August 17, 2010.

[11] Settlement of International Investment Disputes Act, S.B.C. 2006, c.16, Settlement of International Investment Disputes Act, S.N.L. 2006, c.S-13.3, Settlement of International Investment Disputes Act, 1999, S.O. 1999, c.12, Sched. D., Settlement of International Investment Disputes Act, S.S. 2006, c. S-47.2, Northwest Territories and Nunavut.

[12] The World Bank, Last accessed August 17, 2010.

[13] Andreas F. Lowenfeld, "The ICSID Convention: Origins and Transformation", 38:47 GA. J. Int'l & Comp. L. 54.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions