Canada: Canada Ratified ICSID Convention

At long last, the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (generally known as the ICSID Convention, but also referred to as the Washington Convention) has entered into force for Canada, as of 01 December 2013. An important tool for the resolution of international investor-state disputes is now available to Canadians who invest abroad, and to foreigners who invest in Canada.


Unique challenges arise in the resolution of international investor-state disputes. Chief among them is finding an effective dispute resolution mechanism. Should investors rely on diplomatic channels, despite the delay and uncertainty that entails? Should they sue in the local courts of the host state, despite fears of discriminatory adjudication on foreign soil?

Realizing that such non-commercial concerns could discourage the free international flow of private investment, the World Bank sponsored negotiations in the 1960s to remove them, by establishing a specialized international dispute resolution framework. Those negotiations resulted in the ICSID Convention, a multilateral treaty that came into force in 1966.

The ICSID Convention offered a major step forward, by establishing neutral arbitration tribunals to resolve international investor-state disputes. Their neutrality would avoid the risk of discriminatory adjudication in the national courts. As well, ICSID awards would be enforceable with the same ease as other international arbitral awards. The sole mechanism for challenging a final ICSID award was the self-contained review regime established by the Convention itself.

As a result, and unlike many other forms of investor-state arbitration, awards under the ICSID Convention are not amenable to challenge in national courts. National courts cannot decline to recognize and enforce ICSID awards on the grounds in the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) or the UNCITRAL Model Law on International Commercial Arbitration.

Over the intervening four decades, the ICSID Convention has become the leading mechanism for the resolution of international investor-state disputes. After a slow start, the Convention became a cornerstone of international investor protection in the 1990s, with a proliferation of bilateral investment treaties that required disputes to be resolved under its auspices. More than 2,000 such treaties are now in place and, as of November 2013, 158 states have ratified the Convention and become members of the International Centre for Settlement of Investment Disputes, the impartial international institution established under the Convention.

Until now, Canada had remained on the sidelines – the only G8 country to do so. This delay was generally attributed to Canada's federal system of government: Canadian ratification of the ICSID Convention would require its implementation not only by the federal Parliament, but also by a least a critical mass of the provincial and territorial Legislatures. During that period, the only aspect of ICSID's operations in which Canada has been able to participate is the ICSID Additional Facility, which was established by the World Bank in 1978 to extend the availability of ICSID arbitration to certain types of international disputes between investors and states that are not ICSID members. For example, so long as Canada and Mexico were not ICSID members, disputes under the North American Free Trade Agreement were ineligible for resolution under the Convention, but have been eligible for resolution under the Additional Facility. Although many of the principles that guide arbitration under the Additional Facility are similar to those under the Convention, one key distinction remains: the Convention's self-contained provisions on recognition and enforcement of ICSID awards do not apply to Additional Facility awards. Additional Facility awards are as vulnerable to challenge in the national courts as any other international commercial arbitration award.


Over the past 20 years, the government of Canada has been actively promoting Canadian ratification of the ICSID Convention. These efforts have now paid off. Since the subject matter of the Convention falls within provincial jurisdiction over property and civil rights, the Uniform Law Conference of Canada sought to facilitate implementation by drafting model legislation for adoption by the federal Parliament and each of the provincial and territorial Legislatures. The ULCC's model Settlement of International Investment Disputes Act is short (just 15 clauses) and aims to implement the Convention provisions concerning the jurisdiction and powers of the provincial superior courts to recognize and enforce ICSID awards (Clause 3). Under Clause 6 ICSID awards may be registered in the provincial superior court and thereafter are enforceable as a judgment of that court. Under Clause 8 an ICSID award is final and binding "and is not subject to appeal, review, setting aside or any other remedy except as provided in the ICSID Convention". If a provincial, federal or territorial government in Canada consents to resolve disputes with foreign investors under the Convention, Clause 5 allows for variation as to whether the resulting ICSID award will bind crown corporations, crown agents and other similar entities.

To date, several Canadian jurisdictions have enacted legislation implementing the ICSID Convention based on the ULCC's model statute. Although some jurisdictions have yet to legislate, it appears that there are firm understandings in place and that the appropriate steps will be taken in the near term, i.e., less than a year. Although some have suggested that Canada could or should have ratified the Convention without all provinces being onside, political reality has required a more subtle approach. The statutes enacted so far have followed the ULCC model statute template with only minor variations.

As a result of these developments, for the first time international investor-state disputes involving Canadians or their federal, provincial, and territorial governments will have direct access to the many advantages of dispute resolution under the ICSID Convention. Ratification provides important additional protections for the many Canadian companies of all sizes, and in a wide range of industries, that increasingly are investing in all parts of the world. Canada's ratification also serves as a strong vote of confidence in ICSID, which recently has been the target of strong criticism, including denunciation of it by Bolivia and Ecuador.

As with any major policy initiative, Canada's ratification of the ICSID Convention has attracted criticism from some quarters, including:

  • "We ratified only to placate the European Union!"
  • "Ratification compromises Canadian judicial sovereignty and puts our democracy into the hands of arbitrators rather than independent and accountable judges!"
  • "We have tilted the playing field to favour the interests of investors over those of states!"

Time will tell if this alarmism is well-founded, but early indicators suggest not. Around 75% of the world's countries have ratified the ICSID Convention, and only a small handful have subsequently withdrawn from it – namely, the states that are repeatedly hammered for treating foreign investors unfairly. Canada is not in that camp. Even if its ratification of the Convention did prove to be a disaster, Canada would be able to withdraw at any time. As for the suggestion that ratification reflects idiosyncratic policy values of the current government, Canada's Trade Law Bureau and members of the Canadian trade and arbitration community have been actively promoting Canadian ratification of the Convention for two decades, under governments of all political stripes.

About BLG

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
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
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