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Exchange of Notes between the Government of Canada and the Government of the Commonwealth of the Bahamas constituting an Agreement relating to Foreign Investment Insurance [1984] CATSer 27 (21 September 1984)

E101470 - CTS 1984 No. 27

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE COMMONWEALTH OF THE BAHAMAS CONSTITUTING AN AGREEMENT RELATING TO FOREIGN INVESTMENT INSURANCE

I

The High Commissioner of Canada to the Minister of Foreign Affairs and Attorney General of the Bahamas

NASSAU, May 11, 1984

No. 008

Excellency,

I have the honour to refer to discussions which have recently taken place between representatives of our two Governments relating to investments in the Commonwealth of The Bahamas which would further the development of economic relations between Canada and the Commonwealth of The Bahamas, and to insurance of such investments by the Government of Canada, through its agent the Export Development Corporation, hereinafter called the ‘Insuring Agency’. 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 Insuring Agency under a contract of insurance for any loss by reason of:

(a) war, riot, insurrection, revolution or rebellion in The Bahamas;

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

(c) any other method of takeover by a Government, or an agency thereof in The Bahamas, other than action of the kind described in subparagraph (b) that deprives the investor of any right in, or in connection with, an investment; or

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

the Insuring Agency shall be authorized by the Government of The Bahamas 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 The Bahamas partially or wholly invalidate the acquisition of any interests in any property within its national territory by the Insuring Agency, The Bahamas 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 Bahamas.

3. The Insuring Agency shall assert no greater rights than those of the transferring investor under the laws of The Bahamas with respect to any interest transferred or succeeded to as contemplated in paragraph 1. 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 Insuring Agency acquire, under investment insurance contracts, amounts and credits of the lawful currency of the Government of The Bahamas, the said Government 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 Bahamas.

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

6. (a) Difference 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 six 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.

(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 expense 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 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.

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 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.

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

High Commissioner

Chalmer Reece

II

The Minister of Foreign Affairs and Attorney General of The Bahamas to the High Commissioner of Canada

NASSAU, September 21, 1984

No. 416

His Excellency Mr. David Chalmer Reece,
High Commissioner of Canada,
Jamaica

Excellency,

I have the honour to acknowledge receipt of Your Excellency’s Note of 11th May, 1984, which reads as follows:

“(See Canadian Note No. 008 of May 11, 1984)”

I have the honour to inform Your Excellency that the foregoing proposals are acceptable to the Government of The Commonwealth of The Bahamas and in consequence Your Excellency’s Note and this reply should constitute an Agreement between our two Governments in this matter which shall enter into force with effect from the date of this letter.

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

Paul L. Adderley

Minister of Foreign Affairs and Attorney General