Scope of Application [Return to the top of the page]

DEFINITION OF INVESTMENT

The term “investment” means any kind of asset owned or controlled either directly, or indirectly through an investor of a third State, by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the latter’s laws, and, in particular, though not exclusively, includes:

• traditional property rights;

• rights in companies;

• goodwill;

• monetary claims and claims to performance;

• intellectual property rights;

• concessions and other similar rights.

The term “investment” does not mean real estate or other property, tangible or intangible, not acquired in the expectation or used for the purpose of economic benefit or other business purposes. (Article 1 (a) (f).

DEFINITION OF INVESTOR

Nationals

The term “investor” means:

• in the case of Canada, any natural person possessing the citizenship of or permanently residing in Canada in accordance with its laws, who makes the investment in the territory of Barbados and who does not possess the citizenship of Barbados

• in the case of Barbados, any natural person possessing the citizenship of or permanently residing in Barbados in accordance with its laws, who makes the investment in the territory of Canada and who does not possess the citizenship of Canada. (Article 1 (g)).

Companies

The term “investor” means:

• in the case of Canada, any enterprise incorporated or duly constituted in accordance with applicable laws of Canada and who makes the investment in the territory of Barbados, and

• in the case of Barbados, any enterprise incorporated or duly constituted in accordance with applicable laws of Barbados and who makes the investment in the territory of Canada. (Article 1 (g)).

Application in Time (Entry into Force and Duration: Applicability to Investments made Prior to Entry into Force)

Date of signature: May 29, 1996
Entry into force: January 17, 1997
Duration: The Agreement shall remain in force until one year from the date when a Contracting Party has received the termination notice from the other Contracting Party.

Admission [Return to the top of the page]

Each Contracting Party shall permit establishment of a new business enterprise or acquisition of an existing business enterprise or a share of such enterprise by investors or prospective investors of the other Contracting Party on a basis no less favorable than that which, in like circumstances, it permits such acquisition or establishment by:

1. its own investors or prospective investors; or
2. investors or prospective investors of any third state. (Article II (3)).

Decisions by either Contracting Party, pursuant to measures not inconsistent with this Agreement, as to whether or not to permit an acquisition shall not be subject to the provisions of Articles XIII [Settlement of Disputes between an investor and the host Contracting Party] or XV [Disputes between the Contracting Parties] of this Agreement. (Article II (4) (a)).
Decisions by either Contracting Party not to permit establishment of a new business enterprise or acquisition of an existing business enterprise or a share of such enterprise by investors or prospective inventors shall not be subject to the provisions of Article XIII of this Agreement (Article II (4) (b)).

Neither Contracting Party may impose any of the following requirements in connection with permitting the establishment or acquisition of an investment or enforce any of the following requirements in connection with the subsequent regulation of that investment:

1. to export a given level or percentage of goods;
2. to achieve a given level or percentage of domestic content;
3. to purchase, use or accord a preference to goods produced or services provided in its territory, or to purchase goods or services provided in its territory, or to purchase goods or services from persons in its territory;
4. to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; or
5. to transfer technology, a production process or other proprietary knowledge to a person in its territory unaffiliated with the transferor, except when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal or competition authority, either to remedy an alleged violation of competition laws or acting in a manner not inconsistent with other provisions of this Agreement. (Article V (2)).

The provisions of Articles II [Establishment, Acquisition and Protection of Investment], III [MFN Treatment after Establishment and Exceptions to MFN], 4 [National Treatment after Establishment and Exceptions to National Treatment] and V [Other Measures] do not apply to:

1. procurement by a government or state enterprise;
2. subsidies or grants provided by a government or a state enterprise, including government-supported loans, guarantees and insurance;
3. any measure denying investors of the other Contracting Party and their investments any rights or preferences provided to the aboriginal peoples of Canada;
4. any current or future decision aid program to promote economic development, whether under a bilateral agreement, or pursuant to a multilateral arrangement or agreement, such as the OECD Agreement on Export Credits. (Article VI (2)).

Investments in cultural industries are exempt from the provisions of this Agreement. “Cultural industries” means natural persons or enterprise engaged in any of the following activities:

1. the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
2. the production, distribution, sale or exhibition of film or video recordings;
3. the production, distribution, sale or exhibition of audio or video music recordings;
4. the publication, distribution, sale or exhibition of music in print or machine readable form; or
5. radio communications in which the transmissions are intended for direct reception by the general public, in all radio, television or cable broadcasting undertakings and all satellite programming network services. (Article VI (3)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Investments of nationals and companies of the other Contracting Party shall receive, in all cases, fair and equitable treatment in accordance with the rules and principles of international law. (Article 2 (2)).

Full Protection and Security

Yes. Full protection and security. (Article 2 (2)).

Non-Discrimination

Yes. None of the Contracting Parties shall use arbitrary and discriminatory measures with respect to the management, maintenance, use, enjoyment or disposal of investments in its territory of nationals or companies of the other Contracting Party. (Article 2 (2)).

National Treatment

Yes. None of the Contracting Parties shall submit investments or returns of nationals or companies of the other Contracting Party to a treatment less favorable than that it grants to investments or returns of its own nationals or companies, or investments or returns of nationals or companies of any third State. (Article 3 (1)).

Most-Favored Nation Treatment

Yes. None of the Contracting Parties shall submit investments or returns of nationals or companies of the other Contracting Party to a treatment less favorable than that it grants to investments or returns of its own nationals or companies or investments or returns of nationals or companies of any third State. (Article 3 (1)).

None of the Contracting Parties shall submit investments or returns of nationals or companies of the other Contracting Party, with respect to the management, maintenance, use, enjoyment or disposal of these investments, to a treatment less favorable than that it grants to investments or returns of nationals or companies of any third State. (Article 3 (2)).

EXCEPTIONS

Contracting Parties are not obliged to extend the benefits of national treatment and most-favored-nation treatment to nationals or companies of the other Contracting Party when these benefits derive from:

1. an existing or future customs union, or similar international agreement, in which the Contracting Party is participating; or
2. an agreement or settlement related entirely or principally to taxation. (Article 7).  

OTHER ASPECTS

Performance Requirements

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Others

If the provisions in the legislation of a Contracting Party, or if the existing or future obligations under international law between the two Contracting Parties, or if an agreement between an investor of a Contracting Party and the other Contracting Party include provisions granting to investments of investors of the first Contracting Party a more favorable treatment, these provisions shall prevail if they are more favorable. (Art. 11).

Each Contracting Party shall observe any obligation it has entered into with respect to the treatment of investments of investors or companies of the other Contracting Party. (Article 2 (2)).

Investors of a Contracting Party suffering losses with respect to their investments in the territory of the other Contracting Party, due to war or other armed conflicts, national emergency, revolt, insurrection or uprising, shall receive treatment, in regard to restitution, compensation or other settlement, no less favorable than that accorded by the latter Contracting Party to its own investors or investors of any third State. (Article 4 (1)).

Article 4 (1) shall not be interpreted to relieve a Contracting Party from its obligations, by virtue of international law, to grant restitution or compensation for losses of nationals or companies of the other Contracting Party as a result of requisition or destruction of their property by its forces or authorities. (Art. 4 (2)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Each Contracting Party shall guarantee, with respect to the investments of nationals or companies of the other Contracting Party, the unrestricted transfer of investments and returns. (Article 6).

Repayment of Loans

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Proceeds of the Total or Partial Liquidation of an Investment

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Licenses and Other Fees

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Other Categories of Payment

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CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected in the convertible currency in which the investment was originally made or in any other convertible currency agreed by the investor and the Contracting Party concerned. (Article 6).

Exchange Rates

Unless otherwise agreed, transfers shall be effected at the applicable rate on the date of transfer, in accordance with the regulations in effect with respect to the exchange rate. (Article 6).

Time of Transfer

Transfers shall be effected without delay. (Article 6).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation, nationalization or measures which have a similar effect. (Article 5 (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “...public interest linked to internal needs of (the expropriating host Party) ...” (Article 5 (1)).

Due Process of Law and Judicial Review

Yes. (Article 5 (1)).

Other

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Compensation Standard; Form and Time of Payment

“Prompt, adequate and effective compensation”

Compensation shall:

• amount to the market value of the investment immediately before the date of expropriation or before the impending expropriation became publicly known;
• include interests at a normal commercial rate until the time of payment;
• be made without delay;
• be effectively realizable and freely transferable. (Article 5 (1)).

Settlement of Disputes between Contracting Parties
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PRE-ARBITRATION NEGOTIATIONS

Any dispute between the Contracting Parties concerning the interpretation or application of the Agreement shall, whenever possible, be settled through diplomatic channels. (Article 9 (1)).

If it cannot be settled, the dispute shall, at the request of either Contracting Party, be submitted to an arbitral tribunal for decision. (Article 9 (2)).

ARBITRATION

Constitution of the Tribunal

An arbitral tribunal shall be constituted for each dispute.

• Within two months of the request of arbitration, each Party shall appoint an arbitrator.
• The two arbitrators are required to select, within the next two months, a national of a third State who serves as Chairman of the tribunal. When agreement cannot be reached, the President of the International Court of Justice might be entrusted by either Contracting Party with the responsibility of making the appointment. There are also additional provisions to cover cases when the President is a national of either Party or is otherwise prevented from fulfilling this function.
• Regarding costs, each Party is required to bear the expenses of its own member of the tribunal and of its representation in the proceedings, while the costs related to the Chairman are to be paid for equally by the Parties. The Tribunal may, however, direct that a higher proportion of the costs be paid by one of the Parties. (Article 9 (3) (4) (5)).

Procedural Rules of the Tribunal

The arbitral tribunal shall determine its own procedure.
Decisions of the tribunal shall be taken by a majority of votes and shall be binding on both Parties. (Article 9 (5)).

Applicable Law

No reference.

Settlement of Disputes between a Contracting Party and an Investor [Return to the top of the page]

DEFINITION

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PREARBITRAL CONSULTATIONS AND DISPUTE SETTLEMENT MECHANISMS

No reference to prearbitral consultations or negotiations. The dispute is referred directly to ICSID arbitration.  

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

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Consent

Consent set out explicitly in Article 8 (4).

Forms of Arbitration

Any dispute between a Party and a national or company of the other Party concerning the former’s obligations pursuant to the Agreement in relation to an investment, shall, at the request of the investor, be submitted to ICSID for settlement through consultation or arbitration. In the interim period, while Venezuela has not acceded to the ICSID Convention, the dispute shall be submitted to the ICSID Additional Facility. If the Facility is not available, the investor will have the right to submit the dispute to arbitration in accordance with UNCITRAL Arbitration Rules. (Article 8 (1)(2)).

Applicable Law

No reference.