Canada-China pact: Can it inspire talks with India?

The recent consummation of a Canada-China bilateral investment treaty (BIT), which came into force on 1 October, establishes important rights for Chinese and Canadian investors, and the tools to enforce those rights.

Host of advantages

In the absence of a BIT, the only legal recourse for a foreign investor aggrieved by the conduct of a host country is to the domestic courts of the host country, to the extent that the conduct may contravene local law, or to have the government of its home country pursue the matter through diplomatic channels.

By contrast, a BIT – or a foreign investment protection agreement (FIPA), to use the Canadian term – imposes substantive obligations on the host country in its treatment of foreign investors of the other state with respect to concerns like discrimination, arbitrary treatment and expropriation. In the event those obligations are breached, most BITs provide foreign investors with direct and enforceable rights to bring claims for damages before independent and impartial international arbitral tribunals.

Matthew Kronby, Milos Barutciski and Jesse Goldman are partners in the International Trade and Investment Group at Bennett Jones LLP, a law firm with offices in Calgary, Toronto, Edmonton, Ottawa, Vancouver, Washington DC, Dubai and Doha, and a representative office in Beijing.