E101511
E101511 - CTS 1990 No. 43
AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT
OF THE REPUBLIC OF POLAND FOR THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS
The Government of Canada and the Government of the Republic of Poland, recognizing
that the promotion and the reciprocal protection of investments of investors
of one State in the territory of the other State will be conducive to the stimulation
of business initiative and to the development of economic cooperation between
both States, hereinafter referred to as the "Contracting Parties",
Have agreed as follows:
ARTICLE I
Definitions
For the purpose of this Agreement:
(a) the term
"territory" means the territory of Canada or the territory of the Republic
of Poland respectively, as well as those maritime areas, including the seabed
and subsoil adjacent to the outer limit of the territorial sea of either of
the above territories, over which the State concerned exercises, in accordance
with international law, sovereign rights for the purpose of exploration and
exploitation of the natural resources of such areas;
(b) the term
"investment" means any kind of asset invested by an investor of one Contracting
Party in the territory of the other Contracting Party and in particular, though
not exclusively, shall include:
(i) any
movable and immovable property and any related property rights, such as
mortgages;
(ii) shares,
stock, bonds and debentures or any other form of participation in a company;
(iii) claims
to money, and claims to performance under contract having a financial value;
(iv) any intellectual
property rights, including rights with respect to copyrights, patents, trademarks,
trade names, industrial designs, trade secrets as well as know-how;
(v) rights
having financial value, conferred by law or under contract, necessary to
undertake any economic and commercial activity, including any rights to
search for, cultivate, extract or exploit natural resources.
Any change in the form of an investment, admitted
in accordance with laws and regulations of the Contracting Party in whose
territory the investment was made, does not affect its character as an investment.
If the investment is made by an investor through
an entity not covered by paragraph (d) (ii) of this Article, in which he holds
an equity participation, such investor shall enjoy the benefits of this Agreement
to the extent of such indirect equity participation, provided, however, that
such an investor shall not enjoy the benefits of this Agreement if the investor
invokes the dispute settlement mechanism under another foreign investment
protection agreement concluded by a Contracting Party in whose territory the
investment is made.
(c) the term
"returns" means all amounts yielded by an investment and in particular, though
not exclusively, profits, interest, capital gains, dividends, royalties, fees
or other current income;
(d) the term
"investor" means with regard to either Contracting Party:
(i) any
natural person possessing the citizenship of a Contracting Party in accordance
with its laws; or
(ii) any
corporation, partnership, trust, organization, association or enterprise
incorporated or duly constituted in accordance with applicable laws of that
Contracting Party.
ARTICLE II
Promotion of investment
(1) Each Contracting
Party shall encourage the creation of favourable conditions for investors of
the other Contracting Party to make investments in its territory.
(2) Subject
to its laws, regulations and published policies, each Contracting Party shall
admit investments of investors of the other Contracting Party.
(3) This Agreement
shall not preclude either Contracting Party from prescribing laws and regulations
in connection with the establishment of a new business enterprise or the acquisition
or sale of a business enterprise in its territory, provided that such laws and
regulations are applied equally to all foreign investors. Decisions taken in
conformity with such laws and regulations shall not be subject to the provisions
of Articles IX or XI of this Agreement.
ARTICLE III
Protection of Investment
(1) Investments
or returns of investors of either Contracting Party shall at all times be accorded
fair and equitable treatment in accordance with principles of international
law and shall enjoy full protection and security in the territory of the other
Contracting Party.
(2) Each Contracting
Party shall grant to investments or returns of investors of the other Contracting
Party in its own territory treatment no less favourable than that which it grants
to investments or returns of investors of any third State.
(3) Each Contracting
Party shall grant investors of the other Contracting Party in its territory,
as regards their management, use, enjoyment or disposal of their investments
or returns, treatment no less favourable than that which it grants to investors
of any third State.
ARTICLE IV
Exceptions
The provisions of this Agreement shall not be
construed so as to oblige one Contracting Party to extend to the investors of
the other Contracting Party the benefits of any treatment, preference or privilege
resulting from participation in:
(a) any
existing or future free trade area or customs union;
(b) any
multilateral agreement for mutual economic assistance, integration or cooperation,
such as the Council for Mutual Economic Assistance, the European Economic
Community or the Organization for Economic Cooperation and Development, to
which either of the Contracting Parties is or may become a party;
(c) any
bilateral convention, including any customs agreement, in force on the date
of entry into force of this Agreement which grants benefits essentially equivalent
to those contained in paragraph (b) above; or
(d) any
existing or future convention relating to double taxation or other fiscal
matters.
ARTICLE V
Compensation for Losses
Investors of one Contracting Party whose investments
or returns in the territory of the other Contracting Party suffer losses owing
to war, other armed conflicts, a state of national emergency or other similar
circumstances in the territory of the latter shall be accorded, as regards restitution,
indemnification, compensation or other settlement, treatment no less favourable
than that which the latter Contracting Party grants to investors of any third
State. Any payment made under this Article shall be prompt, adequate, effective
and freely transferable.
ARTICLE VI
Expropriation
Investments or returns of investors of either
Contracting Party shall not be nationalized, expropriated or subjected to measures
having an effect equivalent to nationalization or expropriation (hereinafter
referred to as "expropriation") in the territory of the other Contracting Party
except for a public purpose, under due process of law, in a non-discriminatory
manner and provided that it is accompanied by prompt, adequate and effective
compensation. Such compensation shall be based on the real value of the investment
at the time of the expropriation, shall be made within two months of the date
of expropriation, after which interest at the rate agreed between the investor
and the Contracting Party concerned and in no case less than the London Inter
Bank Offered Rate (LIBOR) shall accrue until the date of payment, be effectively
realizable and freely transferable. The investor affected shall have a right,
under the law of the Contracting Party making the expropriation, to prompt review
by a judicial or other independent authority of that Contracting Party of its
case and of the valuation of its investment in accordance with the principles
set out in this Article.
ARTICLE VII
Transfer of Funds
(1) Each Contracting
Party shall guarantee to any investor of the other Contracting Party the prompt
transfer of, in particular:
(a) the
returns accruing from any investment;
(b) the
proceeds of the total or partial liquidation of any investment;
(c) fund
in repayment of loans related to an investment;
(d) the
corresponding part of wages and other remuneration accruing to a citizen of
that other Contracting Party who was permitted to work in connection with
an investment in the territory of the former Contracting Party; and
(e) any
compensation owed to an investor by virtue of Articles V or VI of this Agreement;
in any convertible currency agreed upon between
the investor and the Contracting Party concerned at the exchange rate on the
day of the transfer.
For the purpose of this paragraph, prompt transfer
means transfer within a period not exceeding two months.
(2) Notwithstanding
the provisions of paragraph (1), in respect of the Republic of Poland, prompt
transfer of returns earned by a Canadian investor is guaranteed to the maximum
extent permitted by its laws and regulations and in no case shall amount to
less than 15% of annual returns.
(3) In cases
where exceptional balance of payments difficulties exist, and then for a period
not exceeding eighteen months, the Contracting Party shall guarantee the transfer
of any amount mentioned in paragraph (1) of this Article on a pro rata basis,
provided that the total period for the transfer does not exceed five years.
(4) The Contracting
Parties undertake to accord to transfers referred to in paragraphs (1) and (2)
of this Article a treatment no less favourable than that accorded to transfers
originating from investments made by investors of any third State.
ARTICLE VIII
Subrogation
(1) If a Contracting
Party or any agency thereof makes a payment to any of its investors under a
guarantee or insurance it has contracted in respect of an investment, the other
Contracting Party shall recognize the validity of the subrogation in favour
of the former Contracting Party or agency thereof to any right or title held
by the investor.
The Contracting
Party or any agency thereof which is subrogated in the rights of an investor
shall be entitled to the same rights as those of the investor and to the extent
that they exercise such rights they shall do so subject to the obligations of
the investor pertaining to such insured investment.
(2) In the
case of subrogation as defined in paragraph (1) above, the investor shall not
pursue a claim unless authorized to do so by the Contracting Party or any agency
thereof.
ARTICLE IX
Settlement of Disputes between an
Investor and the Host Contracting Party
(1) Any dispute
between one Contracting Party and an investor of the other Contracting Party
relating to the effects of a measure taken by the former Contracting Party with
respect to the essential aspects pertaining to the conduct of business, such
as expropriation mentioned in Article VI of this Agreement or transfer of funds
mentioned in Article VII of this Agreement, shall, to the extent possible, be
settled amicably between both parties concerned.
(2) If the
dispute has not been settled amicably within a period of six months from the
date on which the dispute was initiated, it may be submitted by the investor
to arbitration.
(3) In that
case, the dispute shall then be settled in conformity with the Arbitration Rules
of the United Nations Commission on International Trade Law, as then in force.
ARTICLE X
Consultations and Exchange of Information
Upon request by either Contracting Party, the
other Contracting Party shall agree promptly to consultations on the interpretation
or application of this Agreement. Upon request by either Contracting Party,
information shall be exchanged on the impact that the laws, regulations, decisions,
administrative practices or procedures, or policies of the other Contracting
Party may have on investments covered by this Agreement.
ARTICLE XI
Disputes between the Contracting
Parties
(1) Any dispute
between the Contracting Parties concerning the interpretation or application
of this Agreement shall, whenever possible, be settled through diplomatic channels.
(2) If the dispute
cannot be settled through diplomatic channels within six months, it shall, at
the request of either Contracting Party, be submitted to an arbitral tribunal
for decision.
(3) The arbitral
tribunal shall be constituted for each dispute. Within two months after receiving
the request for arbitration, each Contracting Party shall appoint one member
to the arbitral tribunal. The two members shall then select a national of a
third State who, upon approval by the two Contracting Parties, shall be appointed
Chairman of the arbitral tribunal. The Chairman shall be appointed within two
months from the date of appointment of the other two members of the arbitral
tribunal.
(4) If within
the periods specified in paragraph (3) of this Article the necessary appointments
have not been made, either Contracting Party may, in the absence of any other
agreement, invite the President of the International Court of Justice to make
the necessary appointments. If the President is a national of either Contracting
Party or is otherwise prevented from discharging the said function, the Vice-President
shall be invited to make the necessary appointments. If the Vice-President is
a national of either Contracting Party or is prevented from discharging the
said function, the Member of the International Court of Justice next in seniority,
who is not a national of either Contracting Party, shall be invited to make
the necessary appointments.
(5) The arbitral
tribunal shall reach its decision by a majority of votes. Such decision shall
be binding on both Contracting Parties. Unless otherwise agreed, the decision
of the arbitral tribunal shall be rendered within six months of the appointment
of the Chairman in accordance with paragraph (3) or (4) of this Article. The
arbitral tribunal shall determine its own procedure. Each Contracting Party
shall bear the costs of its own member of the tribunal and of its representation
in the arbitral proceedings; the costs related to the Chairman and any remaining
costs shall be borne equally by the Contracting Parties. The arbitral tribunal
may, however, in its decision direct that a higher proportion of costs shall
be borne by one of the two Contracting Parties, and this award shall be binding
on both Contracting Parties.
ARTICLE XII
Other International Agreements
Where a matter is covered both by the provisions
of this Agreement and any other international agreement to which both Contracting
Parties are bound, nothing in this Agreement shall prevent an investor of one
Contracting Party that has investments in the territory of the other Contracting
Party from benefitting from the most favourable regime.
ARTICLE XIII
Entry into force
(1) This Agreement
shall enter into force on the day the two Contracting Parties notify each other
in writing that their constitutional requirements for the entry into force of
this Agreement have been fulfilled.
(2) This Agreement
shall apply to any investment made by an investor of one Contracting Party in
the territory of the other Contracting Party on or after January 1st 1965.
ARTICLE XIV
Duration and Termination
This Agreement shall remain in force for a period
of ten years. Thereafter this Agreement shall remain in force for an indefinite
period unless either Contracting Party notifies in writing the other Contracting
Party of its intention to terminate it. The notice of termination of this Agreement
shall become effective one year after it has been received by the other Contracting
Party. In respect of investments made prior to the date when the notice of termination
of this Agreement becomes effective, the provisions of Articles I to XIII inclusive
of this Agreement shall remain in force for a period of twenty years.
DONE at Warsaw this 6 day of April 1990 in two originals, each in
the English, French and Polish languages, the texts in each of the three languages
having equal authenticity.
IN WITNESS WHEREOF the undersigned, being duly
authorized by their respective Governments, have signed this Agreement.
Don Mazankowski
FOR THE GOVERNMENT OF CANADA
Leazek Balcerowicz
FOR THE GOVERNMENT OF THE REPUBLIC OF POLAND
