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Canada Signs Bilateral Investment Treaty with Peru - India and China Are Next.

Article Excerpt
On November 14, 2006, Canada and Peru signed a bilateral investment treaty (BIT), otherwise referred to as a Foreign Investment Protection and Promotion Agreement (FIPA). This is Canada's first BIT to be negotiated in eight years and the first BIT to be based on Canada's new 2004 Model FIPA. This will bring the number of BITs Canada has with developing and newly industrialized countries to a total of 22. Canada is currently in the process of active negotiations with two other countries: India and China. The BIT with India is expected to be finalized within the next four months and the BIT with China within the next eight to 12 months.

Over the last decade or so, BITs have quickly emerged as a viable option for businesses seeking protection of their investments in foreign jurisdictions. Traditionally, when investment disputes arose, foreign investors were limited to seeking remedies through either the domestic court of the host country system or diplomatic espousal claims. These BITs are an attractive alternative because they provide a mechanism to pursue damages claims directly against host states through international arbitration. There has been phenomenal growth in the negotiation of these agreements worldwide-in 1989, there were less than 400 BITs in force and by the end of 2005, that number increased to approximately 2,500.

Negotiations with Peru

Negotiations for the Canada-Peru BIT commenced in the early 1990s, but were put on hold for several years while Canada drafted the new 2004 Model FIPA, taking into account its experiences as a respondent in investment claims brought...