THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF
THE LEBANESE REPUBLIC, hereinafter referred to as the "Contracting Parties",
RECOGNIZING that the promotion and the protection of investments of
investors of one Contracting Party in the territory of the other Contracting Party will
be conducive to the stimulation of business initiative and to the development of
economic cooperation between them,
HAVE AGREED as follows:
For the purpose of this Agreement:
(a) "enterprise" means:
(i) any entity constituted or organized under applicable law, whether or not
for profit, whether privately-owned or governmentally-owned, including
any corporation, trust, partnership, sole proprietorship, joint venture or
other association; and
(b) "existing measure" means a measure existing at the time this Agreement enters
(ii) a branch of any such entity;
(c) "intellectual property rights" means copyright and related rights, trademark
rights, patent rights, rights in layout designs of semiconductor integrated
circuits, trade secret rights, plant breeders' rights, rights in geographical
indications and industrial design rights;
(d) "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:
(i) movable and immovable property and any related property rights, such
as mortgages, liens or pledges;
(e) "investor" means:
(ii) shares, stock, bonds and debentures or any other form of participation
in a company, business enterprise or joint venture;
(iii) money, claims to money, and claims to performance under contract
having a financial value;
(v) intellectual property rights;
(vi) rights, conferred by law or under contract, to undertake any economic
and commercial activity, including any rights to search for, cultivate,
extract or exploit natural resources,
but 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.
For further certainty, an investment shall be considered to be controlled
by an investor if the investor controls, directly or indirectly, the
enterprise which owns the investment.
Any change in the form of an investment does not affect its character
as an investment.
(i) any natural person possessing the citizenship of or permanently residing
in one Contracting Party in accordance with its laws; or
(f) "measure" includes any law, regulation, procedure, requirement, or practice;
(ii) any enterprise incorporated or duly constituted in accordance with
applicable laws of one Contracting Party,
who makes the investment in the territory of the other Contracting
In the case of persons who have both Canadian and Lebanese
citizenship, they shall be considered Canadian citizens in Canada and
Lebanese citizens in Lebanon.
(g) "returns" means all amounts yielded by an investment and in particular, though
not exclusively, includes profits, interest, capital gains, dividends, royalties,
fees or other current income;
(h) "state enterprise" means an enterprise that is governmentally-owned or
controlled through ownership interests by a government;
(i) "territory" means the territory of the Contracting Parties, as well as those
maritime areas, including the seabed and subsoil adjacent to the outer limit of
the territorial sea, over which the Contracting Parties exercise, in accordance
with international law, sovereign rights for the purpose of exploration and
exploitation of the natural resources of such areas.
Promotion and Protection of Investments
- Each Contracting Party shall promote the creation of favourable conditions for
investors of the other Contracting Party to make investments in its territory.
- Each Contracting Party shall accord investments or returns of investors of the
other Contracting Party
(a) fair and equitable treatment in accordance with principles of
international law, and
(b) full protection and security.
Establishment of Investment
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
favourable than that which, in like circumstances, it permits such acquisition or
(a) investors or prospective investors of any third state;
(b) its own investors or prospective investors.
Treatment of Established Investment
- Each Contracting Party shall grant to investments and to returns of investors of
the other Contracting Party treatment no less favourable than that which, in
like circumstances, it grants to investments and returns of:
(a) investors of any third State;
(b) its own investors.
- Each Contracting Party shall grant investors of the other Contracting Party, as
regards the enjoyment, use, management, conduct, operation, expansion, and
sale or other disposition of their investments or returns, treatment no less
favourable than that which, in like circumstances, it grants to:
(a) investors of any third State;
(b) its own investors.
Management. Directors and Entry of Personnel
- A Contracting Party may not require that an enterprise of that Contracting
Party, that is an investment under this Agreement, appoint to senior
management positions individuals of any particular nationality.
- A Contracting Party may require that a majority of the board of directors, or
any committee thereof, of an enterprise that is an investment under this
Agreement be of a particular nationality, or resident in the territory of the
Contracting Party, provided that the requirement does not materially impair the
ability of the investor to exercise control over its investment.
- Subject to its laws, regulations and policies relating to the entry of aliens, each
Contracting Party shall grant temporary entry to citizens of the other
Contracting Party employed by an enterprise who seeks to render services to
that enterprise or a subsidiary or affiliate thereof, in a capacity that is
managerial or executive or requires specialized knowledge.
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:
(a) to export a given level or percentage of goods;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use or accord a preference to goods produced or services
provided in its territory, or to purchase goods or services from persons in its
(d) 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
(e) 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.
Compensation for Losses
Investors of one Contracting Party who suffer losses because their investments
or returns on the territory of the other Contracting Party are affected by an armed
conflict, a national emergency or a natural disaster on that territory, shall be accorded
by such latter Contracting Party, in respect of restitution, indemnification,
compensation or other settlement, treatment no less favourable than that which it
accords to its own investors or to investors of any third State.
- 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 against prompt,
adequate and effective compensation. Such compensation shall be based on the
fair market value of the investment or returns expropriated immediately before
the expropriation or at the time the proposed expropriation became public
knowledge, whichever is the earlier, shall be payable from the date the
expropriation takes final effect with interest equivalent to the interest paid by
the government of the territory in which the expropriation is taking place in its
general borrowing. Such interest shall be paid without delay and shall be
effectively realizable and freely transferable. Valuation criteria shall include
going concern value, asset value including declared tax value of tangible
property, and other criteria, as appropriate, to determine fair market value.
- 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 Party, of its case and of the valuation of its investment or
returns in accordance with the principles set out in this Article.
- The provisions of this Article apply to taxation measures having an effect
equivalent to nationalization or expropriation unless the taxation authorities of
the Contracting Parties, no later than six months after being notified by an
investor that he disputes a taxation measure, jointly determine that the measure
in question is not an expropriation.
Transfer of Funds
- Each Contracting Party shall grant to an investor of the other Contracting
Party the right to the unrestricted transfer of investments and returns. Without
limiting the generality of the foregoing, each Contracting Party shall also grant
to the investor the right to the unrestricted transfer of:
(a) funds in repayment of loans related to an investment;
(b) the proceeds of the total or partial liquidation of any investment;
(c) wages and other remuneration accruing to a citizen of the other
Contracting Party who was permitted to work in connection with an
investment in the territory of the first Contracting Party;
(d) any compensation owed to an investor by virtue of Articles VII or VIII
of the Agreement.
- Transfers shall be effected without delay in the convertible currency in which
the capital was originally invested or in any other convertible currency agreed
by the investor and the Contracting Party concerned. Unless otherwise agreed,
transfers shall be made at the rate of exchange applicable on the date of
- If a Contracting Party or any agency thereof makes a payment to any of its
investors under a guarantee or a contract of insurance it has entered into in
respect of an investment, the other Contracting Party shall recognize the
validity of the subrogation in favour of such Contracting Party or agency
thereof to any right or title held by the investor.
- A Contracting Party or any agency thereof which is subrogated to the rights of
an investor in accordance with paragraph (I) of this Article, shall be entitled in
all circumstances to the same rights as those of the investor in respect of the
investment concerned and its related returns. Such rights may be exercised by
the Contracting Party or any agency thereof or by the investor if the
Contracting Party or any agency thereof so authorizes.
- Except where express reference is made thereto, nothing in this Agreement
shall apply to taxation measures. For further certainty, nothing in this
Agreement shall affect the rights and obligations of the Contracting Parties
under any tax convention. In the event of any inconsistency between the
provisions of this Agreement and any such convention, the provisions of that
convention shall apply to the extent of the inconsistency.
- A claim by an investor that a tax measure imposed by a Contracting Party
breaches an earlier agreement concerning an investment entered into between
the central government authorities of a Contracting Party and the investor shall
be considered a claim for breach of this Agreement unless the taxation
authorities of the Contracting Parties, no later than six months after being
notified of the claim by the investor, jointly determine that the measure does
not contravene such agreement.
Settlement of Disputes between an Investor
and the Host Contracting Party
- Any dispute between one Contracting Party and an investor of the other
Contracting Party, relating to a claim by the investor that a measure taken or
not taken by the former Contracting Party is in breach of this Agreement, and
that the investor has incurred loss or damage by reason of, or arising out of,
that breach, shall, to the extent possible, be settled amicably between them.
- If a dispute has not been settled amicably within a period of six months from
the date on which it was initiated, it may be submitted by the investor to
arbitration in accordance with paragraph (4). For the purposes of this
paragraph, a dispute is considered to be initiated when the investor of one
Contracting Party has delivered notice in writing to the other Contracting Party
alleging that a measure taken or not taken by the latter Contracting Party is in
breach of this Agreement, and that the investor has incurred loss or damage by
reason of, or arising out of, that breach.
- An investor may submit a dispute as referred to in paragraph (1) to arbitration
in accordance with paragraph (4) only if:
(a) the investor has consented in writing thereto;
(b) the investor has waived its right to initiate or continue any other
proceedings in relation to the measure that is alleged to be in breach of
this Agreement before the courts or tribunals of the Contracting Party
concerned or in a dispute settlement procedure of any kind;
(c) not more than three years have elapsed from the date on which the
investor first acquired, or should have first acquired, knowledge of the
alleged breach and knowledge that the investor has incurred loss or
- The dispute may, at the election of the investor concerned, be submitted to
(a) The International Centre for the Settlement of Investment Disputes
(ICSID), established pursuant to the Convention on the Settlement of
Investment Disputes between States and Nationals of other States,
opened for signature at Washington 18 March, 1965 (ICSID
Convention), provided that both the disputing Contracting Party and the
Contracting Party of the investor are parties to the ICSID Convention;
(b) the Additional Facility Rules of ICSID, provided that the Republic of
Lebanon, but not Canada, is a party to the ICSID Convention; or
(c) an international arbitrator or ad hoc arbitration tribunal established
under the Arbitration Rules of the United Nations Commission on
International Trade Law (UNCITRAL).
- Each Contracting Party hereby gives its unconditional consent to the
submission of a dispute to international arbitration in accordance with the
provisions of this Article.
(a) The consent given under paragraph (5), together with either the consent
given under paragraph (3), or any relevant provision of Annex II, shall
satisfy the requirements for:
(i) written consent of the parties to a dispute for purposes of
Chapter II (Jurisdiction of the Centre) of the ICSID Convention
and for purposes of the Additional Facility Rules; and
(b) Subject to paragraph (c), any arbitration under this Article shall be held
in a State that is a party to the New York Convention, and claims
submitted to arbitration shall be considered to arise out of a commercial
relationship or transaction for the purposes of Article I of that
(ii) an "agreement in writing" for purposes of Article II of the
United Nations Convention for the Recognition and Enforcement
of Foreign Arbitral Awards, done at New York, June 10, 1958
("New York Convention").
(c) Until the Lebanese Republic becomes a signatory to the New York
Convention, arbitration arising from claims by a Canadian investor in
Lebanon shall be an "arbitrage international" under Second Part of the
Decret-loi 83/90 of 16 September 1983.
- A tribunal established under this Article shall decide the issues in dispute in
accordance with this Agreement and applicable rules of international law.
- A tribunal may order an interim measure of protection to preserve the rights of
a disputing party, or to ensure that the tribunal's jurisdiction is made fully
effective, including an order to preserve evidence in the possession or control
of a disputing party or to protect the tribunal's jurisdiction. A tribunal may
not order attachment or enjoin the application of the measure alleged to
constitute a breach of this Agreement. For purposes of this paragraph, an
order includes a recommendation.
- A tribunal may award, separately or in combination, only:
(a) monetary damages and any applicable interest;
(b) restitution of property, in which case the award shall provide that the
disputing Contracting Party may pay monetary damages and any applicable interest in lieu of restitution.
A tribunal may also award costs in accordance with the applicable arbitration
- An award of arbitration shall be final and binding and shall be enforceable in
the territory of each of the Contracting Parties. Each Contracting Party
undertakes to carry out through its laws without delay the provisions of any
- Any proceedings under this Article are without prejudice to the rights of the
Contracting Parties under Article XIII.
Disputes between the Contracting Parties
- Either Contracting Party may request consultations on the interpretation or
application of this Agreement. The other Contracting Party shall give
sympathetic consideration to the request. Any dispute between the Contracting
Parties concerning the interpretation or application of this Agreement shall,
whenever possible, be settled amicably through consultations.
- If a dispute cannot be settled through consultations, it shall, at the request of
either Contracting Party, be submitted to an arbitral panel for decision.
- An arbitral panel shall be constituted for each dispute. Within two months
after receipt through diplomatic channels of the request for arbitration, each
Contracting Party shall appoint one member to the arbitral panel. 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 panel.
The Chairman shall be appointed within two months from the date of
appointment of the other two members of the arbitral panel.
- 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.
- The arbitral panel shall determine its own procedure. The arbitral panel 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
panel shall be rendered within six months of the appointment of the Chairman
in accordance with paragraphs (3) or (4) of this Article.
- Each Contracting Party shall bear the costs of its own member of the panel
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 panel 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.
- The Contracting Parties shall, within 60 days of the decision of a panel, reach
agreement on the manner in which to implement the decision of the panel. If
the Contracting Parties fail to reach agreement, the Contracting Party bringing
the dispute shall be entitled to receive compensation to be agreed upon by both
Contracting Parties or to suspend benefits of equivalent value to the panel's
- Each Contracting Party shall, to the extent practicable, ensure that its laws,
regulations, procedures, and administrative rulings of general application
respecting any matter covered by this Agreement are promptly published or
otherwise made available in such a manner as to enable interested persons and
the other Contracting Party to become acquainted with them.
- Upon request by either Contracting Party, information shall be exchanged on
the measures of the other Contracting Party that may have an impact on new
investments, investments or returns covered by this Agreement.
Application and Entry into Force
- This Agreement shall apply to any investment made by an investor of one
Contracting Party in the territory of the other Contracting Party before or after
the entry into force of this Agreement.
- The two Annexes hereto shall form integral parts hereof.
- Each Contracting Party shall notify the other in writing of the completion of
the procedures required in its territory for the entry into force of this
Agreement. This Agreement shall enter into force thirty days after the latter
of the two notifications.
- This Agreement shall remain in force indefinitely unless either Contracting
Party notifies the other Contracting Party in writing of its intention to
terminate it. The termination of this Agreement shall become effective one
year after notice of termination has been received by the other Contracting
Party. In respect of investments or commitments to invest made prior to the
date when the termination of this Agreement becomes effective, the provisions
of Articles I to XIV inclusive, as well as paragraphs (1) and (2) of this Article,
shall remain in force for a period of twenty years.
IN WITNESS WHEREOF the undersigned, being duly authorized by their respective
Governments, have signed this Agreement.
DONE in duplicate at Ottawa, this 11th day of April 1997, in the English, French
and Arabic languages, each text being equally authentic.
FOR THE GOVERNMENT
|FOR THE GOVERNMENT OF
THE LEBANESE REPUBLIC
General and Specific Exceptions
- MFN Exceptions:
- Articles III(a), IV(I)(a) and IV(2)(a) shall not apply to treatment by a
Contracting Party pursuant to any existing or future bilateral or
(a) establishing, strengthening or expanding a free trade area or
(b) negotiated within the framework of the GATT (including in
particular the General Agreement on Trade in Services (GATS)), the World Trade Organization, or any successor
organization), and containing obligations and rights relating to trade in services; or
(c) relating to:
(ii) telecommunications transport networks and
telecommunications transport services;
(iv) maritime matters, including salvage; or
(v) financial services.
- In the case of the Lebanese Republic, Articles III(a), IV(1)(a) and
IV(2)(a) shall not apply to ownership of real estate by nationals of Arab
states in accordance with Decree number 11614, dated January 4, 1969.
- Article III(a) does not apply to the discretion of the competent
authorities of each Contracting Party with respect to the establishment
of financial services.
- For the purposes of this Agreement, the term "financial service" means
a service of a financial nature, including insurance, and a service
incidental or auxiliary to a service of a financial nature.
- National Treatment Exceptions:
- Articles III(b), IV(1)(b), IV(2)(b), V(l), V(2) and VI do not apply to:
(i) any existing non-conforming measures maintained within
the territory of a Contracting Party; and
(ii) any measure maintained or adopted after the date of
entry into force of this Agreement that, at the time of
sale or other disposition of a government's equity
interests in, or the assets of, an existing state enterprise
or an existing governmental entity, prohibits or imposes
limitations on the ownership of equity interests or assets
or imposes nationality requirements relating to senior
management or members of the board of directors;
(b) the continuation or prompt renewal of any such non-conforming
measure or any measure referred to in subparagraph (a) above;
(c) an amendment to any non-conforming measure referred to in
subparagraph (a) above, to the extent that such amendment does
not decrease the conformity of the measure as it existed
immediately before the amendment;
(d) the right of each Contracting Party to make or maintain
exceptions within the following sectors or matters:
- social services (Le. public law enforcement; correctional
services; income security or insurance; social security or
insurance; social welfare; public education; public
training; health and child care);
- residency requirements for ownership of oceanfront land;
- measures implementing the Northwest Territories Oil and
- government securities - as described in Standard
Industrial Classification number 8152 as set out in
Statistics Canada Standard Industrial Classification,
fourth edition, 1980.
- social services (i.e. public law enforcement; correctional
services; income security or insurance; social security or
insurance; social welfare; public education; public
training; health and child care);
- ownership of real estate (ie. authorization procedures and
restrictions with respect to the size of real estate property
owned by foreigners);
- citizenship of commercial representatives;
- authorization procedures with respect to the establishment
of banking and financial services;
- audiovisual services;
- ownership of newspapers.
- The Contracting Parties shall, within a two year period after the entry
into force of this Agreement, exchange letters listing, to the extent
possible, any existing measures that it may rely on to limit national
treatment obligations in accordance with paragraph (I)(b) hereof.
- Notwithstanding any other provision of this Agreement, the Contracting
Parties agree that in respect of services, nothing in this Agreement shall
oblige a Contracting Party to accord to investors, prospective investors,
or to investments of investors of the other Contracting Party any
treatment or right under subparagraph (b) of Article III, subparagraphs
(1)(b) or (2)(b) of Article IV, paragraphs (l) or (2) of Article V or
Article VI more favourable than that which the Contracting Party is
required to accord to such investor, prospective investor, or investment
pursuant to the General Agreement on Trade in Services ("GATS"), as
it may from time to time be amended or replaced.
- General Exceptions and Exemptions:
- Nothing in this Agreement shall be construed to prevent a Contracting
Party from adopting, maintaining or enforcing any measure otherwise
consistent with this Agreement that it considers appropriate to ensure
that investment activity in its territory is undertaken in a manner
sensitive to environmental concerns.
- Provided that such measures are not applied in an arbitrary or
unjustifiable manner, or do not constitute a disguised restriction on
international trade or investment, nothing in this Agreement shall be
construed to prevent a Contracting Party from adopting or maintaining
measures, including environmental measures:
(a) necessary to ensure compliance with laws and regulations that
are not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) relating to the conservation of living or non-living exhaustible
natural resources if such measures are made effective in
conjunction with restrictions on domestic production or
- Nothing in this Agreement shall be construed to prevent a Contracting
Party from adopting or maintaining reasonable measures for prudential
reasons, such as:
(a) the protection of investors, depositors, financial market
participants, policy-holders, policy-claimants, or persons to
whom a fiduciary duty is owed by a financial institution;
(b) the maintenance of the safety, soundness, integrity or financial
responsibility of financial institutions; and
(c) ensuring the integrity and stability of a Contracting Party's
- Investments in cultural industries are exempt from the provisions of this
Agreement. "Cultural industries" means natural persons or enterprises
engaged in any of the following activities:
(a) 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
(b) the production, distribution, sale or exhibition of film or video
(c) the production, distribution, sale or exhibition of audio or video
(d) the publication, distribution, sale or exhibition of music in print
or machine readable form; or
(e) radiocommunications in which the transmissions are intended for
direct reception by the general public, and all radio, television
or cable broadcasting undertakings and all satellite programming
and broadcast network services.
- The provisions of Articles II, III, IV, V and VI of this Agreement do
not apply to:
(a) procurement by a government or state enterprise;
(b) subsidies or grants provided by a government or a state
enterprise, including government-supported loans, guarantees
(c) any measure denying investors of the other Contracting Party
and their investments any rights or preferences provided to the
aboriginal peoples of Canada; or
(d) any current or future foreign 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.
- Exceptions to Specific Obligations:
- In respect of intellectual property rights, a Contracting Party may
derogate from Article IV in a manner that is consistent with the Final
Act Embodying the Results of the Uruguay Round of Multilateral Trade
Negotiations, done at Marrakesh, April 15, 1994.
- The provisions of Article VIII do not apply to the issuance of
compulsory licenses granted in relation to intellectual property rights,
or to the revocation, limitation or creation of intellectual property
rights, to the extent that such issuance, revocation, limitation or
creation is consistent with the provisions of Articles 30 and 31 of the
Agreement on Trade-Related Aspects of Intellectual Property Rights
incorporated into the Final Act Embodying the Results of the Uruguay
Round of Multilateral Trade Negotiations, done at Marrakesh, April
- Special Provisions Relating to Transfers:
- Notwithstanding the provisions of Article IX, a Contracting Party may
prevent a transfer through the equitable, non-discriminatory and good
faith application of its laws relating to:
(a) bankruptcy, insolvency or the protection of the rights of
(b) issuing, trading or dealing in securities;
(c) criminal or penal offenses;
(d) reports of transfers of currency or other monetary instruments;
(e) ensuring the satisfaction of judgments in adjudicatory
- Neither Contracting Party may require its investors to transfer, or
penalize its investors that fail to transfer, the returns attributable to
investments in the territory of the other Contracting Party.
- Paragraph (2) shall not be construed to prevent a Contracting Party
from imposing any measure through the equitable, non-discriminatory
and good faith application of its laws relating to the matters set out in
- Notwithstanding the provisions of Article IX and paragraph (2) above,
and without limiting the applicability of paragraph (1) above, a
Contracting Party may prevent or limit transfers by a financial
institution to, or for the benefit of, an affiliate of or a person related to
such institution, through the equitable, non-discriminatory and good
faith application of measures relating to maintenance of the safety,
soundness, integrity or financial responsibility of financial institutions
without affecting the obligations of the institution towards its clients or
any other third party.
- For the purposes of this Agreement, "financial institution" means any
financial intermediary or other enterprise that is authorized to do
business and regulated or supervised as a financial institution, under the
law of the Contracting Party in whose territory it is located.
- Exclusions from Dispute Settlement (Establishment):
- Decisions of a Contracting Party taken in accordance with national
legislation as to whether or 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 investors of the
other Contracting Party shall not be subject to dispute settlement under
Article XII of this Agreement.
- Further to paragraph (1), decisions by a Contracting Party pursuant to a
pre-existing non-conforming measure described in Article II(1)(b) of
this Annex as to whether or not to permit an acquisition shall, in
addition, not be subject to dispute settlement under Article XIII of this
Specific Rules re Article XII
Settlement or Disputes between an Investor
and the Host Contracting Party
- Prudential Measures:
- Where an investor submits a claim to arbitration under Article XII, and
the disputing Contracting Party invokes Article III(3) or V(4) of Annex
I, the tribunal established pursuant to Article XII shall, at the request of
that Contracting Party, seek a report in writing from the Contracting
Parties on the issue of whether and to what extent the said paragraphs
are a valid defence to the claim of the investor. The tribunal may not
proceed pending receipt of a report under this Article.
- Pursuant to a request received in accordance with paragraph (1), the
Contracting Parties shall proceed in accordance with Article XIII to
prepare a written report, either on the basis of agreement following
consultations, or by means of an arbitral panel. The consultations shall
be between the competent financial services authorities of the
Contracting Parties. The report shall be transmitted to the tribunal, and
shall be binding on the tribunal.
- Where, within 70 days of the referral by the tribunal, no request for the
establishment of a panel pursuant to paragraph (2) has been made and
no report has been received by the tribunal, the tribunal may proceed to
decide the matter.
- Panels for disputes on prudential issues and other financial matters shall
have the necessary expertise relevant to the specific financial service in
- Taxation Measures:
- An investor may submit a claim relating to taxation measures covered
by this Agreement to arbitration under Article XII only if the taxation
authorities of the Contracting Parties fail to reach the joint
determinations specified in Article VIII(3) or XI(2) within six months
of being notified in accordance with the relevant Article.
- The taxation authorities referred to in Articles VIII(3) and XI(2) shall
be the following until notice in writing to the contrary is provided to
the other Contracting Party:
(a) for Canada: the Assistant Deputy Minister, Tax Policy, of the
Department of Finance Canada;
(b) for the Lebanese Republic: the Director of the Revenue
Directorate in the Ministry of Finance.
- Damage Incurred by a Controlled Enterprise:
- A claim that a Contracting Party is in breach of this Agreement, and
that an enterprise that is a juridical person incorporated or duly
constituted in accordance with applicable laws of that Contracting Party
has incurred loss or damage by reason of, or arising out of, that
breach, may be brought by an investor of the other Contracting Party
acting on behalf of an enterprise which the investor owns or controls
directly or indirectly. In such a case
(a) any award shall be made to the affected enterprise;
(b) the consent to arbitration of both the investor and the enterprise
shall be required;
(c) both the investor and enterprise must waive any right to initiate
or continue any other proceedings in relation to the measure that
is alleged to be in breach of this Agreement before the courts or
tribunals of the Contracting Party concerned or in a dispute
settlement procedure of any kind; and
(d) the investor may not make a claim if more than three years have
elapsed from the date on which the enterprise first acquired, or
should have first acquired, knowledge of the alleged breach and
knowledge that it has incurred loss or damage.
- Notwithstanding paragraph (1)(a) above, where a disputing Contracting
Party has deprived a disputing investor of control of an enterprise, the
following shall not be required:
(a) a consent to arbitration by the enterprise under (1)(b); and
(b) a waiver from the enterprise under (1)(c).