Published Date: 2023-08-09
Publication:2022.12
Principal Investigator:顏慧欣Yen, Huai-Shing
Researchers:鄭昀欣Cheng, Yun-Hsing、王煜翔Wang, Yu-Shung
In
January 10, 2022, Taiwan and Canada announced the initiation of exploratory
discussions on a possible Foreign Investment Promotion and Protection
Arrangement (FIPA). In the present study, a number of international arbitration
cases with Canada as a respondent were analyzed to inform Taiwan’s negotiation strategy
and facilitate bilateral talks.
In
the study, a general analysis of 31 arbitration cases where Canada was the
respondent was conducted, and the results indicate the following: 1) the
majority of cases were filed by American investors against Canada; 2) major
sectors involved in these cases include manufacturing, mining and quarrying,
power and gas supply, as well as agriculture, forestry, fishing, and animal
husbandry; 3) common claims by foreign investors centered around Canada’s
obligation-violating conduct in resource management, environmental protection,
and industrial policy enforcement, and 4) most claims by foreign investors were
related to Canada’s breach of national treatment, most-favored-nation (MFN)
treatment, minimum standard of treatment, expropriation, and performance
requirements, with the highest number of allegations associated with the
minimum standard of treatment.
The
study also selected recent cases involving Canada for further analysis, and the
findings are similar to the aforementioned general analysis, which are
summarized as follows: 1) most foreign investor claimants challenged Canada’s
practices in energy management, environmental protection, and industrial
policies; 2) arbitral tribunals have previously dismissed claims due to reasons
such as lack of standing, Canada’s prior exclusion of specific sectors from the
national treatment provisions in the agreement’s annex, and the claimant’s
failure to waive other remedies. 3) most claims by foreign investors were
related to Canada’s violation of provisions on national treatment, MFN
treatment, minimum standard of treatment, expropriation and compensation, with
the highest number of allegations involving the minimum standard of treatment.
Based on the above findings, the present study proposes the following policy
recommendations: 1) Canadian investors are active users of the Investor-State
Dispute Settlement (ISDS) mechanism; Taiwan and Canada may consider
incorporating more alternatives for the FIPA; 2) Canada sticks to using ISDS
but keeps a flexible approach, and does not exclude the possibility of adopting
the international investment court system proposed by the EU, and 3) monitor
Canada’s adjustments and stance towards the ISDS mechanism under the 2021 FIPA.