Canada has recently signed a Foreign Investment Promotion and Protection Agreement (FIPA) with the People's Republic of China. Under the Agreement, a complaining Investor is entitled to submit a claim and have it dealt with under the UNCITRAL Arbitration Rules. The real questions about this Agreement are:
Will the UNCITRAL Arbitration rules in FIPA provide real and enforceable protection for Canadian Investments in China?
Will the UNCITRAL Arbitration Rules be sufficient to overcome Canadian concerns about the lack of responsiveness of the Chinese government to domestic public opinion and the lack of independence of the Chinese judicary?
The use of the UNCITRAL Arbitration Rules in the FIPA with China will go a long way to giving confidence to Canadian investors that they will obtain procedural fairness in the arbitration of a dispute arising under the FIPA with China. However, procedural fairness is no substitute for actual adherence of governments to their agreements. The real issues will be whether both the Chinese and Canadian governments fully implement FIPA and whether awards made by the arbitral process are enforced.
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