On April 27, 2012, Industry Canada published a new guideline regarding the availability of mediation where the responsible Minister believes a non-Canadian has failed to comply with undertakings (i.e., commitments) in relation to an approved Investment Canada Act investment.
The new Investment Canada Act guideline provides that, where the responsible Minister believes that a non-Canadian investor has failed to fulfill undertakings, the following steps may be taken: (i) Investment Review Division officials may discuss potential resolutions for the non-implementation of undertakings, (ii) new undertakings may be negotiated, or (iii) the Minister may demand the non-complying investor to justify non-compliance with its undertakings (and commence proceedings where an investor fails to comply).
Interestingly, the new Investment Canada Act guideline states that: “[the] Minister recognizes that, in some instances, a resolution achieved through discussion may be preferable to potentially lengthy and costly legal proceedings.”
While it is not clear what precipitated the issuance of this new guideline, it may be that it was issued following lengthy and contentious proceedings relating to the alleged non-compliance of U.S. Steel with undertakings made in relation to its acquisition of Stelco in 2007.
For a copy of the guideline see:
For more about Canadian foreign investment rules see:
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