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Updated: April 16, 2013 21:53 IST

Investment pacts can’t be subject to foreign jurisdictions: FM

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P. Chidambaram
P. Chidambaram

Finance Minister P. Chidambaram has made it clear that any bilateral investment protection agreement has to be subject to jurisdiction of domestic legal institutions, and India will not allow it to be decided by foreign courts or tribunals.

“We cannot allow highest court of the land to be subjected to any foreign courts or tribunals,” Mr. Chidambaram said during a question-answer session at a breakfast meeting organised by the Canada-India Business Council (C-IBC) here on Monday.

“Will you allow the Supreme Court of Canada be subject to jurisdiction of any other court or tribunal?” Mr. Chidambaram asked the audience.

The Minister was answering a question from Peter Sutherland, President and CEO of the C-IBC, who wanted to know the status of bilateral Foreign Investment Promotion and Protection Agreement (FIPPA) treaty.

The Minister said, “We have put FIPPA on hold not only for Canada but other 83 countries too because of two major legal issues, namely, right of a foreign investor to sue a sovereign state in a commercial dispute, and jurisdiction. All agreements are under review.”

However, he assured the audience that both the Comprehensive Economic Partnership Agreement (CEPA) and FIPPA would become realty soon. Referring to Canadian Prime Minister Stephen Harper’s visit to India in November last year, Mr. Chidambaram said India and Canada had longstanding bilateral relations, built upon shared traditions of democracy, pluralism and strong interpersonal connections with an Indian diaspora of more than one million in Canada.

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