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Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America
Message: Questions to Canadian Embassy
I e-mailed the Canadian embassy a week or so to ask a few questions regarding the arbitration process regarding FIBA.The two points i got out of it was,once we proceed it becomes a legal issue between Kry and the Vens,the Canadian government isnt directly involved.The other thing is if we become insolvent during the process we are fcked.Below is the response.
Bill
Please excuse our belated answer to your e-mail, and thank you for your correspondence of August 28, 2009, regarding to Crystallex International Corporation’s Las Cristinas project. Let us assure you that we share your concerns and are taking this matter very seriously.
1) If the company filed for arbitration before operating cash ran out,and during the arbitration process became insolvent,does the trade agreement still protect stockholders/investors until the decision was rendered.
The Canadian Embassy in Venezuela has worked closely with Crystallex for several years in its efforts to obtain the necessary authorizations in order to develop the Las Cristinas Project. Our Embassy has raised this issue repeatedly with senior Venezuelan government officials. We assure you that both the Canadian Embassy and officials in Ottawa are following up on the statements of the Venezuelan government concerning Las Cristinas. The Foreign Investment Promotion and Protection Agreement (FIPA) provides Canadian investors with guarantees against discrimination and expropriation without compensation, which, if breached, can be the basis for a monetary claim by affected investors before an international arbitration tribunal. The Government of Canada expects that the Government of Venezuela will fully honour its obligations under this Agreement. The Government of Canada will continue to monitor developments closely and, in consultation with Crystallex, make every effort to defend the interests of the company and its shareholder
Mr. XXXXX, the question of whether the company will pursue litigation can/should only be addressed by its shareholders to the company. We note that the company's website (in the information about its last general meeting) has a series of detailed questions and answers about the prospects for litigation.
In the case of Loewen versus the United States (a NAFTA chapter 11 case) the company launched a claim against the U.S. government and before the case was resolved the company was sold. While the facts of this case are specific to the dispute between Loewen and the United States, the award rendered by the tribunal may be of interest to you in light of the question you have raised. Documents related to the arbitration of the Loewen case can be found at the following web site. >http://www.state.gov/s/l/c3755.htm
2) If there is FIPA insurance for helping a company(operating expenses) through the arbitration process,which could take a number of years.
The FIPA is a bilateral treaty between Canada and Venezuela. Investors may make use of the dispute resolution mechanism of the treaty in order to challenge a measure that the investor believes to be a breach of the treaty. Costs of the arbitral tribunal are shared by the disputing parties and each party must absorb the cost of litigating its case.
3) With Venezuela being our 3rd largest trading partner in South America,could Canada not put forth some sort of pressure on Venezuela to stop other Canadian companies from having to go through what Crystallex has.
Our officials at Posts often work to facilitate communications between the Parties and to seek clarification with the host government with a view to promoting a mutually acceptable solution. However, the Canadian Government considers a formal dispute between an investor and the state to be a private matter and would encourage companies that wish to claim a breach of the treaty to seek private legal counsel.
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