China is a good example. I will get back to your comment about the Indias and the Brazils of the world, but China is a very good example. The country I think would have every incentive to comply with an ICSID award, which is quite different from complying with an award of a Chinese court or a Chinese arbitrator that might have gone to a foreign investor.
You're absolutely right, the rule of law in China, while they are struggling to enhance it, can be a dicey affair for an investor or a foreign claimant--for example, a foreign supplier who is exporting goods to China and gets into a dispute with their buyer. Usually it is the other way around. They are exporting more the other way, but there are Canadian companies that are exporting there too and I've acted for a number of them.
When you get into a dispute there are standard forms that force you into arbitration under the Chinese...and there are several Chinese commercial arbitration regimes. Under their standard form contracts, you are forced into that world. Then if you happen to be lucky enough to win in arbitration there might be a few other challenges in enforcing your award if you got an award.
So yes, you're right, there is a risk. The beauty of ICSID is that it doesn't go before the Chinese judicial system. If the Chinese government loses an award the only way they can have it reviewed is by going to the ICSID treaty review mechanism. Then on enforcement, enforcement when you're dealing with sovereign defendants is always a challenge. You have to find goods that are attachable and so on.
My point here goes a little further. I do not think the benefit of ICSID is an order that can be enforced the way you would enforce a domestic order, register it in a court and get a bailiff to seize assets. The beauty of ICSID is that it is an express international obligation of the member of the host country against whom the award has been made to live up to its obligation including paying the award.
So for a country like China that today is becoming a very significant outbound investor.... My former firm acted for a Canadian company, PetroKazakhstan, where they sold their assets--virtually all of the assets were overseas in Kazakhstan--to the Chinese national oil company. That is just one example. The Chinese have assets here. They have made substantial investments in Canada, which aren't particularly well known but they are here. They are looking for further investments, not just in Canada, the United States, or Europe but all over the world.
For a country like that to welch on its ICSID obligations has some serious ramifications in terms of the receptivity of the countries where it's going to make investment. That is part of the beauty of ICSID. It is a mechanism that everybody who is a party to it has agreed to. If you choose to welch on your obligations you put your own investors' rights and interests at risk. So I think that is an important function.
As to Brazil and India, let me just touch on them briefly. I do not know the facts why specifically they haven't signed on. But last time I looked, while we would love as a business community and I am sure as a country to increase our trade to India and our investment in India, frankly it's a drop in the bucket. I think our outbound trade is about $200 million and our outbound investment is about $500 million. I may be off by a couple of hundred million dollars, but frankly it is insignificant.
Brazil is a little better, but even there we are not--