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GUT DAM; PROCEDURE FOR DISPOSAL OF US DAMAGE CLAIMS
7. The Secretary of State for External Affairs referring to discussion at the meeting of November 17th, 1952 said the US State Department had agreed to discuss with Canadian representatives the possibility of establishing some uniform procedure for the disposal of US claims for damages allegedly caused to Lake Ontario riparian owners as a result of the construction and operation of the Gut Dam. Preliminary discussions had taken place at Washington on December 17th, 1952. These discussions were to be continued during the week of January 26th and instructions were now sought as to the sort of proposals the Canadian negotiators might be authorized to approve on behalf of the Government.
An explanatory note had been circulated.
(Minister's memorandum, Jan. 19, 1953 -- Doc. 16-53)?
8. The Minister of Finance thought it was perhaps unfortunate that Canada had, by its note of November 10th, 1952, to the US State Department, recognized in principle her obligation to pay damages to US citizens provided they were attributable to the construction and operation of the Gut Dam. After looking at the history of the Dam, he held the view that Canada had not in fact, waived her immunity in any respect and that the only legal obligation assumed by Canada was in respect of damages that might be caused to property owners on Les Galops Island in the St. Lawrence River. That obligation had been discharged when the Canadian government had purchased for the relatively large amount of $4,000 one acre of land from the US owner of the island. As a consequence, he felt Canadian representatives should make it quite clear that Canada had not waived her immunity in this matter. Furthermore, he did not think that it would be wise at this time to consider submitting to the jurisdiction of any domestic US court.
9. The Cabinet, after further discussion, noted the report of the Secretary of State for External Affairs and agreed that, --
(a) during the course of forthcoming talks with the US State Department on the procedure to be followed in the disposal of US claims for damages allegedly arising out of the construction and operation of the Gut Dam, the Canadian representatives attempt, as a first choice, to obtain agreement for the establishment of a mixed arbitral tribunal of three judicial members (Canada and the United States each to select one member and to agree on a third from a third country) or, as a second choice, to seek agreement for the establishment of an arbitral tribunal consisting of a single third national appointed by Canada and the United States from among the best qualified judicial or legal authorities of a third country;
(b) Canadian representatives should not agree to Canada submitting to the jurisdiction of any existing US court without first referring the question back to Cabinet for consideration; and,
(c) as a matter of general principle, Canadian representatives should reassert the position already taken that Canada had not, in fact, waived her sovereign immunity in respect of damages allegedly caused by the construction or operation of the Gut Dam.
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