Scope of Application [Return to the top of the page]

DEFINITION OF INVESTMENT

The term “investment” means every kind of asset invested by an investor of one Party in the territory of the other Party, in accordance with the latter’s laws. This general definition is illustrated by a non exhaustive list of five groups of specific rights, including:

• traditional property rights;

• rights in companies;

• monetary claims and titles to performance directly related to a specific investment;

• intellectual property rights; and,

• concessions and similar rights. (Article I (1)).

DEFINITION OF INVESTOR

Nationals

The term “investor” means any natural person who is a national of a Contracting Party, in accordance with its laws. (Article I(2)(a)).

The treaty does not apply to investments made by natural persons who are nationals of one Contracting Party in the territory of the other Contracting Party if such persons, not having entered that territory as investors, have been residents in the latter Contracting Party for more than two years, unless it is proved that the investment was admitted from abroad. (Article I (3)).

Companies

The term “investor”means any legal person constituted in accordance with the laws and regulations of a Contracting Party, and having its seat in the territory of that Contracting Party, whether or not for pecuniary profit. (Article I (2) (b)).

Application in Time (Entry into Force and Duration: Applicability to Investments made Prior to Entry into Force)

Date of signature: February 8, 1994
Entry into force: December 1, 1995
Duration: 10 years.
Thereafter it shall remain in force until the expiration of 12 months from the date that either Party in writing notifies the other Party of its decision to terminate the Agreement.

Admission [Return to the top of the page]

Each Contracting Party shall admit investments of investors of the other Contracting Party subject to its laws and regulations. (Article 2).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Contracting Party shall at all times ensure fair and equitable treatment to investments by investors of the other Contracting Party. (Article 3 (1)).

Full Protection and Security

Yes. Each Contracting Party, once it has admitted investments in its territory by investors of the other Contracting Party, shall grant full legal protection to such investments. (Article 3 (2)).

Non-Discrimination

Yes. Each Contracting Party shall not impair the management, maintenance, use, enjoyment or disposal thereof, through unjustified or discriminatory measures. (Article 3 (1)).

National Treatment

Yes. Each Contracting Party, once it has admitted investments in its territory by investors of the other Contracting Party, shall accord them treatment which is no less favorable than that accorded to investments by its own investors or by investors of third States. (Article 3 (2)).

Most-Favored Nation Treatment

Yes. Each Contracting Party, once it has admitted investments in its territory by investors of the other Contracting Party, shall accord them treatment which is no less favorable than that accorded to investments by its own investors or by investors of third States. (Article 3 (2)).

Exceptions

Notwithstanding the provisions of Article 3(2), the treatment of the most-favored-nation shall not apply to privileges which either Contracting Party accords to investors of a third State because of its membership in, or association with, a free trade area, customs union, common market or regional agreement. (Article 3 (3)).

The provisions of Article 3 (2)[full legal protection, national treatment, and MFN treatment] shall neither be construed so as to extend to investors of the other Contracting Party the benefit of any treatment, preference or privilege resulting from the bilateral agreements providing for concessional treatment concluded by the Argentine Republic and Italy on December 10, 1987 and with Spain on June 3, 1988. (Article 3 (5)).

OTHER ASPECTS

Performance Requirements

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Others

If the provisions of the law of either Contracting Party, or obligations under international law existing at present or established hereafter between the Contracting Parties, in addition to the present Agreement, or if any Agreement between an investor of one Contracting Party and the other Contracting Party contain rules, whether general or specific, entitling investments by investors of the other Contracting Party to a treatment more favorable than is provided for in the present Agreement, such rules shall, to the extent that they are more favorable, prevail over the present Agreement. (Article 7).

Investors of either Contracting Party who suffer losses of their investments in the territory of the other Contracting Party due to war or other armed conflict, a state of national emergency, revolt, insurrection or riot shall be accorded with respect to restitution, indemnification, compensation or other settlement, a treatment which is no less favorable than that accorded to its own investors or to investors of any third State. (Article 4 (2)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall grant investors of the other Contracting Party the unrestricted right to transfer payments related to investments, in particular, though not exclusively, of:

1. capital and additional sums necessary for the maintenance and developments of the investments;
2. returns;
3. proceeds from a total or partial sale or liquidation of an investment;
4. earnings of nationals of one Contracting Party who are allowed to work in connection with an investment in the territory of the other;
5. compensation provided for in Article 4. (Article 5 (1)).

Repayment of Loans

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Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article 5 (1) (c)).  

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article 5 (1) (a), (d), (e)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected without delay, in freely convertible currency, at the normal applicable rate at the date of transfer, in accordance with the procedures established by the Contracting Party in whose territory the investment was made. Such procedures shall not impair the substance of the rights set forth in this Article. (Article 5 (2)).

Exchange Rates

Transfers shall be effected at the normal applicable rate at the date of transfer. (Article 5 (2)).

Time of Transfer

Transfers shall be effected without delay. (Article 5 (2)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation, nationalization or measures which have a similar effect. (Article 4 (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “Public interest.” (Article 4 (1)).

Due Process of Law and Judicial Review

Yes. (Article 4 (1)).
The BIT does not include an independent requirement that expropriations be subject to judicial review. However, it has been argued that the international standard of due process includes such a requirement.

Other

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Compensation Standard; Form and Time of Payment

“Prompt, adequate and effective compensation”

Compensation shall:

• amount to the market value of the investment immediately before the date of expropriation or before the impending expropriation became publicly known;
• include interests at a normal commercial rate from the date of expropriation;
• be made without delay;
• be effectively realizable and freely transferable. (Article 4 (1)).

Settlement of Disputes between Contracting Parties
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PRE-ARBITRATION NEGOTIATIONS

Any dispute between the Contracting Parties concerning the interpretation or application of the Agreement should, if possible, be settled amicably through diplomatic channels. (Article 8 (1)).
If it cannot be settled within six months, the dispute shall, at the request of either Party, be submitted to an arbitral tribunal for decision. (Article 8 (2)).

ARBITRATION

Constitution of the Tribunal

An arbitral tribunal shall be constituted for each dispute.

• Within two months of the request of arbitration, each Party shall appoint an arbitrator.
• The two arbitrators are required to select, within the next two months, a national of a third State who serves as Chairman of the tribunal. When agreement cannot be reached, the President of the International Court of Justice might be entrusted by either Contracting Party with the responsibility of making the appointment. There are also additional provisions to cover cases when the President is a national of either Party or is otherwise prevented from fulfilling this function.
• Regarding costs, each Party is required to bear the expenses of its own member of the tribunal and of its representation in the proceedings, while the costs related to the Chairman are to be paid for equally by the Parties. The Tribunal may, however, direct that a higher proportion of the costs be paid by one of the Parties. (Article 8 (3) (4) (5)).

Procedural Rules of the Tribunal

The arbitral tribunal shall determine its own procedure.
Decisions of the tribunal shall be taken by a majority of votes and shall be binding on both Parties. (Article 8 (5)).

Applicable Law

No reference.

Settlement of Disputes between a Contracting Party and an Investor [Return to the top of the page]

DEFINITION

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PREARBITRAL CONSULTATIONS AND DISPUTE SETTLEMENT MECHANISMS

Any dispute relating to investments between an investor of one Contracting Party and the other Contracting Party will, to the extent possible, be settled amicably. (Article 9 (1)).

If it was not possible to settle the dispute within a period of six months, it may be submitted:

1. to the competent tribunals of the host party; or
2. to international arbitration.

If the investor is the claimant and the parties do not agree on which dispute settlement mechanism to use, the investor’s opinion shall prevail. Election by the investor of either one of these procedures shall be definitive. (Article 9 (2)(3)(4)).

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

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Consent

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Forms of Arbitration

In case of international arbitration, the dispute shall be submitted to:

1. ICSID, provided each Contracting Party is a party to the ICSID Convention. (For the interim period, both parties give their consent to the submission of the dispute to the ICSID Additional Facility Rules); or
2. an ad hoc arbitration tribunal established under the UNCITRAL Arbitration Rules. If after three months the selection of a forum has not been made, the parties shall be bound to submit the dispute to ICSID. (Article 9 (5)(6)).

Applicable Law

The arbitral tribunal shall decide the dispute in accordance with the provisions of the Agreement; with reference to the laws of the Contracting Party involved in the dispute; terms of any specific agreement concluded in relation to such an investment; and, principles of international law. (Article 9 (7)).