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

DEFINITION OF INVESTMENT

The term “investment” comprises every kind of good and right linked to an investment. This general definition is illustrated by a non exhaustive list of five groups of specific rights, including:

• traditional property rights;
• rights in companies;
• claims to money (only when directly linked with a specific investment) and titles to performance;
• intellectual property rights; and,
• concessions and similar rights. (Article I (1)).

DEFINITION OF INVESTOR

Nationals

The term “investor” comprises any natural person who is a national of one of the Contracting Parties under their applicable law. (Article I (2) (a)).

The agreement does not apply to investments made in the territory of one Contracting Party by natural persons who are nationals of the other Contracting Party if they have been domiciled in the host country for more than five years, unless it is proved that the investment was admitted from abroad. (Article I (3)).

Companies

The term “investor” comprises any legal person constituted under the law of one of the Contracting Parties, that has its seat and has effective economic activities in the territory of said Party. (Article I (2) (b)).

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

Date of signature: May 16, 1994
Entry into force: January 14, 1996
Duration: 10 years.
The Agreement shall remain in force until the expiration of a period of 12 months from the date that either Party notifies the other Party of its decision to terminate the Agreement.

Admission [Return to the top of the page]

Subject to its general policy in the field of foreign investment, each Contracting Party shall promote, in its territory, investments of investors of the other Contracting Party, and shall admit them in accordance with its laws and regulations. (Article III).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

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

Full Protection and Security

Yes. Full legal protection for admitted investments of investors of the other Contracting Party. (Article IV (2)).

Non-Discrimination

Yes. Each Contracting Party shall not impair the management, maintenance, use, enjoyment, usufruct, extension, liquidation or disposal of investments of investors of the other Contracting Party through unjustified or discriminatory measures. (Article IV (1)).

National Treatment

Yes, for admitted investments of investors of the other Contracting Party. (Article IV (2)).

Most-Favored Nation Treatment

Yes, for admitted investments of investors of the other Contracting Party. (Article IV (2)).

EXCEPTIONS

The MFN treatment shall not apply to privileges accorded by each Contracting Party to investors of any third State by virtue of its participation or association in a free trade agreement, customs union, economic union, common market or regional agreement. (Article IV (3)).

The treatment referred to in Article IV (2) does not extend to benefits which either Contracting Party accords to investors of any third State under a taxation agreement. (Article IV (4)).

OTHER ASPECTS

Performance Requirements

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Others

If the provisions in the legislation of a Contracting Party, or if the existing or future obligations under international law between the two Contracting Parties, or if an agreement between an investor of a Contracting Party and the other Contracting Party include provisions granting to investments of investors of the first Contracting Party a more favorable treatment, these provisions shall prevail (if they are more favorable). (Article VIII).

Investors of a 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. These payments shall be freely transferable. (Article V(2)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall guarantee to investors of the other Contracting Party the transfer, without delay, of the payments related to an investment and, in particular, but not exclusively:

1. capital and additional amounts necessary for the maintenance and the development of investments;
2. profits, interests, dividends, and other current incomes;
3. funds in repayment of loans, as defined in Article I (1) (c);
4. bonuses;
5. proceeds of the total or partial liquidation or sale of any investment;
6. any compensation as indicated in Article IV;
7. payments that shall be effected by virtue of Article VII. (Article VI (1)).

Repayment of Loans

Yes. (Article VI (1) (c)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article VI (1) (e)).

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article VI (1) (a), (d), (f), (g)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected in a freely convertible currency. (Article VI (2)).

Exchange Rates

Transfers shall be effected at the exchange rate applicable on the date of transfer. (Article VI (2)).

Time of Transfer

Transfers shall be effected without delay, i.e. within the time necessary to fulfill the formalities for the transfer. This period shall in no case exceed 60 days after the documents were first filed. (Article VI (2)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

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

CONDITIONS

Public Purpose and Non-Discrimination

Yes. (Article V (1)).

Due Process of Law and Judicial Review

Yes. (Article V (1)).

Other

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Compensation Standard; Form and Time of Payment

“Prompt, adequate and effective compensation”

Compensation shall:

• be based on the market value of the investment immediately before the expropriation or at the time the impending expropriation became public or effective, whichever is earlier;
• include interests at a normal commercial rate from the date of expropriation. (Article V (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 shall, whenever possible, be settled through diplomatic channels. (Article IX (1)).

If it cannot be settled within six months, the dispute shall, at the request of either Contracting Party, be submitted to an arbitral tribunal for decision. (Article IX (2)).

ARBITRATION

Constitution of the Tribunal

The arbitral tribunal shall be constituted ad hoc.

• Each Party shall appoint an arbitrator within two months.
• 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 a Party does not select an arbitrator or agreement cannot be reached on the designation of the Chairman, the President of the International Court of Justice might be entrusted with the responsibility of making the appointments. 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. (Article IX (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 IX (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 the provisions of the Agreement between an investor of one Contracting Party and the other Contracting Party will, to the extent possible, be settled through amicable consultations. (Article X(1)).

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

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

Election by the investor of either one of these procedures shall be definitive. (Article X(2)).

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 ICSID. (Article X(3)).

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 X(4)).