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

DEFINITION OF INVESTMENT

The term “investment” comprises every kind of right or asset, invested by an investor of one Contracting Party in the territory of the other Contracting Party, according to the latter’s laws and regulations. This general definition is illustrated by a non exhaustive list of five groups of specific rights, including:

• traditional property rights;

• rights in companies;

• credits or obligations (loans directly related to a specific investment);

• intellectual property rights; and,

• concessions and similar rights. (Article 1 (2)).

DEFINITION OF INVESTOR

Nationals

The term “investor” includes any natural person who is a national of one of the Contracting Parties under its law. (Article 1 (1)).

Companies

The term “investor” includes:

• any legal person constituted under the laws of a Contracting Party, and having its seat in the territory of said Party; and,

• any legal person constituted under the laws of any country but effectively controlled, directly or indirectly, by natural persons of said Contracting Party or by legal persons having their seat and effective economic activities in the territory of said Contracting Party. (Article 1 (1) (b)(c)).

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

Date of signature: May 9, 1996.
Entry into force: Thirty days after the date of exchange of instruments of ratification.
Duration: 10 years.
Thereafter it shall remain in force until either Party notifies the other Party, six months in advance, of its decision to terminate the Treaty.

Admission [Return to the top of the page]

Each Contracting Party shall promote, in its territory, investments of investors of the other Party, and shall admit such investments in accordance with its laws and regulations. (Article 3 (1)).

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 of investors of the other Contracting Party. (Article 3 (2)).

Full Protection and Security

Yes. Each Contracting Party shall accord, in its territory, to investments of investors of the other Contracting Party full legal protection. (Article 3 (2)).

Non-Discrimination

Yes. Each Contracting Party shall not impair the management, maintenance, use, enjoyment or disposal of investments of investors of the other Contracting Party through unjustified or discriminatory measures. (Article 3 (2)).

National Treatment

Yes. Each Contracting Party shall accord to investments of investors of the other Contracting Party, in its territory, treatment no less favorable than the one accorded to its own investors or those of a third State, if the latter is more favorable. (Article 4 (1)).

Most-Favored Nation Treatment

Yes. Each Contracting Party shall accord to investments of investors of the other Contracting Party, in its territory, treatment no less favorable than the one accorded to its own investors or those of a third State, if the latter is more favorable. (Article 4 (1)).

Exceptions

If one of the Contracting Parties has accorded a different treatment to a third country by virtue of an agreement which establishes provisions to avoid double taxation or other tax-related agreements, free trade agreements, customs unions, common markets, economic or monetary unions or other similar institutions, such Contracting Party shall not be obliged to accord such treatment to investments of investors of the other Contracting Party. (Article 4 (2)).

The treatment referred to in Article 4 (1) does not extend to benefits which the other Contracting Party receives from bilateral agreements providing concessional financing, such as the agreements subscribed by Argentina with Italy on December 10, 1987, and Spain on June 3, 1988. (Article 4 (3)).

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 investments of investors of the first Contracting Party a more favorable treatment, these provisions shall prevail (if they are more favorable). (Article 9).

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, if possible, be settled amicably through diplomatic channels. (Article 11 (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 11 (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 thirty days, 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 11 (3) (4) (5) (6)).

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 11 (6)).

Applicable Law

The tribunal shall decide on the basis of the provisions of the Agreement, legal principles recognized by the Parties and the general principles of international law. (Article 11 (6)).

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 or negotiations. (Article 10 (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 10 (2)).

ARBITRAL SETTLEMENT OF DISPUTES

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Conditions

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Consent

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Forms of Arbitration

When the dispute is referred to international arbitration, the investor may refer the dispute to:

1. ICSID; or
2. an ad hoc arbitration tribunal established under the UNCITRAL Arbitration Rules. (Article 10 (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 10 (4)).