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

DEFINITION OF INVESTMENT

The term “investment” comprises every kind of asset directly or indirectly owned by a national or a company of the other Contracting Party, 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;
• monetary claims and titles to performance having a financial value (loans that are directly related to a specific investment);
• intellectual property rights; and
• concessions and similar rights. (Article 1(1)).

DEFINITION OF INVESTOR

Nationals

The term “investor” includes any natural person who is a national of one of the Contracting Parties under its law, and who makes an investment in the territory of the other Party. (Article 1(2)(a)).

The provisions of this Agreement do not apply to the investments of natural persons who are nationals of one Party in the territory of the other Party, if at the time of the investment such persons had been residing in the latter Part for more than two years, unless it is proved that the investment was admitted from abroad. (Article 1(3)).

Companies

The term “investor” means any legal person who is constituted in accordance with the laws and regulations of a Contracting Party, and has its seat in the territory of that Contracting Party and is making an investment in the territory of the other Party. (Article 1(2)(b)).

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

Date of signature: August 10, 1998
Entry into force: The first day of the second month after last written notification has been submitted indicating that the Parties have completed the procedures required in their respective territories for the entry into force of the Agreement.
Duration: 10 years.
Thereafter it may automatically be extended by tacit agreement for another ten years, unless a Party decides to terminate the Agreement by way of written notification to the other Party with twelve months’ advance notice.

Admission [Return to the top of the page]

Each 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 2).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Party shall ensure fair and equitable treatment, in its territory, to investments of investors of the other Party. (Article 3 (1)).

Full Protection and Security

Yes. Each Party, once it has admitted investments in its territory by investors of the other Party, shall accord such investments full protection and security. (Article 3 (2)).

Non-Discrimination

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

National Treatment

Yes. Each Party, once it has admitted investments in its territory by investors of the other 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 Party, once it has admitted investments in its territory by investors of the other 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), MFN treatment shall not apply to privileges accorded by each Party to investors of any third State by virtue of its participation or association in a free trade agreement, customs union, common market, or regional agreement. (Article 3 (3)).

The provisions of Article 3 (2) shall neither be construed so as to extend to investors of the other 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 in the legislation of a Party, or if the existing or future obligations under international law between the two Parties, or if an agreement between an investor of a Party and the other Party include provisions granting investments of investors of the first Party a more favorable treatment, these provisions shall prevail if they are more favorable. (Article 9).

Subject to its laws, regulations and policies relating to the entry stay of aliens, both Parties shall allow the entry and stay in its territory of nationals of the other Party in their capacity as personnel establishing, developing, managing or advising an investment. (Article 4 (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 unrestricted transfers of investments and returns and, in particular, but not exclusively:

1. capital and additional amounts necessary for the maintenance and the development of investments;
2. benefits, profits, interests, dividends, and other current incomes;
3. funds in repayment of loans, as defined in Article 1 (1) ( c);
4. bonuses and honoraria;
5. proceeds of the total or partial liquidation or sale of any investment;
6. any compensation as indicated in Article 6;
7. incomes of nationals of a Contracting Party (nationals that have obtained authorization to work in the territory of the other Contracting Party with respect to an investment. (Article 7 (1)).

Repayment of Loans

Yes. (Article 7 (1) (c )).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article 7 (1) (e)).

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article 7 (1) (a), (f) (g)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected without delay in a freely convertible currency at the exchange rate applicable on the date of transfer, in accordance with the procedures established by the Contracting Party in which territory the investment was made, procedures which cannot affect the substance of the rights set forth in this Article. (Article 7 (2)).

Exchange Rates

Transfers shall be effected without delay in a freely convertible currency at the exchange rate applicable on the date of transfer, in accordance with the procedures established by the Contracting Party in which territory the investment was made, procedures which cannot affect the substance of the rights set forth in this Article. (Article 7 (2)).

Time of Transfer

Transfers shall be effected without delay in a freely convertible currency at the exchange rate applicable on the date of transfer, in accordance with the procedures established by the Contracting Party in which territory the investment was made, procedures which cannot affect the substance of the rights set forth in this Article. (Article 7 (2)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation, nationalization or measures which have a similar effect. (Article 6(1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “Public use” (Article 6(1)).

Due Process of Law and Judicial Review

Yes. (Article 6(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 6 (1)).

Settlement of Disputes between Contracting Parties
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PRE-ARBITRATION NEGOTIATIONS

Any dispute between the Parties concerning the interpretation or application of the Agreement shall, to the extent possible, be settled through diplomatic channels. (Article 10 (1)).

If it cannot be settled within six months from the start of negotiations, the dispute shall, at the request of either Party, be submitted to an arbitral tribunal for decision. (Article 10 (2)).

ARBITRATION

Constitution of the Tribunal

An arbitral tribunal shall be constituted for each dispute as follows:

• Within two months of the request of arbitration, each Party shall appoint a member of the tribunal.
• These two members 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 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, and such an award shall be binding on the Parties. (Article 10 (3) (4) (5)).

Procedural Rules of the Tribunal

The 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 10 (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 through amicable consultations. (Art. 11 (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 11 (2)).    

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

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Consent

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Forms of Arbitration

When the dispute is referred to international arbitration, it may be submitted, at the choice of the investor, 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. (Article 11 (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 11 (4)).