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
• economic concessions. (Article I (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. (Article 1 (2)(a)).

Companies

The term “investor” means any legal person constituted in accordance with the laws and regulations of a Contracting Party, having its seat in the territory of that Contracting Party; and any legal person constituted according to the laws of any country and is effectively controlled by natural or legal persons of the other Contracting Party (Article 1(2)(b)(c)).

The Contracting Party receiving the investment may request proof of control as invoked by the other Contracting Party. The following may be considered as proof of control: a percentage of direct or indirect contribution to the capital of a legal entity that facilitates effective control, such as a financial contribution that amounts to more than half of the total capital; the direct or indirect ownership of a quantity of votes that allow the investor to influence in a decisive manner the functioning of the legal entity (Ad. Article 1(2)(c)).

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

Date of signature: November 10, 1994
Entry into force: October 24, 1996
Duration: Indefinite. The Agreement may only be terminated by any of the Contracting Parties ten years after the entry into force of the Agreement. The termination will take effect twelve months from the date when one of the Contracting Parties gives written notification to the other Contracting Party of its intention to terminate the Agreement.

Admission [Return to the top of the page]

Each Contracting Party shall promote in its territory investments of investors of the other Contracting Party, and shall admit the in accordance with its laws and regulations. (Article 2(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 by investors of the other Contracting Party. (Article 2 (3)).

Full Protection and Security

Investments made by investors of one Contracting Party in the territory of the other Contracting Party in accordance with the laws and regulations of the latter shall enjoy full protection under this Agreement. (Article 2 (2)).

Non-Discrimination

Yes. Each Contracting Party shall at all times ensure fair and equitable treatment to investments by investors of the other Contracting Party, and shall not impair the management, maintenance, use, enjoyment or disposal such investments through unjustified or discriminatory measures. (Article 2 (3)).

National Treatment

Yes. Each Contracting 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, considering whichever is the most favorable for investments of investors of the other Contracting Party. (Article 3 (1)).

Most-Favored Nation Treatment

Yes. Each Contracting 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, considering whichever is the most favorable for investments of investors of the other Contracting Party. (Article 3 (1)).

Exceptions

Notwithstanding the provisions of Article 3 (1), 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 (2)).

The provisions of Article 3 (1) 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. (Protocol).

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 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).

Investors of either Party who suffer losses of their investments in the territory of the other Party due to war or other armed conflict, a state of national emergency, revolt, insurrection or riots shall be accorded in respect of 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. Payments shall be freely transferable. (Article 5).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall grant to investors of the other Contracting Party the free transfer of payments relating with an investment and, in particular, but not exclusively:

1. investment and reinvestment capital, and additional amounts necessary for the maintenance and the development of investments;
2. returns;
3. funds for the reimbursement of loans, as defined in Article 1 (1) (c), as well as interests; d) proceeds of the total or partial liquidation or sale of any investment;
4. compensation or indemnification; as defined in Articles 4 and 5;
5. 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 6 (1)).

Repayment of Loans

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

Proceeds of the Total or Partial Liquidation of an Investment

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

Licenses and Other Fees

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Other Categories of Payment

Yes. Article 6 (1) (a), (e), (f)).

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 6 (2)).

Exchange Rates

Transfers shall be effected at the exchange rate applicable on the date of transfer. (Article 6 (2)).

Time of Transfer

Transfers shall be effected without delay. (Article 6 (2)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Nationalization or expropriation, or any measure with a similar effect. (Article 4(2)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “National security or public use” (Article 4(2)).

Due Process of Law and Judicial Review

Yes. (Article 4(2), Article 4(4)).

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 and 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 shall, to the extent possible, be settled through diplomatic channels. (Article 11 (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 11 (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 Contracting 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 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 Contracting Party or is otherwise prevented from fulfilling this function.
• Regarding costs, each Contracting 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 Contracting Parties. The Tribunal may, however, direct that a higher proportion of the costs be paid by one of the Contracting Parties, and such an award shall be binding on the Contracting Parties. (Article 11 (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 Contracting Parties. (Article 11 (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. 9 (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 9 (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 9 (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 9 (4)).