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

DEFINITION OF INVESTMENT

The term “investment” comprises every kind of asset, invested by an investor of one Contracting Party in the territory of the other Contracting Party, in accordance with 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; and, intellectual property 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 their applicable law. (Article 1 (1) (a)).

Companies

The term “investor” includes: any legal person constituted under the laws and regulations of a Contracting Party, and having its seat in the territory of said Party; and, any legal person effectively controlled by investors of a 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: November 16, 1993
Entry into force: July 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 promote, in its territory, investments of investors of the other Contracting Party, and shall admit such investments in accordance with its laws and regulations. (Article 3).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Contracting Party, in accordance with international law, shall at all times accord fair and equitable treatment to investments of investors of the other Contracting Party. (Article 4 (1)).

Full Protection and Security

Yes, full legal protection to admitted investments of investors of the other Contracting Party. (Article 4 (2)).

Non-Discrimination

Yes. Each Contracting Party, in accordance with international law, shall not impair the management, maintenance, use, enjoyment or disposal of investments of investors of the other Contracting Party through unjustified and discriminatory measures. (Article 4 (1)).

National Treatment

Yes, to admitted investments of investors of the other Contracting Party. (Article 4 (2)).

Most-Favored Nation Treatment

Yes, to admitted investments of investors of the other Contracting Party. (Article 4 (2)).

EXCEPTIONS

None of the Contracting Parties is obliged to extend to investments of investors of the other Contracting Party benefits, advantages or privileges that it accords to investors of third States as a result of :

1. its participation or association in a free trade area, customs union, common market or integration agreement;
2. a taxation agreement;
3. bilateral agreements which provide concessional financing, subscribed by Argentina with Italy on December 10, 1987, and with 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 to investments of investors of the first Contracting Party a more favorable treatment, these provisions shall prevail if they are more favorable. (Article 9).

A Contracting Party shall fulfill the obligations it has entered into with respect to an investor of the other Contracting Party (and his investments). (Article 4 (4)).

Investors of a Contracting Party suffering losses with respect to their investments in the territory of the other Contracting Party due to war or other armed conflicts, national emergency, revolt, insurrection or uprising, shall receive treatment, in regard to restitution, indemnification, compensation or other settlement, no less favorable than that accorded by the latter Contracting Party to its own investors or investors of any third State. (Article 7).

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 unrestricted transfer of investments and returns, and in particular, but not exclusively:

1. capital and additional sums necessary for the management, maintenance or development of investments;
2. benefits, profits, interests, dividends and other current incomes;
3. funds for the reimbursement of loans;
4. bonuses and honoraria;
5. proceeds of the total or partial liquidation or sale of any investment;
6. any compensation as indicated in Articles 6 and 7;
7. incomes of nationals of a Contracting Party, in accordance with the laws of the other Contracting Party, who have lent their services as directors, managers, advisers, technicians or specialists with respect to the investment of an investor in the territory of the latter Party. (Article 5 (1)).

Repayment of Loans

Yes. (Article 5 (1) (c)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article 5 (1) (e)).

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article 5 (1) (a), (d), (f), (g)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

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

Exchange Rates

Transfers shall be effected at the normal applicable rate on the date of transfer, in accordance with the procedures established by that Contracting Party. (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 6 (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. (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, in the case of being higher, before the impending expropriation became publicly known;
• include interests at a normal commercial rate until the time of payment;
• be made without delay;
• be effectively realizable and freely transferable. (Article 6 (2)).

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 10(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 10 (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 10 (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 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. (Article 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

Where the dispute is referred to international arbitration, the investor and the Contracting Party may agree to submit the dispute 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);
2. an ad hoc arbitration tribunal established under the UNCITRAL Arbitration Rules.

If after a period of three months an agreement has not been reached on the procedure, the parties shall submit it for arbitration to the ICSID or the ICSID Additional Facility. (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)).