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

DEFINITION OF INVESTMENT

The term “investment” comprises every kind of asset defined according to the host country’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;

• claims to money and titles to performance;

• intellectual property rights; and,

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

DEFINITION OF INVESTOR

Nationals

“National” of a Party comprises any natural person who is a national of that Party under its law. (Article 1 (4) (a)).

Companies

“National” of a Party comprises companies constituted under the law of one of the Contracting Parties or that are controlled, directly or indirectly, by nationals of said Party. (Article 1 (4) (b)).

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

Date of Signature: July 30, 1993
Entry into force:
February 19, 1995
Duration: 10 years.
Thereafter it shall be extended tacitly for periods of ten years, unless notice of termination has been given twelve months in advance.

Admission [Return to the top of the page]

Each Contracting Party shall promote, in its territory, investments of nationals of the other Contracting Party, and shall admit these investments in accordance with its laws and regulations. (Article 2 (1)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. (Article 3 (1)).

Full Protection and Security

Yes, full protection. (Article 2 (2)).

Non-Discrimination

Yes. Each Contracting Party shall not impair, with arbitrary and discriminatory measures, the management, utilization, use, enjoyment or disposal of investments of investors of the other Contracting Party. (Article 3 (1)).

National Treatment

Yes. Each Contracting Party shall accord to investments of investors of the other Contracting Party treatment no less favorable than that it accords to investments of its nationals or those of a third State, i.e. treatment that will be the most favorable to investments of nationals of the other Contracting Party. (Article 3 (2)).

Most-Favored Nation Treatment

Yes. Each Contracting Party shall accord to investments of investors of the other Contracting Party treatment no less favorable than that it accords to investments of its nationals or those of a third State, i.e. treatment that will be the most favorable to investments of nationals of the other Contracting Party. (Article 3 (2)).

Nationals of a Contracting Party shall enjoy MFN treatment with respect to Articles 5 [expropriation] and 6 [compensation] in the territory of the other Contracting Party. (Article 7).

EXCEPTIONS

The treatment accorded in Article 3 (2) shall not be extended to the privileges that a Contracting Party accords to nationals of third States by virtue of a customs or economic union, a common market or free trade area, or other similar international agreements with third States for mutual economic assistance, or other forms of regional cooperation. (Article 3 (3)).

National treatment and most-favored-nation treatment do not extend to the benefits or advantages that one of the Contracting Parties accords to nationals of third States as a result of a taxation agreement. (Article 3 (4)).

Nothing in this Treaty shall prevent a Contracting Party from reserving some economic activities in accordance with its political Constitution. Moreover, nothing in this Treaty shall prevent a Contracting Party from adopting measures, if not discriminatory, for reasons of internal and external national security, public or moral order. (Article 3 (5)).  

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 10 (1)).

Nationals of one Contracting Party, suffering losses due to war or armed conflict, revolution, national emergency, state of siege, insurrection or other similar events in the territory of the other Contracting Party, shall not be treated less favorably than investors of this Contracting Party with regard to restitution, compensation, indemnification or other settlement. These payments shall be transferable to the territory of the first Contracting Party or any third State. (Article 6).

Each Contracting Party shall comply with the other commitments it has entered into with respect to investments of investors of the other Contracting Party. (Article 10 (2)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall guarantee to nationals of the other Contracting Party the free transfer to the territory of the latter Party or that of third States of payments related to an investment, especially:

1. capital of an investment and reinvestments that have been effected in accordance with the laws and regulations of the host country;
2. all the returns;
3. amortization of loans;
4. proceeds of the sale or the total or partial liquidation of an investment;
5. indemnifications as provided in Article 5 of this Treaty;
6. compensations or settlements as provided in Article 6. (Article 4 (1)).

Repayment of Loans

Yes. (Article 4 (1) (c)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article 4 (1) (d)).  

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article 4 (1) (a), (e), (f)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected in convertible currency, without restrictions and delay. (Article 4 (2)).  

Exchange Rates

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Time of Transfer

Transfers shall be effected without delay. (Article 4 (2)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation, nationalization or measures which have a similar effect. (Article 5 (2)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “Public use or social interest.” (Article 5 (2)). There is no reiteration of the non-discrimination standard in the expropriation context.

Due Process of Law and Judicial Review

Yes. (Article 5 (4)).

Other

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Compensation Standard; Form and Time of Payment

Compensation shall:

• amount to the 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 until the time of payment;
• be made without delay;
• be effectively realizable and freely transferable. (Art. 5 (3)).

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 12(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 12 (1) (2)).

ARBITRATION

Constitution of the Tribunal

An arbitral tribunal shall be constituted ad hoc.

• Within two months of the request of arbitration, each Party shall appoint an arbitrator.
• The two arbitrators are required to select, within the next three months, a national of a third State who serves as Chairman of the tribunal. When the appointments cannot be made within these time limits, the President of the International Court of Justice might be entrusted by either Contracting Party 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. The Tribunal may, however, direct that a higher proportion of the costs be paid by one of the Parties. (Article 12 (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 12 (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

Disputes which arise between an investor of one Party and the other Party with regard to an investment under the Agreement, shall, to the extent possible, be settled amicably. (Article 11 (1)).

If the dispute is not settled within a period of six months, it shall be submitted, at the request of one of the Parties involved, to the decision of the competent tribunal of the Party in whose territory the investment was made. Article 11 (2)).

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

Investment disputes may be submitted to international arbitration:

• at the request of one of the disputing parties, when six months have elapsed without the competent tribunal having given its final decision or when the final decision of the tribunal has been made but the parties are still in dispute;
• when both parties in the controversy have so agreed. (Article 11 (3)).  

Consent

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Forms of Arbitration

Disputes, in the sense of Article 11 (3), will be submitted to:

1. ICSID, provided that both parties are parties to the ICSID Convention, and to the Additional Facility of the Center; or
2. an ad hoc arbitration tribunal established according to an international agreement to which both Contracting Parties are party. (Article 11 (4)).

Applicable Law

No reference.