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;

• intellectual property rights; and,

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

DEFINITION OF INVESTOR

Nationals

The term “investor” comprises any natural person investing in one of the Contracting Parties who is a national of the other Contracting Party under its law. (Article 1 (2)).

Companies

The term “investor” comprises any legal person constituted under the laws of a Contracting Party and having its seat in its territory; and, any legal person constituted under the laws of any country that is controlled by natural or legal persons as defined by the Treaty. (Article 1 (2) (b)(c)).

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

Date of signature: July 4, 1995
Entry into force:
The Agreement enters into force when both Contracting Parties have notified each other that their respective internal legal procedures have been fulfilled (30 days after the latter notification).
Duration: 10 years.
Thereafter it shall remain in force until either Party notifies the other Party, a year in advance, 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 2 (1)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Contracting Party shall, in accordance with the norms and principles of international law, ensure a fair and equitable treatment to investments of investors of the other Contracting Party. (Article 3 (1)).

Full Protection and Security

Yes, full protection and security. (Article 3 (1)).

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 arbitrary and discriminatory measures. (Article 3 (1)).

Once a Contracting Party has admitted investments of the other Contracting Party in its territory, it shall not negate arbitrarily or delay the necessary authorizations for their development, including the execution of contracts of licensing, commercial or administrative assistance and income of direct, administrative, advisory, and technical personnel. (Article 2).

National Treatment

Yes. Each Contracting Party shall grant, to investments of investors of the other Contracting Party, treatment no less favorable than that it grants to its own investors or those of any third State. (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 grants to its own investors or those of any third State. (Article 3 (2)).

EXCEPTIONS

None of the Contracting Parties is obliged to extend to investments of investors of the other Contracting Party benefits of agreements as a result of:

1. its participation or association in a free trade area, custom union, common market or similar agreement;
2. a taxation agreement. (Article 3 (3)).  

OTHER ASPECTS

Performance Requirements

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Others

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 state of 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 4 (2)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall allow investors of the other Contracting Party to freely transfer sums related to investments and returns and, in particular but not exclusively:

1. capital and additional sums necessary for the maintenance and development of investments;
2. benefits, profits, incomes, interests, dividends and other current incomes;
3. funds for reimbursement of loans;
4. bonuses and other payments related to intellectual or industrial property rights (Article 1 (d)) and concessions (such as for natural resources, Article 1 (e));
5. proceeds of the sale or the total or partial liquidation of an investment;
6. remuneration of the nationals of the other Contracting Party that have obtained the authorization to work (with respect to an investment made in that country) as directors, managers, advisers or technicians;
7. compensations, indemnifications or other payments provided in Article 4. (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 freely convertible currency. (Article 5 (2)).  

Exchange Rates

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Time of Transfer

Transfers shall be effected without delay in freely convertible currency. (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 4 (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “Public use or social interest.” (Article 4 (1)).

Due Process of Law and Judicial Review

Yes. Article 4 (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

“Just, prompt and adequate compensation”

Compensation shall:

• be based on the market value of the investment immediately before the expropriation became public knowledge. (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, whenever possible, be settled through diplomatic channels. (Article 7 (1)).

If it cannot be settled within three months, the dispute shall, at the request of either Contracting Party, be submitted to an ad hoc arbitral tribunal for decision. (Article 7 (2)).

ARBITRATION

Constitution of the Tribunal

The ad hoc arbitral tribunal shall be constituted as follows:

• 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. (Article 7 (3) (4) (5)).

Procedural Rules of the Tribunal

No reference.

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 the Agreement between an investor of one Contracting Party and the other Contracting Party will, to the extent possible, be settled through amicable consultations. (Art. 8 (1)).

If it was not possible to settle the dispute within a period of six months, the investor may choose to submit it:

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 8 (2)).    

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

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Consent

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Forms of Arbitration

International arbitration will be referred to ICSID or, if pertinent, to the ICSID Additional Facility. If these mechanisms are not available, UNCITRAL Arbitration Rules will apply. (Article 8 (3)).

Applicable Law

No reference.