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

DEFINITION OF INVESTMENT

The term “investment” means any kind of asset owned or controlled either directly, or indirectly through an enterprise or natural person of a third State, by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the latter's laws. This general definition is illustrated by a non exhaustive list of groups of rights:

• traditional property rights;

• rights in companies;

• money, claims to money, and claims to performance under contract having a financial value;

• goodwill;

• intellectual property rights;

• rights, conferred by law or under contract, to undertake any economic and commercial activity, including any rights to search for, cultivate, extract or exploit natural resources;

• but does not mean real estate or other property, tangible or intangible, not acquired in the expectation or used for the purpose of economic benefit or other business purposes.

For further certainty, investment does not mean, claims to money that arise solely from:

1. commercial contracts for the sale of goods or services by a national or enterprise in the territory of one Contracting Party to a national or an enterprise in the territory of the other Contracting Party; or

2. the extension of credit in connection with a commercial transaction, such as trade financing, where the original maturity of the loan is less than three years. Without prejudice to subparagraph (ii) immediately above, a loan to an enterprise where the enterprise is an affiliate of the investor shall be considered an investment.

For the purpose of this Agreement, an investor shall be considered to control an investment if the investor has the power to name a majority of its directors or otherwise to legally direct the actions of the enterprise which owns the investment.

For greater clarity, returns shall be considered a component of investment. (Art. I (g)).

DEFINITION OF INVESTOR

Nationals

The term “investor” means any natural person who is a citizen of a Contracting Party and who is not a citizen of the other Contracting Party, and who is the owner of or controls an investment in the territory of the other Contracting Party. In the case of Canada, the term includes a person who is a permanent resident in Canada in accordance with its laws. (Article I (h)).

Companies

The term “investor” means any enterprise incorporated or duly constituted in accordance with the applicable laws of one of the Contracting Parties and is the owner of or controls an investment in the territory of the other Contracting Party. (Article I (h)).

The term “enterprise” means:

1. any entity constituted or organized under applicable law, whether or not for profit, whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association; and

2. a branch of any such entity;

For further certainty, "business enterprise" means any enterprise which is constituted or organized in the expectation of economic benefit or other business purposes. (Article I (b)).

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

Date of signature: March 18, 1998
Entry into force: Each Contracting Party shall notify the other in writing of the completion of the procedures required in its territory for the entry into force of this Agreement. This Agreement shall enter into force on the date of the latter of the two notifications.
Duration: The Agreement shall remain in force unless one of the Contracting Parties notifies the other Contracting Party in writing its intention to terminate the Agreement. The termination shall become effective one year after the notification has been received. In respect of investments or commitments to invest made prior to the date when the termination of this Agreement becomes effective, the provisions of Articles I to XIV inclusive, as well as paragraphs (1) and (2) of Article XV, shall remain in force for a period of 15 years.
The Agreement shall apply to any investment made by an investor of one Contracting Party in the territory of the other Contracting Party before or after the date of the entry into force of this Agreement. For further certainty, this Agreement does not create rights regarding actions taken and completed prior to its entry into force.

Admission [Return to the top of the page]

Each Contracting Party shall permit establishment of a new business enterprise or acquisition of an existing business enterprise or a share of such enterprise by investors or prospective investors of the other Contracting Party on a basis no less favourable than that which, in like circumstances, it permits such acquisition or establishment by:

1. investors or prospective investor of any third State;
2. its own investors or prospective investors.

For the purpose of this Agreement, “prospective investor” means any natural person or enterprise of one Contracting Party who actually has carried out concrete steps toward making an investment in the territory of the other Contracting Party. (Article III (1)).

A Contracting Party may adopt or maintain exceptions to the obligation stated in paragraph (1) above, in sectors, measures, or with respect to the matters specified in sections I (MFN exceptions), II (National treatment exceptions), III (General Exceptions and exemptions) and VI [Exclusions from Dispute Settlement (Establishment)] of Annex I of this Agreement. (Article III (2)).

Neither Contracting Party may impose, in connection with permitting the establishment or acquisition of an investment, or enforce in connection with the subsequent regulation of that investment, any of the requirements set forth in the World Trade Organization Agreement on Trade Related Investment Measures contained in the Final Act Embodying the results of the Uruguay Round of Multilateral Trade Negotiations, done at Marrakesh on 15 April 1994. (Article VI )

Investments in cultural industries are exempt from the provisions of this Agreement. (Article III (4) of Annex). For the purpose of this Agreement “cultural industries” means natural persons or enterprises engaged in any of the following activities:

1. The publication, distribution, or sale of books, magazines, periodicals, or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
2. The production, distribution, sale or exhibition of film or video recordings;
3. The production, distribution, sale or exhibition of audio or video music recordings;
4. The publication, distribution, sale or exhibition of music in print or machine readable form; or
5. Radiocommunications in which the transmission are intended for direct reception by the general public, and all radio, television, or cable broadcasting undertakings and all satellite programming and broadcast network services. (Article 1 (a)).

The provision of Articles II [Promotion and Protection of Investments], III [Establishment of Investment], IV [Treatment of Established Investment], V [Management, Directors and Entry of Personnel] and VI [Performance Requirements] of this Agreement do not apply to:

1. Procurement by a government or state enterprise;
2. Subsidies or grants provided by a government or a state enterprise, including government-supported loans, guarantees and insurance;
3. Any measure denying investors of the other Contracting Party and their investments any rights or preferences provided to the aboriginal peoples of a Contracting Party; or
4. Any current or future foreign aid program to promote economic development, whether under a bilateral agreement, or pursuant to a multilateral arrangement or agreement, such as the OECD Agreement on Export Credits. (Article III (5) of Annex I).

Decisions of a Contracting Party as to whether or not to permit establishment of a new business enterprise, or acquisition of an existing business enterprise or a share of such enterprise, by investors or prospective investors of the other Contracting Party shall not be subject to dispute settlement under Article XII of this Agreement. (Article VI (1) of Annex I). Further to paragraph (1), decisions by a Contracting Party pursuant to a pre-existing non-conforming measure described in Article II (1)(b) of this Annex as to whether or not to permit an acquisition shall, in addition, not be subject to dispute settlement under Article XIII of this Agreement (Article VI (2) of Annex I).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Contracting Party shall accord investments of the other Contracting Party:

1. fair and equitable treatment in accordance with principles of international law. (Article II (2) (a)).

Full Protection and Security

Yes. Each Contracting Party shall accord investments of the other Contracting Party:

2. full protection and security. (Article II (2) (b)).

Non-Discrimination

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National Treatment

Yes. With respect to investments and the enjoyment, use, management, conduct, operation, expansion, and sale or other disposition thereof, each Contracting Party shall accord treatment no less favourable than that which, in like circumstances, it grants in respect of:

• investments in its territory of its own investors. (Article IV (b)).

Each Contracting Party shall permit establishment of a new business enterprise or acquisition of an existing business enterprise or a share of such enterprise by investors or prospective investors of the other Contracting Party on a basis no less favourable than that which, in like circumstances, it permits such acquisition or establishment by:

1. investors or prospective investors of any third State;
2. its own investors or prospective investors.

For the purpose of this Agreement, "prospective investor" means any natural person or enterprise of one Contracting Party who actually has carried out concrete steps toward making an investment in the territory of the other Contracting Party. (Article III (1)).

See section on admission for exceptions to Article III (1).

Most-Favored Nation Treatment

Yes. With respect to investments and the enjoyment, use, management, conduct, operation, expansion, and sale or other disposition thereof, each Contracting Party shall accord treatment no less favourable than that which, in like circumstances, it grants in respect of:

• investments in its territory of investors of a third State. (Article IV (a)).

Each Contracting Party shall permit establishment of a new business enterprise or acquisition of an existing business enterprise or a share of such enterprise by investors or prospective investors of the other Contracting Party on a basis no less favourable than that which, in like circumstances, it permits such acquisition or establishment by:

1. investors or prospective investors of any third State;
2. its own investors or prospective investors.

For the purpose of this Agreement, "prospective investor" means any natural person or enterprise of one Contracting Party who actually has carried out concrete steps toward making an investment in the territory of the other Contracting Party. (Article III (1)).

See section on admission for exceptions to Article III (1).

EXCEPTIONS

MFN Exceptions:

Articles III (1)(a) and IV (a) shall not apply to treatment by a Contracting Party pursuant to any existing or future bilateral or multilateral agreement:

1. establishing, strengthening or expanding a free trade area, customs union, common market or economic union;
2. negotiated within the framework of the World Trade Organization, or any successor organization (including in particular the GATT and the General Agreement on Trade in Services (GATS)), and containing obligations and rights relating to trade in services; or
3. relating to:
   1. aviation;
   2. telecommunications transport networks and telecommunications transport services;
   3. fisheries;
   4. maritime matters, including salvage; or
   5. financial services. (Article I (1) of Annex 1).

Article III (1)(a) does not apply in respect of financial services. (Article I (2) of Annex 1).

Articles III (1)(a) and IV (a) do not apply in respect of customs brokerage. (Article I (3) of Annex 1).

National Treatment Exceptions:

Articles III (1)(b), IV (b), V (1), V (2) and VI do not apply to:

1. any measure maintained or adopted after the date of entry into force of this Agreement that, at the time of sale or other disposition of a government's equity interests in, or the assets of, an existing state enterprise or an existing governmental entity, prohibits or imposes limitations on the ownership of equity interests or assets or imposes nationality requirements relating to senior management or members of the board of directors;
2. any existing non-conforming measures maintained within the territory of a Contracting Party; the continuation or prompt renewal of any such non-conforming measure or any measure referred to in paragraph (a) above; any amendment to such non-conforming measure or any measure referred to in paragraph (a) above, to the extent that such amendment does not decrease the conformity of the measure as it existed immediately before the amendment with those obligations;
3. the right of each Contracting Party to make or maintain exceptions within the following sectors or matters:

Canada:

• social services (i.e. public law enforcement; correctional services; income security or insurance; social security or insurance; social welfare; public education; public training; health and child care);
• services in any other sector;
• residency requirements for ownership of oceanfront land;
• measures implementing the Northwest Territories Oil and Gas Accords;
• government securities - acquisition, sale or other disposition by nationals of the other Contracting Party of bonds, treasury bills or other kinds of debt securities issued by the Government of Canada, a province or local government.

Costa Rica:

• government or social services (i.e. public law enforcement; correctional services; income security or insurance; social security or insurance; social welfare; public education; public training; health and child care);
• services in any other sector;
• concessions in the maritime land zone, as defined by Costa Rican law;
• export promotion programs. (Article II (1) of Annex 1)

The Contracting Parties shall, within a two year period after the entry into force of this Agreement, exchange letters listing, to the extent possible, any existing measures that it may rely on to limit national treatment obligations in accordance with paragraph (1)(b) hereof. (Article II (2)).

Nothing in this Agreement shall prevent either Contracting Party from maintaining its state monopolies existing on the date of entry into force of this Agreement. The Contracting Parties shall, within a two year period after the entry into force of this Agreement, exchange letters listing their existing state monopolies. (Article II (3)).

General Exceptions and Exemptions:

Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting, maintaining or enforcing any measure otherwise consistent with this Agreement that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns. (Article III (1) of the Annex).

Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on investment, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining measures:

1. necessary to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
2. necessary to protect human, animal or plant life or health; or
3. relating to the conservation of living or non-living exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption. (Article III (2) of Annex 1).

Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining reasonable measures for prudential reasons, such as:

1. the protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution;
2. the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and
3. ensuring the integrity and stability of a Contracting Party's financial system. (Article III (3)).

Investments in cultural industries are exempt from the provisions of this Agreement. (Article III (4) of Annex 1).

Cultural industries" means natural persons or enterprises engaged in any of the following activities:

1. the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
2. the production, distribution, sale or exhibition of film or video recordings;
3. the production, distribution, sale or exhibition of audio or video music recordings;
4. the publication, distribution, sale or exhibition of music in print or machine readable form; or
5. radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television or cable broadcasting undertakings and all satellite programming and broadcast network services. (Article I (a)).

The provisions of Articles II, III, IV, V and VI of this Agreement do not apply to:

1. procurement by a government or state enterprise;
2. subsidies or grants provided by a government or a state enterprise, including government-supported loans, guarantees and insurance;
3. any measure denying investors of the other Contracting Party and their investments any rights or preferences provided to the aboriginal peoples of a Contracting Party; or
4. any current or future foreign aid program to promote economic development, whether under a bilateral agreement, or pursuant to a multilateral arrangement or agreement, such as the OECD Agreement on Export Credits. (Article III (5) of Annex 1).

Subject to the provisions contained in the Agreements concluded under the World Trade Organization, including, in particular, Article XIII of the GATT 1994, nothing in this Agreement shall affect the authority of one Contracting Party to decide whether or not to negotiate with the other Contracting Party, or with any third State, quantitative export restrictions, nor its authority to allocate them. (Article III (6) of Annex 1).

A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is an enterprise of the latter Contracting Party, and to investments of its investors, if investors of a third State own or control the enterprise and the enterprise has no substantial business activities in the territory of the Party under whose law it is constituted or organized. (Article III (7) of Annex 1).

In respect of intellectual property rights, a Contracting Party may derogate from Article IV in a manner that is consistent with the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, done at Marrakesh, April 15, 1994. (Article IV (1) of Annex 1).

Except where express reference is made thereto, nothing in this Agreement shall apply to taxation measures. For further certainty, nothing in this Agreement shall affect the rights and obligations of the Contracting Parties under any tax convention or existing tax laws. In the event of any inconsistency between the provisions of this Agreement and any such convention or law, the provisions of that convention or law shall apply to the extent of the inconsistency. (Article XI (1)).

OTHER ASPECTS

Performance Requirements

Neither Contracting Party may impose, in connection with permitting the establishment or acquisition of an investment, or enforce in connection with the subsequent regulation of that investment, any of the requirements set forth in the World Trade Organization Agreement on Trade-Related Investment Measures contained in the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, done at Marrakesh on 15 April 1994. (Article VI).

Others

Investors of one Contracting Party who suffer losses because their investments on the territory of the other Contracting Party are affected by an armed conflict, a national emergency or a natural disaster on that territory, shall be accorded by such latter Contracting Party, in respect of restitution, indemnification, compensation or other settlement, treatment no less favourable than that which it accords in respect of investments of its own investors or investments of investors of any third State. (Article VII).

A Contracting Party may not require that an enterprise of that Contracting Party, that is an investment under this Agreement, appoint to senior management positions individuals of any particular nationality. (Article V (1)).

A Contracting Party may require that a majority of the board of directors, or any committee thereof, of an enterprise that is an investment under this Agreement be of a particular nationality, or resident in the territory of the Contracting Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment. (Article V (2)).

Subject to its laws, regulations and policies relating to the entry of aliens, each Contracting Party shall grant temporary entry to citizens of the other Contracting Party employed by an enterprise or a subsidiary or affiliate thereof, in a capacity that is senior managerial or executive or requires specialized knowledge. For further certainty, however, nothing in this Article shall be interpreted as an authorization to carry on a professional practice in the territory of a Contracting Party. (Article V (3)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall permit all transfers relating to an investment covered by this Agreement, including returns, to be made freely and without delay. Without limiting the generality of the foregoing, such transfers include:

1. funds in repayment of loans related to an investment;
2. the proceeds of the total or partial liquidation of any investment;
3. wages and other remuneration accruing to a citizen of the other Contracting Party who was permitted to work in connection with an investment in the territory of the other Contracting Party;
4. any compensation owed to an investor by virtue of Articles VII or VIII of this Agreement. (Article IX (1)).

Neither Contracting Party may require its investors to transfer, or penalize its investors that fail to transfer, the returns attributable to investments in the territory of the other Contracting Party. (Art. V(2) of Annex 1).

Repayment of Loans

Yes. (Article IX (1) (a)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article IX (1) (b)).

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article IX (1) (c ) (d)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected without delay in any convertible currency. Unless otherwise agreed by the investor, transfers shall be made at the rate of exchange applicable on the date of transfer. (Article IX (2)).

Exchange Rates

Transfers shall be effected without delay in any convertible currency. Unless otherwise agreed by the investor, transfers shall be made at the rate of exchange applicable on the date of transfer. (Article IX (2)).

Time of Transfer

Transfers shall be effected without delay. (Article IX (2)). Notwithstanding the provisions of Article IX, a Contracting Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:

1. bankruptcy, insolvency or the protection of the rights of creditors;
2. issuing, trading or dealing in securities;
3. criminal or penal offenses;
4. reports of transfers of currency or other monetary instruments;
5. ensuring the satisfaction of judgments in adjudicatory proceedings; or
6. ensuring the payment of income tax obligations. (Article V (1) of Annex 1).

Paragraph (2) shall not be construed to prevent a Contracting Party from imposing any measure through the equitable, non- discriminatory and good faith application of its laws relating to the matters set out in paragraph (1). (Article V (3) of Annex 1).

Notwithstanding the provisions of Article IX, and without limiting the applicability of paragraph (1) above, a Contracting Party may prevent or limit transfers by a financial institution to, or for the benefit of, an affiliate of or person related to such institution, through the equitable, non- discriminatory and good faith application of measures relating to maintenance of the safety, soundness, integrity or financial responsibility of financial institutions. (Art. V (4) of Annex 1).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation, nationalization or measures having an effect equivalent to nationalization or expropriation. (Article VIII (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. (Article VIII (1)).

Due Process of Law and Judicial Review

Yes. (Article VIII (1) (2)).

Other

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Compensation Standard; Form and Time of Payment

“Just, prompt and adequate compensation”

Compensation shall be based on the fair market value of the investment expropriated immediately before the expropriation or at the time the proposed expropriation became public knowledge, whichever is earlier. Such compensation shall be payable:

1. in Canada, from the date of expropriation with interest at a normal commercial rate;
2. in Costa Rica, from the date of dispossession in accordance with Article 11 of the Expropriation No 7495 of May 3, 1995, with interest at the average deposit in the national banking system;

• without delay and shall be effectively realizable and freely transferable.

Valuation criteria to determine fair market value shall include going concern value, asset value including declared tax value of tangible property, and other criteria, as appropriate, including, in the case of Costa Rica, Article 22 of the Expropriation Act. (Article VIII (1)).

Settlement of Disputes between Contracting Parties
[Return to the top of the page]

PRE-ARBITRATION NEGOTIATIONS

Either Contracting Party may request consultations on the interpretation or application of this agreement. The other Contracting Party shall give sympathetic consideration to the request. Any dispute between the Contracting Parties concerning the interpretation or application of this Agreement shall, whenever possible, be settled amicably through consultations. (Article XIII (1)).

If a dispute cannot be settled through consultations, it shall, at the request of either Contracting Party, be submitted to an arbitral panel for decision. (Article XIII (2)).

ARBITRATION

Constitution of the Tribunal

An arbitral panel shall be constituted for each dispute. Within two months after receipt through diplomatic channels of the request for arbitration, each Contracting Party shall appoint one member to the arbitral panel. The two members shall then select a national of a third State who, upon approval by the two Contracting Parties, shall be appointed Chairman of the arbitral panel. The Chairman shall be appointed within four months after the receipt, through diplomatic channels, of the request for arbitration. (Article XIII (3)).

If within the periods specified in paragraph (3) of this Article the necessary appointments have not been made, either Contracting Party may, in the absence of any other agreement, invite the President of the International Court of Justice to make the necessary appointments. (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). (Article XIII (4)).

Each Contracting Party shall bear the costs of its own member of the panel and of its representation in the arbitral proceedings; the costs related to the Chairman and any remaining costs shall be borne equally by the Contracting Parties. The arbitral panel may, however, in cases where it considers appropriate, including when it is of the view that one Contracting Party has acted in bad faith, in its decision direct that a higher proportion of costs shall be borne by one of the two Contracting Parties, and this award shall be binding on both contracting Parties. Such decision shall be made unanimously and shall include a written explanation of the arbitral panel’s reasons. (Article XIII (6)).

Procedural Rules of the Tribunal

The arbitral panel shall determine its own procedure. The arbitral panel shall reach its decision by a majority of votes. Such decision shall be final and binding on both Contracting Parties. Unless otherwise agreed, the decision of the arbitral panel shall be rendered within six months of the appointment of the Chairman in accordance with paragraphs (3) or (4) of this Article. (Article XIII (5)).

The Contracting Parties shall, within sixty (60) days of the decision of a panel, reach agreement on the manner in which to implement the decision of the panel. If the Contracting Parties fail to reach agreement, the Contracting Party bringing the dispute shall be entitled to compensation or to suspend benefits of equivalent value to those awarded by the panel. (Article XIII (7)).

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 between one Contracting Party and an investor of the other Contracting Party, relating to a claim by the investor that a measure taken or not taken by the former Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach, shall, to the extent possible, be settled amicably between them. (Article XII (1)).

If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted  by the investor to arbitration in accordance with paragraph (4). The investor will bear the burden of proof to demonstrate:

1. that it is an investor as defined by Article I of this Agreement;
2. that the measure taken or not taken by the Contracting Party is in breach of this Agreement; and
3. that the investor has incurred loss or damage by reason of, or arising out of, that breach. (Article XII (2)).

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

An investor may submit a dispute as referred to in paragraph (1) to arbitration in accordance with paragraph (4) only if:

1. the investor has consented in writing thereto;
2. the investor has waived its right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of this Agreement before the courts or tribunals of the Contracting Party concerned or in a dispute settlement procedure of any kind;
3. not more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage; and
4. in cases where Costa Rica is a party to the dispute, no judgement has been rendered by a Costa Rican court regarding the measure that is alleged to be in breach of this Agreement. (Art XII (3)).

Consent

Consent set out explicitly in Article XII (5) and (6).

Forms of Arbitration

The dispute may be submitted to arbitration under:

1. ICSID, if both the disputing Contracting Party and the Contracting Party of the investor are parties to the ICSID Convention; or
2. the Additional Facility Rules of ICSID, if either the disputing Contracting Party or the Contracting Party of the investor, but not both, is a party to the ICSID Convention; or
3. an ad hoc arbitration tribunal established under the Arbitration Rules of UNCITRAL in case neither Contracting Party is a member of ICSID, or if ICSID declines jurisdiction. (Article XII (4)).

Applicable Law

A tribunal established under this Article shall decide the issues in dispute in accordance with this Agreement, the applicable rules of international law, and with the domestic law of the host State to the extent that the domestic law is not inconsistent with the provisions of this Agreement or the principles of international law. (Article XII (7)).