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

DEFINITION OF INVESTMENT

The term “investment” refers to every kind of asset or right linked to an investment made in accordance with 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 having an economic value;
• intellectual property rights; and,
• concessions and similar rights. (Article I (2)).

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 I (1) (a)).

Companies

The term “investor” comprises any juridical person constituted or otherwise duly organized under the law of one of the Contracting Parties, that has its seat and has effective economic activities in the territory of said Party. (Article I (1) (b)).

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

Date of signature: November 8, 1996
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 (a month after the latter notification).
Duration: 10 years.
Thereafter it shall remain in force until either Party notifies the other Party, twelve months in advance, of its decision to terminate the Agreement.

Admission [Return to the top of the page]

Subject to its general policy in the field of foreign investment, each Contracting Party shall promote, in its territory, investments of investors of the other Contracting Party, and shall admit them in accordance with its law and regulation. (Article 3 (1)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Contracting Party shall guarantee fair and equitable treatment, in its territory, to investments of investors of the other Contracting Party and shall ensure that the exercise of the rights recognized here shall not be impaired in practice. (Article IV (1)).

Full Protection and Security

Each Contracting Party shall protect, in its territory, investments of investors of the other Contracting Party, according to its laws and regulations. (Article III (2)).

Non-Discrimination

Yes. Each Contracting Party shall not impair the management, maintenance, use, enjoyment, extension, sale and liquidation of investments of investors of the other Contracting Party through unjustified or discriminatory measures. (Article III (2)).

National Treatment

Yes. Each Contracting Party shall accord to investments of investors of the other Contracting Party, in its territory, treatment no less favorable than the one accorded to its own investors or those of a third State, if the latter is more favorable. (Article IV (2)).

Most-Favored Nation Treatment

Yes. Each Contracting Party shall accord to investments of investors of the other Contracting Party, in its territory, treatment no less favorable than the one accorded to its own investors or those of a third State, if the latter is more favorable. (Article IV (2)).

EXCEPTIONS

If one of the Contracting Parties has accorded a different treatment to a third country by virtue of an agreement relating to the creation of a free trade area, customs union, common market, economic union or other similar regional economic organization or by virtue of an agreement relating in its totality or principally to tax matters, such Contracting Party shall not be obliged to accord such treatment to investments of investors of the other Contracting Party. (Article IV (3)).

OTHER ASPECTS

Performance Requirements

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Others

Investors of each Contracting Party whose investments suffer losses in the territory of the other Contracting Party due to war or any other armed conflict, national emergency, civil disturbances and other similar events shall be accorded by such latter Contracting Party, in respect of reparation, indemnification, compensation or other settlement, treatment no less favorable than that it accords to its own investors or investors of any third State. (Article VI (4)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall authorize, without delay, investors of the other Contracting Party to transfer funds related to investments, and returns in a freely convertible currency, in particular, but not exclusively:

1. interests, dividends, incomes, profits and other yields;
2. amortization of loans;
3. proceeds of the sale or of the total or partial liquidation of an investment;
4. payments arising out of an investment dispute. (Article V (1)).

Repayment of Loans

Yes. (Article V (1) (b)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article V (1) (c)).  

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article V (1) (a), (d)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

The transfer shall authorize, without delay, investors of the other Contracting Party to transfer funds related to investments, and returns in a freely convertible currency. (Article V(1)).

Exchange Rates

The transfer shall be effected in a convertible currency at the rate in effect in the market on the date of transfer, in accordance with the legislation of the Contracting Party which has admitted the investment. (Article V (2)).

Time of Transfer

The transfer shall authorize, without delay, investors of the other Contracting Party to transfer funds related to investments, and returns in a freely convertible currency. (Article V(1)).

The capital invested shall be allowed to be transferred only one year after the date of entry, unless the legislation of the Contracting Party accords a more favorable treatment. (Protocol, Ad. Article V).

The expression "without delay" means the normal period of time necessary to fulfill the formalities for the transfer. This period of time shall begin the day when the request, accompanied by the necessary documents, has been presented but shall, in no case, exceed one month. (Protocol, Ad. Article V).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Any measure that might deprive (directly or indirectly) an investor of his investment. (Article VI (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “Public use, national interest or social interest.” (Article VI (1)).

Due Process of Law and Judicial Review

Yes. (Article VI (3)).

Other

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Compensation Standard; Form and Time of Payment

“Adequate and effective compensation”

Compensation shall:

• amount to the market value of the investment immediately before the expropriation became publicly known. (Provisions aimed at calculating the market value of expropriated investments are included). (Article VI (1) (2)).

Settlement of Disputes between Contracting Parties
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PRE-ARBITRATION NEGOTIATIONS

Any dispute between the Contracting Parties concerning the interpretation and application of the Agreement shall, whenever possible, be settled through amicable negotiations. (Article IX (1)).

If it cannot be settled within twelve months, the dispute shall, at the request of either Contracting Party, be submitted to an arbitral tribunal. (Article IX (2)).

ARBITRATION

Constitution of the Tribunal

The 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 a month, a national of a third State, with which both Parties maintain diplomatic relations, 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, unless they decide otherwise. (Article IX (3)(4) (5) (7)).

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 IX (6) (8)).

Applicable Law

The tribunal shall decide on the basis of the provisions of the Agreement, legal principles recognized by the Parties and the general principles of international law. (Article IX (6)).

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. (Article VIII (1)).

If it was not possible to settle the dispute within a period of three 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 under ICSID.

Election by the investor of either one of these procedures shall be definitive. (Article VIII (2) (3)).

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

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Consent

Contracting Parties consent to submit any dispute to international arbitration under ICSID. (Article VIII (2)).

Forms of Arbitration

International arbitration under ICSID. (Article VIII (2)).  

Applicable Law

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