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

DEFINITION OF INVESTMENT

The term “investment” comprises every kind of asset. 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;
• intellectual property rights; and,
• concessions and similar rights. (Article 1 (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 1 (1) (a)).

Companies

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

It also refers to legal persons constituted under the law of any country, if they are effectively controlled by investors as defined in Article 1 (1) (a) and (b). (Article 1 (1)(c)).

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

Date of signature: April 2, 1993
Entry into force: May 25, 1995
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 3 (1)).

Each Contracting Party, after having admitted an investment in its territory, and in accordance with its legislation, shall facilitate the obtention of the necessary permits with respect to this investment, including those for the execution of contracts of licensing; technical, commercial, and administrative assistance; and also for the activities of consultants and other qualified persons (foreigners). (Article 3 (2)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes, in accordance with international law. (Article 4 (2)).

Full Protection and Security

Each Party shall protect investments made, in its territory, according to its laws and regulations. (Article 4 (1)).

Non-Discrimination

Yes. Each Contracting Party will not impair by arbitrary and discriminatory measures the management, maintenance, utilization, enjoyment, extension, sale or liquidation of investments of investors of the other Contracting Party. (Article 4 (1)).

National Treatment

Yes. The treatment accorded by each Contracting Party to investments of investors of the other Contracting Party shall be no less favorable than that it grants to its own investors or investors of any third State, whichever is more favorable. (Article 4 (2)).

Most-Favored Nation Treatment

Yes. The treatment accorded by each Contracting Party to investments of investors of the other Contracting Party shall not be less favorable than that it grants to its own investors or investors of any third State, whichever is more favorable. (Article 4 (2)).

EXCEPTIONS

A Contracting Party is not obliged to extend to investments of investors of the other Contracting Party benefits it receives as a result of a free trade agreement, customs union, or common market or similar agreement, or by virtue of a taxation agreement. (Article 4 (3)).

OTHER ASPECTS

Performance Requirements

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Others

Investors of one Contracting Party suffering losses due to war or armed conflict, revolution, national emergency, revolt, insurrection or civil disturbances in the territory of the other Contracting Party shall not be treated less favorably than investors of this Contracting Party or those of any third State, whichever is the more favorable, in regard of restitution, compensation, indemnification or other settlement. (Article 6 (2)).

Once a Contracting Party has admitted an investment in its territory, it will facilitate, in accordance with its laws and regulations, the obtaining of permits necessary for this investment, including those for the execution of licensing contracts, technical, commercial or administrative assistance; and those for the activities of consultants and other people of other nationalities. (Article 3 (2)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall guarantee to investors of the other Contracting Party the transfer, without delay, in freely convertible currency of the payments related to an investment, particularly:

1. interests, dividends, profits and other incomes;
2. amortization of loans;
3. amounts destined to cover expenses related to the management of investments;
4. bonuses and other payments (defined in Article 1 (2));
5. additional amounts of capital for the maintenance and development of investments;
6. proceeds of the sale or the total or partial liquidation of investments, including eventual increased values;
7. indemnifications as provided in Article 6. (Article 5 (1)).

Repayment of Loans

Yes. (Article 5 (1) (b)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article 5 (1) (f)).

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article 5 (1) (c), (d), (e), (g)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Each Contracting Party shall guarantee to investors of the other Contracting Party the transfer, without delay, in a freely convertible currency of the payments related to an investment. (Article 5 (1)).

Exchange Rates

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Time of Transfer

Without delay. (Article 5 (1)).

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 two months. (Article 5 (2)).

Notwithstanding the provisions of Article 5, the Contracting Parties reserve the right to allow the repatriation of capital in the period of time established in their respective legislation; in no case, shall it be more than three years since the investment had been made by the investor. (Protocol).

While the Programs for the Conversion of the External Debt are still in effect, the Contracting Parties shall apply the rules of these programs with respect to the period of time for repatriation. (Protocol).

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. No mention to “public purpose.” (Article 6 (1)).

Due Process of Law and Judicial Review

Yes. (Article 6 (1)).

Other

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Compensation Standard; Form and Time of Payment

“Adequate and effective compensation”

Compensation shall:

• be paid without delay;
• include interests;
• be made in convertible currency. (Article 6 (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 9 (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 9 (2)).

ARBITRATION

Constitution of the Tribunal

The arbitral tribunal shall have three members.

• Each Party shall appoint an arbitrator within two months.
• 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 a Party does not select an arbitrator or agreement cannot be reached on the designation of the Chairman, 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 9 (2) (3) (4) (5) (6)).

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 9 (6) (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

In the event of a dispute relating to an investment under the Agreement between an investor of one Contracting Party and the other Contracting Party, consultations will be held to find an amicable solution. (Article 8(1)).

If it was not possible to settle the dispute, the investor may submit it to:

1. 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

Contracting Parties consent to submit to international arbitration any dispute concerning an investment under the Agreement. (Article 8(4)).

Forms of Arbitration

In case of international arbitration, the dispute shall be submitted to ICSID. (Article 8 (2)).

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 8(7)).