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, according to 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 (loans directly related to a specific investment);

• intellectual property rights; and,

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

DEFINITION OF INVESTOR

Nationals

The term “investor” comprises any natural person who is a national of one of the Contracting Parties under its applicable law. (Article I (2) (a)).

Companies

The term “investor” comprises any legal person constituted under the laws and regulations of a Contracting Party, and having its seat in the territory of said Party, irrespective of whether or not its activities are directed at profit. (Article I (2) (b)).

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

Date of signature: November 18, 1993
Entry into force: February 1, 1995
Duration: Duration: 10 years.
Thereafter it shall remain in force until the expiration of 12 months from the date that either Party notifies the other Party in writing 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 II).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes, in accordance with the norms and principles of international law. (Article III (1)).

Full Protection and Security

Yes, full legal protection, once admitted. (Article III (2)).

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 unjustified and discriminatory measures. (Article III (1)).

National Treatment

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

Most-Favored Nation Treatment

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

EXCEPTIONS

The MFN provision shall not apply to privileges that each Contracting accords to investors of any third State as a result of its participation or association in a free trade agreement, customs union, common market or regional agreement. (Article III (3)).

The treatment referred to in Article III (2) shall not oblige each Contracting Party to extend to investors of the other Contracting Party benefits it receives from a taxation agreement. (Article III (4)).

OTHER ASPECTS

Performance Requirements

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Others

If a more favorable treatment is available as a result of another agreement, this treatment shall prevail. (Article VII).

Nationals or enterprises of one Contracting Party, suffering losses due to war or armed conflict, state of national emergency, revolt, insurrection or uprising in the territory of the other Contracting Party, shall be treated no less favorably than investors of this Contracting Party or those of any third State, with regard to restitution, indemnification, compensation or other settlement. These payments shall be freely transferable. (Article IV (2)).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party guarantees that it shall not establish restrictions against the free transfer of investments and returns of investors of the other Contracting Party, and in particular, but not exclusively:

1. capital and additional sums necessary for the maintenance and development of investments;
2. benefits, profits, interests, dividends and other current incomes;
3. funds in repayment of loans;
4. bonuses;
5. proceeds of the sale or the total or partial liquidation of an investment;
6. compensations as provided in Article IV. (Article V).

Repayment of Loans

Yes. (Article V (1) (c)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article V (1) (e)).

Licenses and Other Fees

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Other Categories of Payment

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

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected without delay, in a freely convertible currency at the market rate of exchange applicable on the date of transfer, in accordance with the procedures established by the Contracting Party in which territory the investment was made. (Article V (2)).

Exchange Rates

Transfers shall be effected without delay, in a freely convertible currency at the market rate of exchange applicable on the date of transfer, in accordance with the procedures established by the Contracting Party in which territory the investment was made. (Article V (2)).

Time of Transfer

Without delay. (Article V (2)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation, nationalization or measures which have a similar effect. (Article IV (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. (Article IV (1)).

Due Process of Law and Judicial Review

Yes. (Article IV (1)).

Other

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Compensation Standard; Form and Time of Payment

“Prompt, adequate and effective compensation”

Compensation shall:

• be equivalent to the market value of the expropriated investment immediately before the date of expropriation or before the impending expropriation became publicly known, whichever is earlier;
• include interests at a normal commercial rate from the date of expropriation;
• be made without delay;
• be fully realizable and freely transferable. (Article IV (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 VIII (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. (Article VIII (2)).

ARBITRATION

Constitution of the Tribunal

The arbitral tribunal will be constituted ad hoc.

• 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. (Article VIII (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 VIII (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

Any dispute relating to the provisions of the Agreement between an investor of one Contracting Party and the other Contracting Party will be settled, to the extent possible, through amicable consultations (Article IX(1)).

If it was not possible to settle the dispute within a period of six 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.

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

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

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Consent

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Forms of Arbitration

Where the dispute is referred to international arbitration, it shall be submitted to ICSID or to the Additional Facility of the Center. If these are not available, the dispute shall be submitted, at the request of the investor, to an ad hoc arbitration tribunal established under the UNCITRAL Arbitration Rules. (Article IX(3)).

Applicable Law

No reference.