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

DEFINITION OF INVESTMENT

The term “investment” means every kind of goods or rights related to an investment that was made in accordance with the laws and regulations of the receiving Contracting Party. This general definition is illustrated by a non exhaustive list of specific rights, including traditional property rights; rights in companies; monetary claims and titles to performance associated with an investment; intellectual property rights; and concessions and similar rights. (Article 1(2)).

DEFINITION OF INVESTOR

Nationals

The term “investor” means any natural person who is a national of a Contracting Party in accordance with its legislation, and have made an investment in the other Contracting Party in accordance with the Agreement. The Agreement does not apply to investments made by natural persons who are nationals of both Contracting Parties. (Article 1(1)(a)).

Companies

The term “investor” means any juridical entity, including any corporation, company, association, or other organization or entity, that is duly constituted under the legislation of a Contracting Party and that holds an investment in the territory of the other Party under this Agreement. (Article 1(1)(b)).

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

Date of signature: September 15, 1998
Entry into force:
The Parties shall notify each other in writing when they have fulfilled their respective constitutional requirements for the entry into force of the Agreement. The Agreement shall enter into force thirty days after the final notification.
Duration: 15 years.
Thereafter the Agreement may be extended for an indefinite period. The Agreement may be terminated after ten years by either Party, with twelve months’ written notice.

Admission [Return to the top of the page]

Each Contracting Party, subject to its general policy with respect to foreign investments, shall stimulate in its territory investments of investors of the other Contracting Party and shall admit them in accordance with its legislation and regulation.

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 4 (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 3 (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 3 (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 4 (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 4 (2)).

EXCEPTIONS

If a Contracting Party grants special advantages to investors of any third State by virtue of an agreement related to the creation of a free trade area, customs union, common market, economic union, or other forms of regional economic organization, or by virtue of an agreement related totally or principally to tax matters, this Party shall not be obliged to offer these advantages to investors of the other Contracting Party. (Article 4 (3)).

OTHER ASPECTS

Performance Requirements

---

Others

Investors of either Contracting Party who suffer losses due to a war or any other armed conflict, state of national emergency, civil disturbances or other similar events in the territory of the other Contracting Party shall receive from this Contracting Party, in respect of reparation, indemnification, compensation or other settlement, a treatment no less favorable than that accorded to national investors or those of any third State. (Article 7).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

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

1. interests, dividends, incomes, profits, and other yields;
2. amortizations of foreign loans relating to an investment;
3. capital or proceeds of the sale or the total or partial liquidation of an investment;
4. payments arising out of an investment dispute and compensations in accordance with 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) (c)).

Licenses and Other Fees

---

Other Categories of Payment

Yes. (Article 5 (1) (d)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

---

Exchange Rates

Transfers shall be made in accordance with the rate of exchange applicable on the date of transfer. (Article 5 (2)).

Time of Transfer

Without delay. (Article 5 (1)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Nationalization, expropriation, or measures which have a similar effect. (Article 6(1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “Public use or social interest.” (Article 6(1)).

Due Process of Law and Judicial Review

Yes. (Article 6 (1)(2)).

Other

---

Compensation Standard; Form and Time of Payment

“Immediate, adequate and effective compensation”.

Compensation shall:

• amount to the value of the expropriated investment immediately before the expropriatory action became known;
• include interests at a commercially reasonable rate;
• be made without delay;
• be fully realizable and freely transferable in a freely convertible currency. (Article 6(1)).

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

PRE-ARBITRATION NEGOTIATIONS

Any dispute between the Contracting Parties concerning the interpretation or application of the Agreement shall, whenever possible, be settled amicably through consultations. (Article 10 (1)).

If the dispute cannot be settled within six months from the date of the notification of the dispute, it shall, at the request of either Contracting Party, be submitted to an ad-hoc arbitral tribunal. (Article 10 (2)).

ARBITRATION

Constitution of the Tribunal

An arbitral tribunal shall be constituted by three members as follows:

• Within two months of the request of arbitration, each Contracting Party shall appoint an arbitrator.
• The two arbitrators are required to select, within the next thirty days, a national of a third State with which both Contracting Parties maintain diplomatic relations, to serve as Chairman of the tribunal. The selection of the Chairman must be confirmed by the Contracting Parties within thirty days of the nomination. (Article 10 (3) (5)).
• When agreement cannot be reached, 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). (Article 10 (4)).
• 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 agree otherwise. (Article 10 (7)).

Procedural Rules of the Tribunal

The arbitral tribunal shall determine its own procedure. (Article 10 (6)).

Decisions of the tribunal shall be taken by a majority of votes and shall be final and binding on both Contracting Parties. (Article 10 (8)).

Applicable Law

The tribunal shall decide on the basis of the provisions of the Agreement, the general principles of international law and the legal principles recognized by the Contracting Parties. (Article 10 (6)).

Settlement of Disputes between a Contracting Party and an Investor [Return to the top of the page]

DEFINITION

---

PREARBITRAL CONSULTATIONS AND DISPUTE SETTLEMENT MECHANISMS

Any dispute between an investor of a Contracting Party and the other Party shall, to the extent possible, be settled amicably. (Article 9 (1)).

 If it is impossible to settle the dispute within six months of the consultation, it may be submitted to the election of the investor to:

1. competent tribunals of the host Party;
2. international arbitration.

Election by the investor of either one of these procedures shall be definitive. (Article 9 (2)).

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

---

Consent

Consent set out explicitly in Article 9 (4).

Forms of Arbitration

The dispute may, at the election of the investor concerned, be submitted to international arbitration under:

1. ICSID, provided that both the disputing Contracting Party and the Contracting Party of the investor are parties to the ICSID Convention (when this condition is not met, each Party gives its consent so as to submit the dispute to the Additional Facility Rules of ICSID); or
2. ad hoc arbitration tribunal established under the Arbitration Rules of UNCITRAL. (Article 9 (3)).

Applicable Law

The tribunal shall decided the dispute in accordance with:

1. the provisions of the Agreement;
2. the national legislation of the Contracting Party involved in the dispute, including its rules on conflicts between laws;
3. terms of specific agreements concluded in relation to this particular investment; and,
4. principles of international law. (Article 9 (4)).