Article 46 – Definitions
“Investment” means every kind of asset invested by an investor of one Party in the territory of the other, including:
(a) movable/immovable property and related rights (mortgages, pledges, etc.);
(b) shares, debentures, stock, company participations;
(c) claims to money or any performance with economic value linked to an investment;
(d) intellectual property rights (copyrights, patents, trademarks, trade names, technical process, know how, goodwill);
(e) business concessions permitted by law (including concessions to explore, cultivate, extract or exploit natural resources).
A change in the form of assets does not affect their character as investments if done according to the host Party’s laws.
“Investor” means:
(a) natural persons with nationality of a Party under its laws;
(b) legal entities (companies, associations, partnerships, etc.) incorporated/established under a Party’s laws and having their seat there.
“Return” means amounts yielded from investments (profits, dividends, interests, capital gains, royalties, fees, other legitimate income).
Article 47 – Promotion and Protection of Investment
Each Party shall encourage and admit investments of the other Party in accordance with its laws.
Investments shall enjoy constant protection and security in the other Party’s territory.
Neither Party shall take unreasonable or discriminatory measures against the management, maintenance, use, enjoyment or disposal of investments.
Each Party shall assist with visas and work permits for nationals of the other Party engaged in investment related activities.
Article 48 – Treatment of Investment
Investments shall at all times be accorded fair and equitable treatment.
Each Party shall accord to investments of the other Party treatment no less favorable than that accorded to its own investors (national treatment).
Neither Party shall accord less favorable treatment than that accorded to investors of any third Party (MFN).
Paragraph 3 does not oblige a Party to extend benefits under:
(a) customs unions, free trade zones, economic unions, similar international agreements;
(b) taxation agreements;
(c) small scale border trade arrangements.
Article 49 – Expropriation
Expropriation, nationalization or similar measures shall not be taken unless:
(a) for public interest;
(b) under domestic legal procedure;
(c) non discriminatory;
(d) against compensation.
Compensation = value of expropriated investment immediately before expropriation became public knowledge (whichever earlier), determined by recognized valuation principles, plus interest at normal commercial rate from expropriation to payment. Compensation shall be without delay, effectively realizable and freely transferable.
Article 50 – Compensation for Damages and Losses
Investors suffering losses due to war, emergency, insurrection, riot, etc. in the other Party’s territory shall be accorded treatment no less favorable than that given to the investors of that Party or any third Party (whichever is more favorable to the investor), as regards restitution, indemnification, compensation and other settlements.
Article 51 – Transfers
Each Party shall guarantee to investors of the other Party the transfer of investments and returns held in its territory, including:
(a) profits, dividends, interests, other legitimate income;
(b) proceeds from sale or liquidation of investments;
(c) payments under loan agreements related to investments;
(d) royalties (Article 46.1(d));
(e) technical assistance/service fees, management fees;
(f) project related payments;
(g) earnings of nationals of the other Party working in connection with an investment.
Paragraph 1 does not affect free transfer of compensation under Articles 49 and 50.
Transfers shall be made in a freely convertible currency at the prevailing market exchange rate on the date of transfer in the host Party.
Article 52 – Subrogation
If one Party or its agency makes a payment to its investors under a guarantee/insurance against non commercial risks for an investment in the other Party, the latter Party shall recognize:
(a) the assignment of rights/claims from the investor to the former Party or its agency; and
(b) that the former Party or its agency is entitled by subrogation to exercise the investor’s rights and enforce claims to the same extent as the investor.
Article 53 – Settlement of Disputes between Parties
Disputes concerning interpretation/application of this Chapter shall be settled by consultation through diplomatic channels.
If not settled within six months, either Party may submit the dispute to an ad hoc arbitral tribunal.
Tribunal: three arbitrators. Each Party appoints one within two months of arbitration request; the two then select a third Party national (with diplomatic relations with both Parties) as Chairman within two months of their appointment.
If the tribunal is not constituted within four months of the request, either Party may invite the President of the International Court of Justice (or next senior judge not disqualified) to make necessary appointments.
Tribunal determines its own procedure and decides according to this Chapter and recognized international law principles.
Award by majority vote, final and binding. Reasons given upon request.
Each Party bears its own arbitrator’s costs and representation costs; Chairman and tribunal costs shared equally.
Disputes under this Chapter shall be settled exclusively according to this Article.
Article 54 – Settlement of Disputes between Investors and a Party
Legal disputes between an investor of one Party and the other Party concerning an investment shall first be settled amicably through negotiations.
If not settled within six months, the investor may choose to submit the dispute to:
(a) the competent court of the Party involved; or
(b) ICSID under the Washington Convention (1965), provided that the Party involved may require the investor to exhaust domestic administrative review procedures beforehand.
The choice of forum is final.
Arbitration award shall be based on the law of the Party involved (including conflict rules), this Agreement, and universally accepted international law principles.
Award is final and binding; both Parties commit to enforcement.
Article 55 – Other Obligations
If existing or future legislation or international obligations entitle investments of the other Party to more favorable treatment than this Agreement, such treatment shall not be affected.
Each Party shall observe commitments it has entered into with investors of the other Party regarding their investments.
Article 56 – Consultations
The Parties shall hold meetings to:
(a) review implementation of this Chapter;
(b) exchange legal information and investment opportunities;
(c) resolve investment disputes;
(d) forward investment promotion proposals;
(e) study other investment-related issues.
