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, in accordance with the latter’s laws and regulations. This general definition is illustrated by a non exhaustive list of six 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 (if national legislation so allow);

• concessions and similar rights; and,

• reinvested returns. (Article I (1)).

DEFINITION OF INVESTOR

Nationals

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

Companies

The term “investor” comprises any legal person constituted and having its seat in the territory of one of the Contracting Parties, and having made investments in the territory of the other Contracting Party. (Article I (2) (b)).

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

Date of signature: May 25, 1995
Entry into force:
The Agreement enters into force 30 days after both Contracting Parties have notified each other that their respective internal legal procedures have been fulfilled.
Duration: 10 years.
Thereafter it shall be extended for periods of ten years, unless notice of termination has been given, at least twelve months before the expiry of the current period of validity.

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 (1)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. (Article III (1)).

Full Protection and Security

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

Non-Discrimination

Yes. Each Contracting Party shall not impair the management, maintenance, use, enjoyment or disposal through unjustified or discriminatory measures. (Article III (1)).

National Treatment

Yes, for admitted investments, each Contracting Party shall accord treatment no less favorable than that it grants to investments of its own nationals or those of third States. (Article III (2)).

Most-Favored Nation Treatment

Yes, for admitted investments, each Contracting Party shall accord treatment no less favorable than that it grants to investments of its own nationals or those of third State. (Article III (2)).

EXCEPTIONS

Notwithstanding the provisions of Article III (2), MFN treatment shall not apply to privileges accorded by each Contracting Party to investors of third States by virtue of their participation or association in a free trade agreement, customs union, common market or regional agreement. (Article III (3)).

Article III (2) shall not be interpreted as to oblige a Contracting Party to extend benefits of any taxation agreement to investors of the other Contracting Party. (Article III (4)).  

OTHER ASPECTS

Performance Requirements

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Others

If the provisions in the legislation of a Contracting Party, or if the existing or future obligations under international law between the two Contracting Parties, or if an agreement between an investor of a Contracting Party and the other Contracting Party include provisions granting to investments of investors of the first Contracting Party a more favorable treatment, these provisions shall prevail (if they are more favorable). (Article VII).

Investors of one Contracting Party suffering losses due to war or armed conflict, national emergency, revolt, insurrection or uprising 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, with regard to restitution, indemnification, compensation, or other settlement. These payments shall be transferable. (Article IV (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 unrestricted transfer of investments and returns (the capital shall be registered with the national entity responsible, and taxes shall be paid accordingly), in particular, but not exclusively:

1. capital and additional sums necessary for the maintenance and development of investments;
2. benefits, profits, interests, dividends, royalties and other incomes;
3. amortization of external credits;
4. proceeds of the sale or the total or partial liquidation of an investment;
5. payments arising out of an investment dispute or compensations as provided in Article VI. (Article V (1)).

Repayment of Loans

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

Proceeds of the Total or Partial Liquidation of an Investment

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

Licenses and Other Fees

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Other Categories of Payment

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

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected in a convertible currency, in accordance with the exchange rate in effect in the market on the date of transfer and in accordance with the law and regulations of the Contracting Party which has admitted the investment. (Article V (2)).

Exchange Rates

Transfers shall be effected at the exchange rate in effect in the market on the date of transfer and in accordance with the law and regulations of the Contracting Party which has admitted the investment. (Article V (2)).  

Time of Transfer

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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:

• amount to the market value of the investment immediately before the date of expropriation or before the impending expropriation became publicly known;
• include interests at a normal commercial rate from the date of expropriation until the time of payment;
• be made without delay;
• be effectively 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 for decision. (Article VIII (2)).

ARBITRATION

Constitution of the Tribunal

An arbitral tribunal shall be constituted for each dispute.

• Within two months of the request of arbitration, each Party shall appoint an arbitrator.
• 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 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 appointment. 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. The Tribunal may, however, direct that a higher proportion of the costs be paid by one of 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, to the extent possible, be settled 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, the investor may refer the dispute to:

1. ICSID; or
2. an ad hoc arbitration tribunal established under the UNCITRAL Arbitration Rules. (Article IX (3)).

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 IX (4)).