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;

• intellectual property rights; and,

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

DEFINITION OF INVESTOR

Nationals

“National” of a Party means a natural person who is a national of that Party under its laws. (Article 1 (4) (a)).

Companies

The term “company” means any legal person, including commercial or any other company or association with legal personality, which participates in any economic activity within the scope of the Agreement. The company is considered a “national of a Party” when it is constituted according to said Party’s laws or when it is controlled, directly or indirectly, by nationals of that Party. (Article 1 (3) (4) (b)).

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

Date of signature: January 31, 1994
Entry into force: December 18, 1994
Duration: 15 years.
Thereafter it shall be extended automatically for ten year periods, unless notice of termination has been given, at least six 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 nationals of the other Contracting Party, and shall admit such investments in accordance with its laws and regulations. (Article 3 (1)).

The Contracting Party that has admitted investment in its territory shall grant the permits necessary in relation to this investment, including licenses and contracts of technical, commercial, and administrative assistance. Each Contracting Party shall facilitate, when required, the necessary permits for the activities of foreign professionals or consultants. (Article 3 (2)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Contracting Party shall guarantee fair and equitable treatment to investments of investors of the other Contracting Parties. (Article 4 (2)).

Full Protection and Security

Each Contracting Party shall protect, in its territory, investments made, according to its laws and regulations, by nationals of the other Contracting Party. (Article 4 (1)).

Non-Discrimination

Yes. Each Contracting Party shall not impair the management, utilization, enjoyment, growth, sale and, disposal of investments of nationals of the other Contracting Party. As mentioned in Article 3 (2), each Contracting Party shall grant permits necessary in relation to this investment. (Article 4 (1)).

National Treatment

Yes. The treatment accorded to investments of nationals of the other Contracting Party shall be no less favorable than that accorded to investments of its own nationals or investments of nationals of a third country (MFN), when the MFN treatment is more favorable. (Article 4 (2)).

Most-Favored Nation Treatment

Yes. The treatment accorded to investments of nationals of the other Contracting Party shall be no less favorable than that accorded to investments of its own nationals or investments of nationals of a third country (MFN), when the MFN treatment is more favorable. (Article 4 (2)).

EXCEPTIONS

MFN treatment shall not apply to the privileges that a Contracting Party accords to investments of nationals of a third country by virtue of its participation or association in a free trade area, customs union or common market (Article 4 (3)) or by virtue of a taxation agreement (Article 4 (4)).

This Treaty shall not preclude any Contracting Party from applying measures necessary for the maintenance of the public order or national security, in accordance with the general principles of international law. (Article 11 (1)).

OTHER ASPECTS

Performance Requirements

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Others

Nationals or enterprises of one Contracting Party suffering losses with respect to their investment in the territory of the other Contracting Party due to war or armed conflict, revolution national emergency, revolt, insurrection or uprising shall not be treated less favorably than investors of this Contracting Party or those of any third State, with regard to restitution, indemnification or other payments. These payments shall be transferable, according to Article 5 of the Treaty. (Article 6 (3)).

Article 10 says that each Contracting Party shall respect the obligations it has entered into with regard to the investments of nationals of the other Contracting Party.

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Contracting Party shall guarantee to nationals of the other Contracting Party with investments in its territory the free transfer of payments related to these investments, in particular:

1. returns;
2. amortization of loans;
3. amounts destined to cover expenses relative to the management of investments;
4. bonuses and other incomes (as defined in Article I (1) (c), (d), and (e));
5. additional capital necessary for the maintenance and the development of these investments;
6. proceeds of the sale or the total or partial liquidation of an investment, including eventual increased values. (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)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be effected in a freely convertible currency, and without restrictions or delay. (Article 5 (2)).  

Exchange Rates

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Time of Transfer

Without delay. (Article 5 (2)).

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. “Motives expressly established by the Constitutions of each Party.” (Article 6 (1)).

Due Process of Law and Judicial Review

No reference.

Other

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Compensation Standard; Form and Time of Payment

“Just and timely compensation”

Compensation shall:

• be equivalent to the value of the expropriated investment immediately before the expropriatory action became known;
• include interests at the usual commercial rate;
• be made without delay;
• be made in freely convertible currency;
• be fully realizable and freely transferable. (Article 6 (1) (2)).

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 six 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 will 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. (Article 9 (2) (3) (4) (5)).

Procedural Rules of the Tribunal

The arbitral tribunal shall determine its own procedure.
Decisions of the tribunal shall be definitive and 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

Any dispute relating to investments between an investor of one Contracting Party and the other Contracting Party will, to the extent possible, be settled amicably. (Article 8(1)).

If it was not possible to settle the dispute within a period of six months, it may be submitted:

1. to the competent tribunals of the host party; or
2. to international arbitration.

Once the investor has chosen to submit the dispute to a national tribunal, it is not possible to refer it to international arbitration unless 18 months pass without a decision from the tribunal and both parties agree to submit the dispute to said arbitration. (Article 8(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 8(2)).

Applicable Law

The arbitral tribunal may 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(5)).