This section applies to the settlement of disputes between the Parties arising from the interpretation and application of the provisions of this Agreement.
Article 13. Consultations and Negotiations
1. Either Party may request, in writing, consultations regarding the interpretation or application of this Agreement. If disputes arise between the Parties regarding the interpretation or application of this Agreement, they shall, as far as possible, be settled by mutual agreement through consultations and negotiations.
2. If the dispute cannot be settled in this manner within six (6) months from the date on which such negotiations or consultations were requested in writing, either Party may submit the dispute to an arbitration tribunal established in accordance with this section or, with the consent of the Parties, to any other international court.
Article 14. Establishment of the Arbitral Tribunal
1. The arbitration procedure shall be initiated by the submission of a written notification by one Party (the claimant Party) to the other Party (the respondent Party) through diplomatic channels. Such notification shall consist of a statement of the provisions of Chapter 2 (“Protection”) that are alleged to have been violated, the legal and factual grounds for the claim, a summary of the development and results of consultations and negotiations in accordance with Article 13 (“Consultations and Negotiations”) of this Agreement, the claimant's intention to initiate proceedings in accordance with this section, and the full details of the arbitrator appointed by the requesting Party.
2. Within 30 (thirty) calendar days of the transmission of such notification, the responding Party shall inform the requesting Party of the name of the arbitrator it has appointed.
3. Within 30 (thirty) calendar days following the appointment of the second arbitrator, the Parties shall, by mutual agreement, appoint a third arbitrator who shall be the chair of the arbitral tribunal. If the Parties fail to reach mutual agreement on the appointment of the third arbitrator, the arbitrators appointed by the Parties shall, within 30 (thirty) calendar days, appoint a third arbitrator who shall be the chair of the arbitral tribunal.
4. With regard to the selection of arbitrators in paragraphs 1, 2, and 3 of this Article, neither Party nor, where applicable, the arbitrators appointed by them shall select arbitrators who are citizens or permanent residents of one of the Parties.
5. If the required appointments have not been made within the time limits specified in paragraphs 2 and 3 of this Article, either Party may invite the President of the International Court of Justice to appoint the arbitrator or arbitrators who have not been appointed. If the President is a national or permanent resident of a State Party or is unable to act, the Vice-President shall be invited to make the necessary appointments. If the Vice-President is a national or permanent resident of a State Party or is unable to act, the most senior member of the International Court of Justice who is not a national or permanent resident of a State Party shall be invited to make the necessary appointments.
6. If an arbitrator appointed in accordance with this article refuses or is unable to perform his or her duties, a successor shall be appointed in the manner specified for the appointment of the original arbitrator. The successor shall have the same powers and duties as the original arbitrator.
Article 15. Procedure
1. Unless the Parties agree otherwise, the place of arbitration shall be determined by the court. The arbitral tribunal shall decide all questions concerning its jurisdiction and, subject to any agreement between the Parties, shall determine its own procedures. At any stage of the proceedings, the arbitral tribunal may suggest to the Parties that they settle the dispute by negotiation or consultation. At all stages, the arbitral tribunal shall ensure that the Parties are given an open hearing.
2. The arbitral tribunal shall render its decision by a majority vote. The decision shall be in writing and shall state the applicable factual and legal grounds. The signed decision shall be delivered to each Party. The decision of the arbitral tribunal shall be final and binding on the Parties.
3. The arbitral tribunal established under this section shall resolve disputes in accordance with this Agreement and applicable rules and principles of international law.
4. Each Party shall bear the expenses of the member of the tribunal appointed by it and of its representation in the arbitration proceedings. The expenses of the chair of the arbitral tribunal and other expenses related to the arbitration shall be borne equally by the Parties.
Article 16. Third-party Funding of Disputes
1. “Third-party funding of disputes” means the financing of disputes by any natural or legal person who is not a disputing party but who enters into an agreement with a disputing party for the purpose of financing part or all of the costs of the proceedings, including by way of donation, grant, any agreement on remuneration and/or in exchange for remuneration contingent on the outcome of the dispute.
2. In the event of third-party funding of a dispute, the disputing party benefiting from such funding shall disclose to the other disputing party and to the court or arbitration tribunal the existence and nature of the funding agreement, as well as the name and address of the third party providing the funding.
3. Such notification shall be made at the time the claim is filed or, if the financial agreement is concluded or the subsidy or grant is provided after the claim is filed, without delay after the conclusion of the agreement or the provision of the subsidy or grant.
Chapter 4. Final Provisions
Article 17. Waiver of Privileges
Subject to prior notification and consultation, a Party may deny the benefits of this Agreement to an investor of the other Party who is a legal entity of the other Party and to the investments of such investor if the denying Party establishes that that the legal entity is owned or controlled by persons of a third State or of the Party refusing the benefits and does not have substantial business operations in the territory of the other Party.
Article 18. Waiver of Privileges of Central Banks
Nothing in this Agreement shall be construed as a waiver, derogation or other modification of any immunities, privileges or exemptions granted to the central banks of the Parties and/or to property owned by the central banks of the Parties in accordance with international agreements, conventions and/or any applicable law.
Article 19. General Exceptions
1. Provided that such measures are not taken in a manner that would result in arbitrary or unjustifiable discrimination against the other Party or investors of the other Party, depending on the circumstances, or distort the restrictions imposed on investments of investors of the other Party in the territory of the Party, nothing in this Agreement shall be construed as preventing a Party from adopting or enforcing measures:
1.1) necessary to protect public morals or maintain public order;
1.2) necessary to protect health, the environment, humans, animals, or plants;
1.3) protecting national treasures of artistic, historical, or archaeological value;
1.4) conserving natural resources;
1.5) necessary for the enforcement of laws and regulations that are not inconsistent with the provisions of this Agreement, including those related to:
(i) preventing fraud or deception or remedying the consequences of non-performance of obligations under investment agreements;
(ii) protecting the privacy of persons involved in the processing and dissemination of personal data and protecting the confidentiality of personal records and accounts;
(iii) security.
2. The measures specified in subparagraph 1.1) of paragraph 1 of this article may be applied only in cases where there is a genuine and sufficiently serious threat to the essential interests of society.
Article 20. Security Exceptions
Nothing in this Agreement shall be interpreted as:
1) requiring a Party to provide any information the disclosure of which it considers contrary to its essential security interests; or
2) preventing a Party from taking measures that it considers necessary to fulfill its obligations with respect to: maintaining or restoring international peace or security, or protecting its own essential security interests.
Article 21. Taxation
1. Article 5 (“Expropriation”) and Section 1 (“Settlement of disputes between a Party and an investor of the other Party”) of Chapter 3 (“Settlement of disputes”) of this Agreement shall apply to taxation measures to the extent that such taxation measures constitute expropriation. An investor seeking to invoke Article 5 (“Expropriation”) of this Agreement in respect of a tax measure shall first refer the matter to the competent authorities of both Parties referred to in paragraph 2 of this Article at the time when it submits the notification in accordance with Section 1 (“Settlement of disputes between a Party and an investor of the other Party”) of Chapter 3 (“Settlement of disputes”) of this Agreement, with the question of whether the tax measure constitutes expropriation as provided for in Article 5 (“Expropriation”) of this Agreement. If the competent authorities of both Parties fail to agree to consider the matter or, having agreed to consider it, fail to agree that the measure does not constitute expropriation as provided for in Article 5 (“Expropriation”) of this Agreement within 6 (six) months of such referral, the investor may submit its claim to arbitration in accordance with Section 1 (“Settlement of disputes between a Party and an investor of the other Party”) of Chapter 3 (“Settlement of disputes”) of this Agreement.
2. For the purposes of this Article, “competent authority” means the authorized authority in the field of tax administration.
3. With regard to Article 5 (“Expropriation”) of this Agreement, the following considerations are relevant in assessing whether a tax measure constitutes expropriation:
3.1) The introduction of taxes in general does not constitute expropriation. The mere introduction of new tax measures or the introduction of taxes in more than one jurisdiction in relation to investments does not in itself constitute expropriation;
3.2) Tax measures consistent with international tax policy, principles, and practice do not constitute expropriation. In particular, tax measures aimed at preventing tax avoidance or evasion should not, as a rule, be considered expropriatory; and
3.3) Tax measures that are applied on a non-discriminatory basis and are not aimed at investors of a particular nationality or individual taxpayers are less likely to constitute expropriation. A tax measure shall not constitute expropriation if it was already in force at the time the investment was made and information about the measure was made public or otherwise generally available.
Article 22. Amendments and Additions
This Agreement may be amended by mutual written agreement of the Parties, which shall form an integral part of this Agreement and shall be recorded in separate protocols, which shall enter into force in accordance with the procedure provided for in Article 24 (“Entry into force, duration and termination”) of this Agreement.
Article 23. Transparency
Each Party shall promptly publish or otherwise make available to the public, in accordance with its national law, its laws, regulations, procedures, administrative rulings, and judicial decisions of general application, as well as international treaties that may affect the investments of investors of the other Party in its territory.
Article 24. Entry Into Force, Duration and Termination
1. This Agreement shall enter into force on the date of receipt of the last written notification through diplomatic channels that the Parties have completed the internal procedures necessary for its entry into force.
2. This Agreement shall remain in force for a period of 10 (ten) years and shall be automatically extended for successive periods of 10 (ten) years unless, at least one year prior to the expiry of the initial or any subsequent period, one of the Parties notifies the other Party through diplomatic channels of its intention not to extend this Agreement. The termination of this Agreement shall not affect its implementation with respect to investments made during its term for a period of 10 (ten) years from the date of its termination, unless the Parties agree otherwise. From the date of entry into force of this Agreement, the Agreement between the Government of the Republic of Kazakhstan and the Government of the Kyrgyz Republic on the promotion and mutual protection of investments of April 8, 1997, shall cease to be in force.
3. In witness whereof, the undersigned, duly authorized thereto by their respective Governments, have signed this Agreement.
Conclusion
Done at __________ on “____” _________ 2024 in two copies in the Kazakh, Kyrgyz, and Russian languages, all texts being equally authentic.
In the event of any discrepancies between the texts of this Agreement, the Parties shall refer to the Russian text. FOR THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN