3. an amendment to any non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Articles 4 (National Treatment), 5 (MostFavoured-Nation Treatment), 8 (Senior Management, Boards of Directors and Entry of Personnel) and paragraphs 2, 3, and 4 of Article 9 (Performance Requirements).
2. Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment), 8 (Senior Management, Boards of Directors and Entry of Personnel) and paragraphs 2, 3 and 4 of Article 9 (Performance Requirements) shall not apply to any measure that a Party adopts or maintains with respect to sectors or matters, as set out in its schedule to Annex I.
3. Article 5 (Most-Favoured-Nation Treatment) shall not apply to treatment accorded by a Party pursuant to agreements set out in its schedule to Annex II.
4. In respect of intellectual property rights, a Party may derogate from Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment), and subparagraph 2(c) of Article 9 (Performance Requirements) in a manner that is consistent with the TRIPS Agreement, including any amendments to the TRIPS Agreement in force for both Parties, and waivers to the TRIPS Agreement adopted pursuant to Article IX of WTO Agreement.
5. Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment), 8 (Senior Management, Boards of Directors and Entry of Personnel) and 9 (Performance Requirements) of this Agreement shall not apply to procurement by a Party.
6. Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment) and 8 (Senior Management, Boards of Directors and Entry of Personnel) of this Agreement shall not apply to subsidies or grants provided by a Party, including government-supported loans, guarantees and insurance.
7. Articles 6 (Minimum Standard of Treatment), 7 (Compensation for Losses), 8 (Senior Management, Boards of Directors and Entry of Personnel), 9 (Performance Requirements) and 11 (Transfers) shall not apply to taxation measures.
8. Articles 4 (National Treatment) and 5 (Most-Favoured-Nation Treatment) shall not apply to:
1. taxation measures on income, capital gains, or the taxable capital of corporations; or
2. any new taxation measure that is aimed at ensuring the equitable and effective imposition or collection of taxes (including, for greater certainty, any measure that is taken by a Party to ensure compliance with the Party's taxation system or to prevent the avoidance or evasion of taxes) providing that the measure does not arbitrarily discriminate between persons, goods or services of the Parties.
Article 17. General Exceptions
1. Subject to the requirement that such measures are not applied in a manner that would constitute arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting or enforcing measures necessary:
1. to protect human, animal or plant life or health;
2. to ensure compliance with laws and regulations that are not inconsistent with this Agreement; or
3. for the conservation of living or non-living exhaustible natural resources.
2. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:
1. the protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution;
2. the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and
3. ensuring the integrity and stability of a Party's financial system.
3. Nothing in this Agreement shall apply to non-discriminatory measures of general application taken by any public entity in pursuit of monetary and related credit or exchange rate policies. This paragraph shall not affect a Party's obligations under Article 9 (Performance Requirements) or Article 11 (Transfers).
4. Nothing in this Agreement shall be construed:
1. to require any Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests;
2. to prevent any Party from taking any actions that it considers necessary for the protection of its essential security interests:
1. relating to the traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment;
2. taken in time of war or other emergency in international relations; or
3. relating to the implementation of national policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or
3. to prevent any Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
5. Nothing in this Agreement shall be construed to require a Party to furnish or allow access to information the disclosure of which would impede law enforcement or would be contrary to the Party's law protecting the deliberative and policy-making processes of the executive branch of government at the cabinet level, personal privacy or the confidentiality of the financial affairs and accounts of individual customers of financial institutions.
6. Nothing in this Agreement shall be construed to require, during the course of any dispute settlement procedure under this Agreement, a Party to furnish or allow access to information protected under its competition laws, or a competition authority of a Party to furnish or allow access to any other information that is privileged or otherwise protected from disclosure.
7. The competition authority referred to paragraph 6 shall be the following until otherwise notified by a Party:
- For Canada: the Commissioner of Competition; and
- For Mongolia: the relevant authorities by the laws mentioned under the definition of "information protected under its competition laws" in the Article 1 of this Agreement.
8. The provisions of this Agreement shall not apply to investments in cultural industries.
"Cultural industries" means persons engaged in any of the following activities:
1. the publication, distribution or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
2. the production, distribution, sale or exhibition of film or video recordings;
3. the production, distribution, sale or exhibition of audio or video music recordings;
4. the publication, distribution, sale or exhibition of music in print or machine readable form; or
5. radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television or cable broadcasting undertakings and all satellite programming and broadcast network services.
9. Any measure adopted by a Party in conformity with a decision adopted, extended or modified by the World Trade Organization pursuant to Article IX:3 and IX:4 of the WTO Agreement shall be deemed to be also in conformity with this Agreement. An investor purporting to act pursuant to Section C (Settlement of Disputes between an Investor and the Host Party) of this Agreement may not claim that such a conforming measure is in breach of this Agreement.
10. Nothing in this Agreement shall affect the rights and obligations of the Parties under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall apply to the extent of the inconsistency.
11. Nothing in this Agreement shall be construed to require a Party to furnish or allow access to information the disclosure of which would be contrary to the Party's law protecting information concerning the taxation affairs of a taxpayer.
Article 18. Denial of Benefits
1. A Party may deny the benefits of this Agreement to an investor of the other Party that is an enterprise of the other Party and to investments of that investor if investors of a non-Party own or control the enterprise and the denying Party adopts or maintains measures with respect to the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Agreement were accorded to the enterprises or to its investments.
2. A Party may deny the benefits of this Agreement to an investor of the other Party that is an enterprise of the other Party and to investments of that investor if investors of a non-Party own or control the enterprise and the enterprise has no substantial business activities in the territory of the Party under whose law it is constituted or organized.
Section C. Settlement of Disputes between an Investor and the Host Party
Article 19. Purpose
Without prejudice to the rights and obligations of the Parties under Section D (State-to-State Dispute Settlement Procedures), this Section establishes a mechanism for the settlement of investment disputes.
Article 20. Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise
1. An investor of a Party may submit to arbitration under this Section a claim that:
1. the other Party has breached an obligation under Section B (Substantives Obligations), other than an obligation under paragraph 3 of Article 8 (Senior Management, Boards of Directors and Entry of Personnel), Article 12 (Transparency), 14 (Corporate Social Responsibility) or 15 (Health, Safety and Environmental Measures); and
2. the investor has incurred loss or damage by reason of, or arising out of, that breach.
2. An investor of a Party, on behalf of an enterprise of the other Party that is a juridical person that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim that:
1. the other Party has breached an obligation under Section B (Substantive Obligations), other than an obligation under paragraph 3 of Article 8 (Senior Management, Boards of Directors and Entry of Personnel), Article 12 (Transparency), 14 (Corporate Social Responsibility) or 15 (Health, Safety and Environmental Measures); and
2. the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
Article 21. Conditions Precedent to Submission of a Claim to Arbitration
1. The disputing parties shall hold consultations in an attempt to settle a claim amicably before a disputing investor may submit a claim to arbitration. Consultations shall be held within 30 days of the submission of the notice of intent to submit a claim to arbitration under subparagraph 2(c), unless the disputing parties otherwise agree. The place of consultation shall be the capital of the disputing Party, unless the disputing parties otherwise agree.
2. A disputing investor may submit a claim to arbitration under Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise) only if:
1. the disputing investor and, where a claim is made under paragraph 2 of Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), the enterprise, consent to arbitration in accordance with the procedures set out in this Agreement;
2. at least six months have elapsed since the events giving rise to the claim;
3. the disputing investor has delivered to the disputing Party a written notice of its intent to submit a claim to arbitration (Notice of Intent) at least 90 days prior to submitting the claim. The Notice of Intent shall specify:
1. the name and address of the disputing investor and, where a claim is made under paragraph 2 of Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), the name and address of the enterprise;
2. the provisions of this Agreement alleged to have been breached and any other relevant provisions;
3. the issues and factual basis for the claim, including the measures at issue; and
4. the relief sought and the approximate amount of damages claimed;
4. the disputing investor has delivered evidence establishing that it is an investor of the other Party with its Notice of Intent;
And
5. in the case of a claim submitted under paragraph 1 of Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise):
1. not more than three years have elapsed from the date on which the disputing investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the disputing investor has incurred loss or damage thereby; and
2. the disputing investor and, where the claim is for loss or damage to an interest in an enterprise of the disputing Party that is a juridical person that the disputing investor owns or controls directly or indirectly, the enterprise, waive their right to initiate or continue before any administrative tribunal or court under the law of any Party, or other dispute settlement procedures, any proceedings with respect to the measure of the disputing Party that is alleged to be a breach referred to in Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of the disputing Party;
6. in the case of a claim submitted under paragraph 2 of Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise):
1. not more than three years have elapsed from the date on which the enterprise first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the enterprise has incurred loss or damage thereby; and
2. both the disputing investor and the enterprise waive their right to initiate or continue before any administrative tribunal or court under the law of any Party, or other dispute settlement procedures, any proceedings with respect to the measure of the disputing Party that is alleged to be a breach referred to in Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of the disputing Party.
3. A consent and waiver required under paragraph 2 shall be delivered to the disputing Party and shall be included in the submission of a claim to arbitration. A waiver from the enterprise under subparagraphs 2(e)(ii) or 2(f)(ii) shall not be required where a disputing Party has deprived the disputing investor of control of an enterprise.
4. In addition to satisfying the conditions precedent listed in paragraph 2, a disputing investor may submit a claim to arbitration under Article 20 (Claims by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise) with respect to a taxation measure only if:
1. the disputing investor provides a copy of the notice of claim to the taxation authorities of the Parties; and
2. six months after receiving notification of the claim by the disputing investor, the taxation authorities of the Parties fail to reach a joint determination that the measure does not breach the relevant provisions of this Agreement.
5. If, in connection with a claim by a disputing investor of a Party or a dispute between the Parties, an issue arises as to whether a measure of a Party is a taxation measure, a Party may refer the issue to the taxation authorities of the Parties. A decision of the taxation authorities shall bind any Tribunal formed pursuant to Section C (Settlement of Disputes between an Investor and the Host Party) or arbitral panel formed pursuant to Section D (State-to-State Dispute Settlement Procedures). A Tribunal or arbitral panel seized of a claim or a dispute in which the issue arises may not proceed pending receipt of the decision of the taxation authorities. If the taxation authorities have not decided the issue within six months of the referral, the Tribunal or arbitral panel shall itself decide the issue.
6. The taxation authorities seized of an issue under paragraphs 4 and 5 may agree to modify the time period allowed for their consideration of the issue.
Article 22. Special Rules Regarding Financial Services
1. With respect to:
1. financial institutions of a Party; and
2. investors of a Party, and investments of such investors, in financial institutions in the disputing Party's territory,
This Section applies only in respect of claims that the disputing Party has breached an obligation under Article 10 (Expropriation), 11 (Transfers) or 18 (Denial of Benefits).
2. Where a disputing investor or disputing Party claims that a dispute involves measures adopted or maintained by a Party relating to financial institutions of the other Party or investors of the other Party and their investments in financial institutions in the disputing Party's territory, or where the disputing Party invokes paragraph 6 of Article 11 (Transfers), paragraph 2 or 3 of Article 17 (General Exceptions), in addition to the criteria set out in paragraph 2 of Article 25 (Arbitrators), the arbitrators shall have expertise or experience in financial services law or practice, which may include the regulation of financial institutions.
3. Where a disputing investor submits a claim to arbitration under this Section, and the disputing Party invokes paragraph 6 of Article 11 (Transfers), paragraph 2 or 3 of Article 17 (General Exceptions), at the request of that Party, the Tribunal shall seek a report in writing from the Parties on the issue of whether and to what extent the said paragraphs are a valid defence to the claim of the disputing investor. The Tribunal may not proceed pending receipt of a report under this Article.
4. Pursuant to a request received in accordance with paragraph 3, the Parties shall proceed to prepare a written report, either on the basis of agreement following consultations, or by means of an arbitral panel in accordance with Section D (State-to-State Dispute Settlement Procedures). The report shall be transmitted to the Tribunal, and shall be binding on the Tribunal.
5. The Tribunal may decide the matter where, within 70 days of the referral by the Tribunal, no request for the establishment of a panel pursuant to paragraph 4 has been made, and no report has been received by the Tribunal.
Article 23. Submission of a Claim to Arbitration
1. A disputing investor who meets the conditions precedent in Article 21 (Conditions Precedent to Submission of a Claim to Arbitration) may submit the claim to arbitration under:
1. the ICSID Convention, provided that both the disputing Party and the Party of the disputing investor are parties to the ICSID Convention;
2. the Additional Facility Rules of ICSID, provided that either the disputing Party or the Party of the disputing investor, but not both, is a party to the ICSID Convention; or
3. the UNCITRAL Arbitration Rules.
2. The arbitration rules applicable under paragraph 1, and in effect on the date the claim or claims were submitted to arbitration under this Section, shall govern the arbitration except to the extent modified by this Agreement and supplemented by any rules adopted by the Parties.
3. A claim is submitted to arbitration under this Section when:
1. the request for arbitration under paragraph 1 of Article 36 of the ICSID Convention is received by the Secretary-General;
2. the request for arbitration under Article 2 of Schedule C of the ICSID Additional Facility Rules is received by the Secretary-General; or
3. the notice of arbitration under Article 3 of the UNCITRAL Arbitration Rules is received by the disputing Party.
4. Delivery of notice and other documents on a Party shall be made to:
For Canada:
Office of the Deputy Attorney General of Canada
Justice Building
239 Wellington Street
Ottawa, Ontario
K1A 0H8
For Mongolia:
The Cabinet Secretariat of the Government of Mongolia
State Palace
Sukhbaatar Square
Ulaanbaatar 12
Mongolia
Article 24. Consent to Arbitration
1. Each Party consents to the submission of a claim to arbitration in accordance with the terms of this Agreement. Failure to meet any of the conditions precedent in Article 21 (Conditions Precedent to Submission of a Claim to Arbitration) shall nullify that consent.
2. The consent given in paragraph 1 and the submission of a claim to arbitration shall satisfy the requirement of:
1. Chapter II of the ICSID Convention (Jurisdiction of the Centre) and the ICSID Additional Facility Rules for written consent of the parties to the dispute; and
2. Article II of the New York Convention for an agreement in writing
Article 25. Arbitrators
1. Except in respect of a Tribunal established under Article 27 (Consolidation), and unless the disputing parties agree otherwise, the Tribunal shall comprise three arbitrators. One arbitrator shall be appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the disputing parties.
2. Arbitrators shall have expertise or experience in public international law, international investment or international trade rules, or the resolution of disputes arising under international investment or international trade agreements. Arbitrators shall be independent of, and not be affiliated with or take instructions from, either Party or the disputing investor.
3. If the disputing parties do not agree on the remuneration of the arbitrators before the constitution of the Tribunal, the prevailing ICSID rate for arbitrators shall apply.
4. If a Tribunal, other than a Tribunal established under Article 27 (Consolidation), has not been constituted within 90 days from the date that a claim is submitted to arbitration, either disputing party may ask the Secretary-General to appoint, in his or her discretion and, to the extent practicable, in consultation with the disputing parties, the arbitrator or arbitrators not yet appointed, except that the presiding arbitrator shall not be a national of either Party.
Article 26. Agreement to Appointment of Arbitrators
For purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator based on a paragraph 2 of Article 25 (Arbitrators) or on a ground other than nationality, citizenship or permanent residence:
1. the disputing Party agrees to the appointment of each individual member of a Tribunal established under the ICSID Convention or the ICSID Additional Facility Rules;
2. a disputing investor referred to in paragraph 1 of Article 20 (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise) may submit a claim to arbitration or continue a claim under the ICSID Convention or the ICSID Additional Facility Rules only if the disputing investor agrees in writing to the appointment of each member of the Tribunal; and
3. a disputing investor referred to in paragraph 2 of Article 20 (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise) may submit a claim to arbitration, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only if the disputing investor and the enterprise agree in writing to the appointment of each member of the Tribunal.
Article 27. Consolidation
1. A Tribunal established under this Article shall be established under the UNCITRAL Arbitration Rules and shall conduct its proceedings in accordance with those Rules, except as modified by this Section.
2. Where a Tribunal established under this Article is satisfied that claims submitted to arbitration under Article 23 (Submission of a Claim to Arbitration) have a question of law or fact in common, the Tribunal may, in the interest of fair and efficient resolution of the claims and after hearing the disputing parties, by order:
1. assume jurisdiction over, and hear and determine together, all or part of the claims; or
2. assume jurisdiction over, and hear and determine one or more of the claims, the determination of which it believes would assist in the resolution of the others.
3. A disputing party that seeks an order under paragraph 2 shall request that the Secretary-General establish a Tribunal and shall specify in the request:
1. the name of the disputing Party or disputing investors against which the order is sought;
2. the nature of the order sought; and
3. the grounds on which the order is sought.
4. The disputing party shall deliver a copy of the request to the disputing Party or disputing investors against which the order is sought.
5. The disputing parties shall request the Secretary-General to establish a Tribunal comprising three arbitrators within 60 days of receipt of the request. The disputing parties shall ask the Secretary-General to appoint one member who is a national of the disputing Party, one member who is a national of the Party of the disputing investors, and a presiding arbitrator who is not a national of either Party.
6. Where a Tribunal has been established under this Article, a disputing investor that has submitted a claim to arbitration under Article 23 (Submission of a Claim to Arbitration) and that has not been named in a request made under paragraph 3 may make a written request to the Tribunal that it be included in an order made under paragraph 2, and shall specify in the request:
1. the name and address of the disputing investor;
2. the nature of the order sought; and
3. the grounds on which the order is sought.
7. A disputing investor referred to in paragraph 6 shall deliver a copy of its request to the disputing parties named in a request made under paragraph 3.
8. A Tribunal established under Article 23 (Submission of a Claim to Arbitration) shall not have jurisdiction to decide a claim, or a part of a claim, over which a Tribunal established under this Article has assumed jurisdiction.
9. On application of a disputing party, a Tribunal established under this Article, pending its decision under paragraph 2, may order that the proceedings of a Tribunal established under Article 23 (Submission of a Claim to Arbitration) be stayed unless the latter Tribunal has already adjourned its proceedings.
Article 28. Documents to, and Participation of, the other Party
1. A disputing Party shall deliver to the other Party a copy of the notice of intent referred to in subparagraph 2(c) of Article 21 (Conditions Precedent to Submission of a Claim to Arbitration), the notice of arbitration referred to in paragraph 3 of Article 23 (Submission of a Claim to Arbitration), any statement of claim and any documents that are appended to such notices or claims no later than 30 days after the date that such documents have been delivered to the disputing Party. The other Party shall be entitled, at its cost, to receive from the disputing Party a copy of the evidence that has been tendered to the Tribunal, copies of all pleadings filed in the arbitration, and the written argument of the disputing parties. The Party receiving such information shall treat the information as if it were a disputing Party.
2. The other Party shall have the right to attend any hearings held under this Section. Upon written notice to the disputing parties, the other Party may make submissions to a Tribunal on a question of interpretation of this Agreement.
Article 29. Place of Arbitration
The disputing parties may agree on the legal place of arbitration under the arbitral rules applicable under paragraph 1 of Article 23 (Submission of a Claim to Arbitration). If the disputing parties fail to reach agreement, the Tribunal shall determine the place in accordance with the applicable arbitral rules, provided that the place shall be in the territory of either Party or of a third State that is a party to the New York Convention.