(k) in cases of balance of payments instability;
(l) in the promotion of technology transfer and food security
9.4 Safeguard provision:
(a) Nothing in this Treaty shall prevent a Party from conditioning or preventing a transfer through a good faith application of its law in the event of serious balance-of-payments difficulties or if movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies, or if there are regional or global financial crises
(b) Where such measures are taken under 9.4(a)), a State Party shall enter into consultations with the other State Party at its request, with a view to review such measures and seek the minimum impact of such measures on an investor. Such measures shall be taken on a temporary basis and shall be eliminated as soon as conditions permit.
(c) Where, in the opinion of a State Party that has taken such measures, it is necessary to extend them for a further period due to the extended period of conditions described in paragraph 9.4(a), the State Party shall offer to enter into consultations with the other State Party with a view to seeking the minimum impact of such measures on an investor.
Article 10. Compliance with Domestic Law
Investors and Investments shall comply with all laws, regulations, administrative guidelines and policies of the Host State. This includes, but is not limited to the following:
Article 11. Obligation Against Corruption
11.1 Investors and their investments in the Host State shall not, either prior to or after the establishment of an Investment, offer, promise, or give any undue pecuniary advantage, gratification or gift whatsoever, whether directly or indirectly, to a public servant or official of the Host State as an inducement or reward for doing or forbearing to do any official act or obtain or maintain other improper advantage.
11.2 Investors and their Investments shall not make illegal contributions to candidates for public office or to political parties or to other political organizations. Any political contributions and disclosures of those contributions must fully comply with the Host State's Law.
11.3. Investors and their Investments shall not be complicit in any act described in this Article, including inciting, aiding, abetting, conspiring to commit, or authorizing such acts.
Article 12. Provision of Information
12.1. An investor shall provide information to Host State on the investment in question and the corporate history and practices of the Investor. Investors and Investments must comply with the requirements of the Law of the Host State to disclose true and complete information regarding their activities, structure, financial situation, performance, relationships with affiliates, ownership, governance, or other matters.
12.2 The Host State shall have the right to timely and accurate information in this regard. An Investor shall not commit fraud or provide false or misleading information provided in accordance with this Article.
12.3. A material breach of paragraph 12.2 by an Investor or an Investment is deemed to constitute a breach of the domestic law of the Host State concerning the establishment, acquisition, management, operation and disposition of Investments.
12.4 The Host State Party may make such information available to the public in the location where the Investment is to be located, subject to other applicable law and the redaction of confidential business information. The State Party shall protect any confidential business information from any disclosure that would prejudice the competitive position of the Investor or the Investment.
12.5 Where required, Investors must also disclose the source and channel of their funds in the Home State or Host State by submitting appropriate documentary evidence establishing the legitimacy of such funds. This disclosure, if requested, shall include any changes in the form or ownership of the enterprise or other entity located in the Home State and the Host State.
12.6 The Investment shall maintain true and complete copies of the records, books of account and current financial statements for the Investment that may be necessary to compute and substantiate compensation for any alleged breach of this Treaty or Host and Home State Laws, including:
(i) Governance structures;
(ii) records documenting the Investment, its shareholders, directors and employees.
12.7 Nothing in this Article shall be construed to prevent a State Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its domestic law or in connection with disputes between the Investor and the State regarding the Investment.
Article 13. Investor Liability
13.1. Investors and Investments shall be subject to civil actions for liability in the judicial process of their Home State for the acts, decisions or omissions made in the Home State in relation to the Investment where such acts, decisions or omissions lead to significant damage, personal injuries or loss of life in the Host State.
13.2. Home States shall ensure that their legal systems and rules allow for, or do not prevent or unduly restrict, the bringing of court actions on their merits before domestic courts relating to the civil liability of Investors and Investments for damages resulting from alleged acts, decisions or omissions made by Investors in relation to their Investments in the territory of the Host State.
Article 14. Transparency of Contracts and Payments
14.1. Investors or their investments shall make public in a timely manner all contracts related to the establishment or right to operate an Investment made by the Investor or the Investment with a government in the Host State.
14.2 Investors or their investments shall make public in a timely manner all payments made to a government related to the establishment or right to operate of an Investment, including all taxes, royalties and similar payments.
14.3. Where feasible, such contracts and payments shall be made available on an Internet website freely accessible by the public.
14.4 The State Party that is the recipient of payments or party to an investment- related contract shall have the right to make the payments and contracts available to the public, including through an Internet site freely accessible to the public.
14.5 Confidential business information shall be redacted from contracts made public in accordance with this Article.
Article 15. Right of States to Regulate
15.1 The Host State shall have the right to take regulatory or other measures to ensure that development in its territory is consistent with the goals and principles of sustainable development and social and economic policy objectives.
15.2 Except where the rights of a Host State are expressly stated as an exception to the obligations of this Treaty a Host State's pursuit of its rights to regulate shall be understood as embodied within a balance of the rights and obligations of Investors and Investments and Host States, as set out in this Treaty.
15.3. For greater certainty, non-discriminatory measures taken by a State Party to comply with its international obligations under other treaties shall not constitute a breach of this Treaty.
Article 16. Right to Pursue Development Goals
16.1 Notwithstanding any other provision of this Treaty, a State Party may grant preferential treatment in accordance with their domestic legislation to any enterprise so qualifying under the domestic law in order to achieve national or sub-national regional development goals.
16.2 Notwithstanding any other provision of this Treaty, a State Party may
(a) support the development of local entrepreneurs, and
(b) seek to enhance productive capacity, increase employment, increase human resource capacity and training, research and development including of new technologies, technology transfer, innovation, and other benefits of investment through the use of specified requirements on investors made at the time of the establishment or acquisition of the investment and applied during its operation.
16.3 Notwithstanding any other provision of this Treaty, a State Party may take measures necessary to address historically based economic disparities suffered by identifiable ethnic or cultural groups due to discriminatory or oppressive measures against such groups prior to the signing of this Treaty.
16.4 With regard to environment, state parties shall not encourage investment by relaxing or waiving from domestic environmental legislation, and shall ensure that its laws and regulations provide for environmental protection and are implemented through domestic adequate laws and regulations. Likewise, investors shall, in performing their activities, protect the environment and where the activity causes damages to the environment, they shall restore it to the extent appropriate and feasible. Investors are encouraged to develop and apply adequate new green technologies for this purpose.
16.5 Host states may develop national policies to guide investors in developing human capacity of the labour force. Such policy may include incentives to encourage employers to invest in training, capacity building and knowledge transfer, paying particular attention to the special needs for youth, women and other vulnerable groups.
16.6 Host states shall ensure that it does not waive or derogate from labour rights and such legislation as an encouragement for the establishment, maintenance or expansion of an investment in its territory. In this regard, investors may:
i. consult with the host State authorities and national employers' and workers' organizations in order to keep manpower plans in harmony with national social development policies, making optimal use of labour available locally and within the sub region to provide substantial employment or reduce unemployment;
ii. give priority to the employment and promotion of the host State nationals;
iii. use technologies which generate employment;
iv. promote employment in the Member States by entering into supply contracts with local enterprises and by prioritizing, to the full extent possible, the use and processing of local raw materials;
16.7 Investors shall comply with international conventions and existing labour policies, and, in particular, not use child labour and shall support efforts for the elimination of all sort of child labour including forced or compulsory labour within Host states.
Article 17. Transparency of Information by State Parties
17.1. Each State Party shall promptly publish, or otherwise make publicly available, its laws and regulations of general application as well as international agreements that may affect the Investments of Investors of the other State Party.
17.2 Each State Party shall endeavour to promptly publish, or otherwise make publicly available, its policies and administrative guidelines or procedures that may affect investment under this Treaty.
17.3. Nothing in this Treaty shall require a State Party to furnish or allow access to any confidential or proprietary information, including information concerning particular Investors or Investments, the disclosure of which would impede law enforcement or be contrary to its domestic laws protecting confidentiality.
17.4 This Article shall not be subject to the investor-State dispute settlement process.
Article 18. Exceptions
18.1 Subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination pursuant to Articles on National Treatment and Most Favoured Nation, nothing in this Treaty shall be construed to oblige a State Party to pay compensation for adopting or enforcing measures taken in good faith and designed and applied to:
a. protect public morals and safety;
b. protect human, animal or plant life or health;
c. conserve of living or non-living exhaustible natural resources; and
d. protect the environment.
18.2 For greater certainty, nothing in this Treaty shall be construed to oblige a State Party to pay compensation if it adopts or maintains reasonable measures for prudential reasons, such as:
a) 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;
b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and
c) ensuring the integrity and stability of a State Party's financial system.
18.3. Nothing in this Treaty shall apply to taxation measures, subject to the continued application of Article 7 on Expropriation.
18.4 The necessity or appropriateness of the measure will be judged by the State invoking the measure.
18.5 The exceptional measures must be applied in a non-arbitrary manner and not be disguised as investment protectionism.
18.6 Nothing in this Treaty shall apply to non-discriminatory measures of general application taken by any public entity in pursuit of monetary and related credit policies or exchange rate policies. This paragraph shall not affect a State Party's obligations under Article 9 Transfers.
18.7 Nothing in this Treaty shall apply to a State Partyâs measures that it considers necessary for the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its national security interests.
18.8 Nothing in this Treaty requires a State Party to furnish or allow access to any information, the disclosure of which it determines to be contrary to its national security interests.
18.9 In the event of force Majeure, each party will be excused from liability if some unforeseen event beyond the control of that party prevents it from performing its obligations under the Treaty. The affected party may request for re-negotiation of the Treaty if the continued performance of one partyâs contractual duties has become excessively onerous due to an unforeseen event beyond the control of that party.
Article 19. Denial of Benefits
19.1 A Party may at any time deny the benefits of this Treaty to an investor of another Party that is an enterprise of such Party and to investments of such investor if investors of a non-Party own or control the enterprise and the denying Party:
a. does not maintain diplomatic relations with the non-Party, or
b. 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 Treaty were accorded to the enterprise or to its investments.
19.2 Subject to prior notification and consultation with the other State Party, a State Party may at any time deny the benefits of this Treaty to an investor of another Party that is an enterprise of such Party and to investments of such investors 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.
19.3 For greater certainty, the Host State may at any time, including after the institution of arbitration proceedings in accordance with this Treaty, deny the benefits of this Treaty to:
(i) an Investment or Investor owned or controlled, directly or indirectly, by persons of a non-Party or of the Host State; or
(j) an Investment or Investor that has been established or restructured with the primary purpose of gaining access to the dispute resolution mechanisms provided in this Treaty.
Article 20. Periodic Review of this Treaty
20.1. The State Parties shall meet every five years after the entry into force of this Treaty to review its operation and effectiveness, including the levels of investment between the Parties.
20.2 The State Parties may adopt joint measures including regular consultations in order to improve the effectiveness of this Treaty.
Part 3. DISPUTE SETTLEMENT
Article 21. Counter-claims by State Parties
21.1. Where an investor or its investment is alleged by a State party in a dispute settlement proceeding under this Treaty to have failed to comply with its obligations under this Treaty or other relevant rules and principles of domestic and international law, the competent body hearing such a dispute shall consider whether this breach, if proven, is materially relevant to the issues before it, and if so, what mitigating or off- setting effects this may have on the merits of a claim or on any damages awarded in the event of such award.
21.2. A State Party may initiate a counterclaim against the investor before any competent body dealing with a dispute under this Treaty for damages or other relief resulting from an alleged breach of the Treaty.
21.3 In accordance with its applicable domestic law, the Host State, including political subdivisions and officials thereof, private persons, or private organizations, may initiate a civil action in domestic courts against the Investor or Investment for damages arising from an alleged breach of the obligations set out in this Treaty.
21.4 In accordance with the domestic law of the Home State, the Host State, including political subdivisions and officials thereof, private persons, or private organizations, may initiate a civil action in domestic courts of the Home State against the Investor, where such an action relates to the specific conduct of the Investor, and claims damages arising from an alleged breach of the obligations set out in this Treaty.
Article 22. State - State Dispute Settlement
Paragraphs 22.1 and 22.2 set out a requirement to seek to resolve disputes by amicable means prior to resorting to a formal and binding dispute settlement process. This is very common. Paragraph 22.2 seeks to encourage a formal mediation process and makes it mandatory for both parties to enter into such a process if one party formally states it desires to do so. Mediation is a non-binding process; hence a solution to the potential dispute cannot be imposed during mediation without the consent of both State Parties.
Paragraph 22.3 sets out the two options for State-State dispute settlement noted above: a State acting on behalf of an investor and a State initiating the process in order to resolve a dispute directly between itself and the other State Party. States have, under customary international law, a right to make claims for damages suffered by their citizens or businesses due to breaches of international law by a State. The provisions allowing for a State Party to make a claim on behalf of an investor here reflects a concrete application of this customary law right.
Paragraph 22.4 requires the exhaustion of local remedies by an investor or investment before a State may initiate a claim on behalf of an investor. The exhaustion of local remedies clause means that before any claim can be taken under the dispute settlement process set out in the treaty, the investor or investment must have sought to resolve the dispute in the local courts or other dispute settlement processes available in the Host State. It is important to note here that the language for such a clause must be set out as domestic proceedings relating to the measures underlying the claim under this Treaty. Some treaties have phrased the condition as requiring a claim concerning the breach of the treaty to be taken in the domestic courts, if it can be so taken. However, most States do not allow claims for a breach of the treaty per se to be taken, but rather a claim that the measure taken by the government is otherwise in breach of the domestic law or constitution. This difference is important. In addition, the exhaustion of local remedies clause allows a State seeking to take a claim on behalf of an investor or investment to argue that no local remedies are available under which to challenge the underlying measure. A State making such a claim must show evidence of this in order to be entitled to go directly to the international process.
Paragraphs 22.5-22.8 are fairly standard paragraphs relating to the appointment and operation of a tribunal at the international level. They ensure that the tribunal can be appointed and become functional even if one State is recalcitrant and uncooperative. Paragraph 22.9 sets out options that States may consider for identifying the arbitration rules that will be applied by the tribunal to the dispute. This can be made specific, or left general. It should be noted that a tribunal can utilize the ICSID arbitration rules, which are fully accessible at any time to the public, without having to utilize the ICSID process if it does not wish to. Similarly, the UNCITRAL arbitration rules can be adopted, or any other rules, without any other impacts on the organization of the arbitration.
Paragraphs 22.10-22.13 are drawn from the COMESA approach and more recent approaches to investor-State arbitration in the U.S. and Canadian treaties, as well as others. Paragraph 21.10 requires that all the key arbitral documents be made public. Posting them on a website is the easiest way to do this.
Paragraph 22.11 allows for the participation of amicus curiae, either organizations or individuals, with an interest in the case.
Paragraph 22.12 requires the tribunal hearings to be open to the public. Paragraph 22.13 sets out the exception to the previous few paragraphs, that the tribunal can take such steps as may be needed to protect confidential business information from being put into the public domain. For documents this can be done by redacting any such information from the public versions. For oral hearings it may mean holding portions of a session in camera.
22.1 Disputes between the State Parties concerning the interpretation or application of this Treaty shall, as far as possible, be resolved through the use of consultations, good offices, mediation, conciliation, or any other agreed dispute resolution mechanism.
22.2 If a dispute between the Parties cannot be settled within six months from the time the dispute arose, it shall upon the request of either Party be submitted to an arbitral tribunal.
22.3 Such an arbitral tribunal shall be constituted for each individual case in the following way: Within two months of the receipt of the request for arbitration, each Party shall appoint one member of the tribunal. Those two members shall then select a national of a third State who, on approval by the two Parties, shall be appointed Chairman of the tribunal. The Chairman shall be appointed within two months from the date of appointment of the other two members.
22.4 If within the periods specified in Article 22.1 the necessary appointment(s) have not been made, either Party may, in the absence of any other agreement, invite the President of the International Court of Justice to make any necessary appointment(s). If the President is a national of either Party or if he or she is otherwise prevented from discharging the said function, the Vice President shall be invited to make the necessary appointment(s). If the Vice President is a national of either Party or if he or she too is prevented from discharging the said function, the member of the International Court of Justice next in seniority who is not a national of either Party shall be invited to make the necessary appointment(s).
22.5 The arbitral tribunal shall reach its decision by a majority of votes. Such decision shall be binding on both Parties.
22.6 The Parties to the arbitration shall share the costs of the arbitration, including the arbitrator fees, expenses, allowances and other administrative costs. Each Party shall bear the cost of its representation in the arbitral proceedings. The tribunal may, however, in its discretion direct that the entire costs or a higher proportion of costs shall be borne by one of the two disputing Parties and this determination shall be binding on both disputing Parties.
22.7 A tribunal constituted under this Article shall have the power to determine its own procedures. The tribunal shall apply the [UNCITRAL] [ICSID] Arbitration Rules in force at the time of the submission of the dispute to arbitration, in accordance with paragraph 22.5.
22.8. All documents relating to a notice of arbitration, the settlement or resolution of any dispute pursuant to this Article, and the pleadings, evidence and decisions in them, shall be available to the public, subject to the redaction of confidential information.
22.9. Amicus Curiae submissions: The tribunal shall have the authority to accept and consider amicus curiae submissions from a person or entity that is not a governmental entity of either State Party. The procedures in Schedule 3 shall apply for this purpose.
22.10 Procedural and substantive oral hearings shall be open to the public. This may be achieved though live broadcasting of the hearings by Internet broadcast.
22.11 An arbitral tribunal may take such steps as are necessary, by exception, to protect confidential business information in written form or at oral hearings.
22.12 No claims under this provision may be commenced if more than three years have elapsed from the date on which the Investor first acquired, or should have first acquired, knowledge of the breach alleged in the arbitration claim and knowledge that the Investor has incurred loss or damage; or one year from the conclusion of the request for local remedies initiated in the domestic courts.
22.13 For greater certainty, a dispute within the meaning of paragraph 22 includes instances in which one of the State Parties refuses to take a position on a matter of interpretation.
Article 23. Investor-State Dispute Settlement
However, if EAC decide to negotiate and include this, the text below may provide guidance for this purpose.
22.10 Procedural and substantive oral hearings shall be open to the public. This may be achieved through live broadcasting of the hearings by Internet broadcast.
22.11 An arbitral tribunal may take such steps as are necessary, by exception, to protect confidential business information in written form or at oral hearings.
22.12 No claims under this provision may be commenced if more than three years have elapsed from the date on which the Investor first acquired, or should have first acquired, knowledge of the breach alleged in the arbitration claim and knowledge that the Investor has incurred loss or damage; or one year from the conclusion of the request for local remedies initiated in the domestic courts.
22.13 For greater certainty, a dispute within the meaning of paragraph 22 includes instances in which one of the State Parties refuses to take a position on a matter of interpretation.
Article 23. Investor-State Dispute Settlement
23.1. Amicable Settlement of Disputes
In the event of an investment dispute between an Investor or its Investment (referred to as an "Investor" for the purposes of the Investor-State dispute settlement provisions) and a Host State pursuant to this Treaty, the Investor and the Host State should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding, third-party mediation or other mechanisms.
23.2 Notice of Intent to Arbitrate
At least six months before submitting any claim to arbitration under this Part, an Investor shall deliver to the Host State a written notice of its intention to submit the claim to arbitration ("Notice of Intent"). The notice shall specify:
a) the name and address of the Investor;
b) for each claim, the provision of this Treaty alleged to have been breached and any other relevant provisions;
c) the legal and factual basis for each claim; and
d) the relief sought and the approximate amount of damages claimed.
23.3 Mediation
After submission of the Notice of Intent, the Investor or the Host State may request mediation of the dispute, in which case the other disputing party may agree to such mediation. The costs of the mediation shall be shared equally unless the mediator decides otherwise for good cause. The mediator shall provide written reasons for such a decision.
23.4 Conditions for Submission of a Claim to Arbitration
(i) An Investor may submit a claim to arbitration pursuant to this Treaty, provided that:
a) six months have elapsed since the Notice of Intent was filed with the State Party and no solution has been reached;
b) the Investor or Investment, as appropriate,
i. has first submitted a claim before the domestic courts of the Host State for the purpose of pursuing local remedies, after the exhaustion of any administrative remedies, relating to the measure underlying the claim under this Treaty, and a resolution has not been reached within a reasonable period of time from its submission to a local court of the Host State; or
ii. the Investor demonstrates to a tribunal established under this Treaty that there are no reasonably available legal remedies capable of providing effective remedies of the dispute concerning the underlying measure, or the legal remedies provide no reasonable possibility of such remedies in a reasonable period of time.
c) The Investor has provided a clear and unequivocal waiver of any right to pursue and/or to continue any claim relating to the measures underlying the claim made pursuant to this Treaty, on behalf of both the Investor and the Investment, before local courts in the Host State or in any other dispute settlement forum.
d) No more than three years have elapsed from the date on which the Investor first acquired, or should have first acquired, knowledge of the breach alleged in the Notice of Arbitration and knowledge that the Investor has incurred loss or damage, or one year from the conclusion of the request for local remedies initiated in the domestic courts.
e) The Investor consents in writing to arbitration in accordance with the procedures set out in this Treaty.
f) For the avoidance of doubt, the provisions in this Treaty relating to arbitration procedures shall prevail over those in the arbitration rules selected to govern the arbitration in the event of any inconsistency.
23.5 Exception for Interim Relief
Notwithstanding paragraph 23.4(c), the Investor may initiate or continue an action that seeks interim relief before a judicial or administrative tribunal of the State Party, for the sole purpose of preserving the Investors rights and interests during the pendency of the arbitration, and that does not involve the payment of monetary damages.
23.6 Applicable Arbitration Rules Subject to Article 23.3, an Investor may submit an arbitration claim: a) under the ICSID Convention and the ICSID Rules of Procedure for Arbitration Proceedings, provided that both the Host State and the other State Party are parties to the ICSID Convention;
b) under the ICSID Additional Facility Rules, provided that either the Host State or the other State Party is a party to the ICSID Convention;
c) under the UNCITRAL Arbitration Rules; or
d) to the East African Court of Justice
22.10 Procedural and substantive oral hearings shall be open to the public. This may be achieved though live broadcasting of the hearings by Internet broadcast.
22.11 An arbitral tribunal may take such steps as are necessary, by exception, to protect confidential business information in written form or at oral hearings.
22.12 No claims under this provision may be commenced if more than three years have elapsed from the date on which the Investor first acquired, or should have first acquired, knowledge of the breach alleged in the arbitration claim and knowledge that the Investor has incurred loss or damage; or one year from the conclusion of the request for local remedies initiated in the domestic courts.