Bahrain - Hungary BIT (2024)
Previous page

7. The proceeding shall be suspended upon the filing of the notice of the challenge until a decision on the challenge has been made, except to the extent that the disputing patties agree to continue the proceeding. 

Article 14. Settlement of Disputes between the Contracting Parties

1. Disputes between the Contracting Parties concerning the interpretation or application of this Agreement shall, if possible, be settled through consultation or negotiation.

2. If the dispute cannot be thus settled within six months, it shall upon the request of either Contracting Party, be submitted to an Aibitral Tribunal of three members, in accordance with the provisions of this Article.

3. The Arbitral Tribunal shall be constituted for each individual case in the following way. Within two months from the date of the receipt of the request for arbitration, each Contracting Party shall appoint one member of the Tribunal. These two members shall then select a national of a third State who shall be appointed the Chairman of the Tribunal (hereinafter referred to as the "Chairman"). The Chairman shall be appointed within three months from the date of appointment of the other two members.

4. If within the periods specified in paragraph 3 of this Article the necessary appointments have not been made, a request may be made to the President of the International Court of Justice to make the appointments. If the President happens to be a national of either Contracting Party, or if the President is otherwise prevented from discharging the said function, the Vice-President shall be invited to make the appointments. lf the Vice-President also happens to be a national of either Contracting Party or 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 Contracting Party shall be invited to make the appointments.

5. The Arbitral Tribunal shall reach its decision by a majority of votes.

6. The Tribunal shall issue its decision on the basis of the provisions of this Agreement, as well as of the universally accepted principles of international law.

7. Subject to other provisions made by the Contracting Parties, the Tribunal shall detern1 ine its procedure.

8. Each Contracting Party shall bear the cost of its own arbitrator and its representation in the arbitral proceedings; the cost of the Chair and the remaining costs shall be borne in equal parts by both Contracting Parties. The Arbitral Tribunal may make a different regulation concerning the costs.

9. The decisions of the Tribunal are final and binding for each Contracting Parties.

Article 15. Transparency

1. The "UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration" as adopted by the United Nations Commission on International Trade Law on 10 July 2013 shall apply to international arbitration proceedings initiated pursuant to Article 12 of this Agreement. Nothing in this Article requires a Contracting Party to make available to the public or otherwise disclose during or after the proceedings, including the hearing, confidential or protected information within the meaning of paragraph (2) of Article 7 of UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, or information the disclosure of which is protected under its domestic law, or which it considers to be contrary to its essential security interests.

2. With respect to regulations of general application adopted at central government level respecting any matter covered by this Agreement, the Contracting Parties shall publish the regulation in accordance with the relevant procedures of the Contracting Parties.

3. Upon the specific request of a Contracting Party consultations might be held on issues of best transparency practices.

4. Subject to paragraph 1 of this Article, nothing in this Agreement or the applicable arbitration mies shall prevent the exchange of information between the European Union and Hungary, or vice versa, which relates to international arbitration proceedings initiated pursuant to this Article 12.

Article 16. Application of other Rules and Special Commitments

Nothing in this Agreement shall be taken to limit the rights of investors of the Contracting Parties from benefiting from any more favourable treatment that may be provided for in any existing or future bilateral or multilateral agreement to which they are both parties.

Article 17. Applicability of this Agreement

1. This Agreement shall apply to investments made in the territory of one of the Contracting Parties in accordance with its laws and regulations by investors of the other Contracting Party prior to as well as after the entry into force of this Agreement, but shall not apply to any dispute or claim concerning an investment which arose, or which was settled before the entry into force of this Agreement.

2. For greater certainty, this Agreement provides only post-establishment protection and does not cover the pre-establishment phase or matters of market access.

Article 18. Consultations

Upon request by either Contracting Party, the other Contracting Party shall agree to consultations on the interpretation or application of this Agreement. Upon request by either Contracting Party, information shall be exchanged on the impact that the laws, regulations, decisions, administrative practices or procedures, or policies of the other Contracting Party may have on investments covered by this Agreement.

Article 19. Exceptions

1. Nothing in this Agreement shall prevent a Contracting Party from adopting or maintaining measures for prudential reasons, such as:

a. the protection of investors, depositors, policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier:

b. ensuring the integrity and stability of a Contracting Party's financial system. Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the Contracting Party's commitments or obligations under the Agreement.

2. Nothing in this Agreement shall be construed as requiring a party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.

3. Where a Contracting Party experiences serious balance of payments or external financial difficulties, or threat thereof, it may adopt or maintain restrictive measures with regard to transfers. Such measures shall:

a. be consistent with other international obligations of the Contracting Party, and with the Articles of Agreement of the International Monetary Fund;

b. not exceed those necessary to deal with the difficulties addressed under this paragraph;

c. be temporary and phased out progressively;

d. avoid unnecessary damage to the commercial, economic and financial interests of the other Contracting Party;

e. be non-discriminatory compared to third countries in like situations. A Contracting Party maintaining or having adopted measures referred to in this paragraph shalI promptly notify them to the other Contracting Party.

4. Nothing in this Agreement shall be construed:

a. as requiring a Contracting Party to provide any information the disclosure of which it considers contrary to its essential security interests;

b. to prevent any Contracting Party from taking any actions that it considers necessary for the protection of its essential security interests

(i) relating to the production of or traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology, and to economic activities, carried out directly or indirectly for the purpose of supplying a military establishment,

(ii) taken in time of war or other emergency in international relations, or

(iii) relating to fissionable and fusionable materials or the materials from which they are derived; or

c. to prevent any Contracting Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

5. A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is a legal person and to investments of that investor, if investors of a third state own or control the first mentioned investor or the investments and:

a. the investor has no substantial business activities in the territory of the Contracting Party under whose law it is constituted, or

b. the denying Contracting Party adopts or maintains measures related to the maintenance of international peace and security, including the protection of human rights with respect to the third state that prohibit transactions with such investor and its investments or that would be violated or circumvented if the benefits of the Agreement were accorded to the investments of investors.

6. Dispute settlement according to Article 12 of this Agreement shall not be considered as treatment, preference or privilege.

7. 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, paragraphs J and 2 of Article 4 and Article 7 of this Agreement shall not be construed to prevent a Contracting Party from adopting or enforcing measures necessary:

a. to protect public security or public morals or to maintain public order; (1)

(1) The public security and public order exceptions may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.

b. to protect human, animal or plant life or health; (2)

(2) The Contracting Parties understand that the measures referred to in subparagraph (b) include environmental measures necessary to protect human, animal or plant life or health. 

c. to ensure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:

(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contracts;

(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; (iii) safety.

Article 20. Regional Economic Integration Organisation Rights and Obligations

Nothing in this Agreement shall prevent a Contracting Party from exercising its rights and fulfilling its obligations deriving from their membership in any existing or future economic integration agreement, such as free trade area, customs union, common market economic and monetary union, e.g. the European Union and the Co-operation Council for the Arab States of the Gulf ("GCC"), or as to oblige a Contracting Party to extend to the investors of the other Contracting Party and to their investments, the benefits of any treatment, preference or privilege by virtue of its membership or participation in such economic integration agreement.

Article 21. Service of Documents

1. Notices and other documents relating to Articles 12 and 14 of this Agreement shall be served on a Contracting Party by delivery to: a. with respect to the Kingdom of Bahrain: The Ministry of Foreign Affairs, P.O. Box 547, Manama, Kingdom of Bahrain; and b. with respect to Hungary: The Ministry of Foreign Affairs and Trade, P.O. Box 1525 Budapest, Pf. 28., Hungary.

2. Each Contracting Party shall make publicly available any changes to the name and address of the authorities referred to in paragraph l of this Article.

Article 22. Final Provisions, Entry Into Force, Duration, Termination and Amendments

1. The Contracting Parties shall notify each other through diplomatic channels that their internal procedure requirements for the entry into force of this Agreement have been complied with. This Agreement shall enter into force sixty (60) days after the receipt of the last notification.

2. This Agreement shall remain in force for a period of ten years and afterwards shall continue to be in force unless, either Contracting Party notifies in writing the other Contracting Party of its intention to terminate this Agreement. The notice of termination shall become effective one year after it has been received by the other Contracting Party but not earlier than the expiry of the initial period of ten years.

3. In respect of investments made prior to the termination of this Agreement, the provisions of this Agreement shall continue to be effective for a period of ten years from the date of tem1ination.

4. This Agreement may be amended by written agreement between the Contracting Parties. Any amendment shall be integral part of the Agreement and enter into force under the same procedure required for entering into force of the present Agreement. 

Conclusion

IN WITNESS WHEREOF, the undersigned duly authorized have signed this Agreement. DONE in duplicate at Manama, this 4th day of September 2024, in the Arabic, Hungarian and English languages, all texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.

FOR THE GOVERNMENT OF THE KINGDOM OF BAHRAIN

FOR THE GOVERNMENT OF HUNGARY

Attachments

Annex I. CODE OF CONDUCT FOR MEMBERS OF TRIBUNALS APPOINTED UNDER THE AGREEMENT BETWEEN THE GOVERNMENT OF THE KINGDOM OF BAHRAIN AND THE GOVERNMENT OF H1JNGARY FOR THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS

1. Definitions

For the purpose of this Code of Conduct, the following definitions apply: "member" means a person who has been appointed to serve as a member of a tribunal established pursuant to the applicable provisions of paragraph 3 of Article 12 of this Agreement between the Government of the Kingdom of Bahrain and the Government of Hungary for the promotion and reciprocal protection of investments (the "Agreement"); "assistant"' means a person who, under the terms of appointment of a member, assists the member, conducts research, or supports him or her in his or her duties; "candidate" means a person who is under consideration for appointment as member.

2. Governing Principles

Any candidate or member shall avoid impropriety and the appearance of impropriety, and shall observe high standards of conduct so that the integrity and impartiality of the dispute settlement proceeding is preserved.

3. Disclosure Obligations

1. Prior to confirmation of their appointment as members under paragraph 3 of Article 12 of this Agreement, candidates shall disclose to the disputing parties any past or present interest, relationship or matter that is likely to affect their independence or impai1iality, or that might reasonably be seen as creating a direct or indirect conflict of interest, or that creates or might reasonably be seen as creating an appearance of impropriety or bias. To this end, candidates shall make all reasonable efforts to become aware of any such interests, relationships or matters. The disclosure of past interests, relationships or matters shall cover at least the last five years prior to a candidate becoming aware that he or she is under consideration for appointment as member in a dispute under this Agreement.

2. Following their appointment, members shall at all times continue to make all reasonable efforts to become aware of any interests, relationships or matters referred to in Article 3 paragraph 1 of this Code of Conduct. Members shall at all times disclose such interests, relationships or matters throughout the performance of their duties by informing the disputing parties and the Contracting Parties. They shall also communicate matters concerning actual or potential violations of this Code of Conduct to the disputing parties and the Contracting Parties.

4. Independence, Impartiality and other Obligations of Members

1. In addition to the obligations established pursuant to Articles 2 and 3 of this Code of Conduct, members shall: 

a. get acquainted with this Code of Conduct;

b. be and appear to be, independent and impartial, and avoid any direct or indirect conflicts of interest;

c. not take instructions from any organisation or government with regard to matters before the tribunal for which they are appointed;

d. avoid creating an appearance of bias and not be influenced by self-interest, outside pressure, political considerations, public clamour, loyalty to a Contracting Party, disputing party or any other person involved or participating in the proceeding, fear of criticism or financial, business, professional, family or social relationships or responsibilities;

e. not, directly or indirectly, incur any obligation. or accept any benefit, enter into any relationship, or acquire any financial interest that \VOuld in any \Vay intertere, or appear to interfere, with the proper performance of their duties, or that is likely to affect their impartiality;

f. not use their position as a member to advance any personal or private interests and avoid actions that may create the impression that others are in a special position to influence them;

g. perform their duties thoroughly and expeditiously throughout the course of the proceeding, and with fairness and diligence;

h. avoid engaging in ex parte contacts concerning the proceeding;

i. consider only those issues raised in the proceeding and which are necessary for a decision or award and not delegate this duty to any other person.

2. Members shall take all appropriate steps to ensure that their assistants are aware of, and comply with, Articles 2 and 3, Article 4 paragraph 1 and Articles 5 and 6 of this Code of Conduct mutatis mutandis.

5. Obligations of Former Members

1. Former members shall avoid actions that may create the appearance that they were biased in carrying out their duties or derived advantage from the decisions or awards of the tribunal.

2. Former members shall undertake that for a period of three years after the end of their duties in relation to a dispute settlement proceeding under this Agreement they shall not:

a. become involved in any manner whatsoever in investment disputes directly and clearly connected with disputes, including concluded disputes, that they have dealt with as members of a tribunal established under this Agreement;

b. act as party-appointed member, legal counsel or party-appointed witness or expert of any of the disputing parties, in relation to investment disputes under this or other bilateral or multilateral investment treaties.

3. If the Secretary General of the IC SID is informed or becomes otherwise aware that a former member is alleged to have acted inconsistently with the obligations established in Article 5 paragraph 1 and 2, or any other part of this Code of Conduct while performing the duties of member of a tribunal in an investment dispute under this Agreement, it shall examine the matter, provide the opportunity to the fonner member to be heard, and after verification, inform:

a. the professional body or other such institution with which the former member is affiliated;

b. the Contracting Parties;

c. the disputing parties in the specific dispute; d. any other relevant international court or tribunal.

4. The Secretary General of the ICSID shall make public its decision to take the actions referred in paragraphs 3(a) to 3(d) above, together with the reasons thereof.

6. Confidentiality

1. No member or former member shall at any time disclose or use any non-public information concerning a proceeding or acquired during a proceeding, except for the purposes of that proceeding, and shall not, in any case, disclose or use any such information to gain personal advantage or advantage for others or to adversely affect the interest of others.

2. Members shall not disclose an order, decision, or award or parts thereof prior to publication.

3. Members or former members shall not at any time disclose the deliberations of the tribunal, or any views of other members forming part of the tribunal, except in an order, decision or award.

7. Expenses

Each member shall keep a record and render a final account of the time devoted to the procedure and of the expenses incurred, as well as the time and expenses of their assistants.

Previous page Page 2
  • Article   1 Definitions 1
  • Article   2 Treatment of Investors and Investments 1
  • Article   3 Investment and Regulatory Measures 1
  • Article   4 National and Most-Favoured-Nation Treatment 1
  • Article   5 Compensation for Losses 1
  • Article   6 Expropriation 1
  • Article   7 Transfers 1
  • Article   8 Subrogation 1
  • Article   9 Corporate Social Responsibility 1
  • Article   10 Investment and Environment 1
  • Article   11 Investment and Labour 1
  • Article   12 Settlement of Investment Disputes between a Contracting Party and an Investor of the other Contracting Party 1
  • Article   13 Impartiality and Independence of Arbitrators 1
  • Article   14 Settlement of Disputes between the Contracting Parties 2
  • Article   15 Transparency 2
  • Article   16 Application of other Rules and Special Commitments 2
  • Article   17 Applicability of this Agreement 2
  • Article   18 Consultations 2
  • Article   19 Exceptions 2
  • Article   20 Regional Economic Integration Organisation Rights and Obligations 2
  • Article   21 Service of Documents 2
  • Article   22 Final Provisions, Entry Into Force, Duration, Termination and Amendments 2
  • Annex I  CODE OF CONDUCT FOR MEMBERS OF TRIBUNALS APPOINTED UNDER THE AGREEMENT BETWEEN THE GOVERNMENT OF THE KINGDOM OF BAHRAIN AND THE GOVERNMENT OF H1JNGARY FOR THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS 2
  • 1 Definitions 2
  • 2 Governing Principles 2
  • 3 Disclosure Obligations 2
  • 4 Independence, Impartiality and other Obligations of Members 2
  • 5 Obligations of Former Members 2
  • 6 Confidentiality 2
  • 7 Expenses 2