(c) to purchase, use, or accord a preference to a good produced or service provided in its territory, or to purchase a good or service from a person in its territory;
(d) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that investment;
(e) to restrict sales of a good or service in its territory that the investment produces or provides by relating those sales to the volume or value of its exports or foreign exchange earnings;
(f) to transfer technology, a production process, or other proprietary knowledge to a person in its territory; or
(g) to supply exclusively from the territory of the Party a good that the investment produces or a service that the investment provides to a specific regional market or to the world market.
2. A measure that requires an investment to use a technology to meet generally applicable health, safety, or environmental requirements is not inconsistent with paragraph 1(f). For greater certainty, Articles 10.4 and 10.5 apply to the measure.
3. A Party may not make the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, conditional on compliance with any of the following requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use, or accord a preference to a good produced in its territory, or to purchase a good from a producer in its territory;
(c) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that investment; or
(d) to restrict sales of a good or service in its territory that the investment produces or provides by relating those sales to the volume or value of its exports or foreign exchange earnings.
4. Paragraph 3 does not prevent a Party from making the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, conditional on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or to carry out research and development, in its territory.
5. Paragraphs 1 and 3 do not apply to a requirement other than the requirements set out in those paragraphs.
6. This Article does not preclude enforcement of a commitment, undertaking, or requirement between private parties.
Article 10.8. Senior Management and Boards of Directors
1. A Party may not require an enterprise of that Party, that is also an investment of an investor of the other Party, to appoint individuals of a particular nationality to senior management positions.
2. A Party may require that a majority of the board of directors, or a committee, of an enterprise of that Party that is an investment of an investor of the other Party, be of a particular nationality or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
Article 10.9. Reservations and Exceptions
1. Articles 10.4, 10.5, 10.7 and 10.8 do not apply to:
(a) an existing non conforming measure that is maintained by:
(i) the national government of a Party, as set out in its Schedule to Annex I, or
(ii) a sub-national government of a Party;
(b) the continuation or prompt renewal of a non-conforming measure referred to in subparagraph (a); or
(c) an amendment to a non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not diminish the conformity of the measure, with Articles 10.4, 10.5, 10.7 and 10.8, as it existed immediately before the amendment.
2. Articles 10.4, 10.5, 10.7 and 10.8 do not apply to a measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II.
3. A Party may not, under a measure adopted after the date of entry into force of this Agreement and set out in its Schedule to Annex II, require an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
4. In respect of intellectual property rights, a Party may derogate from Articles 10.4, 10.5 and subparagraph 1(f) of 10.7 in a manner that is consistent with the TRIPS Agreement and with the waivers to the TRIPS Agreement adopted pursuant to Article IX of the WTO Agreement.
5. Article 10.5 does not apply to treatment accorded by a Party pursuant to agreements, or with respect to sectors, set out in its Schedule to Annex II.
6. Articles 10.4, 10.5 and 10.8 do not apply to:
(a) procurement by a Party or a state enterprise; or
(b) a subsidy or grant provided by a Party or a state enterprise, including a government-supported loan, guarantee or insurance.
7. The provisions of:
(a) Articles 10.7(1)(a), (b) and (c), and (3)(a) and (b) do not apply to a qualification requirement for a good or service with respect to export promotion and foreign aid programs;
(b) Articles 10.7(1)(b), (c), (f) and (g), and (3)(a) and (b) do not apply to procurement by a Party or a state enterprise; and
(c) Articles 10.7(3)(a) and (b) do not apply to a requirement imposed by an importing Party relating to the content of a good necessary to qualify for a preferential tariff or preferential quota.
Article 10.10. Transfers
1. Each Party shall permit transfers relating to an investment of an investor of the other Party in the territory of the Party to be made freely and without delay. Those transfers include:
(a) fees, returns in kind, and other amounts derived from the investment, including profits, dividends, interest, capital gains, royalty payments, management fees, and technical assistance;
(b) proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment;
(c) payments made under a contract entered into by the investor, or its investment, including payments made pursuant to a loan agreement;
(d) payments made pursuant to Article 10.11 and Article 10.12;
(e) payments arising under Section C; and
(f) contributions to capital.
2. Each Party shall permit transfers relating to an investment of an investor of the other Party to be made in a freely usable currency at the market rate of exchange in effect on the date of transfer.
3. A Party may not require one of its investors to transfer or penalize one of its investors for failure to transfer the income, earnings, profits, or other amounts derived from, or attributable to, an investment in the territory of the other Party.
4. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer through the equitable, non discriminatory and good faith application of its domestic law relating to:
(a) bankruptcy, insolvency, or the protection of the rights of a creditor;
(b) issuing, trading, or dealing in securities;
(c) a criminal or penal offence;
(d) reports of transfers of currency or other monetary instruments; or
(e) compliance with an order or judgment in judicial or administrative proceedings.
5. Paragraph 3 does not prevent a Party from imposing a measure through the equitable, non discriminatory and good faith application of its domestic law relating to the matters referred to in paragraph 4.
6. Notwithstanding paragraph 1, a Party may restrict transfers of returns in kind in circumstances where it could otherwise restrict those transfers under Article XI of the GATT 1994, and as set out in paragraph
Article 10.11. Expropriation
1. A Party may not expropriate or nationalize an investment of an investor of the other Party in its territory, directly or indirectly, through a measure that has an effect
equivalent to expropriation or nationalization ("expropriation"), except:
(a) for a public purpose;
(b) on a non-discriminatory manner;
(c) in accordance with due process of law; and
(d) on payment of prompt, adequate, and effective compensation in accordance with paragraphs 2 through 6.
2. The compensation referred to in paragraph 1(d) shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place ("date of expropriation"), and shall not reflect any change in value that occurs as a result of prior knowledge of the intended expropriation. The valuation criteria includes going concern value, asset value (including declared tax value of tangible property), and other criteria, as appropriate, to determine fair market value.
3. Compensation shall be paid without delay and be fully realizable and freely transferable. Compensation shall be payable in a freely convertible currency and shall include interest at a commercially reasonable rate for that currency from the date of expropriation until the date of payment.
4. The affected investor shall have the right under the law of the expropriating Party to a prompt review of its case and of the valuation of the investment by a judicial or other independent authority of that Party in accordance with the principles set out in this Article.
5. This Article does not apply to a compulsory license granted in relation to intellectual property rights, or to the revocation, limitation, or creation of an intellectual property right, provided that the issuance, revocation, limitation or creation is consistent with the WTO Agreement.
6. For the purposes of this Article, a non-discriminatory measure of general application is not be considered a measure equivalent to an expropriation of a debt security or loan covered by this Chapter solely on the ground that the measure imposes a cost on the debtor that causes the debtor to default on the debt.
7. For greater certainty, Article 10.11(1) shall be interpreted in accordance with Annex 10.11.
Article 10.12. Compensation for Losses
1, Notwithstanding Article 10.9(6)(b), each Party shall accord to an investor of the other Party, and to an investment of an investor of the other Party, non-discriminatory treatment with respect to a measure it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife.
2. Paragraph 1 does not apply to an existing measure relating to a subsidy or grant that would be inconsistent with Article 10.4, but for Article 10.9(6)(b).
Article 10.13. Special Formalities and Information Requirements
1. Article 10.4 does not prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with the establishment of an investment by an investor of the other Party, such as a requirement that an agent of an investor be a resident of the Party or that an investment be legally constituted under the laws or regulations of the Party, provided that those formalities do not materially impair the protections afforded by a Party to investors of the other Party or investments of investors of the other Party under this Chapter.
2. Notwithstanding Articles 10.4 and 10.5, a Party may require an investor of the other Party, or its investment in its territory, to provide routine information concerning that investment solely for informational or statistical purposes. The Party shall protect any confidential information from disclosure that would prejudice the competitive position of the investor or the investment. This paragraph does not prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its law.
Article 10.14. Denial of Benefits
1. A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to an investment of that investor if the investor of a non-Party owns or controls 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 Chapter were accorded to the enterprise or to its investment.
2. A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to an investment of that investor if the investor of a non- Party or of the denying Party owns or controls the enterprise and the enterprise does not have substantial business activity in the territory of the Party under whose domestic law it is constituted or organized.
Article 10.15. Health, Safety and Environmental Measures
The Parties recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures. Accordingly, a Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, those measures to encourage the establishment, acquisition, expansion or retention in its territory of an investment of an investor. If a Party considers that the other Party has offered this encouragement, it may request discussions with the other Party and the two Parties shall enter into discussions with a view to avoiding any such encouragement.
Article 10.16. Corporate Social Responsibility
Each Party should encourage enterprises operating within its territory, or entreprises subject to its jurisdiction, to voluntarily incorporate internationally recognized standards of corporate social responsibility in their internal policies, such as those statements of principle that are endorsed or supported by the Parties. These principles address issues such as labour, the environment, human rights, community relations, and anti-corruption.
Article 10.17. Subrogation
1. If a Party or an agency of a Party makes a payment to one of its investors under a guarantee or a contract of insurance that it has entered into in respect of an investment, the other Party shall recognize the validity of the subrogation in favour of that Party or agency to a right or title held by the investor.
2. A Party or an agency of a Party, which is subrogated to the rights of an investor in accordance with paragraph 1, is entitled the same rights as those of the investor in respect of the investment. These rights may be exercised by the Party or an agency of the Party, or by the investor if the Party or an agency of the Party so authorizes.
Section C. Settlement of Disputes between a Party and an Investor of the other Party
Article 10.18. Purpose
Without prejudice to the rights and obligations of the Parties under Chapter Twenty-One (Institutional Arrangements and Dispute Settlement Procedures),this Section establishes a mechanism for the settlement of investment disputes.
Article 10.19. Claim by an Investor of a Party on Its Own Behalf
1. An investor of a Party may submit to arbitration under this Section a claim that the other Party has breached an obligation under:
(a) Section B, other than an obligation under Articles 10.3(2), 10.10, 10.13, 10.15 or 10.16;
(b) Article 15.3(a) (Competition Policy, Monopolies and State Enterprises – Monopolies) or Article 15.4(2) (Competition Policy, Monopolies and State Enterprises – State Enterprises), only to the extent that a designated monopoly or state enterprise has acted in a manner inconsistent with the Party’s obligations under Section B, other than an obligation under Article 10.10, 10.13, 10.15 or 10.16; or
(c) a legal stability agreement referred to in paragraph 2,
and that the investor has incurred loss or damage by reason of, or arising out of, that breach.
2. A claim by an investor that a tax measure of a Party is in breach of a legal stability agreement between a national government authority of a Party and the investor concerning an investment may be submitted to arbitration under this Section unless:
(a) the legal stability agreement between the national government authority of a Party and the investor precede the entry into force of this Agreement; or
(b) the taxation authorities of the Parties, within 6 months of being notified by the investor of its intention to submit the claim to arbitration, jointly determine that the measure does not contravene that legal stability agreement. The investor shall refer the issue of whether a taxation measure does not contravene a legal stability agreement for a determination to the taxation authorities of the Parties when the investor gives notice under Article 10.21.
3. An investor may not make a claim if more than 3 years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage.
Article 10.20. Claim by an Investor of a Party on Behalf of an Enterprise
1. An investor of a Party, on behalf of an enterprise of the other Party that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim that the other Party has breached an obligation under:
(a) Section B other than an obligation under Articles 10.3(2), 10.10, 10.13, 10.15 or 10.16;
(b) Article 15.3(a) (Competition Policy, Monopolies and State Enterprises – Monopolies) or Article 15.4(2) (Competition Policy, Monopolies and State Enterprises – State Enterprises), only to the extent that a designated monopoly or state enterprise has acted in a manner inconsistent with the Party’s obligations under Section B, other than an obligation under Article 10.10, 10.13, 10.15 or 10.16; or
(c) a legal stability agreement referred to in paragraph 2, and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
2. An investor of a Party may submit a claim under this Section on behalf of an enterprise that the investor owns or controls directly or indirectly, that a tax measure of that Party is in breach of a legal stability agreement between a national government authority of that Party and the enterprise unless:
(a) the legal stability agreement between the national government authority of a Party and the enterprise preceded the entry into force of this Agreement; or
(b) the taxation authorities of the Parties, within 6 months of being notified by the investor of its intention to submit the claim to arbitration, jointly determine that the measure does not contravene that legal stability agreement. The investor shall refer the issue of whether a taxation measure contravenes a legal stability agreement for a determination to the taxation authorities of the Parties at the same time that it gives notice under Article 10.21.
3. An investor may not make a claim on behalf of an enterprise described in paragraph 1 if more than 3 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.
4. If an investor makes a claim under this Article and the investor or a non controlling investor in the enterprise makes a claim under Article 10.19 arising out of the same events that gave rise to the claim under this Article, and two or more of the claims are submitted to arbitration under Article 10.23, the claims should be heard together by a Tribunal established under Article 10.29, unless the Tribunal finds that the interests of a disputing party would be prejudiced as a result.
5. An investment may not make a claim under this Section.
Article 10.21. Notice of Intent to Submit a Claim to Arbitration
1. The disputing investor shall deliver to the disputing Party written notice of its intent to submit a claim to arbitration at least 6 months before submitting the claim. The notice shall include the following:
(a) the name and address of the disputing investor and, if a claim is made under Article 10.20, the name and address of the enterprise;
(b) the provisions of this Agreement alleged to have been breached and any other relevant provisions;
(c) the legal and the factual basis for the claim, including the measures at issue; and
(d) the relief sought and the approximate amount of damages claimed.
2. The disputing investor shall also deliver, with its notice of intent to submit a claim to arbitration, evidence that it is an investor of the other Party.
Article 10.22. Settlement of a Claim Through Consultation
1. Before a disputing investor may submit a claim to arbitration, the disputing parties shall first hold consultations to attempt to settle a claim amicably.
2. Consultations shall be held within 6 months of the submission of the notice under Article 10.21, unless the disputing parties decide otherwise.
3. The place of consultation shall be the capital of the disputing Party, unless the disputing parties decide otherwise.
Article 10.23. Submission of a Claim to Arbitration
1. Except as provided in Annex 10.23, a disputing investor who meets the conditions precedent provided for in Article 10.24 may submit the claim to arbitration under:
(a) the ICSID Convention, if both Parties are party to the Convention;
(b) the ICSID Additional Facility Rules , if only one Party is a party to the ICSID Convention;
(c) the UNCITRAL Arbitration Rules; or
(d) any other rules designated by the Commission that are available for arbitration under this Section.
2. The Commission has the power to make rules supplementing the applicable arbitral rules and may amend any rules of its own making. Those rules shall be binding on a Tribunal established under this Section, and on individual arbitrators serving on that Tribunal.
3. The applicable arbitration rules shall govern the arbitration unless they are modified by this Agreement or supplemented by any rules adopted by the Commission under this Section.
Article 10.24. Conditions Precedent to Submission of a Claim to Arbitration
1. A disputing investor may submit a claim to arbitration under Article 10.19 only if:
(a) the disputing investor consents to arbitration in accordance with the procedures set out in this Agreement;
(b) at least 6 months have elapsed since the events giving rise to the claim;
(c) not more than 3 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;
(d) the disputing investor has delivered the notice required under Article 10.21, in accordance with the requirements of that Article, at least 6 months prior to submitting the claim; and
(e) the disputing investor and, if the claim is for loss or damage to an interest in an enterprise of the other Party that the disputing investor owns or controls directly or indirectly, the enterprise, waive their right to initiate or continue before an administrative tribunal or court under the domestic law of the other Party, or other dispute settlement procedures, proceedings with respect to the measure of the disputing Party that is alleged to be a breach referred to in Article 10.19, except for proceedings for injunctive, declaratory, or other extraordinary relief, not involving the payment of monetary damages, before an administrative tribunal or court under the domestic law of the disputing Party.
2. A disputing investor may submit a claim to arbitration under Article 10.20 only if:
(a) both the disputing investor and the enterprise consent to arbitration in accordance with the procedures set out in this Agreement;
(b) at least 6 months have elapsed since the events giving rise to the claim;
(c) not more than 3 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;
(d) the disputing investor has delivered the notice required under Article 10.21, in accordance with the requirements of that Article, at least 6 months prior to submitting the claim; and
(e) both the disputing investor and the enterprise waive their right to initiate or continue before an administrative tribunal or court under the domestic law of the other Party, or other dispute settlement procedures, proceedings with respect to the measure of the disputing Party that is alleged to be a breach referred to in Article 10.19, except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of monetary damages, before an administrative tribunal or court under the domestic law of the disputing Party.
3. A consent and waiver required by this Article shall be in the form provided for in Annex 10.24, shall be delivered to the disputing Party and shall be included in the submission of a claim to arbitration.
4. A waiver from the enterprise under paragraph 1(e) or 2(e) shall not be required if a disputing Party has deprived a disputing investor of control of an enterprise.
5. Failure to meet any of the conditions precedent provided for in paragraphs 1 through 3 nullifies the consent of the Parties given in Article 10.25.
6. An investor may submit a claim relating to a taxation measure covered by this Agreement to arbitration, only if the taxation authorities of the Parties fail to reach the joint determinations specified in Article 22.4 (Exceptions – Taxation), Articles 10.19(2) or 10.20(2) within 6 months of being notified in accordance with these provisions.
Article 10.25. Consent to Arbitration
1. Each Party consents to the submission of a claim to arbitration in accordance with the terms set out in this Agreement.
2. The consent given in paragraph 1 and a disputing investor's submission of a claim to arbitration satisfies the following requirements:
(a) Chapter Il of the ICSID Convention (Jurisdiction of the Centre) and the ICSID Additional Facility Rules for written consent of the parties;
(b) Article II of the New York Convention for an agreement in writing; and
(c) Article 1 of the Inter-American Convention for an agreement.
Article 10.26. Arbitrators
1. Except in respect of a Tribunal established under Article 10.29, and unless the disputing parties decide otherwise, the Tribunal shall consist of 3 arbitrators. Each disputing party shall appoint one arbitrator. The disputing parties shall jointly appoint the third, who shall be the presiding arbitrator.