(b) “disputing parties” means the claimant and the respondent;
(c) “disputing party” means either the claimant or the respondent;
(e) “enterprise” means any entity constituted or organised under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including a corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organisation; and a branch of an enterprise;
(f) “enterprise of a Party” means an enterprise constituted or organised under the law of a Party, and a branch (1) located in the territory of a Party and carrying out business activities there;
(g) “freely useable currency” means any currency as determined by the IMF under the Articles of Agreement of the International Monetary Fund and any amendments thereto;
(h) “government procurement” means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale, or use in the production or supply of goods or services for commercial sale or resale;
(i) “ICLP” means the Arbitration Centre of the Institute for the Development of Commercial Law and Practice in Sri Lanka;
(j) “intellectual property rights” means:
(i) copyright and related rights;
(ii) patents;
(iii) trademarks;
(iv) designs;
(v) layout-designs (topographies) of integrated circuits;
(vi) geographical indications; and
(vii) protection of undisclosed information;
(k) “investment” means every kind of asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, (2) which includes the commitment of capital or other resources, a certain duration, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include: (3)(4)
(i) an enterprise;
(ii) shares, stock, and other forms of equity participation in an enterprise;
(iii) bonds, debentures, loans and other debt instruments, (5)(6) of an enterprise;
(iv) turnkey, construction, management, production, concession, revenue-sharing, and other similar contracts;
(v) claims to money (7) or to other assets, or to any contractual performance having an economic value associated with an investment;
(vi) intellectual property rights; (8)
(vii) licences, authorisations, permits, and similar rights conferred pursuant to applicable domestic law;
(viii) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens, and pledges; (9)
(l) “investor of a Party” means a Party, a natural person or an enterprise of a Party recognised as a legal entity by the laws of the other Party, that has made a covered investment in the territory of the other Party;
(m) “investor of a non-Party” means, with respect to a Party, an investor that has made an investment in the territory of that Party, that is not an investor of either Party;
(n) “measures” means any measure taken by a Party, whether in the form of a law, regulation, rule, procedure, decision or administrative action, and includes measures taken by:
(i) central, regional or local governments and authorities; and
(ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;
(o) “national” means”
(i) with respect to the Republic of Singapore, any person who is a citizen of
Singapore within the meaning of its Constitution and its domestic laws; and
(ii) with respect to Sri Lanka, any person who is a citizen of Sri Lanka within the meaning of its Constitution and its domestic laws;
(p) “New York Convention” means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted at the United Nations in New York on 10 June 1958;
(q) “respondent” means the Party that is a party to an investment dispute;
(r) “return” means an amount yielded by or derived from an investment, including profits, dividends, interest, capital gains, royalty payments, payments in connection with intellectual property rights, and all other lawful income. For the purposes of the definition of “investment”, returns that are invested shall be treated as investments and any alteration of the form in which assets are invested or reinvested shall not affect their character as investments;
(s) “SIAC” means the Singapore International Arbitration Centre;
(t) “SLNAC” means the Sri Lanka National Arbitration Centre; and
(u) “UNCITRAL Arbitration Rules” means the arbitration rules of the United Nations Commission on International Trade Law, as adopted by the United Nations General Assembly on 15 December 1976, as revised in 2010.
(a) claims to money that arise solely from commercial contracts for the sale of goods or services by a natural person or enterprise in the territory of a Party to a natural person or enterprise in the territory of the other Party;
(b) the domestic financing of such contracts; or
(c) any order, judgment or arbitral award related to sub-paragraph (a) or (b) above.
Section 10-A . INVESTMENT PROTECTION
Article 10.2. Scope and Coverage
1. This Chapter shall apply to measures adopted or maintained by a Party relating to:
(a) investors of the other Party; and
(b) all investments made by investors of one Party in the territory of the other Party, whether made before or after the entry into force of this Agreement.
2. This Chapter shall not apply to:
(a) government procurement by a Party;
(b) services supplied in the exercise of governmental authority within the territory of the respective Party. For purposes of this Chapter, a service supplied in the exercise of governmental authority means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers;
(c) subsidies or grants provided by a Party, or to any conditions attached to the receipt or continued receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to investors of the Party or investments of investors of the Party, including government-supported loans, guarantees and insurance;
(d) any measures adopted or maintained by a Party to the extent that they are covered by Chapter 7 (Trade in Services). Notwithstanding the foregoing, Article 10.3 (Minimum Standard of Treatment), Article 10.6 (Compensation for Losses), Article 10.10 (Expropriation), Article 10.11 (Transfers), Article 10.12 (Subrogation) and Section 10-B (Investment Disputes Between a Party and an Investor) shall apply, mutatis mutandis, to any measure affecting the supply of service by a service supplier of a Party through commercial presence in the territory of the other Party pursuant to Chapter 7 (Trade in Services), but only to the extent that any such measures relate to an investment and an obligation under this Chapter, regardless of whether such a service sector is scheduled in the Party’s Schedule of Specific Services Commitments in Annex 7-A (Sri Lanka) and Annex 7-B (Singapore); and
(e) any taxation measure, including measures taken to enforce taxation obligations.
3. Notwithstanding any other provisions of this Chapter, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of this Chapter, they shall not be used as a means of avoiding the Party’s commitments or obligations under this Chapter.
4. In the event of any inconsistency between this Chapter and another Chapter, the other Chapter shall prevail over this Chapter to the extent of the inconsistency. For the avoidance of doubt, this paragraph shall not be deemed to impose additional obligations on a Party other than the obligations set out in this Chapter in respect of any dispute under Section 10-B (Investor-State Dispute Settlement).
5. The requirement by a Party that a service provider of the other Party post a bond or other form of financial security as a condition of providing a service into its territory does not of itself make this Chapter applicable to the provision of that cross-border service. This Chapter applies to that Party’s treatment of the posted bond or financial security, to the extent that such bond or financial security is an investment.
6. For greater certainty, the provisions of this Chapter do not impose any obligation on either Party in relation to any act or fact that took place or any situation that ceased to exist before the date of entry into force of this Agreement.
7. In the event that a Party extends protection to the establishment, acquisition or expansion of investments to any non-Party after the signing of this Agreement, the other Party shall have the right to initiate a review of the commitments under this Chapter, to extend the provisions of this Chapter to the establishment, acquisition and expansion of investments in like circumstances.
8. Articles 10.4 (National Treatment), 10.5 (Most-Favoured-Nation Treatment), 10.7 (Performance Requirements) and 10.8 (Senior Management and Board of Directors) do not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities, as set out in its Schedule to Annex 10-B (Sri Lanka) and Annex 10-C (Singapore).
9. Neither Party may, under any measure adopted after the date of entry into force of this Agreement and set out in its Schedule to Annex 10-B (Sri Lanka) and Annex 10-C (Singapore), 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.
10. Articles 10.4 (National Treatment) and 10.5 (Most-Favoured-Nation Treatment) do not apply to any measure that is an exception to, or derogation from, a Party’s obligations under Chapter 13 (Intellectual Property) and the TRIPS Agreement, as specifically provided for in that Agreement.
Article 10.3. Minimum Standard of Treatment
1. Each Party shall accord to investments treatment in accordance with customary international law minimum standard of treatment of aliens, (10) including “fair and equitable treatment” and “full protection and security”.
2. For greater certainty, paragraph 1 of this Article prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to investments. The concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligation to provide:
(a) “fair and equitable treatment” requires the Parties not to deny justice in criminal, civil or administrative adjudicatory proceedings in accordance with the principle of due process; and
(b) “full protection and security” requires each Party to provide the level of police protection in relation to the physical security of investors and investments as required under customary international law.
3. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.
Article 10.4. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, (11) to its own investors with respect to the management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the management, conduct, operation, and sale or other disposition of investments.
Article 10.5. Most-Favoured-Nation Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of any non-Party with respect to the management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of investors of any non- Party with respect to the management, conduct, operation, and sale or other disposition of investments.
3. For greater certainty, paragraphs 1 and 2 of this Article shall not be construed as granting to investors options or procedures for the settlement of disputes other than those set out in Section 10-B (Investor-State Dispute Settlement).
4. The treatment, as set forth in paragraphs 1 and 2 of this Article, shall not include:
(a) any preferential treatment accorded to investors or their investments under any existing bilateral, regional, multilateral or international agreements or arrangements or any forms of economic and regional cooperation with any non-Party;
(b) in the case of Singapore, any measure that accords preferential treatment to ASEAN member states under any agreements between all ASEAN member states, in force or signed after the date of entry into force of this Agreement. For the avoidance of doubt, such agreements do not include agreements between ASEAN member states and non-ASEAN member states; and
(c) in the case of Sri Lanka, any measure that accords preferential treatment to SAARC member states under any agreements between all SAARC member states, in force or signed after the date of entry into force of this Agreement. For the avoidance of doubt, such agreements do not include agreements between SAARC member states and non-SAARC member states.
Article 10.6 . Compensation for Losses
1. Investors of one Party whose investments in the territory of the other Party suffer losses owing to war or other armed conflict, revolution, a state of national emergency, insurrection, riot, or any other similar event in the territory of the latter Party, shall be accorded by the latter Party treatment, as regards restitution, indemnification, compensation or other settlement, no less favourable than that which the latter Party accords to investments of its own investors or investments of investors of any non- Party, whichever is more favourable, to the investment of the investor of the former Party.
2. Notwithstanding paragraph 1 of this Article, if an investor of a Party, in the situations referred to in paragraph 1 of this Article, suffers a loss in the territory of the other Party resulting from:
(a) requisitioning of its investment or part thereof by the latter’s forces or authorities; or
(b) destruction of its investment or part thereof by the latter’s forces or authorities, which was not required by the necessity of the situation,
the latter Party shall provide the investor restitution, compensation, or both, as appropriate, for such loss.
Article 10.7 . Performance Requirements
The provisions of Annex 1A to the TRIMs Agreement, which are not specifically mentioned in or modified by this Chapter, shall apply, mutatis mutandis, to this Chapter.
Article 10.8. Senior Management and Boards of Directors
1. A Party shall not require that an enterprise of that Party that is an investment appoint to senior management positions natural persons of any particular nationality.
2. A Party may require that a majority of the board of directors, or any committee thereof, of an enterprise of that Party that is an investment, 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 of the other Party to exercise control over its investment.
3. For the avoidance of doubt, nothing in this Article shall be construed to limit a Party from exercising its rights as a shareholder.
Article 10.9. Special Formalities and Treatment of Information
1. Nothing in Article 12.4 (National Treatment) shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with investments, such as residency requirements for registration or a requirement that investments be legally constituted under its laws or regulations, provided that such formalities do not materially impair the protections afforded by the Party to investors of the other Party and investments pursuant to this Chapter.
2. Notwithstanding Article 12.4 (National Treatment) and Article 12.5 (Most-Favoured- Nation Treatment), a Party may require an investor of the other Party or its investment to provide information concerning that investment solely for informational or statistical purposes. The Party shall protect such business information that is confidential from any disclosure that would prejudice the competitive position of the investor or the investment. Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its law.
Article 10.10. Expropriation (12)
1. Neither Party shall nationalise, expropriate or subject to measures having effect equivalent to nationalisation or expropriation (hereinafter referred to as “expropriation”) an investment unless such a measure is taken on a non- discriminatory basis, for a public purpose, in accordance with due process of law and upon payment of compensation in accordance with this Article.
2. The expropriation shall be accompanied by the payment of prompt, adequate and effective compensation. Compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation or impending expropriation became public knowledge. Such compensation shall be effectively realisable, freely transferable in accordance with Article 10.11 (Transfers) and made without delay. The compensation shall include interest at an appropriate and reasonable rate for that currency, accrued from the date of expropriation until the date of payment.
3. Notwithstanding paragraphs 1 and 2 of this Article, any measure of expropriation relating to land, which shall be as defined in the existing domestic legislation of the expropriating Party on the date of entry into force of this Agreement, shall be for a purpose and upon payment of compensation in accordance with the aforesaid legislation.
4. This Article does not apply to the issuance of compulsory licences granted in relation to intellectual property rights in accordance with the TRIPS Agreement, or to the revocation, limitation, or creation of intellectual property rights, to the extent that such issuance, revocation, limitation, or creation is consistent with Chapter 13 (Intellectual Property) and the TRIPS Agreement. (13)
Article 10.11. Transfers
1. Each Party shall permit all transfers relating to an investment to be made freely and without delay (14) into and out of its territory. Such transfers include:
(a) the initial capital and additional amounts to maintain or increase an investment;
(b) profits, dividends, capital gains, and proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment;
(c) interest, royalty payments, management fees, and technical assistance and other fees;
(d) payments made under a contract entered into by the investor, or its investment, including payments made pursuant to a loan agreement;
(e) payments made pursuant to Article 10.6 (Compensation for Losses) and Article 10.10 (Expropriation); and
(f) payments arising under Section 10-B (Investor-State Dispute Settlement).
2. Each Party shall permit such transfers to be made in a freely convertible currency at the market rate of exchange prevailing at the time of transfer.
3. Each Party shall permit returns in kind relating to an investment to be made as authorised or specified in an investment authorisation or other written agreement between the Party (15) and an investment or an investor of the other Party.
4. Notwithstanding paragraphs 1, 2, and 3 of this Article, a Party may delay or prevent a transfer through the equitable, non-discriminatory, and good faith application of its laws relating to:
(a) bankruptcy, insolvency, or the protection of the rights of creditors;
(b) issuing, trading, or dealing in securities, futures, options, or derivatives;
(c) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
(d) criminal or penal offences; (16)
(e) ensuring compliance with orders or judgments in judicial or administrative proceedings;
(f) social security, (17) public retirement or compulsory savings schemes; or
(g) labour and severance entitlements of employees.
5. Nothing in this Chapter shall affect the rights and obligations of the members of the IMF under the Articles of Agreement of the International Monetary Fund, including the use of exchange actions which are consistent with such Articles of Agreement, provided that a Party shall not impose restrictions on any capital transactions inconsistently with its obligations under this Chapter regarding such transactions, except under Article 17.6 (Restrictions to Safeguard the Balance-of-Payments) of Chapter 17 (Institutional, General and Final Provisions) or at the request of the IMF.
Article 10.12. Subrogation
1. If a Party (or any agency, institution, statutory body or corporation designated by it) makes a payment to any of its investors under a guarantee, a contract of insurance or other form of indemnity it has granted in respect of an investment, against non- commercial risks, the other Party shall recognise the subrogation or transfer of any right or title in respect of such investment. The Party or its designated agency is entitled by virtue of subrogation to exercise the rights and enforce the claims of that investor. The subrogated or transferred right or claim shall not be greater than the original right or claim of the investor.
2. Where a Party (or any agency, institution, statutory body or corporation designated by it) has made a payment to an investor of that Party and has taken over rights and claims of the investor, that investor shall not, unless authorised to act on behalf of the Party or the designated agency of the Party making the payment, pursue those rights and claims against the other Party.
Section 10-B. INVESTOR-STATE DISPUTE SETTLEMENT
Article 10.13. Scope
1. This Section shall apply to disputes between a Party and an investor of the other Party (18) concerning an alleged breach of Articles 10.3 (Minimum Standard of Treatment), 10.4 (National Treatment), 10.5 (Most-Favoured-Nation Treatment), 10.6 (Compensation for Losses), 10.9 (Special Formalities and Treatment of Information), 10.10 (Expropriation), 10.11 (Transfers), and 10.12 (Subrogation), which causes loss or damage to that investor or its investment.
2. This Section shall apply to losses and damages incurred in respect of activities carried out prior to the establishment of an investment only where such activities result in an investment being established in the Party hosting the investment.
3. This Section shall not apply to any dispute concerning any measure adopted or maintained or any treatment accorded to investors or investments by a Party in respect of tobacco or tobacco-related products (19) that is aimed at protecting or promoting human health.
Article 10.14. Institution of Arbitral Proceedings
1. The disputing parties shall initially seek to resolve the dispute by consultations.
2. In the event of an investment dispute, the claimant may deliver to the respondent a written request for consultations. Such written request shall specify the measure(s) complained of and how such measure(s) has given rise to the dispute.
3. Where the dispute cannot be resolved as provided for under paragraphs 1 and 2 of this Article within six (6) months from the date of receipt of such written request for consultations, the claimant shall exhaust any domestic remedy provided in the respondent State. In the event:
(a) the claimant has invoked domestic remedies and such remedies have not been concluded within a period of twenty-four (24) months from the date that notice invoking such domestic remedies was served on the respondent State; or
(b) the claimant has invoked and exhausted all domestic remedies,
the claimant may have recourse to the dispute settlement procedures in this Section.
4. Subject to paragraph 3 of this Article, a claimant may submit to arbitration: (20)
(a) a claim, on its own behalf, that the respondent has breached an obligation under this Agreement and the claimant has incurred loss or damage by reason of, or arising out of, that breach; or
(b) a claim, on behalf of an enterprise of the respondent that is an enterprise that the claimant owns or controls, (21) that the respondent has breached an obligation under this Agreement and the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
5. A claimant may submit the claim to arbitration:
(a) under the SIAC and the SIAC Arbitration Rules;
(b) to the ICLP or the SLNAC;
(c) under the UNCITRAL Arbitration Rules; or