Government or the ownership or control of assets of Government-owned enterprises or Government
controlled enterprises-
(a) from a Government in a Contracting State or from a corporation, authority or entity owned
or controlled by the Government in a Contracting State;
(b) to an investor or investment not owned or controlled by a Contracting Party or by
Government or by a corporation, authority or entity owned or controlled by Government in
the Contracting Party.
A. MONOPOLIES
1. Nothing in this Agreement shall be construed to prevent a Contracting Party from
maintaining, designating or eliminating a monopoly.
2. Each Contracting Party shall endeavour to accord non-discriminatory treatment when
designating a monopoly.
3. Each Contracting Party shall ensure that any monopoly that its national or sub-national
governments maintains or designates or any privately-owned monopoly that it designates
and any government monopoly that it maintains or designates:
(a) acts in a manner that is not inconsistent with the Contracting Party's obligations
under this Agreement wherever such a monopoly exercises any regulatory,
administrative or other governmental authority that the Contracting Party has
delegated to it in connection with the purchase or sale of the monopoly good or
service or any other matter.
(b) provides non-discriminatory treatment to investors of another Contracting Party and
their investments in its sale of the monopoly good or service in the relevant market;
(c) provides non-discriminatory treatment to investors of another Contracting Party and
their investments in its purchase of the monopoly good or service in the relevant
market. This paragraph does not apply to procurement by governmental agencies of
goods or services for government purposes and not with a view to commercial resale
or with a view to use in the production of goods or services for commercial sale;
(d) does not use its monopoly position, in a non-monopolised market in its territory, to
engage, either directly or indirectly, including through its dealing with its parent
company, its subsidiary or other enterprise with common ownership, in
anti-competitive practices that might adversely affect an investment by an investor of
another Contracting Party, including through the discriminatory provision of the
monopoly good or service, cross-subsidisation or predatory conduct.
(e) except to comply with any terms of its designation that are not inconsistent with
subparagraph (b), (c) or (d), acts solely in accordance with commercial
considerations in its purchase or sale of the monopoly good or service in the relevant
market, including with regard to price, quality, availability, marketability,
transportation and other terms and conditions of purchase or sale.
Nothing in Article A shall be construed to prevent a monopoly from charging different prices in
different geographic markets, where such differences are based on normal commercial
considerations, such as taking account of supply and demand conditions in those markets.
4. In case of a demonopolisation which has the effect of extending the obligations under the
Agreement to a new area, the principle of standstill does not intend to prevent any
Contracting Party from lodging any reservation to the Agreement for this new area.
5. Each Contracting Party shall notify to the Parties group any existing monopoly within (60)
days after the entry into force of the Agreement and any newly created monopoly within (6)
days after its creation.
6. Neither investors of another Contracting Party nor their investments may have recourse to
investor-state arbitration for any matter arising out of paragraph 3(b), (c), (d) or (e) of this
Article.
B. STATE ENTERPRISES
1. Each Contracting Party shall ensure that any state enterprise that it maintains or establishes
acts in a manner that is not inconsistent with the Contracting Party's obligations under this
Agreement wherever such enterprise exercises any regulatory, administrative or other
governmental authority that the Contracting Party has delegated to it.
2. Each Contracting party shall ensure that any state enterprise that it maintains or establishes
accords non-discriminatory treatment in the sale, in the Contracting Party's territory, of its
goods or services to investors of another Contracting Party and their investment.
3. Neither investors of another Contracting Party nor their investments may have recourse to
investor-state arbitration for any matter arising out of paragraph 2 of this Article.
C. DEFINITIONS RELATED TO MONOPOLIES AND STATE ENTERPRISES
1. "Delegation" means a legislative grant, and a government order directive or other act
transferring to the monopoly or state enterprise, or authorising the exercise by the monopoly
or state enterprise of, governmental authority.
2. "Designate" means to establish, designate or authorise, or to expand the scope of a
monopoly to cover an additional good or service, after the date of entry into force of this
agreement.
3. "Monopoly" means an entity, including a consortium or government agency, that in any
relevant market in the territory of a Contracting Party is designated as the sole provider or
purchaser of a good or service, but does not include an entity that has been granted an
exclusive intellectual property right solely by reason of such grant or "Monopoly" means
any person, public and private, designated by a national or local government authority as the
sole supplier or buyer of a good or service in a given market in the territory of a Contracting
Party.
4. "Relevant market" means the geographical and commercial market for a good or service.
5. "Non-discriminatory treatment" means the better of national treatment and most favoured
nation treatment, as set out in the relevant provisions of this Agreement.
6. "State enterprises" means, an enterprise owned, or controlled through ownership interest, by
a Contracting Party.
C--EXCEPTIONS FOR CERTAIN STATES
The provisions contained under "A." Monopolies" and "B. State Enterprises" above, shall not bind
Contracting Parties, where their statutory provisions conflict with aforesaid provisions.
Article 7. CORPORATE ENTERPRISES: SENIOR MANAGERS
No Contracting Party may require that an enterprise in the territory of that Party, which is an
investment of an investor of another Contracting Party, shall appoint, to senior managerial positions
in that enterprise, individuals of any particular nationality. An exception to this obligation shall,
however, be permissible where such a requirement, is considered necessary, having regard to the
following considerations:
(a) the technical or financial or other participation in the enterprise, contributed by the
Contracting Party, or by any Corporation, authority or agency owned or controlled by the
Government in the Contracting State; or
(b) some compelling, economic or political interest of the Contracting Party.
Article 8. APPLICABLE LAW
1. Except as otherwise provided in this Agreement, all investments shall be governed by the
laws in force in the territory of the Contracting Party in which such investments are made.
2. Notwithstanding paragraph 1 of this Article, nothing in this Agreement precludes the host
Contracting Party from taking action for the protection of its essential security interests or in
circumstances of extreme emergency in accordance with its laws normally and reasonably
applied on a non-discriminatory basis.
Article 9. INVESTMENT PROTECTION: GENERAL TREATMENT
1.1. (a) Each Contracting Party shall accord, to investments (in its territory) of investors of
another Contracting State, fair and equitable treatment and full and constant protection and security,
including such treatment, protection and security in respect of the operation, management,
maintenance, use, enjoyment or disposal of such investment.
(b) In no such case shall a Contracting Party accord, to such investments, treatment or
protection that is less favourable than that required by customary international law.
EXPROPRIATION AND COMPENSATION
2.1 A Contracting Party shall not expropriate or nationalise directly or indirectly an investment in
its territory of an investor of another Contracting Party or take any measure or measures having
equivalent effect (hereinafter referred to as "expropriation"") except :
(a) for a purpose which is in the public interest;
(b) on a non-discriminatory basis;
(c) in accordance with due process of law; and
(d) accompanied by payment of prompt, adequate and effective compensation in
accordance with Articles 2.2 to 2.5 below.
2.2 Compensation shall be paid without delay.
2.3 Compensation shall be equivalent to the fair market value of the expropriated investment
immediately before the expropriation occurred. The fair market value shall not reflect any change in
value occurring because the expropriation had become publicly known earlier.
2.4 Compensation shall be fully realisable and freely transferable.
2.5 Compensation shall include interest at a commercial rate established on a market basis for the
currency of payment from the date of expropriation until the date of actual payment.
2.6 Due process of law includes, in particular, the right of an investor of a Contracting Party which
claims to be affected by expropriation by another Contracting Party to prompt review of its case,
including the valuation of its investment and the payment of compensation in accordance with the
provisions of this article, by a judicial authority or another competent and independent authority of
the latter Contracting Party.
2.7 For the purpose of deciding whether expropriation by a Contracting Party is for a purpose which
is in the public interest within the meaning of clause (a) of Article 2, it shall be permissible to use
the following as persuasive (though not binding) material, namely:
(a) statutory precedents in the Contracting Party (in whose territory the investment is
situated), providing for expropriation of any property, undertaking or assets;
(b) judicial decisions relevant to the concept of public purpose or analogical concepts in
the context of expropriation of any property, undertaking or assets."
3. PROTECTION FROM STRIFE
3.1 An investor of a Contracting Party which has suffered losses relating to its investment in the
territory of an another Contracting Party due to war or other armed conflict, state of emergency,
revolution, insurrection, civil disturbance, or any other similar event in the territory of the latter
Contracting Party, shall be accorded by the latter Contracting Party, as regards restitution,
indemnification, compensation or any other settlement, treatment no less favourable than that which
it accords to its own investors or to investors of any third State, whichever is most favourable to the
investor.
3.2 Notwithstanding Article 3.1, an investor of a Contracting Party which, in any of the situations
referred to in that paragraph, suffers a loss in the territory of another Contracting 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, shall be accorded by the latter Contracting
Party restitution or compensation which in either case shall be prompt, adequate and
effective and, with respect to compensation, shall be in accordance with Articles 2.1 to 2.5.