Title
AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES FOR THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS
Preamble
PREAMBLE
The Government of the Republic of the Philippines ("Philippines") and the Government of the United Arab Emirates ("UAE"), (hereinafter referred to individually as "Contracting Party" and collectively as "Contracting Parties");
Desiring to promote greater economic cooperation between them, with respect to investments made by investors of one Contracting Party in the territory of the other Contracting Party;
Recognizing that an agreement on the promotion and reciprocal protection to be accorded to such investments will stimulate the flow of capital and the economic development of the Contracting Parties;
Considering that a stable framework for investments will ensure effective utilization of economic resources and improve living standards;
Agreeing that the establishment of investments must be in accordance with their laws and regulations;
Understanding that promotion of such investments requires co-operative efforts of the investors of both Contracting Parties;
Have agreed as follows:
Body
Section A. Definitions
For the purposes of this Agreement, the term:
1. "Competent authority" means:
(a) in the case of the Philippines, the Department of Foreign Affairs or its authorized representative;
(b) in the case of the UAE, the Ministry of Finance or its authorized representative.
2. "Covered investment" means with respect to a Contracting Party, an investment in its territory, of an investor of the other Contracting Party, existing on the date of entry into force of this Agreement, or made or acquired thereafter, and which has been admitted by the Contracting Party, subject to its laws, rules, and regulations;
3. "Disputing investor" means an investor of a Contracting Party that makes a claim against the other Contracting Party;
4. "Disputing parties" means the disputing investor and the disputing Party;
5. "Disputing Party" means a Contracting Party against which a claim is made;
6. "Disputing party" means either the disputing investor or the disputing Party;
7. "Freely usable currency" means any freely usable currency designated as such by the International Monetary Fund (IMF) under its Articles of Agreement and any amendments thereto;
8. "ICSID" means the International Centre for Settlement of Investment Disputes;
9. "ICSID Additional Facility Rules" means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes;
10. "ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, 18 March 1965;
11. "Investment" means every kind of asset which is owned or controlled directly or indirectly by the investors of a Contracting Party in the territory of the other Contracting Party in accordance with its laws and regulations that has the characteristics of an investment, such as the commitment of capital or other resources, the expectation of gains or profits, or the assumption of risk, and shall include in particular:
(a) movable and immovable property as well as any other property rights, such as mortgages, pledges, usufructs and similar rights;
(b) stocks, shares, bonds, debentures, loans and other forms of participation, loans to state enterprises, turnkey projects, in a juridical person (1);
(c) intellectual property rights, which are recognized under the domestic law of the host Contracting Party;
(d) rights to engage in economic activities conferred by law;
(e) returns reinvested; and
(f) claims to money or any other rights to contractual performance having financial value related to an investment.
The term "investment" does not include:
(a) claims to money arising solely from:
(i) commercial contracts for the sale of goods or services;
(ii) the extension of credit in connection with commercial transaction;
(iii) trade financing;
(b) an order or judgment entered in a judicial or administrative action;
The term "investment" also includes returns that are invested. Any alteration of the form in which assets are invested or reinvested shall not affect their character as investment.
This Agreement shall not apply to market access and services.
Natural resources shall not be covered by this Agreement.
12. "Investor" means in respect of either Contracting Party:
(a) a natural person, who is a national of a Contracting Party; and
(b) a juridical person who is a legal entity duly constituted or otherwise organized under the applicable law of a Contracting Party, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, partnership, joint venture, sole proprietorship, association or similar organization, and who has made an investment in the territory of the other Contracting Party;
13. "Measure" means any measure by a Contracting Party, whether in the form of a law, rule, regulation, procedure, administrative action, or other similar forms;
14. "New York Convention" means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958;
15. "Returns" means income derived from an investment and includes, in particular, but not exclusively, profits, dividends, capital gains, interests, royalties and any other fees;
16. "Territory" of a Contracting Party means in respect of:
(a) The Philippines, the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas, and areas over which the Philippines has sovereignty, sovereign rights or jurisdiction in accordance with the United Nations Convention on the Law of the Sea (UNCLOS). The waters around, between and connecting the islands of the archipelago, regardless of their breadth and dimensions form part of the internal waters of the Philippines;
(b)The UAE, its territorial sea, airspace and submarine areas over which the UAE exercises, in accordance with international law and the law of the UAE, sovereign rights, including the Exclusive Economic Zone and the mainland and islands under its jurisdiction in respect of any activity carried on in its water, seabed and subsoil in connection with the exploration for or the exploitation of the natural resources by virtue of its law and international law;
17. "UNCITRAL Arbitration Rules" means the arbitration rules of the United Nations Commission on International Trade Law, adopted by the United Nations General Assembly on 15 December 1976, as revised in 2010; and
18. "Vienna Convention on the Law of Treaties" means the Convention done at Vienna, 23 May 1969.
Section B. SECTION B: Investment Promotion and Protection
Article 1. Scope
1. This Agreement shall apply to measures adopted or maintained by a Contracting Party relating to:
(a) covered investments; and
(b) investors of the other Contracting Party.
2. This Agreement shall not apply to:
(a) any taxation measure except under Article 8 (Expropriation) and Article 9 (Transfers);
(b) subsidies or grants provided by a Contracting Party; and
(c) government procurement.
3. This Agreement shall apply to investments made prior to or after the entry into force of this Agreement, but shall not apply to any investment dispute that may have arisen no to any claim that was settled before its entry into force.
4. The treatment accorded to an investor of a Contracting Party under this Agreement does not extend to the preestablishment stage of the investment.
Article 2. Promotion and Admission of Investments
1. Each Contracting Party shall encourage and create favorable conditions for investors of the other Contracting Party to make investments in its territory and shall admit such investments in accordance with its laws and regulations.
2. In order to encourage mutual investment flows, each Contracting Party shall endeavor as far as possible to inform the other Contracting Party, at its request, of the investment opportunities in its territory.
Article 3. Treatment of Investments
1. Each Contracting Party shall accord in its territory to a covered investment made by investors of the other Contracting Party, fair and equitable treatment and full protection and security.
2. For greater certainty, a Contracting Party breaches the obligation of fair and equitable treatment referred to in paragraph 1 if a measure or series of measures constitute:
(a) denial of justice in criminal, civil or administrative proceedings;
(b) fundamental breach of due process in judicial and administrative proceedings;
(c) manifest arbitrariness; and
(d) targeted discrimination on the ground of gender.
3. For greater certainty, the concepts of "fair and equitable treatment" and "full protection and security" do not require treatment to be accorded to covered investments in addition to or beyond that which is required under customary international law and do not create additional substantive rights.
4. For greater certainty, 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 4. National Treatment
Each Contracting Party shall, in accordance with its laws and regulations, accord in its territory to covered investments of investors of the other Contracting Party treatment no less favorable than that which it accords, in like circumstances, to investments of its own investors, or to investments of investors of a non-Party with respect to the management, use, enjoyment or disposal of investments.
Article 5. Most-Favored-Nation Treatment
1. Each Contracting Party shall, in accordance with its laws and regulations, accord in its territory to covered investments of the investors of the other Contracting Party treatment no less favorable than that it accords, in like circumstances, to investors of any third Party, with respect to the management, conduct, operation, and sale or other disposition of investment in its territory.
2. The provisions of paragraph 1 of this Article shall not be construed so as to oblige a Contracting Party to extend to the investors of the other Contracting Party the benefit of
(a) any existing or future customs union or economic or monetary union, free trade area or similar international agreements, including international investment agreements to which either of the Contracting Parties is or may become a Party in the future; or
(b) any international agreement or arrangement, wholly or partially related to taxation.
3. For greater certainty, the treatment referred to in paragraphs 1 and 2 of this Article does not encompass any international dispute resolution procedures or mechanisms under other existing or future international agreements.
4. For greater certainty, whether the treatment is accorded in "like circumstances" under this Article depends on the totality of the circumstances.
Article 6. Prohibition of Performance Requirements
1. Within the context of its national economic policy and goals, each Contracting Party shall avoid imposing on the investments of investors of the other Contracting Party, conditions which require the export of goods produced, the purchase of goods locally or the transfer of technology, production process or other proprietary knowledge to a natural person or juridical person in the territory of the other Contracting Party.
2. For greater certainty, any investment relating to real estate acquisitions by foreigners should be made in accordance with the host Contracting Party's applicable law at the time the investment is made.
Article 7. Compensation for Damages or Losses
Covered investments made by investors of a Contracting Party which suffer loss or damage owing to war or other armed conflict, civil disturbances, state of national emergency, revolution, riot or similar events in the territory of the other Contracting Party shall be accorded by the latter Contracting Party treatment, as regards compensation, not less favorable than the treatment that it accords to its own investors or to investors of a non-Party.
Article 8. Expropriation
1. Each Contracting Party shall not expropriate or nationalize directly or indirectly in its territory an investment of an investor of the other Contracting Party or take any measures having equivalent effect such as freezing, or levying excessive tax, except:
(a) for a public purpose;
(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 paragraphs 2 and 3 of this Article.
2. The compensation referred to in paragraph 1, subparagraph (d) shall:
(a) be paid without undue delay (2);
(b) be equivalent to the fair market value of the expropriated investment:
i. For the Philippines, at the date of filing of the Petition for Expropriation or when the expropriation occurred, whichever is applicable; and
ii. For the UAE, at the time when or immediately before the expropriation was publicly known or when the expropriation occurred;
(c) not reflect any change in value because the intended expropriation had become known earlier; and
(d) be effectively realizable and freely transferable.
3. In the event of delay, the compensation referred to in paragraph 1, subparagraph (d) shall include an appropriate interest in accordance with the laws, rules, and regulations in the territory of the Contracting Party making the expropriation.
4. Where the fair market value cannot be ascertained, the compensation shall be determined in an equitable manner considering all relevant factors and circumstances, such as the capital invested, the nature and duration of the investment, replacement cost, book value and goodwill.
5. The government assets of each Contracting Party shall be immune from nationalization and expropriation.
For the avoidance of doubt, government assets referred to under this paragraph shall exclude commercial and private transactions.
6. An investor of a Contracting Party affected by the expropriation carried out by the other Contracting Party shall have the right to prompt review of its case by a judicial authority or another competent and independent authority of the latter Contracting Party.
7. This Article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights, or to the revocation, limitation, or creation of intellectual property rights, to the extent that such issuance, revocation, limitation, or creation is consistent with the Trade-Related Aspects of Intellectual Property Rights Agreement. (3)
Article 9. Transfers
1. Each Contracting Party shall, in accordance with its laws and regulations, ensure that all payments relating to an investment in its territory of an investor of the other Contracting Party shall be freely transferred into and out of its territory without delay. Such transfers shall include, in particular:
(a) initial capital and additional amounts to maintain or increase an investment;
(b) returns;
(c) payments made under a contract, including repayments pursuant to a loan agreement;
(d) proceeds from the sale or liquidation of all or any part of an investment;
(e) payments of compensation under Article 7 (Compensation for Damages and Losses) and Article 8 (Expropriation) of this Agreement;
(f) payments under Article 12 (Subrogation) of this Agreement;
(g) payments arising out of the settlement of an investment dispute by any means, including adjudication, arbitration or the agreement of the disputing parties;
(h) earnings and other remuneration of personnel engaged from abroad in connection with a covered investment; and
(i) profits and returns of national airlines operating international traffic of each Contracting Party.
2. Each Contracting Party shall ensure that the transfers under paragraph 1 of this Article are made without delay in a freely usable currency, at the market rate of exchange prevailing on the date of transfer and under the laws and regulations in force in the territory of the Contracting Party where investments have been made.
3. Notwithstanding paragraphs 1 and 2, each Contracting Party may prevent or delay a transfer through the equitable, non~discriminatory, and good faith application of its laws, rules, and regulations 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) criminal or penal offenses and the recovery of the proceeds of crime;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
(e) ensuring compliance with orders or judgments in judicial or administrative proceedings;
(f) payment of taxation liabilities;
(g) social security, public retirement, or compulsory savings schemes; and
(h) requirement to register and satisfy other formalities imposed by the central bank and financial regulatory authorities of a Contracting Party.
4. Nothing in this Agreement shall affect the rights and obligations of the Contracting Parties as members of the IMF under the Articles of Agreement of the IMF, including the use of exchange actions which are in conformity with the Articles of Agreement, provided that a Contracting Party shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under Article 10 (Measures to Safeguard the Balance of Payments) or at the request of the IMF.
Article 10. Measures to Safeguard the Balance of Payments
1. Each Contracting Party may, in a non-discriminatory manner, adopt or maintain restrictions on payments or transfers relating to investments in like situations:
(a) in the event of serious balance of payments and external financial difficulties or threat thereof; or
(b) in cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies.
2. The restrictions referred to in paragraph 1 shall:
(a) be consistent with the Articles of Agreement of the IMF;
(b) avoid unnecessary damage to the commercial, economic, and financial interests of the other Contracting Party;
(c) not exceed those necessary to deal with the circumstances described in paragraph 1;
(d) be temporary and be phased out progressively as the situation specified in paragraph 1 improves; and
(e) not treat the other Contracting Party less favorably than a non-Party in like situations.
3. Any restrictions adopted or maintained under paragraph 1 of this Article, or any changes therein, shall be promptly notified to the other Contracting Party.
Article 11. Prudential Measures
1. Notwithstanding any other provisions in this Agreement, each Contracting Party shall not be prevented from adopting or maintaining measures for prudential reasons (4), including for the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by an entity supplying financial services, or to ensure the integrity and stability of the 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 this Agreement.
2. Nothing in this Agreement shall be construed to require a Contracting 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.