2. The compensation referred to in paragraph 1(d) shall:
(a) be paid without delay;
(b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place ("the date of expropriation");
(c) include interest at a commercially reasonable rate accrued from the date of expropriation until the date of payment; (d) not reflect any change in value that occurs as a result of prior knowledge of the intended expropriation;
(e) be fully realisable and freely transferable; and (f) be payable in a freely usable or freely convertible currency.
3. The affected investor shall have the right under the law of the expropriating Party to a prompt review, by a judicial or other independent authority of that Party, of its case and of the valuation of its investment in accordance with the principles set out in this Article.
4. This Article does not apply to compulsory licenses granted in relation to intellectual property rights under the TRIPS Agreement, or to the revocation, limitation, or creation of intellectual property rights, provided that the issuance, revocation, limitation, or creation is consistent with the WTO Agreement.
Article 8.12. Transfers
1. Each Party shall permit transfers relating to a covered investment to be made freely, and without delay, into and out of its territory. Those transfers include:
(a) contributions to capital, including the initial contribution;
(b) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance, and other fees;
(c) proceeds from the sale of all or part of the covered investment or from the partial or complete liquidation of the covered investment;
(d) payments made under a contract entered into by the investor, or the covered investment, including payments made pursuant to a loan agreement;
(e) payments made pursuant to Articles 8.6 and 8.11; and
(f) payments arising out of a dispute.
2. Each Party shall permit transfers relating to a covered investment to be made in a freely usable currency. Transfers shall be made at the market rate of exchange prevailing at the time of transfer.
3. Each Party shall permit returns in kind relating to a covered investment to be made as authorised or specified in a written agreement between the Party and a covered investment or an investor of the other Party.
4. Notwithstanding paragraphs 1, 2, and 3, 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 creditors;
(b) issuing, trading or dealing in securities, futures, options, or derivatives;
(c) criminal or penal offences;
(d) financial reports of transfers when necessary to assist law enforcement or financial regulatory authorities; or
(e) compliance with orders or judgments in judicial or administrative proceedings.
5. A Party shall not require its investors to transfer, or penalise its investors for failure to transfer the income, earnings, profits, or other amounts derived from, or attributable to investments in the territory of the other Party.
6. Paragraph 5 is not to be construed to 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 paragraphs 4(a) through (e).
7. Notwithstanding paragraph 1, a Party may restrict transfers of returns in kind in circumstances where it could otherwise restrict those transfers under this Agreement and as set out in paragraph 4.
Article 8.13. 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 recognise the validity of the subrogation in favour of that Party or the agency of the Party 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 in all circumstances to 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 authorises.
Article 8.14. 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 investments of that investor if persons of a non-party own or control the enterprise and the denying Party adopts or maintains measures with respect to the non-party or a person of 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 investments.
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 investments of that investor if the enterprise has no substantial business activities in the territory of the other Party under whose domestic law it is constituted or organised and persons of a non-party, or of the denying Party, own or control the enterprise.
Article 8.15. Special Formalities and Information Requirements
1. Article 8.3 is not to be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with the establishment of investments by investors of the other Party, including a requirement that investments 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 and investments of investors of the other Party under this Chapter.
2. Notwithstanding Articles 8.3 and 8.4, a Party may require an investor of the other Party, or its investment in the Party's territory, to provide routine information concerning that investment solely for informational or statistical purposes. The Party shall protect such business information that is confidential from disclosure that would prejudice the competitive position of the investor or the investment. This paragraph is not to 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 8.16. Corporate Social Responsibility
Each Party should encourage enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate internationally recognised standards of corporate social responsibility in their practices and their internal policies, including statements of principle that are endorsed or supported by the Parties. These principles address issues such as labour, environment, human rights, community relations, and anti-corruption.
Section B. Investor-State Dispute Settlement
Article 8.17. Purpose
Without prejudice to the rights and obligations of the Parties under Chapter Twenty-One (Dispute Settlement), this Section establishes a mechanism for the settlement of investment disputes.
Article 8.18. Claim by an Investor of a Party on Its Own Behalf
An investor of a Party may submit to arbitration under this Section a claim that the other Party has breached an obligation under Section A, other than Articles 8.10, 8.15, and 8.16 and that the investor has incurred loss or damage by reason of, or arising out of, that breach.
Article 8.19. 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 is a juridical person 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 Section A, other than Articles 8.10, 8.15, and 8.16 and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
2. If an investor makes a claim pursuant to this Article and the investor or a non-controlling investor in the enterprise makes a claim pursuant to Article 8.18 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 pursuant to Article 8.23, the claims should be heard together by a Tribunal established under Article 8.28, unless the Tribunal finds that the interests of a disputing party would be prejudiced as a result.
3. An investment shall not make a claim under this Section.
Article 8.20. 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 (hereinafter referred to as the "Notice of Intent") at least 90 days before submitting the claim. The Notice of Intent must specify:
(a) the name and address of the disputing investor and, if a claim is made under Article 8.19, 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, evidence establishing that it is an investor of the other Party. Examples of evidence that might be relevant include a copy of a title to property, a deed of incorporation of the enterprise, share certificates, and a joint venture agreement.
Article 8.21. Consultation and Negotiation
In the event of an investment dispute, the disputing investor and the disputing Party shall initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding third-party procedures.
Article 8.22. Conditions Precedent to Submission of a Claim to Arbitration
1. A disputing investor may submit a claim to arbitration pursuant to Article 8.18 only if:
(a) the disputing investor consents to arbitration in accordance with the procedures set out in this Agreement;
(b) at least six months have elapsed since the events giving rise to the claim;
(c) not more than three 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 thereby;
(d) the disputing investor has delivered the Notice of Intent required under Article 8.20; 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 is a juridical person 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 any 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 8.18, except as set out in Annex 8-C.
2. A disputing investor may submit a claim to arbitration pursuant to Article 8.19 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 six months have elapsed since the events giving rise to the claim;
(c) not more than three 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 of Intent required pursuant to Article 8.20; 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 any 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 8.19, except as set out in Annex 8-C.
3. A consent and waiver required by this Article 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 only if a disputing Party has deprived a disputing investor of control of the enterprise.
5. Failure to meet any of the conditions precedent provided for in paragraphs 1, 2, and 3 nullifies the consent of the Parties given in Article 8.24.
Article 8.23. Submission of a Claim to Arbitration
1. Except as provided in Annex 8-C, a disputing investor who meets the conditions precedent provided for in Article 8.22 may submit the claim to arbitration:
(a) under the ICSID Convention, if both Parties are party to the Convention;
(b) under the ICSID Additional Facility Rules, if only one Party is a party to the ICSID Convention;
(c) under the UNCITRAL Arbitration Rules; or
(d) if the disputing parties agree, to any other arbitration institution or under any other arbitration rules.
2. The applicable arbitration rules govern the arbitration unless they are modified by this Section.
Article 8.24. Consent to Arbitration
1. Each Party consents to the submission of a claim to arbitration in accordance with the procedures set out in this Agreement.
2. The consent given in paragraph 1 and the submission by a disputing investor of a claim to arbitration shall satisfy the requirement of:
(a) Chapter II of the ICSID Convention and the ICSID Additional Facility Rules for written consent of the parties; and
(b) Article II of the New York Convention for an agreement in writing.
Article 8.25. Arbitrators
1. Except in respect of a Tribunal established pursuant to Article 8.28, and unless the disputing parties agree otherwise, the Tribunal shall be composed of three arbitrators, one arbitrator appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the disputing parties.
2. Arbitrators must:
(a) have expertise or experience in public international law, international trade or international investment rules, or the resolution of disputes arising under international trade or international investment agreements; and
(b) be independent of, and not be affiliated with or take instructions from, either Party or the disputing investor.
3. The disputing parties should agree on the arbitrators' remuneration. If the disputing parties do not agree on such remuneration before the Tribunal is constituted, the prevailing ICSID rate for arbitrators applies.
Article 8.26. Constitution of a Tribunal by the Secretary-general
1. The Secretary-General shall serve as appointing authority for an arbitration under this Section if a Party fails to appoint an arbitrator or the disputing parties are unable to agree on a presiding arbitrator.
2. If a Tribunal, other than a Tribunal established pursuant to Article 8.28, is not constituted within 90 days from the date that a claim is submitted to arbitration, the Secretary-General, at the request of either disputing party, shall appoint, in his or her discretion, the arbitrator or arbitrators not yet appointed. The presiding arbitrator shall not be a national of either Party.
Article 8.27. Agreement to Appointment of Arbitrators
For the purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator based on a ground other than nationality:
(a) the disputing Party agrees to the appointment of each individual member of a Tribunal established under the ICSID Convention or the ICSID Additional Facility Rules;
(b) a disputing investor referred to in Article 8.18 may submit a claim to arbitration, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only if the disputing investor agrees in writing to the appointment of each individual member of the Tribunal; and
(c) a disputing investor referred to in Article 8.19.1 may submit a claim to arbitration, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only if the disputing investor and the enterprise agree in writing to the appointment of each individual member of the Tribunal.
Article 8.28. Consolidation
1. A Tribunal established under this Article shall be established under the UNCITRAL Arbitration Rules and shall conduct its proceedings in accordance with those Rules, unless otherwise provided in this Section.
2. If a Tribunal established under this Article is satisfied that claims submitted to arbitration under Article 8.23 have a question of law or fact in common, the Tribunal may, in the interests of fair and efficient resolution of the claims, and after hearing the disputing parties, by order:
(a) assume jurisdiction over, and hear and determine together, all or part of the claims; or
(b) assume jurisdiction over, and hear and determine one or more of the claims, the determination of which it believes would assist in the resolution of the others.
3. A disputing party that seeks an order under paragraph 2 shall request that the Secretary-General establish a Tribunal and shall specify in the request:
(a) the name of the disputing Party or disputing investors against which the order is sought;
(b) the nature of the order sought; and
(c) the grounds for the order sought.
4. The disputing party shall deliver a copy of the request to the disputing Party or disputing investors against which the order is sought.
5. The Secretary-General shall, within 60 days of receipt of the request, establish a Tribunal composed of three arbitrators appointed from the ICSID Panel of Arbitrators. To the extent arbitrators are not available from that Panel, appointments shall be at the discretion of the Secretary-General. The Secretary-General shall appoint one member who is a national of the disputing Party, one member who is a national of the Party of the disputing investors and a presiding arbitrator, who is not a national of either Party.
6. If a Tribunal is established pursuant to this Article, a disputing investor that has submitted a claim to arbitration pursuant to Article 8.23 and that has not been named in a request made pursuant to paragraph 3 may submit a written request to the Tribunal that it be included in an order made pursuant to paragraph 2, and shall specify in the request: (a) the name and address of the disputing investor; (b) the nature of the order sought; and (c) the grounds for the order sought.
7. A disputing investor referred to in paragraph 6 shall deliver a copy of its request to the disputing parties named in a request made pursuant to paragraph 3.
8. A Tribunal established pursuant to Article 8.23 does not have jurisdiction to decide a claim, or a part of a claim, over which a Tribunal established pursuant to this Article has assumed jurisdiction.
9. On the application of a disputing party, a Tribunal established pursuant to this Article, pending its decision pursuant to paragraph 2, may order that the proceedings of a Tribunal established pursuant to Article 8.23 be stayed, unless the latter Tribunal has already adjourned its proceedings.
Article 8.29. Notice to the Non-disputing Party
A disputing Party shall deliver to the non-disputing Party a copy of the Notice of Intent and other documents, such as the Notice of Arbitration and the Statement of Claim, within 30 days of the date that those documents are delivered to the disputing Party.
Article 8.30. Documents
1. The non-disputing Party is entitled, at its cost, to receive from the disputing Party:
(a) a copy of the evidence that has been tendered to the Tribunal;
(b) copies of all pleadings filed in the arbitration; and
(c) copies of the written arguments of the disputing parties.
2. The non-disputing Party receiving information pursuant to paragraph 1 shall treat the information on the same basis as the Party providing the information treats them.
Article 8.31. Participation by the Non-disputing Party
1. On written notice to the disputing parties, the non-disputing Party may make oral or written submissions to a Tribunal on a question of interpretation of this Agreement. Upon the request of a disputing party, the non-disputing Party shall submit its oral submission in writing.
2. The non-disputing Party shall treat the information it receives at hearings on the same basis as the Party providing the information treats them.
Article 8.32. Place of Arbitration
1. Unless otherwise agreed by the disputing parties, a Tribunal shall hold an arbitration in the territory of a Party that is a party to the New York Convention, selected in accordance with:
(a) the ICSID Additional Facility Rules, if the arbitration is under those Rules or the ICSID Convention; or
(b) the UNCITRAL Arbitration Rules, if the arbitration is under those Rules.
2. Unless otherwise agreed by the disputing parties, the Tribunal may determine a place for meetings and hearings, other than the legal place of arbitration. In doing so, the Tribunal shall take into consideration, its convenience for the parties and the arbitrators, the location of the subject matter, and the proximity of the evidence.
Article 8.33. Language of Proceedings
1. Unless otherwise agreed by the disputing parties, the language of the arbitration proceedings, including hearings, decisions, and awards, shall be:
(a) French and English if Canada is a disputing Party; and
(b) Korean and English if Korea is a disputing Party.
2. Communications, submissions, witness statements and documentary evidence can be submitted in either one of the language of the arbitration without a translation.
Article 8.34. Preliminary Objections to Jurisdiction or Admissibility
If issues relating to jurisdiction or admissibility are raised as preliminary objections, the Tribunal shall, whenever possible, decide the matter before proceeding to the merits.
Article 8.35. Transparency of Arbitral Proceedings
1. Subject to paragraphs 2, 3, and 4, the disputing Party shall, after receiving the following documents, promptly transmit them to the non-disputing Party and make them available to the public:
(a) the Notice of Intent;
(b) the Notice of Arbitration;
(c) pleadings, memorials, and briefs submitted to the Tribunal by a disputing party and any written submissions submitted pursuant to Articles 8.28, 8.31, and 8.36;
(d) minutes or transcripts of hearings of the Tribunal, if available; and
(e) orders, awards, and decisions of the Tribunal.
2. The Tribunal shall conduct hearings open to the public and shall determine, in consultation with the disputing parties, the appropriate logistical arrangements. However, a disputing party that intends to use information designated as protected information in a hearing shall advise the Tribunal. The Tribunal shall make appropriate arrangements to protect the information from disclosure.
3. This Section does not require a disputing Party to disclose protected information or to furnish or allow access to information that it may withhold in accordance with Articles 22.2 (National Security) and 22.5 (Disclosure of Information).
4. Any protected information that is submitted to the Tribunal shall be protected from disclosure in accordance with the following procedures:
(a) subject to subparagraph (d), the disputing parties or the Tribunal shall not disclose to the non-disputing Party or to the public any protected information if the disputing party that provided the information clearly designates it in accordance with subparagraph (b);
(b) a disputing party claiming that certain information constitutes protected information shall clearly designate the information at the time it is submitted to the Tribunal;
(c) a disputing party shall, at the time it submits a document containing information claimed to be protected information, also submit a redacted version of the document that does not contain such protected information. Only the redacted version shall be provided to the non-disputing Party and made public in accordance with paragraph 1;
(d) the Tribunal shall decide an objection by a disputing party regarding the designation of information claimed to be protected information. If the Tribunal determines that such information was not properly designated, the disputing party that submitted the information may: