(a) the same treatment in respect of the rights and claims acquired by it by virtue of the assignment referred to in paragraph 1; and
(b) the same payments due pursuant to those rights and claims, as the investor referred to in paragraph 1 was entitled to receive by virtue of this Chapter in respect of the investment.
3. If a Party or its designated agency has made a payment to its investor and has taken over rights and claims of the investor under paragraph 1, that investor shall not, unless authorised in writing by the Party or its designated agency to act on behalf of the Party or its designated agency making the payment, pursue those rights and claims against the other Party. In the exercise of subrogated rights or claims, a Party or its designated agency exercising such rights or claims shall disclose evidence of the subrogation or transfer of rights from the investor to the Party or its designated agency to the other Party.
4. In the exercise of subrogated rights or claims, a Party or the agency of the Party exercising such rights or claims shall disclose the coverage of the claims arrangement with its investors to the relevant Party.
Article 9.16. Taxation Measures (7)
1. Nothing in this Section shall impose obligations with respect to taxation measures except as expressly provided in paragraph 3.
2. Nothing in this Agreement shall affect the rights and obligations of either Party under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency.
3. Articles 9.13 (Expropriation and Compensation) and 9.6 (Performances requirements) shall apply to taxation measures.
Article 9.17. 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 the other Party and to its covered investments if persons of a non- Party own or control the enterprise and the denying Party (8):
(a) does not maintain diplomatic relations with the non - Party; or
(b) 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. For the purpose of this Article, an enterprise is:
(a) “owned” by an investor if more than 50 percent of the equity interest in it is beneficially owned by the investor; and
(b) “controlled” by an investor if the investor has the power to name a majority of its directors or otherwise to legally direct its actions.
Article 9.18. General Exceptions
1. Notwithstanding Article 9.5 (Most-Favoured Nation Treatment), nothing in this Agreement shall be construed so as to oblige a Party to extend to the investors of the other Party and to their covered investments the benefits of any treatment resulting from:
(a) any bilateral or multilateral international agreement for the promotion and protection of investment which was signed prior to the date of entry into force of this Agreement;
(b) any existing or future customs union, free trade area agreement, common market, economic union or similar international agreement, to which either Party is a party or may become a party, within the meaning of "customs union" or "free trade area" in accordance with Article XXIV of the GATT 1994 and Article V of the GATS; or
(c) any existing or future bilateral or multilateral agreement concerning intellectual property.
2. Subject to the requirements that such measures are not applied in an arbitrary or unjustifiable manner, and do not constitute a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting, maintaining, enforcing measures including environmental measures, that it considers necessary:
(a) to protect human, animal or plant life or health;
(b) to protect public morals or to maintain public order, provided that the measure may only be invoked where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society;
(c) to ensure safety;
(d) to protect national treasures of artistic, historic or archaeological value;
(e) to conserve living or non-living exhaustible natural resources, provided that such measures are made effective in conjunction with restrictions on domestic production or consumption; or
(f) to secure compliance with the legislation which are not inconsistent with the provisions of this Chapter including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contract; and
(ii) the protection of the privacy of the individual in relation to the processing and dissemination of personal data and the protection of confidentiality of personal records and accounts.
2. Nothing in this Agreement shall prevent a Party from adopting or maintaining reasonable measures for prudential reasons, including:
(a) the protection of investors, depositors, policy holders, policy claimants, as well as financial market participants, or persons to whom a fiduciary duty is owed by a financial institution;
(b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and
(c) ensuring the integrity and stability of the Party’s financial system.
Such measures shall be taken in good faith and shall not be used as means of avoiding a Party´s commitments or obligations under this Agreement.
Section D. Investor – State Dispute Settlemen
Article 9.19. Consultation and Negotiation
1. In the event of an investment dispute, the claimant and the respondent should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding, third-party procedures.
2. The claimant shall deliver to the respondent a written request for consultations setting out the following:
(a) the name and address of the claimant and its covered investment;
(b) the nature of the claim, including the measure or measures alleged to breach the provisions of this Chapter, and a brief description of facts regarding said measure or measures;
(c) the relief sought and the initial assessment of amount of damages claimed; and
(d) indication and supporting documents that the claimant is an investor of the other Party and that it owns or controls the covered investment with respect to which a request for consultations was submitted.
3. For greater certainty, the initiation of consultations and negotiations shall not be construed as recognition of the jurisdiction of a tribunal.
Article 9.20. Submission of Claim to Arbitration
1. In the event that an investment dispute cannot be settled by consultation and negotiation according to Article 9.19 (Consultation and Negotiation) within six months from the date on which the claimant requested in writing the respondent for consultation and negotiation, the claimant may, only on its own behalf, submit to arbitration under this Article, a claim that:
2. the respondent has breached an obligation under:
i. Section C (Investment Promotion and Protection); or
ii. Articles 9.4 (National Treatment), 9.5 (Most-Favoured Nation Treatment), 9.7 (Senior Management and Board of Directors) and 9.6 (Performance Requirement) with regard to management, maintenance, use, enjoyment or disposal of investments, and
(b) the claimant has incurred loss or damage by reason of, or arising out of, that breach.
2. For greater certainty, a claimant may only submit a claim with regards to an investment as defined in Article 9.1 (Definitions).
3. The extent of the claim referred to in paragraph 1 shall not exceed the monetary value of the loss or damage caused to the investor as a result of the breach mentioned in paragraph 1.
4. At least 90 days before submitting any claim to arbitration under this Section, a claimant shall deliver to the respondent a written notice of its intention to submit the claim to arbitration (notice of intent). The notice shall specify:
(a) the name and address of the claimant and its covered investment;
(b) for each claim, the provision of Section C (Investment Promotion and Protection) alleged to have been breached and any other relevant provisions;
(c) the legal and factual basis for each claim;
(d) the relief sought and the approximate amount of damages claimed; and
(e) indication and supporting documents establishing that the claimant is an investor of the other Party and that it owns or controls the covered investment in respect of which a request for consultations was submitted.
5. Provided that six months have elapsed since the claimant requested in writing the respondent for consultation and negotiation, the claimant may submit a claim referred to in paragraph 2 to arbitration:
(a) under the ICSID Convention, provided that both Parties are parties to the ICSID Convention;
(b) under the ICSID Additional Facility Rules, provided that either Party, but not both, is a party to the ICSID Convention;
(c) under the UNCITRAL Arbitration Rules; or
(d) if the disputing parties agree, under any other arbitration institution or arbitration rules.
6. The claimant shall provide with the notice of arbitration:
(a) the name of the arbitrator that the claimant appoints; or
(b) the claimant’s written consent for the Secretary-General to appoint that arbitrator.
7. A claim shall be deemed submitted to arbitration under this Article when the claimant’s notice of or request for arbitration:
(a) referred to in paragraph 1 of Article 36 of the ICSID Convention is received by the Secretary-General of ICSID;
(b) referred to in Article 2 of Schedule C of the ICSID Additional Facility Rules is received by the Secretary-General of ICSID;
(c) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the statement of claim referred to in Article 20 of the UNCITRAL Arbitration Rules, are received by the respondent; or
(d) under any other arbitration institution or arbitration rules selected under subparagraph 3(d) is received by the respondent, unless otherwise specified by such institution or in such rules.
A claim asserted by the claimant for the first time after such notice of arbitration is submitted shall be deemed submitted to arbitration under this Article on the date of its receipt under the applicable arbitral rules.
Article 9.21. Consent of Each Party to Arbitration
1. Each Party hereby consents to the submission of a claim to arbitration under this Article in accordance with this Chapter.
2. The claimant shall deliver its consent in accordance with the procedures provided for in this Section at the time of submitting a claim pursuant to Article 9.20 (Submission of a Claim to Arbitration).
3. The consent under paragraphs 1 and 2 and the submission of a claim to arbitration under this Article shall be deemed to satisfy the requirements of:
(a) Chapter II of the ICSID Convention or 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 9.22. Conditions and Limitations on Consent of Each Party
1. No claim may be submitted to arbitration under this Article if more than three years have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged under paragraph 1 of Article 9.20 (Submission of Claim to Arbitration) and knowledge that the claimant has incurred loss or damage.
2. No claim may be submitted to arbitration under this Section unless:
(a) the claimant consents in writing to arbitration in accordance with the procedures set out in this Article;
(b) the notice of arbitration is accompanied, for claims submitted to arbitration under Article 9.20 (Submission of Claim to Arbitration), by the claimant’s written waiver of any right to initiate or continue, before any administrative tribunal or court under the law of either Party, or other dispute settlement procedures, including those in other bilateral or multilateral agreements which both Parties are parties to, any proceeding with respect to the subject matter of its claim or to any measure alleged to constitute a breach referred to in Article 9.20 (Submission of Claim to Arbitration); and
(c) no judgment or award has been delivered on the subject matter of the dispute with regard to any measure alleged to constitute a breach referred to in paragraph 2 of Article 9.20 (Submission of Claim to Arbitration) before any administrative tribunal or court under the law of either Party, other dispute settlement procedures or under the mechanisms mentioned in subparagraph (b).
Article 9.23. Selection of Arbitrators
1. Unless the disputing parties otherwise agree, the tribunal shall comprise 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. The Secretary-General shall serve as appointing authority for an arbitration under this Section. If the Secretary-General is a national of either Party or a national of a non-Party that does not maintain diplomatic relations with either Party or otherwise prevented from discharging the said function, the Deputy Secretary-General shall be invited to make the appointment.
3. If a tribunal has not been constituted within 90 days of the date a claim is submitted to arbitration under this Section, the Secretary-General, on the request of a disputing party, shall appoint, in his or her discretion, the arbitrator or arbitrators not yet appointed. The Secretary-General shall not appoint a national of either Party as the presiding arbitrator unless the disputing parties otherwise agree.
4. Arbitrators shall not be nationals of states not having diplomatic relations with either Party.
Article 9.24. Place of Arbitration
1. The claimant and the respondent may agree on the place of arbitration.
2. If the claimant and the respondent fail to reach an agreement regarding the place of arbitration, the tribunal shall determine the place of arbitration provided:
(a) that the place shall be in the area of a Party or in the area of a non-Party that is a party to the New York Convention;
(b) that the determined place of arbitration is in accordance with the applicable arbitrational rules.
Article 9.25. Places of Hearings and Procedural Language
1. The claimant and the respondent may agree on the place of a hearing, subject to the applicable arbitration rules.
2. If the claimant and the respondent fail to reach an agreement regarding the place of a hearing, the tribunal shall determine the place of a hearing, provided:
(a) that the determined place of the hearing is in accordance with the applicable arbitrational rules;
(b) that the tribunal has taken both disputing parties' interests under consideration with regard to the financial burden of the arbitration procedure; and
(c) that if the determined place of the hearing is in the territory of a non- Party it shall be a non- Party with which both Parties have diplomatic relations.
3. Unless the claimant and the respondent agree otherwise, the procedural language of the proceedings shall be English.
4. Any language or languages selected under paragraph 3 shall be made in accordance with the applicable arbitration rules.
Article 9.26. Conduct of Arbitration
1. In an arbitration procedure under this Section, the respondent shall not assert, as a defence, counterclaim, right of setoff or otherwise, that the claimant has received or will receive indemnification or other compensation for all or part of the alleged damages pursuant to an insurance or guarantee contract.
2. Unless the disputing parties have agreed to another expedited procedure for making preliminary objections, the Party which is the party to the dispute may, no later than 30 days after the constitution of the tribunal, and in any event before the first session of the tribunal, file an objection that a claim is manifestly without legal merit. The Party which is the party to the dispute shall specify as precisely as possible the basis for the objection. The tribunal, after giving the disputing parties the opportunity to present their observations on the objection, shall, at its first session or promptly thereafter, notify the disputing parties of its decision on the objection. The decision of the tribunal shall be without prejudice to the right of the Party which is the party to the dispute to file an objection to the jurisdiction of the tribunal or to object, in the course of the proceedings, that a claim lacks legal merit.
3. The tribunal may order security for costs at a proposal of the respondent. The tribunal shall especially consider ordering security for costs when there is a reason to believe:
(a) that the claimant will be unable to pay, if ordered to do so, a reasonable part of attorney fees and other costs to the Party which is the party to the dispute; or
(b) that the claimant has divested assets to avoid the consequences of the arbitral proceedings.
Should the claimant fail to pay the security for costs ordered by the tribunal within the time period set by the tribunal, the tribunal may order the suspension or termination of the arbitral proceedings.
Article 9.27. Third-Party Funding
1. An investor shall file a written notice to the other disputing party and the arbitral tribunal disclosing the name and address of any non-party from which the investor, directly or indirectly, has received funds for the pursuit or defence of the proceeding through a donation or grant, or in return for remuneration dependent on the outcome of the proceeding ("third-party funding"). If the non-party providing funding is a juridical person, the notice shall include the names of the persons and entities that own and control that juridical person.
2. The investor shall file the notice referred to in paragraph 1 upon submission of the request for arbitration, or immediately upon concluding a third-party funding arrangement after submission. The investor shall immediately notify the arbitral tribunal and the other disputing party of any changes to the information in the notice.
3. The tribunal may order disclosure of further information regarding the funding agreement and the non-party providing funding.
Article 9.28. Governing Law
1. Subject to paragraph 3, when a claim is submitted under this Section, the tribunal shall decide the issues in dispute in accordance with this Chapter and applicable rules of international law, and take into consideration, as matter of fact, any relevant domestic law of the disputing Party. (9)
2. The tribunal shall not have jurisdiction to determine the legality of a measure, alleged to constitute a breach of this Chapter, under the domestic law of a Party.
3. In cases where reference to the TRIPS Agreement is made in an arbitration procedure under this Section, the tribunal shall consider relevant interpretation in reports of panels and the Appellate Body adopted by the WTO Dispute Settlement Body regarding substantially equivalent rights or obligations of the Parties under the TRIPS Agreement, or other multilateral intellectual property treaties.
4. When serious concerns arise as regards issues of interpretation which may affect matters relating to this Section, the Parties may adopt, at any time, joint interpretations of provisions of this Agreement. Any such interpretation shall be binding upon the tribunal.
5. For greater certainty, the tribunal shall be bound by the interpretation given to the domestic law by the courts or authorities which are competent to interpret the relevant domestic law, and any meaning given to the relevant domestic law made by the tribunal shall not be binding upon the courts and the authorities of either Party.
Article 9.29. Awards
1. Where a tribunal makes a final award against a respondent, the tribunal may award:
(a) monetary damages and applicable interest;
(b) restitution of property, in which case the award shall provide that the respondent may pay monetary damages and any applicable interest, in lieu of restitution; or
(c) both.
2. A tribunal may also award costs and attorney’s fees in accordance with this Section and the applicable arbitration rules. At the request of the respondent, the award will specify the account for transfer of money or the person to whom restitution should be made.
3. Without prejudice to paragraph 2 and to the claimant's right to claim that they are not adequately compensated, the monetary value of the award made under paragraph 1 shall not be greater than the loss suffered by the investor as a result of the breach determined by the tribunal, reduced by any prior damages or compensation already provided in relation to the same factual dispute. For the calculation of monetary damages, the tribunal shall take into account any restitution of property or repeal or modification of the measure, or other mitigating factors.
4. A tribunal may not award punitive damages.
5. An award made by a tribunal shall have no binding force except between the disputing parties and in respect of the particular case.
6. Subject to the applicable arbitration rules and the applicable review procedure for an interim award, a disputing party shall abide by and comply with an award without delay.
7. Each Party shall provide for the enforcement of an award in its territory.
8. A disputing party may seek enforcement of an arbitration award under the ICSID Convention or the New York Convention.
Section E. Final Provisions
Article 9.30. Duration and Termination
1. In respect of investments made while this Agreement is in force, the provisions of Sections A (General Provisions), C (Investment Promotion and Protection) and D (Investor-State Dispute Settlement) of this Chapter and relevant provisions of Chapter 1 (Initial Provisions and General Definitions) and Chapter 11 (Exceptions) shall continue in effect with respect to such investments for a period of ten years after the date of termination of this Agreement unless otherwise agreed by the Parties thereafter.
Annex 9A . Expropriation
The Parties confirm their shared understanding that:
1. An action or a series of actions by a Party cannot constitute an expropriation unless it interferes with a tangible or intangible property right or property interest in an investment.
2. Expropriation may be direct or indirect:
(a) direct expropriation occurs when an investment is nationalised or otherwise directly expropriated through formal transfer of title or outright seizure; and
(b) indirect expropriation occurs if a measure or series of measures of a Party has an effect equivalent to direct expropriation, in that it substantially deprives the investor of the fundamental attributes of property in its investment, including the right to use, enjoy and dispose of its investment, without formal transfer of title or outright seizure.
3. The determination of whether a measure or series of measures of a Party, in a specific fact situation, constitutes an indirect expropriation requires a case-by-case, fact-based inquiry that takes into consideration, among other factors:
(a) the economic impact of the measure or series of measures, although the sole fact that a measure or series of measures of a Party has an adverse effect on the economic value of an investment does not establish that an indirect expropriation has occurred;
(b) the duration of the measure or series of measures of a Party;
(c) the extent to which the measure or series of measures interferes with distinct, reasonable investment-backed expectations (10); and
(d) the character of the measure or series of measures, notably their object, context and intent.
4. For greater certainty, except in the rare circumstance when the impact of a measure or series of measures is so severe in light of its purpose that it appears manifestly excessive, non-discriminatory measures of a Party that are designed and applied to protect legitimate public welfare objectives, such as health, safety and the environment, do not constitute indirect expropriations.