(i) any award shall be made to the affected enterprise;
(ii) the consent to arbitration of both the investor and the enterprise shall be required;
(iii) both the investor and enterprise must waive any right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of this Agreement before the courts or tribunals of the Contracting Party concerned or in a dispute settlement procedure of any kind; and
(iv) the investor may not make a claim if 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 it has incurred loss or damage.
(b) Notwithstanding subparagraph 12(a), where a disputing Contracting Party has deprived a disputing investor of control of an enterprise, the following shall not be required:
(i) a consent to arbitration by the enterprise under 12(a)ii); and
(ii) a waiver from the enterprise under 12(a)iii).
(11) The procedures referred to in this article shall be without prejudice to the rights of the Contracting Parties under Articles XIV and xv.articles XIV and XV.
(12)
a) A claim that a Contracting Party is in breach of this Agreement and that the enterprise has legal personality and duly constituted in accordance with the relevant laws of that Contracting Party has incurred loss or damage by reason of that breach may be submitted by an investor of the other contracting party acting on behalf of an enterprise that the investor owns or controls directly or indirectly. in such a case,
i) The award is intended for the undertaking concerned;
ii) The investor and the enterprise must both consent to arbitration;
iii) The investor and the enterprise both to waive the right to initiate or continue any proceedings with respect to the alleged measure to be inconsistent with this Agreement, civil or administrative courts of the Contracting Party concerned or to any body for the resolution of disputes; and
iv) An investor may not make a claim if more than three years have elapsed since the date on which the undertaking became aware or should have had knowledge of the alleged breach and that it has caused him injury.
b) Notwithstanding subparagraph (a), if the contracting party in the dispute has deprived the investor of control of the enterprise, the following conditions shall not apply to: subparagraph 12 (a), if the contracting party in the dispute has deprived the investor of control of the enterprise, the following conditions shall not apply to:
i) The enterprise consent to arbitration in accordance with subparagraph 12 (a) (ii); et12 (a) (ii); and
ii) A waiver from the enterprise under subparagraph 12 (a) (iii). (a) (iii).
Article XIV. Consultations and Exchange of Information
Either Contracting Party may request consultations on the interpretation or application of this Agreement. The other Contracting Party shall give sympathetic consideration to the request. Upon request by either Contracting Party, information shall be exchanged on the measures of the other Contracting Party that may have an impact on new investments, investments or returns covered by this Agreement.
Article XV. Disputes between the Contracting Parties
(1) Disputes between the Contracting Parties concerning the interpretation and application of this Agreement shall be settled, as far as possible, through friendly consultations by both parties through diplomatic channels.
(2) If such disputes cannot be settled through consultations, they shall, at the request of either Contracting Party, be submitted for settlement to an ad hoc international arbitral panel (hereinafter called "the Panel").
(3) The Panel mentioned above shall be established as follows: The Panel is composed of three arbitrators. Within two months after receipt through diplomatic channels of the request for arbitration, each Contracting Party shall appoint one arbitrator; the two arbitrators shall propose by mutual agreement the third arbitrator who is a national of a third State which has diplomatic relations with both Contracting Parties, and the third arbitrator shall, upon approval by the two Contracting Parties, be appointed as Chairman of the Panel. The Chairman shall be appointed within two months from the date of appointment of the other two members of the Panel.
(4) If the appointments of the members of the Panel are not made within the periods specified in paragraph (3) of this Article, either Contracting Party may, in the absence of any other arrangement, invite the President of the International Court of Justice to make necessary appointments within three months. Should the President be a national of one Contracting Party or should he not be able to perform this designation because of other reasons, this task shall be entrusted to the Vice-President of the Court, or to the next senior Judge of the Court who is not a national of either Contracting Party.
(5) The Panel shall determine its own procedure. The Panel shall decide its award by majority of votes. Such award is final and binding upon the Contracting Parties. Unless otherwise agreed, the decision of the Panel shall be rendered within six months of the appointment of the Chairman in accordance with paragraphs (3) and (4) of this Article.
(6) Each Contracting Party shall bear the cost of its own member of the panel and of its representation in the arbitral proceedings. The costs of the Chairman and the remaining costs shall be borne in equal parts by the Contracting Parties. The Panel may, however, in its decision direct that a higher proportion of costs shall be borne by one of the two Contracting Parties, and this award shall be binding on both Contracting Parties.
(7) Within 60 days after a decision is made by the Panel, the Contracting Parties shall agree on the manner in which to give effect to the decision which shall normally consist of implementation of such decision. If the Contracting Parties fail to reach an agreement, the Contracting Party bringing the dispute shall be entitled to compensation or to suspend benefits of equivalent value to those awarded by the panel. Any dispute between the contracting parties relating to the interpretation or application of this Agreement shall as far as possible be settled amicably through consultations through diplomatic channels.
Article XVI. Transparency
(1) The Contracting Parties shall, within a two year period after the entry into force of this Agreement, exchange letters listing, to the extent possible, any existing measures that do not conform to the obligations in subparagraph (3)(a) of Article II, Article IV or paragraphs (1) and (2) of Article V.
(2) Each Contracting Party shall, to the extent practicable, ensure that its laws, regulations, procedures, and administrative rulings of general application respecting any matter covered by this Agreement are promptly published or otherwise made available in such a manner as to enable interested persons and the other Contracting Party to become acquainted with them.
Article XVII. Application and General Exceptions
(1) This Agreement shall apply to any investment made by an investor of one Contracting Party in the territory of the other Contracting Party before or after the entry into force of this Agreement.
(2) Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting, maintaining or enforcing any measure otherwise consistent with this Agreement that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.
(3) Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining measures, including environmental measures:
(a) necessary to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) relating to the conservation of living or non-living exhaustible natural resources.
(4) The Annex shall form an integral part of this Agreement.
Article XVIII. Entry Into Force
(1) This Agreement shall enter into force three months after the notification between the Contracting Parties of the accomplishment of their respective internal procedures for the entry into force of this Agreement.
(2) This Agreement shall remain in force unless either Contracting Party notifies the other Contracting Party in writing of its intention to terminate it. The termination of this Agreement shall become effective one year after notice of termination has been received by the other Contracting Party. In respect of investments or commitments to invest made prior to the date when the termination of this Agreement becomes effective, the provisions of Articles I to XVII inclusive of this Agreement shall remain in force for a period of fifteen years.
Conclusion
IN WITNESS WHEREOF, the undersigned, duly authorized thereto by their respective Governments, have signed this Agreement.
Done in duplicate at Manila on November 9, 1995 in French and English Languages, both texts being equally authentic.
ROY MACLAREN
Trade Minister
FOR THE GOVERNMENT OF CANADA
RIZALINO S. NAVARRO
Secretary
Department of Trade and Industry
FOR THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES
Attachments
ANNEX
Section 1. Reservations and Exceptions
(a) In accordance with Article IV, subparagraph 2(d), Canada reserves the right to make and maintain exceptions in the sectors or matters listed below:
• social services (i.e. public law enforcement; correctional services; income security or insurance; social security or insurance; social welfare; public education; public training; health and child care);
• services in any other sector;
• government securities -as described in SIC 8152;
• residency requirements for ownership of oceanfront land;
• measures implementing the Northwest Territories and the Yukon Oil and Gas Accords.
(b) In accordance with Article IV, subparagraph 2(d), the Republic of the Philippines reserves the right to make and maintain exceptions in the sectors or matters listed below:
• mass media as described in Article XVI, Section 11 of the Constitution;
• services involving the practice of licensed profession;
• small-scale retail trade as described in Republic Act No. 1180;
• cooperative enterprises as described in Republic Act No. 6938;
• private security agencies as described in Republic Act No. 5487;
• small-scale mining as described in Republic Act No. 7076;
• utilization of marine resources except deep sea fishing as described in Article XII, Section 2 of the Constitution;
• trading in rice and corn as described in Republic Act No. 3018; Presidential Decree No. 194. For the purpose of this Annex, "SIC" means, with respect to Canada, Standard Industrial Classification numbers as set out in Statistics Canada, Standard Industrial Classification, fourth edition, 1980.
Section 2. Canada Specific Interpretation and Exceptions
(a) For the purposes of this Agreement an "investment" shall not include real estate or other property, tangible or intangible, located in the territory of Canada, not acquired in the expectation or used for the purpose of economic benefit or other business purposes.
(b) The provisions of Articles II, III, IV and V of this Agreement do not apply to any measure denying investors of the Philippines and their investments any rights or preferences provided to the aboriginal peoples of Canada.
(c) Investments in cultural industries in Canada are exempt from the' provisions of this Agreement. "Cultural Industries" means natural persons or enterprises engaged in any of the following activities:
(i) the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
(ii) the production, distribution, sale or exhibition of film or video recordings;
(iii) the production, distribution, sale or exhibition of audio or video music recordings;
(iv) the publication, distribution, sale or exhibition of music in print or machine readable form; or
(v) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television or cable broadcasting undertakings and all satellite programming and broadcast network services.
Section 3. Philippines-specific Interpretation and Exceptions
For the purposes of this Agreement, "investment" in the territory of the Philippines shall only include assets which, where registration is required by the Philippine laws, rules or regulations, have been so registered.
Section 4. Interest
The compensation for expropriation described in Article VIII (Expropriation) shall include interest payable from the date of expropriation to the date of payment at a normal commercial rate.
Section 5. Procedure for Disputes on Prudential and Financial Measures
(a) Where an investor submits a claim to arbitration under Article XIII, and the disputing Contracting Party invokes paragraphs (1) or (2) of Article XI, the tribunal established pursuant to Article XIII, shall at the request of that Contracting Party, seek a report in writing from the Contracting Parties on the issue of whether and to what extent the said paragraphs are a valid defence to the claim of the investor. The tribunal may not proceed pending receipt of a report under this Article.
(b) Pursuant to a request received in accordance with subparagraph (a), the Contracting Parties shall proceed in accordance with Article XV, to prepare a written report, either on the basis of agreement following consultations, or by means of an arbitral panel. The consultations shall be between the financial services authorities of the Contracting Parties. The report shall be transmitted to the tribunal, and shall be binding on the tribunal.
(c) Where, within 70 days of the referral by the tribunal, no request for the establishment of a panel pursuant to subparagraph (b) has been made and no report has been received by the tribunal, the tribunal may proceed to decide the matter.
(d) Panels for disputes on prudential issues and other financial matters shall have the necessary expertise relevant to the specific financial service in dispute.