2. Each Party shall have 6 months from the entry into force of this Agreement to indicate in its Schedule to Annex I (Nonconforming Measures) any existing nonconforming measure maintained by a state or region referred to in paragraph 1(a)(ii) and shall be incorporated into this Agreement by a decision adopted by the Commission pursuant to Article 17.2 (Functions of the Administrative Commission).
3. Articles 11.3, 11.4, 11.7 and 11.8 shall not apply to any measures that a Party adopts or maintains, in relation to sectors, subsectors or activities, as indicated in its Schedule to Annex II (Future Measures).
4. Neither Party may require, pursuant to any measure adopted after the entry into force of this Agreement and included in a Schedule to Annex II (Future Measures), an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure enters into force.
5. The provisions contained in:
a) paragraphs 1(a), 1(b) and 1(c), and 3(a) and 3(b) of Article 11.7 shall not apply to the requirements for qualification of goods and services with respect to export promotion and foreign aid programs;
b) paragraphs 1(b), 1(c), 1(f) and 1(g), and 3(a) and 3(b) of Article 11.7 shall not apply to purchases made by a Party or a State enterprise; and
c) paragraphs 3(a) and 3(b) of Article 11.7 shall not apply to requirements imposed by an importing Party on goods that, by virtue of their content, qualify for preferential tariffs or quotas.
Article 11.10. Exceptions
1. Articles 11.3, 11.4 and 11.8 do not apply to:
a) purchases made by a Party or a state enterprise; or
b) subsidies or grants, including government-backed loans, guarantees and insurance, provided by a Party or a state enterprise.
2. Article 11.4 does not apply to treatment accorded by a Party pursuant to international agreements, or with respect to sectors, set out in its Schedule to Annex Il (Future Measures) or Annex IV (Exceptions to Most-Favored-Nation Treatment).
3. A Party has the right to engage exclusively in the economic activities listed in Annex V (Activities reserved to the State), and to refuse to authorize the establishment of investments in such activities.
Article 11.11. Compensation for Losses
With respect to measures such as restitution, indemnification, compensation and other settlement, investors of a Party whose investments suffer losses in the territory of the other Party due to war, armed conflict, state of national emergency, revolt, insurrection, riot or any other similar event, shall be accorded treatment no less favorable than that which the other Party accords to its own investors or investments of any non-Party.
Article 11.12. Expropriation and Compensation (3)
1. No Party shall expropriate or nationalize an investment, directly or indirectly through measures tantamount to expropriation or nationalization (hereinafter referred to as "expropriation"), unless it is:
a) for a public purpose (4) ;
b) on a non-discriminatory basis;
c) in accordance with the principle of legality; and
d) by payment of compensation in accordance with paragraph 2.
2. Compensation:
a) shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place. The fair market value will not reflect any change in value due to the fact that the expropriation was publicly known in advance. The valuation criteria will include the current value, the value of the assets, including the declared tax value of the property of tangible assets, as well as other criteria that are appropriate for determining fair market value;
b) will be paid without delay;
c) shall include interest at a reasonable commercial rate for the currency in which such payment is made, from the date of expropriation until the date of payment; and
d) shall be fully liquidable and freely transferable.
3. An investor whose investment is expropriated shall have the right, under the law of the Party that carried out the expropriation, to a prompt review of its case by a judicial or other competent authority and to a valuation of its investment in accordance with the provisions set forth in this Article.
Article 11.13. Transfers
1. Each Party shall permit all transfers relating to an investment of an investor of the other Party to be made freely and without delay to and from its territory.
2. Each Party shall allow transfers to be made in a freely convertible currency at the market rate of exchange prevailing on the date of transfer. Such transfers shall include:
a) initial capital and additional amounts to maintain or increase an investment;
b) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance payments and other remuneration, as well as other amounts derived from the investment;
c) proceeds from the total or partial sale of the investment, or from the total or partial liquidation of the investment;
d) payments made under a contract to which an investor or its investment is a party, including payments made under a loan agreement;
e) payments derived from expropriation compensation; and
f) payments arising from the application of dispute resolution provisions.
3. For the purposes of paragraph 1, transfers shall be deemed to have been made without delay when they have been carried out within the time normally required for the completion of the transfer.
4. Notwithstanding paragraphs 1, 2 and 3, a Party may prevent the implementation of a transfer through the equitable, non-discriminatory and good faith application of its legislation in the following cases:
a) bankruptcy, insolvency or protection of creditorsâ rights;
b) issuance, trading or operations of securities;
c) criminal or administrative offenses;
d) reports from transfers from transfer reports u other monetary instruments; or
e) guarantee of compliance with rulings in contentious proceedings.
5. In the event of a fundamental disequilibrium in the balance of payments or a threat thereto, each Party may, on a temporary basis, restrict transfers, provided that such Party implements measures or a program that:
a) is consistent with the Articles of Agreement of the International Monetary Fund;
b) does not exceed what is necessary to meet the circumstances mentioned in paragraph 5;
c) is temporary and is eliminated as soon as conditions permit; d) is promptly notified to the other Party; and
e) is equitable, non-discriminatory and in good faith.
Article 11.14. Special Formalities and Reporting Requirements
1. Nothing in Article 11.3 shall be construed to prevent a Party from adopting or maintaining a measure prescribing special formalities in connection with the establishment of investments by investors of the other Party, such as a requirement that the investors be residents of the Party or that the investments be constituted in accordance with the laws and regulations of the Party, provided that such formalities do not significantly impair the protection afforded by a Party to investors of the other Party and to investments of investors of another Party under this Chapter.
2. Notwithstanding Articles 11.3 and 11.4, a Party may require an investor of the other Party or its investment in its territory to provide routine information concerning that investment solely for informational or statistical purposes. The Party shall protect from disclosure information that is confidential and that could adversely affect the competitive position of the investment or the investor. Nothing in this paragraph shall be construed to prevent a Party from obtaining or disclosing information relating to the equitable and good faith application of its laws.
Article 11.15. Relationship with other Chapters
1. In case of incompatibility between this Chapter and another Chapter, the latter shall prevail to the extent of the incompatibility.
2. The fact that a Party requires a service supplier of the other Party to post a bond or other form of financial security as a condition for supplying a service in its territory does not, of itself, make this Chapter applicable to the cross-border supply of that service. This Chapter applies to the treatment accorded by that Party to the posted bond or financial security.
Article 11.16. 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 such investor, if such enterprises are owned or controlled by investors of a non-Party, and:
a) the Party denying benefits does not maintain diplomatic relations with the non-Party; or
b) the Party denying the benefits adopts or maintains measures in relation to the non-Party that prohibit transactions with that enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to that enterprise or its investments.
2. A Party may, upon notification to the other Party, deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to investments of such investor, if investors o f a non-Party own or control the enterprise and the enterprise does not have substantial business activities in the territory of the Party under whose law it is incorporated or organized.
Article 11.17. Measures Relating to the Environment
1. Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measure, otherwise consistent with this Chapter, that it considers appropriate to ensure that investments in its territory are made taking into account environmental concerns.
2. The Parties recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures. Accordingly, no Party should waive or otherwise derogate from, or offer to waive or derogate from, such measures as a means of inducing the establishment, acquisition, expansion or retention of an investor's investment in its territory. If a Party considers that the other Party has encouraged an investment in such a manner, it may request consultations with that other Party and both Parties shall consult with a view to avoiding such inducements.
Section C. Dispute Settlement between a Party and an Investor of the other Party
Article 11.18. Objective
This Section establishes a mechanism for the settlement of disputes between a Party and an investor of the other Party arising out of an alleged breach of an obligation set forth in Section B of this Chapter, resulting in damage.
Article 11.19. Notification and Consultation
1. The disputing parties shall first attempt to settle the dispute through consultation or negotiation.
2. In order to resolve the dispute amicably, the disputing investor shall notify the disputing Party in writing of its intention to submit the claim to arbitration at least 6 months before the claim is submitted in accordance with the Annex to the Article 11.19. The notification shall specify:
a) the name and address of the disputing investor and, where the claim is made by an investor on behalf of an enterprise pursuant to Article 11.20, the name and address of the enterprise;
b) the provisions of Section B of this Chapter alleged to have been breached and any other applicable provisions;
c) the matters of fact and law on which the claim is based; and
d) the repair requested and the approximate amount of damages claimed.
Article 11.20. Submission of a Claim to Arbitration
1. An investor of a Party may, at its own expense, submit a claim to arbitration that the other Party has breached an obligation set forth in Section B, and that the investor has suffered loss or damage by reason of or arising out of that breach.
2. An investor of a Party may, on behalf of an enterprise that is a juridical person organized under the laws of the other Party and owned or controlled by the investor, submit to arbitration a claim that the other Party has breached an obligation set forth in Section B, and that the enterprise has suffered loss or damage by reason of, or arising out of, that breach.
3. An investment may not submit a claim to arbitration under this Section.
4. An investor may not submit a claim to arbitration under this Section unless 6 months have elapsed since the events giving rise to the claim took place.
5. A disputing investor may submit the claim to arbitration pursuant to:
a) the ICSID Convention, provided that both the disputing Party and th e Party of the investor are parties to the ICSID Convention;
b) the ICSID Additional Facility Rules, where either the disputing Party or the Party of the investor, but not both, is a party to the ICSID Convention;
c) the UNCITRAL Arbitration Rules; or
d) if the disputing parties so agree, any other arbitration rules.
6. A disputing investor may submit a claim to arbitration only if:
a) the investor expresses its consent to submit to arbitration in accordance with the procedures set forth in this Chapter; and
b) the investor and, where the claim concerns loss or damage to an interest in an enterprise of the other Party that is a juridical person owned or controlled by the investor, the enterprise, waive their right to initiate or continue any proceedings before an administrative tribunal or court under the Party's law, or other binding dispute settlement procedures, with respect to the measure of the disputing Party alleged to be in breach of Section B, seeking compensation for damages caused by the measure for breach of obligations other than those contained in Section B, except for proceedings seeking injunctive, declaratory or extraordinary relief, not involving the payment of damages, in accordance with the laws of the disputing Party.
7. A disputing investor may, under paragraph 2, submit a claim to arbitration on behalf of an enterprise of the other Party that is a juridical person owned or controlled by the investor only if both the investor and the enterprise:
a) they express their consent to submit to arbitration in accordance with the procedures set forth in this Chapter; and
b) the investor and, where the claim concerns loss or damage to an interest in an enterprise of the other Party that is a juridical person owned or controlled by the investor, the enterprise, waive their right to initiate or continue any proceedings before an administrative tribunal or court under the Party's law, or other binding dispute settlement procedures, with respect to the measure of the disputing Party alleged to be in breach of Section B, seeking compensation for damages caused by the measure for breach of obligations other than those contained in Section B, except for proceedings seeking injunctive, declaratory or extraordinary relief, not involving the payment of damages, in accordance with the laws of the disputing Party.
8. The consent and waiver required by this Article shall be in writing, delivered to the disputing Party and included in the submission of the claim to arbitration.
9. The applicable arbitration rules shall govern the arbitration, except as modified by this Section.
10. A dispute may be submitted to arbitration provided that the investor has delivered to the Party that is a party to the dispute, the notice of intent referred to in Article 11.19, at least 180 days in advance and provided that no more than 3 years have elapsed from the date on which the investor or the enterprise of the other Party that is a legal person owned or controlled by the investor first had, or should have first had, knowledge of the facts giving rise to the dispute.
11. If the investor, or an enterprise owned or controlled by the investor, brings a claim that an obligation under Section B of this Chapter has been breached before a competent administrative or judicial tribunal of the Party, or, as the case may be, before any other binding dispute setilementprocedure, it may not submit to arbitration under Section C of this Chapter a claim with respect to the allegedly breached measure.
12. The liability of the disputing parties for expenses arising from their participation in the arbitration shall be established:
a) by the arbitration institution before which the dispute has been submitted, in accordance with its rules of arbitration procedure; or
b) in accordance with the rules of arbitration procedure agreed upon by the investor and the Party, where applicable.
Article 11.21. Consent of the Party
1. Each Party gives its unconditional consent to submit a dispute to international arbitration in accordance with the procedures set forth in this Section.
2. The consent referred to in paragraph 1 and the submission of a claim to arbitration by a disputing investor shall comply with the requirements set forth in:
a) Chapter II of the ICSID Convention (Jurisdiction of the Centre) and the ICSID Additional Facility Rules, which require the written consent of the parties; and
b) Article Il of the New York Convention, which requires a written agreement. Article 11.22: Membership of the arbitral tribunal 1. Unless otherwise agreed by the disputing parties, the arbitral tribunal shall consist of 3 arbitrators. Each disputing party shall appoint one arbitrator. The third arbitrator, who shall be the Chairman of the arbitral tribunal, shall be appointed by agreement of the disputing parties.
2. The arbitrators referred to in paragraph 1 shall have experience in international law and investment matters.
3. If an arbitral tribunal has not been constituted within 90 days from the date on which the claim was submitted to arbitration, either because one of the disputing parties has not appointed a member or because there is no agreement on the appointment of the Chairman of the tribunal, the Secretary-General of ICSID shall, at the request of any of the disputing parties, appoint, at his discretion, the arbitrator or arbitrators not yet appointed. However, in appointing the Chairman of the arbitral tribunal, the Secretary-General of ICSID shall ensure that the Chairman is not a national of any of the Parties.
Article 11.23. Accumulation
1. Pursuant to the provisions of this Article, the Secretary-General of ICSID may establish a consolidation tribunal under the UNCITRAL Arbitration Rules. The consolidation tribunal shall proceed in accordance with such Rules, except as modified by this Section.
2. In the interest of a fair and efficient resolution, and unless it is determined that the interests of either disputing party would be seriously prejudiced, a tribunal established under this Article shall consolidate the proceedings:
a) when 2 or more investors related to the same investment submit a claim to arbitration under this Chapter; or
b) when 2 or more claims arising out of common legal or factual considerations are submitted to arbitration.
3. At the request of a disputing party, a tribunal established under Article 11.22, pending the determination of a consolidation tribunal under paragraph 4, may order that the proceedings that have been initiated be suspended.
4. A tribunal established under this Article, having heard the disputing parties, may determine that:
a) assumes jurisdiction, hears and resolves jointly, all or part of the claims; or
b) assumes jurisdiction, hears and resolves one or more of the claims, on the basis that it would contribute to the resolution of the others.
5. A court established under Article 11.22 shall not have jurisdiction to hear and determine a claim, or part of a claim, over which a consolidation court has assumed jurisdiction.
6. A disputing party seeking a determination of aggregation under this Article may request the Secretary-General of ICSID to establish a tribunal, and shall specify in its request:
a) the name and address of the disputing Party or disputing investors in respect of which the cumulation order is sought;
b) the nature of the requested consolidation order; and
c) the basis on which the request is supported.
7. A disputing party shall deliver a copy of its request to the other disputing party or to any other disputing investor in respect of which the order of cumulation is sought.
8. Within 60 days from the date of receipt of the request, the Secretary-General of ICSID, having heard the disputing parties in respect of which a consolidation order is sought, shall establish a tribunal composed of three arbitrators. One arbitrator shall be a national of the disputing Party and the other arbitrator shall be a national of the investor Party. A third arbitrator, who shall serve as Chairman of the arbitral tribunal, shall not be a national of either disputing party.
9. Where a disputing investor submitting a claim to arbitration under Article 11.20 has not been named in the request for consolidation, the disputing investor or the disputing Party may request in writing that the tribunal include the disputing investor inthe order made pursuant to paragraph 2:
a) the name and address of the disputing investor;
b) the nature of the requested consolidation order; and
c) the grounds on which the request is based.
10. A disputing investor referred to in paragraph 9 shall provide a copy of its request to the other disputing parties identified in a request made under paragraph 6. Article 11.24: Notification The disputing Party shall deliver to the other Party:
a) written notice of a claim that has been submitted to arbitration no later than 30 days after the date of submission of the claim to arbitration; and
b) copies of all pleadings filed in the arbitration proceedings.
Article 11.25. Participation of a Party
Upon written notice to the disputing parties, a Party may submit submissions to a tribunal on a question of interpretation of this Chapter.
Article 11.26. Documentation
1. a Party shall be entitled to receive from the disputing Party, a copy of:
a) the evidence offered to the tribunal; and
b) the written arguments presented by the disputing parties.
2. A Party receiving information pursuant to paragraph 1 shall treat the information as if it were a disputing Party.
Article 11.27. Place of Arbitral Proceedings
Any arbitration under this Section shall, at the request of either disputing party, be conducted in a State that is a party to the New York Convention. For the purposes of Article 1 of the New York Convention only, claims submitted to arbitration under this Section shall be deemed to arise out of a commercial relationship or transaction.
Article 11.28. Indemnification
In an arbitration under this Section, a disputing Party shall not assert as a defense, counterclaim, right of set-off or for any other reason, that indemnification or other compensation, in respect of all or part of the alleged loss or damage, has been or is to be received by the investor pursuant to an indemnity, guarantee or insurance contract.
Article 11.29. Applicable Law
1. An arbitral tribunal established under this Section shall decide disputes submitted to it in accordance with this Agreement and the applicable rules of international law.
2. An interpretation by the Commission of a provision of this Agreement shall be binding on any tribunal established pursuant to this Section.
Article 11.30. Interpretation of Annexes
1. Where a Party asserts as a defense that an allegedly violative measure falls within the scope of a reservation or exception set out in Annex I (Nonconforming Measures), Annex II (Future Measures), Annex IV (Exceptions to Most-Favored- Nation Treatment) or Annex V (Activities Reserved to the State), the tribunal shall, at the request of the disputing Party, request the Commission for an interpretation of that matter. The Commission shall, within 60 days of delivery of the request, submit its interpretation in writing to the tribunal.
2. Pursuant to Article 11.29(2), the Commission's interpretation submitted under paragraph 1 shall be binding on the tribunal. If the Commission fails to submit an interpretation within 60 days, the tribunal shall decide the matter.
Article 11.31. Awards and Enforcement
1. Unless the disputing parties agree otherwise, an arbitral award finding that a Party has failed to comply with its obligations under this chapter may only be made separately or in combination:
a) monetary damages and any applicable interest; or
b) restitution of the property, in which case the award shall provide that the disputing party may pay monetary damages, plus interest as appropriate, in lieu of restitution.
A tribunal may also award costs and attorneysâ fees in accordance with the applicable arbitration rules.
2. Pursuant to paragraph 1, when the claim has been filed on behalf of an enterprise: