27.4 The Tribunal may not award punitive or moral damages or any injunctive relief against either of the disputing parties under any circumstance.
Article 28. Finality and Enforcement of Awards
28.1 An award made by a tribunal shall have no binding force except between the disputing parties and in respect of the particular case and the tribunal must clearly state those limitations in the text of the award.
28.2 Subject to Article 28.3, a disputing party shall abide by and comply with an award without delay.
28.3 A disputing party shall not seek enforcement of a final award under the UNCITRAL Arbitration Rules until,
(i) 90 days have elapsed from the date the award was rendered and no disputing party has commenced a proceeding to revise, set aside or annul the award, or
(ii) a court has dismissed or allowed an application to revise, set aside or annul the award and there is no further appeal.
28.4 Each Party shall provide for the enforcement of an award in its territory in accordance with its law.
Article 29. Costs
The disputing parties shall share the costs of the arbitration, with arbitrator fees, expenses, allowances and other administrative costs. Each of the disputing parties shall also bear the cost of its representation in the arbitral proceedings. The Tribunal may, however, in its discretion direct that the entire costs or a higher proportion of costs shall be borne by one of the two disputing parties and this determination shall be final and binding on both disputing parties.
Article 30. Diplomatic Exchange between Parties
If a disputing investor has commenced a dispute against a Defending Party under this Chapter, the Non-disputing Party shall not give diplomatic protection, or bring an international claim, in respect of such dispute between one of its investors and the Defending Party, unless the Defending Party has failed to abide by and comply with an award or the decisions of its courts, as the case may be, in accordance with this Chapter and other applicable law regarding recognition and enforcement of foreign judgments and arbitral awards.
Chapter V. State-State Dispute Settlement
Article 31. Disputes between Parties
31.1 Disputes between the Parties concerning the interpretation or application of this Agreement should, as far as possible, be settled amicably through consultation or negotiation, which may include the use of non-binding third-party mediation or other mechanisms. Such consultation or negotiation shall be initiated by delivering a notice to the other Party.
31.2 Unless the Parties agree to a longer period, the Parties shall, within 30 days of the notice, meet to consider the matter with a view to reaching a mutually satisfactory resolution.
31.3 If a dispute between the Parties cannot be settled within six months from the time the dispute arose, it shall upon the request of either Party be submitted to a Tribunal.
31.4 Such a Tribunal shall be constituted for each individual case in the following way: Within two months of the receipt of the request for arbitration, each Party shall appoint one member of the Tribunal. Those two members shall then select a national of a Non-Party with which both Parties maintain diplomatic relationswho, on approval by the two Parties, shall be appointed Chairman of the Tribunal. The Chairman shall be appointed within two months from the date of appointment of the other two members. All arbitrators shall be nationals of states having diplomatic relations with both Parties.
31.5 If within the periods specified in Article 31.4 the necessary appointment(s) have not been made, either Party may, in the absence of any other agreement, invite the Secretary General of the Permanent Court of Arbitration to make any necessary appointment(s). If the Secretary General of the Permanent Court of Arbitration is a national of either Party or a national of a non-Party that does not maintain diplomatic relations with either Party or if he or she is otherwise prevented from discharging the said function, the Deputy Secretary General of the Permanent Court of Arbitration shall be invited to make the necessary appointment(s). If the Deputy Secretary General of the Permanent Court of Arbitration is a national of either Party or a national of a non-Party that does not maintain diplomatic relations with either Party or if he or she too is prevented from discharging the said function, the member of the Permanent Court of Arbitration next in seniority who is not a national of either Party nor a national of a non-Party that does not maintain diplomatic relations with either Party shall be invited to make the necessary appointment(s).
31.6 Subject to the rights of the Parties provided for in this section to choose a national of each Party as an arbitrator, all arbitrators referred to under this section shall be nationals of states having diplomatic relations with both Parties.
31.7 The arbitral tribunal shall reach its decision by a majority of votes. Such decision shall be binding on both Parties.
31.8 The Parties to the arbitration shall share the costs of the arbitration, including the arbitrator fees, expenses, allowances and other administrative costs. Each Party shall bear the cost of its representation in the arbitral proceedings. The Tribunal may, however, in its discretion direct that the entire costs or a higher proportion of costs shall be borne by one of the two Parties and this determination shall be binding on both Parties.
31.9 The Tribunal shall decide all questions relating to its competence and, subject to any agreement between the Parties, determine its own procedure, taking into account the PCA Arbitration Rules 2012. (11)
Chapter VI. Exceptions
Article 32. General Exceptions
32.1 Nothing in this Agreement shall be construed to prevent the adoption or enforcement by a Party of measures of general applicability applied on a non-discriminatory basis that are necessary (12) to:
(i) protect public morals or maintaining public order;
(ii) protect human, animal or plant life or health;
(iii) ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(iv) protect and conserve the environment, including all living and non-living natural resources; or
(v) protect national treasures or monuments of artistic, cultural, historic or archaeological value.
32.2 Nothing in this Agreement shall apply to non-discriminatory measures of general application taken by a central bank or monetary authority of a Party in pursuit of monetary and related credit policies or exchange rate policies. This paragraph is without prejudice to a Party's rights and obligations under Article 8 (Transfers).
32.3 Nothing in this Agreement shall affect the rights and obligations of Parties as members of the International Monetary Fund under the IMF Articles of Agreement, as applicable from time to time, including the use of exchange actions which are in conformity with the IMF Articles of Agreement. In case of any inconsistency between the provisions of this Agreement and the IMF Articles of Agreement, the latter shall prevail.
32.4 Nothing in this Agreement shall prevent the Parties from adopting or maintaining measures relating to financial services 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 financial services supplier owes a fiduciary duty;
b) the maintenance of the safety, soundness, integrity or financial responsibility of financial services suppliers; or
c) ensuring the integrity and stability of the Party's financial system. Where the measures taken by a Party pursuant to paragraph 32.4 are not in conformity with this Agreement, they shall not be used as a means of avoiding the obligations of a Party under this Agreement.
Article 33. Essential Security Exceptions
Nothing in this Agreement shall be construed:
(a) To require a Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests; or
(b) To preclude a Party from applying measures that is considers necessary for the fulfilment of its obligations under the United Nations Charter with respect to the maintenance or restoration of international peace or security, or for the protection of its own essential security interests, or in order to carry out obligations it has accepted for the purposes of maintaining international security.
Chapter VII. Final Provisions
Article 34. Relationship with other Treaties
34.1 This Agreement or any action taken hereunder shall not affect the rights and obligations of the Parties under any other Agreements to which they are Parties.
34.2 Any inconsistency, or question regarding the relationship between this Agreement and another bilateral agreement between the Parties, or a multilateral agreement to which both Parties are a party, shall be resolved in accordance with applicable provisions of the Vienna Convention on the Law of Treaties, 1969.
Article 35. Denial of Benefits
35.1 The benefits of this Agreement, including after the institution of arbitration proceedings in accordance with Chapter IV of this Agreement, shall not be available to:
(i) an investment or investor owned or controlled (13), directly or indirectly, by juridical entities or natural persons of a non-Party or of the denying Party; or
(ii) an investment or investor that has been established or restructured or does not have substantial business activity or has otherwise acquired the nationality of a Party with the primary purpose of gaining access to the dispute resolution mechanisms provided in this Agreement.
35.2 The benefit under this Agreement shall not be extended to an investor of the other Party and to investments of that investor in case (i) a Specified Non-Party (14), or (ii) a natural person or an entity of a Specified Non-Party, has beneficial interest (15) in the investor or investment of the other Party.
35.3 The benefit under this Agreement shall not be provided to the investor of the other Party and to investments of that investor, if an investment is routed through the territory of a non-Party or a Specified Non-Party, and a natural person or an entity of a Specified Non-Party, holds a beneficial interest in the entity through which the investment is routed.
Article 36. Consultations and Periodic Review
36.1 Either Party may request in writing and the other Party shall promptly agree to, consultations in good faith on any issue regarding the interpretation, application, implementation, execution or any other matter including, but not limited to:
(i) reviewing the implementation of this Agreement;
(ii) reviewing the interpretation or application of this Agreement;
(iii) exchanging legal information; and
(iv) addressing disputes arising under Chapter IV of this Agreementor any other disputes arising out of investment.
36.2 Further to consultations under this Article, the Parties may take any action as they may jointly decide, including making and adopting rules supplementing the applicable arbitral rules under Chapter IV or Chapter V of this Agreement, and issuing binding interpretations of this Agreement.
36.3 The Parties upon mutual consent shall meet every five years after the entry into force of this Agreement to consult and review the operation and effectiveness of this Agreement.
Article 37. Amendments
This Agreement may be amended at any time by the mutual written consent of the Parties. The amendments shall enter into force subject to the completion of the relevant legal procedures necessary for its entry into force. The amendments shall be binding on the tribunals constituted under Chapter IV or Chapter V of this Agreement, and a tribunal award must be consistent with all amendments to this Agreement.
Article Entry Into Force, Duration and Termination
38.1 The Parties shall notify each other in writing of the completion of their internal legal procedures necessary for the entry into force of this Agreement. The Agreement shall enter into force thirty (30) days after the date of receipt of the later notification regarding ratification.
38.2 This Agreement shall remain in force for a period of ten years. Thereafter, it shall continue to remain in force until and unless it is terminated as per Article 38.3.
38.3 This Agreement may be terminated any time after its entry into force if either Party gives to the other Party a prior notice in writing one year in advance stating its intention to terminate the Agreement. The Agreement shall stand terminated immediately after the expiry of the one year notice period.
38.4 In respect of Investments made prior to the date when the termination or the expiry of this Agreement becomes effective, the provisions of this Agreement shall remain in force for a period of ten years.
Conclusion
In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this Agreement.
Done at New Delhi on this 8th day of September in two originals each in the Hindi and English, all texts being equally authoritative.
In case of any divergence in interpretation, the English text shall prevail.
For the Government of the Republic of India
NIRMALA SITHARAMAN
Minister of Finance
For the Government of the State of Israel
BEZALEL SMOTRICH
Minister of Finance
Attachments
Annex. Essential Security Exceptions
The Parties confirm the following understanding with respect to interpretation and/or implementation of Article 33 of this Agreement:
For avoidance of doubt, for the purpose of this Agreement, where the Party asserts as a defence that conduct alleged to be a breach of its obligations under this Agreement is for the protection of its essential security interests protected by Article 33, any decision of such Party taken on such security considerations and its decision to invoke Article 33 at any time, whether before or after the commencement of arbitral proceedings shall be non-justiciable. It shall not be open to any arbitral tribunal constituted under Chapter IV or Chapter V of this Agreement to review any such decision, even where the arbitral proceedings concern an assessment of any claim for damages and/or compensation, or an adjudication of any other issues referred to the Tribunal.