Title

Agreement between the Government of the United Mexican States and the Government of the Republic of Singapore on the Promotion and Reciprocal Protection of Investments 

Preamble

The Government of the United Mexican States and the Government of the Republic of Singapore, hereinafter referred to as "the Contracting Parties",

DESIRING to intensify economic cooperation for their mutual benefit;

INTENDING to create and maintain favourable conditions for investments by investors of one Contracting Party in the Area of the other Contracting Party; and

RECOGNIZING the need to promote and protect foreign investments with the aim of fostering the (low of productive capital and economic prosperity,

Have agreed as follows:

Body

Article 1. Definitions

For the purposes of this Agreement, the term:

1. "Area" means:
(a) with respect to the United Mexican States (hereinafter referred to as "Mexico"):
(i) the States of the Federation and the Federal District;

(ii) The islands, including the reefs and keys, in adjacent seas;

(iii) the islands of Guadalupe and Revillagigedo situated in the Pacific Ocean;

(iv) The continental shelf and the submarine shelf of such islands, keys and reefs;

(v) The waters of the territorial seas, in accordance with international law, and its interior maritime waters;

(vi) The space located above the national territory, in accordance with international law; and

(vii) Any areas beyond the territorial seas of Mexico within which, in accordance with international law. including the United Nations Convention on the Law; of the Sea, as may be amended, and its domestic law. Mexico may exercise rights with respect to the seabed and subsoil and their natural resources; and

(b) With respect to the Republic of Singapore, its land territory, internal waters and territorial sea, as well as any maritime area situated beyond the territorial sea which has been or might in the future be designated under its national law. in accordance with international law, as an area within which Singapore may exercise sovereign rights or jurisdiction with regards to the sea. the sea-bed, the subsoil and the natural resources.

2. "enterprise" means any entity constituted or organized under the applicable law; of a Contracting Party, whether or not for profit, and whether privately or govern mentally owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association, and a branch of an enterprise;

3. "freely usable currency" means "freely usable currency" as determined by the international Monetary Fund under its Articles of Agreement and any amendments thereto;

4. "ICSID" means the International Centre for Settlement of Investment Disputes;

5. "ICSID Additional Facility Rules" means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the ICSID, as may be amended;

6. "ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, adopted in Washington on March 18, 1965, as may be amended;

7. "investment" means an asset owned or controlled, directly or indirectly by investors of one Contracting Party and established or acquired in accordance with the laws and regulations of the other Contracting Party in whose Area the investment is made, and in particular includes:

(a) An enterprise;

(b) Shares, stocks, and other forms of equity participation in an enterprise, or futures, options, and other derivatives;

(c) Bonds, debentures, and other debt securities of an enterprise: where the enterprise is an affiliate of the investor; or where the original maturity of the debt security is at least three years, but does not include a debt security, regardless of original maturity, Of a Contracting Party or an entity directly owned and controlled by a Contracting Party;
(i) Where the enterprise is an affiliate of the investor; or

(ii) Where the original maturity of the debt security is at least three years. but does not include a debt security, regardless of original maturity, Of a Contracting Party or an entity directly owned and controlled by a Contracting Party;

(d) Loans to an enterprise:
(i) Where the enterprise is an affiliate of the investor; or

(ii) Where the original maturity of the loan is at least three years, but does not include a loan, regardless of original maturity, to a Contracting Party or an entity directly owned and controlled by a Contracting Party;

(e) Interests arising from the commitment of capital or other resources in the Area of a Contracting Party to economic activity in such Area, such as under: 
(i) Contracts involving the presence of an investor's property in the Area of the other Contracting Party, including turnkey or construction contracts, or concessions;

(ii) Contracts where remuneration depends substantially on the production, revenues or profits of an enterprise; or

(iii) Licenses, authorizations, permits, and similar instruments;

(f) Movable or immovable property, and related rights such as leases, mortgages, liens or pledges, acquired in the expectation or used for the purpose of economic benefit or other business purposes;

(g) Intellectual property rights; and

(h) Claims to money involving the kind of interests set out in sub-paragraphs (a) to (g) above, but not claims to money that arise solely from:
(i) Commercial contracts for the sale of goods or services by a national or enterprise in the Area of a Contracting Party to an enterprise in the Area of the other Contracting Party; or

(ii) The extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by sub-paragraph (d) above;

8. "investor of a Contracting Party" means:

a) Natural person having the nationality of a Contracting Party in accordance with its applicable laws, or

(b) An enterprise which is either constituted or otherwise organized under the law of a Contracting Party, and is engaged in substantive business operations in the Area of that Contracting Party;

Having made an investment in the Area of the other Contracting Party;

9. "New York Convention" means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted at the United Nations in New York on June 10, 1958, as may be amended;

10. "UNCITRAL Arbitration Rules" means the Arbitration Rules of the United Nations Commission on International Trade Law, adopted by the United Nations General Assembly on December 15, 1976, as may be amended;

Article 2. Admission of Investments

Each Contracting Party shall admit the entry of investments made by investors of the other Contracting Party pursuant to its applicable laws and regulations.

Chapter II. Protection of Investments

Article 3. National Treatment and Most Favoured Nation Treatment

1. Each Contracting Party shall accord to investors of the other Contracting Party and their investments, treatment no less favourable than that it accords, in like circumstances, to its own investors and to investments of its own investors with respect to the management, maintenance, use, enjoyment or disposition of investments.

2. Each Contracting Party shall accord to investors of the other Contracting Party and their investments, treatment no less favourable than that it accords, in like circumstances, to investors and to investments of investors of any third State with respect to the management, maintenance, use, enjoyment or disposition of investments.

3. This Article shall not be construed so as to oblige one Contracting Party to extend to the investors of the other Contracting Party and their investments the benefits of any treatment, preference or privilege which may be granted by such Contracting Party by virtue of:

(a) Any existing or future regional economic integration organization, free trade area, customs union, monetary union or any other similar integration arrangement, of which one of the Contracting Parties is or may become a party, or any agreement relating to the promotion or protection of investments entered into prior to 1991;

(b) Any rights or obligations of a Contracting Party resulting from an international agreement or arrangement relating wholly or mainly to taxation. In the event of any inconsistency between this Agreement and any tax-related international agreement or arrangement, the latter shall prevail.

4. For greater certainty, paragraph 2 of this Article shall not be construed as granting to investors options or procedures for the settlement of disputes other than those set out in this Agreement.

Article 4. Minimum Standard of Treatment

1. Each Contracting Party shall accord to investments of investors of the other Contracting Party treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.

2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens(1) as the minimum standard of treatment to be afforded to investments of investors of the other Contracting Party. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that which is required by that standard and do not create additional substantive rights.

3. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.

Article 5. Compensation for Losses

Investors of a Contracting Party whose investments in the Area of the other Contracting Party suffer losses owing to war, armed conflict, a state of national emergency, insurrection, riot or any other similar event in the Area of the latter Contracting Party, shall be accorded, as regards the restitution, indemnification, compensation or other settlements, treatment no less favourable than the treatment that other Contracting Party accords to its own investors or investors of any third State.

Article 6. Expropriation and Compensation

1. Neither Contracting Party may expropriate or nationalize an investment either directly or indirectly through measures tantamount to expropriation or nationalization (hereinafter referred to as "expropriation"), except:

(a) For a public purpose;

(b) On a non-discriminatory basis;

(c) In accordance with due process of law; and

(d) On payment of compensation in accordance with paragraph 2 below.

2. Compensation shall:

(a) Be equivalent to the fair market value of the expropriated investment immediately before the expropriation occurred. The fair market value shall not reflect any change in value because the intended expropriation had become publicly known earlier.

Valuation criteria may include the going concern value, asset value, including declared tax value of tangible property, and other criteria, as appropriate, to determine the fair market value;

(b) Be paid without delay;

(c) Include interest at a commercially reasonable rate for that currency, from the date of expropriation until the date of actual payment; and

(d) Be fully realizable and freely transferable.

3. Notwithstanding paragraphs 1 and 2, any measure of expropriation relating to land, which shall be defined in each Contracting Party's domestic laws and regulations and amendments thereto, shall be for a purpose and upon payment of compensation in accordance with the aforesaid laws and regulations.

Article 7. Transfers

1. Each Contracting Party shall permit all transfers related to an investment of an investor of the other Contracting Party be made freely and without delay into and out of its Area. Transfers shall be made in a freely usable currency at the market rate of exchange prevailing on the date of transfer. Such transfers may include:

(a) Profits, dividends, interests, capital gains, royalty payments, management fees, technical assistance and other fees and amounts derived from the investment;

(b) Proceeds from the sale of all or any part of the investment, or from the partial or complete liquidation of the investment;

(c) Payments made under a contract entered into by the investor or its investment, including payments made pursuant to a loan agreement;

(d) Payments arising from the compensation for losses or expropriation; and

(e) Payments pursuant to Chapter III, Section One.

2. Notwithstanding paragraph 1 above, a Contracting Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its laws in the following cases:

(a) Bankruptcy, insolvency or the protection of the rights of creditors;

(b) Issuing, trading, dealing in securities, futures, options or derivatives;

(c) Criminal or administrative violations;

(d) Financial reporting or record keeping of transfers of currency or other monetary instruments when necessary to assist law enforcement or financial regulatory authorities;

(e) Ensuring the satisfaction of judgments, orders or awards in judicial or administrative proceedings; or

(f) Social security, public retirement or compulsory savings schemes.

3. In case of a serious balance of payments difficulty or of a threat thereof, a Contracting Party may temporarily restrict transfers provided that such a Contracting Party implements measures or a programme in accordance with the Articles of Agreement of the International Monetary Fund. These restrictions should be imposed on an equitable, non-discriminatory and good faith basis.

Article 8. Subrogation

1. If a Contracting Party or its designated agency has granted a financial guarantee against non-commercial risks with respect to an investment made by one of its investors in the Area of the other Contracting Party, and makes a payment under such guarantee. or exercises its rights as subrogee, the latter Contracting Party shall recognize the subrogation of any right, title, claim, privilege or actions. The Contracting Party or its designated agency shall not assert greater rights than those of the person or entity from whom such rights were received.

2. In case a dispute arises, only the investor or a designated agency operating in accordance with commercial principles may initiate or participate in proceedings before a national tribunal or submit the case to international arbitration in accordance with the provisions of Section One of Chapter III.

CHAPTER III. Dispute Settlement

Section One: Settlement of Disputes between a Contracting Party and an Investor of the Other Contracting Party

Article 9. Purpose

This Section shall apply to disputes between a Contracting Party and an investor of the other Contracting Party arising from an alleged breach of an obligation set forth in Chapter II entailing loss or damage.

Article 10. Notice of Intent and Consultation

1. The disputing parties should first attempt to settle a claim through consultation or negotiation.

2. With a view to settling the claim amicably, the disputing investor shall deliver to the disputing Contracting Party written notice of its intention to submit a claim to arbitration at least six months before the claim is submitted under Article 11. Such notice shall specify:

(a) The name and address of the disputing investor and. where a claim is made by an investor on behalf of an enterprise according to Article 11 paragraph 2, the name and address of the enterprise;

(b) The provisions of Chapter II alleged to have been breached;

(c) The factual and legal basis of the claim;

(d) The kind of investment involved pursuant to the definition set out in Article 1; and

(e) The relief sought and the approximate amount of damages claimed.

Article 11. Submission of a Claim

1. An investor of a Contracting Party may submit to arbitration a claim that the other Contracting Party has breached an obligation set forth in Chapter II, and that the investor has incurred loss or damage by reason of, or arising out of, that breach.

2. An investor of a Contracting Party, on behalf of an enterprise legally constituted pursuant to the laws of the other Contracting Party that is a legal person such investor owns or controls, directly or indirectly, may submit to arbitration a claim that the other Contracting Party has breached an obligation set forth in Chapter II, and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.

3. A disputing investor may submit the claim to arbitration under:

(a) The ICSIO Convention, provided that both the disputing Contracting Party and the Contracting Party of the investor are parties to the ICSID Convention;

(b) The ICSID Additional Facility Rules, provided that either the disputing Contracting Party or the Contracting Party of the investor, but not both, is a party to the ICSID Convention:

(c) The UNCITRAL Arbitration Rules; or

(d) Any other arbitration rules or to any other arbitration institution, if the disputing parties so agree.

4. A disputing investor may submit a claim to arbitration only if:

(a) The investor consents to arbitration in accordance with the procedures set forth in this Section; and

(b) The investor and, where the claim is for loss or damage to an interest of an enterprise of the other Contracting Party that is a legal person that the investor owns or controls, directly or indirectly, the enterprise, waives its right to initiate or continue before any administrative tribunal or court under the laws of the disputing Contracting Party, or other dispute settlement procedures, any proceedings with respect to the measure of the disputing Contracting Party that is alleged to be a breach of Chapter II, except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the laws of the disputing Contracting Party.

5. A disputing investor may submit a claim to arbitration on behalf of an enterprise of the other Contracting Party that is a legal person that the investor owns or controls, directly or indirectly, only if both the investor and the enterprise:

(a) Consent to arbitration in accordance with the procedures set forth in this Section; and

(b) Waive their right to initiate or continue before any administrative tribunal or court under the laws of the disputing Contracting Party, or other dispute settlement procedures, any proceedings with respect to the measure of the disputing Contracting Party that is alleged to be a breach under Chapter II, except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the laws of the disputing Contracting Party.

6. Any consent and waiver required by this Article shall be in writing, delivered to the disputing Contracting Party and included in the submission of a claim to arbitration.

7. The applicable arbitration rules shall govern the arbitration except to the extent modified by this Section.

8. A dispute may be submitted to arbitration provided that the investor has delivered to the disputing Contracting Party its notice of intent referred to in Article 10 no later than three years from the date that either the investor, or the enterprise of the other Contracting Party that is a legal person that the investor owns or controls, directly or indirectly, first acquired or should have first acquired knowledge of the alleged breach and knowledge that the investor or the enterprise has incurred loss or damage.

9. If the investor, or an enterprise that an investor owns or controls, submits the dispute referred to in paragraphs 1 or 2 above to the competent judicial or administrative courts of the disputing Contracting Party, the same dispute may not be submitted to arbitration as provided in this Section.

Article 12. Contracting Party Consent

1. Each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration in accordance with this Section.

2. The consent and the submission of a claim to arbitration by the disputing investor shall be deemed to have satisfied the requirements of:

(a) Chapter II of the ICSID Convention (Jurisdiction of the Centre) and the ICSID Additional Facility Rules for written consent of the parties to the dispute; and

(b) Article II of the New York Convention for an "agreement in writing".

Article 13. Constitution of the Arbitral Tribunal

1. Unless the disputing parties otherwise agree, the arbitral tribunal shall be composed of three arbitrators. Each disputing party shall appoint one arbitrator and the disputing parties shall agree upon a third arbitrator, who shall be the chairman of the arbitral tribunal. In any case the disputing parties shall ensure that Members of arbitral tribunals are nationals of neither of the Contracting Parties.

2. If an arbitral tribunal has not been established within 90 days from the date on which the claim was submitted to arbitration, either because a disputing party failed to appoint an arbitrator or because the disputing parties failed to agree upon the chairman. the Secretary-General of ICSID. upon request of either disputing party, shall appoint, at his own discretion, the arbitrator or arbitrators not yet appointed. Nevertheless, the Secretary-General of ICSID. when appointing the chairman, shall ensure that he or she is a national or permanent resident of neither of the Contracting Parties.

Article 14. Consolidation

1. Where two or more claims have been submitted separately to arbitration under Article 11 and the claims have a question of law or fact in common and arise out of the same events or circumstances, any disputing party may seek a consolidation order in accordance with the agreement of all the disputing parties sought to be covered by the order or in the terms of paragraphs 2 through 10 of this Article.

2. A disputing party that seeks a consolidation order under this Article shall deliver, in writing, a request to the Secretary-General of ICSID and a copy of its request lo any disputing parties sought to be covered by the consolidation order and shall specify in the request:

(a) The names and addresses of all the disputing parties sought to be covered by the order;

(b) The nature of the order sought; and

(c) The grounds on which the order is sought.

3. Unless the Secretary-General of ICSID finds within 60 days after receiving a request under paragraph 2 that the request is manifestly unfounded, a tribunal shall be established under this Article.

4. Unless all the disputing parties sought to be covered by the order otherwise agree, a tribunal established under this Article shall comprise three arbitrators:

(a) One arbitrator appointed by agreement of the disputing investors;

(b) One arbitrator appointed by the disputing Contracting Party; and

(c) The presiding arbitrator appointed by the Secretary-General of ICSID, provided, however, that the presiding arbitrator shall not be a national of either Party.

5. If, within 60 days after the Secretary-General of ICSID receives a request made under paragraph 2, the disputing Contracting Party fails or the disputing investors fail to appoint an arbitrator in accordance with paragraph 4. the Secretary-General, on the request of any disputing party sought to be covered by the order, shall appoint the arbitrator or arbitrators not yet appointed. If the disputing Contracting Party fails to appoint an arbitrator, the Secretary-General of ICSID shall appoint a national of the disputing Contracting Party, and if the disputing investors fail to appoint an arbitrator, the Secretary-General of ICSID shall appoint a national of the non-disputing Contracting Party.

6. Where a tribunal established under this Article is satisfied that two or more claims that have been submitted to arbitration under Article 11 have a question of law or fact in common, the tribunal may, in the interest of fair and efficient resolution of the claims, and after hearing the disputing parties concerned, 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.

7. Where a tribunal has been established under this Article, a disputing investor that has submitted a claim to arbitration under Article 11 and that has not been named in a request made under paragraph 2. may make a written request to the tribunal that it be included in any order made under paragraph 6, 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 on which the order is sought.

The disputing investor shall deliver a copy of its request to the Secretary-General of ICSID. 8. A tribunal established under this Article shall conduct its proceedings in accordance with the UMCITRAL Arbitration Rules, except as modified by this Section.

9. A tribunal established under Article 13 shall not have jurisdiction to decide a claim, or a part of a claim, over which a tribunal established or instructed under this Article has assumed jurisdiction.