If a Party (or any statutory body, governmental agency or institution, or corporation designated by the Party) makes a payment to an investor of the Party under a guarantee, a contract of insurance, or other form of indemnity that it has entered into with respect to a covered investment, the other Party, in whose territory the covered investment was made, shall recognize the subrogation or transfer of any rights the investor would have possessed under this Chapter with respect to the covered investment but for the subrogation, including any rights under Section B, and the investor shall be precluded from pursuing such rights to the extent of the subrogation.
Article 8.16. DENIAL OF BENEFITS
1. A Party may, at any time, including after the institution of arbitration proceedings in accordance with Section B of this Chapter, deny the benefits (16) of this Chapter to an investor of the other Party that is an enterprise of such other Party and to investments of that investor if a non-Party, or a person of a non-Party owns or controls the enterprise and the denying Party:
(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. A Party may, at any time, including after the institution of arbitration proceedings in accordance with Section B of this Chapter, deny the benefits of this Chapter to an investor of the other Party that is an enterprise of such other Party and to investments of that investor if the enterprise has no substantial business activities (17) in the territory of the other Party and a non-Party, a person of a non- Party, or of the denying Party, owns or controls the enterprise.
Article 8.17. DISCLOSURE OF INFORMATION
Nothing in this Chapter shall be construed to require a Party to furnish or allow access to protected information, or other confidential information the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private.
Article 8.18. ESSENTIAL SECURITY INTERESTS
1. Nothing in this Chapter 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 it considers necessary for the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests. With respect to investors of the other Party and covered investments affected by such measures, each Party shall accord non-discriminatory treatment to them, regardless of whether they are governmentally or privately owned.
Article 8.19. PRUDENTIAL MEASURES
1. Notwithstanding any other provision of this Chapter, a Party shall not be prevented from adopting or maintaining measures for prudential reasons, including for the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial services supplier, or to ensure the integrity and stability of the financial system. (18).
2. Nothing in this Chapter applies to non-discriminatory measures of general application taken in pursuit of monetary and related credit policies or exchange rate policies. (19) This paragraph shall not affect a Party's obligations under Article 8.8 (Transfers).
3. Where an investor submits a claim to arbitration under Section B of this Chapter, and the disputing Party invokes paragraphs 1 and 2 of this Article, the investor-State tribunal established pursuant to Section B of this Chapter may not decide whether and to what extent it is a valid defence to the claim of the investor. It shall seek a report in writing from the Parties on this issue. The investor-State tribunal may not proceed pending receipt of such a report or of a decision of a State-State arbitral tribunal, should such a State-State arbitral tribunal be established.
4. Pursuant to a request for a report received in accordance with the above paragraph, the financial services authorities (20) of the Parties shall engage in consultations. If the financial services authorities of the Parties reach a joint decision on the issue of whether and to what extent the relevant paragraphs of this Article is a valid defence to the claim of the investor, they shall prepare a written report describing their joint decision. The report shall be transmitted to the investor-State tribunal, and shall be binding on the investor-State tribunal.
5. If, after 120 days, the financial services authorities of the Parties are unable to reach a joint decision on the issue of whether and to what extent the relevant paragraphs of this Article is a valid defence to the claim of the investor, the issue shall, within 30 days, be referred by either Party to a State-State arbitral tribunal established pursuant to Chapter 15 (Dispute Settlement). In such a case, the provisions requiring consultations between the Parties in Chapter 15 (Dispute Settlement) shall not apply. The decision of the State-State arbitral tribunal shall be transmitted to the investor-State tribunal, and shall be binding on the investor-State tribunal. All of the members of any such State-State arbitral tribunal shall have expertise or experience in financial services law or practice, which may include the regulation of financial institutions.
6. If the respondent or the non-disputing Party has not submitted such issue to arbitration in accordance with Chapter 15 (Dispute Settlement) pursuant to paragraph 5 within 10 days of the expiration of the 120-day period referred to in paragraph 5, the arbitration under Section B may proceed with respect to the claim.
Article 8.20. TAXATION
1. Except as provided in this Article, nothing in this Section shall impose obligations with respect to taxation measures.
2. Article 8.7 (Expropriation and Compensation) shall apply to all taxation measures (21), provided that a claimant asserting that a taxation measure involves an expropriation may submit a claim to arbitration under Section B only if
(a) the claimant has first referred to the competent tax authorities (22) of both Parties in writing the issue of whether that taxation measure involves an expropriation; and
(b) within 180 days after the date of such referral, the competent tax authorities of both Parties fail to agree that the taxation measure is not an expropriation.
3. Nothing in this Chapter shall affect the rights and obligations of a Party under any tax convention. In the event of any inconsistency between this Chapter and any such convention, that convention shall prevail to the extent of the inconsistency. In the case of a tax convention between the Parties, the competent authorities under that convention shall have sole responsibility for determining whether any inconsistency exists between this Chapter and that convention.
Article 8.21. TRANSITION
1. Upon entry into force of this Agreement, the 1996 Agreement shall terminate. (23)
2. Notwithstanding paragraph 1:
(a) a claim may be submitted pursuant to relevant provisions of the 1996 Agreement, regarding any act or fact that took place or any situation that existed while the 1996 Agreement was in force, and provided that not more than three years have elapsed since the date of the entry into force of this Agreement;
(b) a claim submitted pursuant to the relevant provisions of the 1996 Agreement, prior to the entry into force of this Agreement shall continue to be subject to the provisions of the 1996 Agreement.
Section B.
Article 8.22. SCOPE
This section applies to investment disputes between an investor of a Party and the other Party.
Article 8.23. CONSULTATIONS
1. In the event of an investment dispute, if the claimant intends to submit the dispute to arbitration, it shall deliver a request for consultations to the respondent (24) at least 180 days prior to submission of the dispute to arbitration. The request shall:
(a) specify the name and address of the claimant and, where a claim is submitted on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, the name, address, and place of incorporation of the enterprise;
(b) list evidence that the claimant is an investor under this Chapter;
(c) for each claim, identify the provision of this Chapter or the investment agreement alleged to have been breached and any other relevant provisions;
(d) for each claim, identify the measures or events giving rise to the claim;
(e) for each claim, provide a brief summary of the legal and factual basis; and
(f) specify the relief sought and the approximate amount of damages claimed.
2. After a request for consultations is made pursuant to this Section, the claimant and the respondent shall enter into consultations (25) with a view to reaching a mutually satisfactory solution.
Article 8.24. SUBMISSION OF a CLAIM TO ARBITRATION
1. In the event that a disputing party considers that an investment dispute cannot be settled by consultations pursuant to Article 8.23 (Consultations) and 180 days have elapsed since the date of the request for consultations:
(a) the claimant, on its own behalf, may submit to arbitration under this Section a claim:
(i) that the respondent has breached:
(A) an obligation under Article 8.3 (National Treatment), Article 8.4 (Most-Favoured Nation Treatment), Article 8.5 (Minimum Standard of Treatment), Article 8.6 (Compensation for Losses), Article 8.7 (Expropriation and Compensation), Article 8.8 (Transfers) and Article 8.10 (Senior Management and Board of Directors); or
(B) an investment agreement; and
(ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and
(b) the claimant, on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, may submit to arbitration under this Section a claim:
(i) that the respondent has breached:
(A) an obligation under Article 8.3 (National Treatment), Article 8.4 (Most-Favoured Nation Treatment), Article 8.5 (Minimum Standard of Treatment), Article 8.6 (Compensation for Losses), Article 8.7 (Expropriation and Compensation), Article 8.8 (Transfers) and Article 8.10 (Senior Management and Board of Directors); or
(B) an investment agreement; and
(ii) that the enterprise has incurred loss or damage by reason of, or arising out of, that breach (26),
provided that a claimant may submit pursuant to subparagraph (a)(i)(B) or (b)(i)(B) a claim for breach of an investment agreement only if the subject matter of the claim and the claimed damages directly relate to the covered investment that was established or acquired, in reliance on the relevant investment agreement.
2. An investor of a Party may not initiate or continue a claim under this Section if a claim involving the same measure or measures alleged to constitute a breach under this Article and arising from the same events or circumstances is initiated or continued pursuant to an agreement between the respondent and a non-Party by:
(a) an enterprise of a non-Party that owns or controls, directly or indirectly, the investor of a Party; or
(b) an enterprise of a non-Party that is owned or controlled, directly or indirectly, by the investor of a Party.
Notwithstanding the previous paragraph, the claim may proceed if the respondent agrees that the claim may proceed, or if the investor of a Party and the enterprise of a non-Party agree to consolidate the claims under the respective agreements before a tribunal constituted under this Section.
3. Provided that 24 months have elapsed since the events giving rise to the claim, a claimant may submit a claim referred to in paragraph 1:
(a) under the ICSID Convention and the ICSID Rules of Procedure for Arbitration Proceedings, provided that both the respondent and the non- disputing Party are parties to the ICSID Convention;
(b) under the ICSID Additional Facility Rules, provided that either the respondent or the non-disputing Party is a party to the ICSID Convention;
(c) under the UNCITRAL Arbitration Rules (27); or
(d) if the claimant and respondent agree, to any other arbitration institution or under any other arbitration rules.
4. A claim shall be deemed submitted to arbitration under this Section when the claimant's notice of or request for arbitration (hereinafter referred to as "notice of arbitration"):
(a) referred to in paragraph 1 of Article 36 of the ICSID Convention is received by the Secretary-General;
(b) referred to in Article 2 of Schedule C of the ICSID Additional Facility Rules is received by the Secretary-General;
(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) referred to under any arbitral institution or arbitral rules selected under paragraph 3(d) is received by the respondent;
When the claimant submits a claim pursuant to subparagraphs 1(a)(i)(B) or 1(b)(i)(B), the respondent may make a counterclaim in connection with the factual and legal basis of the claim or rely on a claim for the purpose of a set off against the claimant.
5. In addition to any other information required by the applicable arbitral rules, the notice of arbitration shall also include information addressing each of the categories in Article 8.23 (Consultations).
6. The arbitration rules applicable under paragraph 3, and in effect on the date the claim or claims were submitted to arbitration under this Section, shall govern the arbitration except to the extent modified by this Chapter.
Article 8.25. CONSENT OF EACH PARTY TO ARBITRATION
1. Each Party, in respect of an investment dispute under this Section, consents to the submission of a claim to arbitration under this Section in accordance with this Chapter.
2. The consent under paragraph 1 and the submission of a claim to arbitration under this Section shall satisfy the requirements of:
(a) Chapter Il 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 Il of the New York Convention for an "agreement in writing".
Article 8.26. CONDITIONS AND LIMITATIONS ON CONSENT OF EACH PARTY
1. No claim may be submitted to arbitration under this Section 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 Article 8.24(1) and knowledge that the claimant (for claims brought under Article 8.24(1)(a)) or the enterprise (for claims brought under Article 8.24(1)(b)) has incurred loss or damage.
2. No claim may be submitted to arbitration under this Section by national who had the nationality of the Party to the dispute on the date on which the parties consented to submit such dispute to arbitration pursuant to Article 8.24 (Submission of a Claim to Arbitration).
3. 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 Section;
(b) the claim arises from measures included in the request for consultations submitted by the claimant in accordance with Article 8.23 (Consultations); and
(c) the notice of arbitration is accompanied,
(i) for claims submitted to arbitration under Article 8.24(1)(a), by the claimant's written waiver, and
(ii) for claims submitted to arbitration under Article 8.24(1)(b), by the claimant's and the enterprise's written waivers,
of any right to initiate or continue before any administrative tribunal or court under the law of a Party, or other dispute settlement procedures, any proceeding with respect to any measure alleged to constitute a breach referred to in Article 8.24 (Submission of a Claim to Arbitration).
4. Notwithstanding paragraph 3(c)(ii), a waiver from the enterprise shall not be required if the respondent has deprived the claimant of its ownership or control of the enterprise.
Article 8.27. CONSTITUTION OF THE TRIBUNAL
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.
3. Ifa tribunal has not been constituted within 90 days from the date that a claim is submitted to arbitration under this Section, the appointing authority, on the request of a disputing party, shall appoint, in his or her discretion and after consulting with the disputing parties, the arbitrator or arbitrators not yet appointed.
4. The appointing authority may not appoint a presiding arbitrator who is a national of a Party, unless both parties to the dispute otherwise agree.
5. In the event that the appointing authority appoints a presiding arbitrator in accordance with relevant arbitration rules, the presiding arbitrator being appointed should be a recognized expert in public international law, and should be experienced in investor-State dispute settlement.
Article 8.28. CONDUCT OF THE ARBITRATION
1. The disputing parties may agree on the legal place of any arbitration under the arbitral rules applicable under Article 8.24(3). If the disputing parties fail to reach agreement, the tribunal shall determine the place in accordance with the applicable arbitral rules, provided that the place shall be in the territory of a State that is a party to the New York Convention.
2. The non-disputing Party may make oral and written submissions to the tribunal regarding the interpretation of this Agreement.
3. After consulting the disputing parties, the tribunal may allow a person or entity that is not a disputing party to file a written amicus curiae submission with the tribunal regarding a matter within the scope of the dispute. Such a submission shall provide the identity of such person or entity (including any controlling entity and any source of substantial financial assistance in either of the two years preceding the submission, e.g. funding around 20% of an entityâs overall operations annually), disclose any connection with any disputing party, and identify any person, government or other entity that has provided or will provide any financial or other assistance in preparing the submission. In determining whether to allow such a filing, the tribunal shall consider, among other things, the extent to which:
(a) the amicus curiae submission would assist the tribunal in the determination of a factual or legal issue related to the proceeding by bringing a perspective, particular knowledge, or insight that is different from that of the disputing parties;
(b) the amicus curiae submission would address a matter within the scope of the dispute; and
(c) the amicus curiae has a significant interest in the proceeding. 4. The tribunal shall ensure that the amicus curiae submission does not disrupt the proceeding or unduly burden or unfairly prejudice either disputing party, and that the disputing parties are given an opportunity to present their observations on the amicus curiae submission.
5. Without prejudice to a tribunal's authority to address other objections as a preliminary question, a tribunal shall address and decide as a preliminary question any objection by the respondent that, as a matter of law, a claim submitted is not a claim for which an award in favour of the claimant may be made under this Section.
6. In deciding an objection under paragraph 5, the tribunal shall assume to be true the claimant's factual allegations. The tribunal may also consider any relevant facts not in dispute. The tribunal shall decide on the objection on an expedited basis, and issue a decision or award on the objection(s) no later than 150 days after the date of the request.
7. In any arbitration conducted under this Section, at the request of a disputing party, a tribunal shall, before issuing a decision or award on liability, transmit its proposed decision or award to the disputing parties and to the non- disputing Party. Within 60 days after the tribunal transmits its proposed decision or award, the disputing parties may submit written comments to the tribunal concerning any aspect of its proposed decision or award. The tribunal shall consider any such comments and issue its decision or award not later than 45 days after the expiration of the 60-day comment period.
8. In the event that an appellate mechanism for reviewing awards rendered by investor-State dispute settlement tribunals is developed in the future under other institutional arrangements, the Parties shall consider whether awards rendered under Article 8.30 (Awards)should be subject to that appellate mechanism.
Article 8.29. GOVERNING LAW
1. Subject to paragraph 3, when a claim is submitted under Article 8.24 (1)(a)((A) or (1)(b)(D(A), the tribunal shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law (28).
2. Subject to paragraph 3 and the other terms of this Section, when a claim is submitted under Article 8.24(1)(a)\(i)(B) or Article 8.24(1)(b)(i)(B), the tribunal shall apply:
(a) the rules of law specified in the pertinent investment agreement, or as the disputing parties may otherwise agree; or
(b) if the rules of law have not been specified or otherwise agreed:
(i) the law of the respondent, including its rules on the conflict of laws; (29) and
(ii) such rules of customary international law as may be applicable. 3. A joint decision of the Parties declaring their interpretation of a provision of this Agreement shall be binding on a tribunal of any ongoing or subsequent dispute, and any decision or award issued by such a tribunal must be consistent with that joint decision.
Article 8.30. AWARDS
1. Where a tribunal makes an award against a respondent, the tribunal may award, separately or in combination, only:
(a) monetary damages and any applicable interest; and
(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.
A tribunal may also award costs and attorney's fees in accordance with this Section and the applicable arbitration rules.
2. Subject to paragraph 1, where a claim is submitted to arbitration under Article 8.24(1)(b):
(a) an award of restitution of property shall provide that restitution be made to the enterprise;
(b) an award of monetary damages and any applicable interest shall provide that the sum be paid to the enterprise; and
(c) the award shall provide that it is made without prejudice to any right that any person may have in the relief under applicable domestic laws.
3. A tribunal may not award punitive damages.
4. The award shall be made available to the public promptly unless opposed by the respondent. (30)
5. A disputing party shall not seek enforcement of a final award until:
(a) in the case of a final award made under the ICSID Convention:
(i) 120 days have elapsed from the date the award was rendered and no disputing party has requested revision or annulment of the award; or
(ii) revision or annulment proceedings have been completed; and
(b) in the case of a final award under the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules, or the rules selected pursuant to Article 8.24 (Submission of a Claim to Arbitration):
(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.
6. An award made by a tribunal shall have no binding force except between the disputing parties and in respect of the particular case.
Article 8.31. EXPERT REPORTS
Without prejudice to the appointment of other kinds of experts where authorized by the applicable arbitration rules, a tribunal, at the request of a disputing party or, unless the disputing parties disapprove, on its own initiative, may appoint one or more experts to report to it in writing on any factual issue concerning environmental, health, safety, or other scientific matters raised by a disputing party in a proceeding, subject to such terms and conditions as the disputing parties may agree.
Article 8.32. DOMESTIC REMEDIES
Nothing in this Section shall prevent the claimant from resorting to remedies before domestic fora within twenty-four months of the event giving rise to an investment dispute where there has been no amicable settlement of the dispute.