(k) “measure” means any measure, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;
(l) “measure adopted or maintained by a Party” means any measure adopted or maintained by:
(i) central or local governments and authorities of a Party; and
(ii) non-governmental bodies in the exercise of powers delegated by central or local governments or authorities of a Party;
(m) “natural person of a Party” means a natural person who under the law of a Party:
(i) in respect of Brunei Darussalam, is a national of Brunei Darussalam or is a permanent resident in Brunei Darussalam; and
(ii) in respect of Japan, is a national of Japan;
(n) “New York Convention” means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958, as may be amended; and
(o) “TRIPS Agreement” means the Agreement on Trade Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement, as may be amended.
Article 57. National Treatment
1. Each Party shall accord to investors of the other Party and to their investments, treatment no less favourable than that it accords, in like circumstances, to its own investors and to their investments with respect to investment activities.
2. Notwithstanding paragraph 1, each Party may prescribe special formalities in connection with investment activities of investors of the other Party in its Area, such as compliance with registration requirements, provided that such special formalities do not impair the substance of the rights of such investors under this Chapter.
Article 58. Most-favoured-nation Treatment
Each Party shall accord to investors of the other Party and to their investments, treatment no less favourable than that it accords, in like circumstances, to investors of a non-Party and to their investments with respect to investment activities.
Article 59. Minimum Standard of Treatment
Each Party shall accord to investments of investors of the other Party, treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.
Note: 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 customary international law minimum standard of treatment of aliens.
Article 60. Access to the Courts of Justice
Each Party shall in its Area accord to investors of the other Party, treatment no less favourable than that it accords in like circumstances to its own investors or investors of a non-Party, with respect to access to its courts of justice and administrative tribunals and agencies in all degrees of jurisdiction, both in pursuit and in defence of such investorsâ rights.
Article 61. Prohibition of Performance Requirements
1. For the purposes of this Chapter, the Annex to the Agreement on Trade-Related Investment Measures in Annex 1A to the WTO Agreement, as may be amended, is incorporated into and forms part of this Agreement, mutatis mutandis.
2. The Parties shall enter into further consultations, at the earliest possible time. The aim of such consultations is to review issues pertaining to prohibition of performance requirements within five years from the date of entry into force of this Agreement.
Article 62. Reservations and Exceptions
1. Articles 57 and 58 shall not apply to:
(a) any non-conforming measure that is maintained by the central government or authorities of a Party, on the date of entry into force of this Agreement, with respect to the sectors or matters specified in Annex 4;
(b) any non-conforming measure that is maintained by local governments or authorities of a Party on the date of entry into force of this Agreement;
(c) the continuation or prompt renewal of any non-â conforming measure referred to in subparagraphs (a) and (b);
(d) an amendment or modification to any non-conforming measure referred to in:
(i) subparagraph (a), unless the sectors or matters are indicated with an asterisk (*) in Annex 4; and
(ii) subparagraph (b),
provided that the amendment or modification does not decrease the conformity of the measure, as it existed immediately before the amendment or modification, with Articles 57 and 58; and
(e) an amendment or modification to any non-conforming measure referred to in subparagraph (a), where the sectors or matters are indicated with an asterisk ("*"") in Annex 4, provided that the amendment or modification:
(i) does not decrease the conformity of that measure with Articles 57 and 58; and
(ii) ais not more restrictive to existing investors and existing investments than the measure applied to such investors and investments immediately before the amendment or modification.
2. For the purposes of this Article:
(a) "existing investors" and "existing investments" mean respectively investors whose investments are present in the Area of a Party, and investments that are present in the Area of a Party, immediately before the amendment or modification of any non-conforming measure; and
(b) any expansion or diversification of existing investments by existing investors after the amendment or modification of any non-conforming measure shall not be regarded as existing investments to the extent of such expansion or diversification.
3. Each Party shall, on the date of entry into force of this Agreement, notify the other Party of the following information on any non-conforming measure referred to in subparagraph 1(a):
(a) the sector or matter, with respect to which the measure is maintained;
(b) the domestic or international industry classification codes, where applicable, to which the measure relates;
(c) the obligations under this Agreement with which the measure does not conform;
(d) the source of the measure; and (e) the succinct description of the measure.
4. Articles 57 and 58 shall not apply to any measure that a Party adopts or maintains with respect to the sectors or matters specified in Annex 5.
5. Where a Party maintains any non-conforming measure on the date of entry into force of this Agreement with respect to the sectors or matters specified in Annex 5, the Party shall, on the same date, notify the other Party of the following information on the measure:
(a) the sector or matter, with respect to which the measure is maintained;
(b) the domestic or international industry classification codes, where applicable, to which the measure relates;
(c) the obligations under this Agreement with which the measure does not conform;
(d) the source of the measure; and (e) the succinct description of the measure.
6. Neither Party shall, under any measure adopted after the date of entry into force of this Agreement with respect to the sectors or matters specified in Annex 5, require an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment that exists at the time the measure becomes effective, unless otherwise specified in the initial approval by the relevant authority.
7. In cases where a Party makes an amendment or a modification to any non-conforming measure notified pursuant to paragraph 3 or 5, or where a Party adopts any new measure with respect to the sectors or matters specified in Annex 5, after the date of entry into force of this Agreement, the Party shall, prior to the amendment or modification or the adoption of the new measure, or in exceptional circumstances, as soon as possible thereafter:
(a) notify the other Party of detailed information on such amendment, modification or new measure; and
(b) respond, upon the request by the other Party, to specific questions from the other Party with respect to such amendment, modification or new measure.
8. Each Party shall endeavour, where appropriate, to reduce or eliminate the non-conforming measures that it adopts or maintains with respect to the sectors or matters specified in Annexes 4 and 5 respectively.
9. Articles 57 and 58 shall not apply to any measure covered by the exceptions to, or derogations from, obligations under Articles 3 and 4 of the TRIPS Agreement, as specifically provided in Articles 3, 4 and 5 of the TRIPS Agreement.
Article 63. Expropriation and Compensation
1. Neither Party shall expropriate or nationalise investments in its Area of investors of the other Party or take any measure tantamount to expropriation or nationalisation (hereinafter referred to in this Chapter as "expropriation") except:
(a) for a public purpose;
(b) on a non-discriminatory basis;
(c) in accordance with law; and
(d) upon payment of prompt, adequate and effective compensation pursuant to paragraphs 2, 3 and 4,
2. The compensation shall be equivalent to the fair market value of the expropriated investments:
(a) at the time when the expropriation was publicly announced; or
(b) when the expropriation occurred, whichever is the earlier.
3. The fair market value shall not reflect any change in market value occurring because the expropriation had become publicly known earlier.
4. The compensation shall:
(a) be paid without undue delay;
(b) include interest at a commercially reasonable rate taking into account the length of time from the time of expropriation to the time of payment; and
(c) be effectively realisable and freely transferable and shall be freely convertible, at the market exchange rate prevailing on the date of expropriation, into the currency of the Party of the investors concerned and freely usable currencies.
5. (a) This Article shall apply to taxation measures, to the extent that such taxation measures constitute expropriation.
(b) Where subparagraph (a) applies, Articles 60 and 67 shall also apply in respect of taxation measures.
Article 64. Protection from Strife
1. Each Party shall accord to investors of the other Party that have suffered loss or damage relating to their investments in the Area of the former Party owing to war, armed conflict or state of emergency such as revolution, insurrection, civil disturbance, riot or any other similar event in the Area of that former Party, treatment, as regards restitution, indemnification, compensation or any other settlement, that is no less favourable than that it accords to its own investors or to investors of a non-Party.
2. Any payments as a means of settlement referred to in paragraph 1 shall be effectively realisable, freely transferable and freely convertible at the market exchange rate into the currency of the Party of the investors concerned and freely usable currencies.
Article 65. Transfers
1. Each Party shall allow all transfers relating to investments in its Area of an investor of the other Party to be made freely into and out of its Area without undue delay. Such transfers shall include those of:
(a) the initial capital and additional amounts to maintain or expand investments;
(b) net profits, capital gains, dividends, royalties, interest, fees, and other current incomes accruing from investments;
(c) proceeds from the total or partial sale or liquidation of investments;
(d) payments made under a contract, including loan payments in connection with investments;
(e) net earnings and remuneration of personnel from the other Party who are employed and allowed to work in connection with investments in the Area of the former Party;
(f) payments made pursuant to Articles 63 and 64; and
(g) payments arising out of the settlement of a dispute under Article 67.
2. Each Party shall further ensure that such transfers may be made in a freely usable currency at the market exchange rate prevailing on the date of each transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may delay or prevent such transfers through the equitable, non- discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities, futures, options or other derivatives;
(c) criminal or penal offences;
(d) ensuring compliance with orders or judgments in judicial proceedings or administrative rulings; and
(e) obligations of investors arising from social security, and public retirement or compulsory savings scheme.
(e) obligations of investors arising from social security, and public retirement or compulsory savings scheme.
Article 66. Subrogation
1. If a Party or its designated agency makes a payment to any of its investors pursuant to an indemnity, guarantee or insurance contract, pertaining to an investment of that investor within the Area of the other Party, the other Party shall:
(a) recognise the assignment, to the former Party or its designated agency, of any right or claim of the investor that formed the basis of such payment; and
(b) recognise the right of the former Party or its designated agency to exercise by virtue of subrogation such right or claim to the same extent as the original right or claim of the investor.
2. Articles 63, 64 and 65 shall apply mutatis mutandis as regards payment to be made to the Party or its designated agency mentioned in paragraph 1 by virtue of such assignment of right or claim, and the transfer of such payment.
Article 67. Settlement of Investment Disputes between a Party and an Investor of the other Party
1. For the purposes of this Chapter, an âinvestment disputeâ is a dispute between a Party and an investor of the other Party that has incurred loss or damage by reason of, or arising out of, an alleged breach of any obligation under this Chapter with respect to the investor and its investments.
2. Nothing in this Article shall be construed so as to prevent an investor who is a party to an investment dispute (hereinafter referred to in this Article as "disputing investor") from seeking administrative or judicial settlement within the Party that is a party to the investment dispute (hereinafter referred to in this Article as "disputing Party").
3. An investment dispute shall, as far as possible, be settled amicably through consultation or negotiation between the disputing investor and the disputing Party (hereinafter referred to in this Article as "the disputing parties").
4. If the investment dispute cannot be settled through such consultation or negotiation within five months from the date on which the disputing investor requested for the consultation or negotiation in writing and if the disputing investor has not submitted the investment dispute for resolution under courts of justice or administrative tribunals or agencies, the disputing investor may submit the investment dispute to one of the following international conciliations or arbitrations:
(a) conciliation or arbitration in accordance with the ICSID Convention, so long as the ICSID Convention is in force between the Parties;
(b) conciliation or arbitration under the ICSID Additional Facility Rules, so long as the ICSID Convention is not in force between the Parties;
(c) arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law, adopted by the United Nations Commission on International Trade Law on April 28, 1976, as may be amended; and
(d) if agreed with the disputing Party, any arbitration in accordance with other arbitration rules.
5. For greater certainty, an investor of a Party may not submit to conciliation or arbitration referred to in paragraph 4 a dispute arising out of events which occurred, or a dispute which had been settled, prior to the date of entry into force of this Agreement.
6. A disputing investor may not submit to conciliation or arbitration referred to in paragraph 4 an investment dispute with respect to the establishment, acquisition or expansion of its investments.
7. The applicable arbitration rules shall govern the arbitration set forth in paragraph 4 except to the extent modified in this Article.
8. A disputing investor who intends to submit an investment dispute to conciliation or arbitration pursuant to paragraph 4 shall give to the disputing Party written notice of intent to do so at least 90 days before the investment dispute is submitted. The notice of intent shall specify:
(a) the name and address of the disputing investor;
(b) the specific measures of the disputing Party at issue and a brief summary of the factual and legal basis of the investment dispute sufficient to present the problem clearly, including the obligations under this Chapter alleged to have been breached;
(c) conciliation or arbitration set forth in paragraph 4 which the disputing investor will choose; and
(d) the relief sought and the approximate amount of damages claimed.
9. (a) Each Party hereby consents to the submission of investment disputes by a disputing investor to conciliation or arbitration set forth in paragraph 4 chosen by the disputing investor.
(b) The consent given by subparagraph (a) and the submission by a disputing investor of an investment dispute to arbitration shall satisfy the requirements of:
(i) Chapter II of the ICSID Convention or the ICSID Additional Facility Rules, for written consent of the parties to a dispute; and
(ii) Article II of the New York Convention for an agreement in writing.
10. Notwithstanding paragraph 9, no investment dispute may be submitted to conciliation or arbitration set forth in paragraph 4, if more than three years have elapsed since the date on which the disputing investor acquired or should have first acquired, whichever is the earlier, the knowledge that the disputing investor had incurred loss or damage referred to in paragraph 1.
11. Notwithstanding paragraph 4, a disputing investor may initiate or continue an action that seeks interim injunctive relief that does not involve the payment of damages before an administrative tribunal or agency or a court of justice under the applicable laws of the disputing Party.
12. Unless the disputing parties agree otherwise, an arbitral tribunal established under paragraph 4 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. If the disputing investor or the disputing Party fails to appoint an arbitrator or arbitrators within 60 days from the date on which the investment dispute was submitted to arbitration, the Secretary-General of the ICSID may be requested by either of the disputing parties, to appoint the arbitrator or arbitrators not yet appointed from the ICSID Panel of Arbitrators subject to the requirements of paragraphs 13 and 14.
13. Unless the disputing parties agree otherwise, the third arbitrator shall not be a national of either Party, nor have his or her usual place of residence in either Party, nor be employed by either of the disputing parties, nor have dealt with the investment dispute in any capacity.
14. In the case of arbitration referred to in paragraph 4, each of the disputing parties may indicate up to three nationalities, the appointment of arbitrators of which is unacceptable to it. In this event, the Secretary-General of the ICSID may be requested not to appoint as arbitrator any person whose nationality is indicated by either of the disputing parties.
15. Unless the disputing parties agree otherwise, an arbitration shall be held in a country that is a party to the New York Convention.
16. An arbitral tribunal established under paragraph 4 shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.
17. The disputing Party shall deliver to the other Party:
(a) written notice of the investment dispute submitted to the arbitration no later than 30 days after the date on which the investment dispute was submitted; and
(b) copies of all pleadings filed in the arbitration.
18. On written notice to the disputing parties, the Party which is not the disputing Party may make submissions to the arbitral tribunal on a question of interpretation of this Agreement.
19. The arbitral tribunal may order an interim measure of protection to preserve the rights of the disputing investor, or to facilitate the conduct of arbitral proceedings, including an order to preserve evidence in the possession or control of either of the disputing parties.
The arbitral tribunal shall not order attachment or enjoin the application of the measure alleged to constitute a breach referred to in paragraph 1.
20. The award rendered by the arbitral tribunal shall include:
(a) a judgment whether or not there has been a breach by the disputing Party of any obligation under this Chapter with respect to the disputing investor and its investments; and
(b) a remedy if there has been such breach. The remedy shall be limited to one or both of the following:
(i) payment of monetary damages and applicable interest; and
(ii) restitution of property, in which case the award shall provide that the disputing Party may pay monetary damages and any applicable interest in lieu of restitution.
Costs may also be awarded in accordance with the applicable arbitration rules.
21. The award rendered in accordance with paragraph 20 shall be final and binding upon the disputing parties. The disputing Party shall carry out without delay the provisions of the award and provide in its Area for the enforcement of the award in accordance with its relevant laws and regulations.
22. Neither Party shall give diplomatic protection, or bring an international claim, in respect of an investment dispute which the other Party and an investor of the former Party have consented to submit or submitted to arbitration set forth in paragraph 4, unless the other Party shall have failed to abide by and comply with the award rendered in such investment dispute. Diplomatic protection, for the purposes of this paragraph, shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the investment dispute.
Article 68. Temporary Safeguard Measures
1. A Party may adopt or maintain measures not conforming with its obligations under Article 57 relating to crossborder capital transactions and Article 65:
(a) in the event of serious balance-of-payments and external financial difficulties or threat thereof; or
(b) in cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management in particular, monetary, fiscal and exchange rate policies.
2. The measures referred to in paragraph 1 shall:
(a) be consistent with the Articles of Agreement of the International Monetary Fund, as may be amended;
(b) not exceed those necessary to deal with the circumstances set out in paragraph 1;
(c) be temporary and eliminated as soon as conditions permit;
(d) be promptly notified to the other Party;
(e) avoid unnecessary damages to the commercial, economic and financial interests of the other Party; and
(f) ensure that the other Party is treated as favourably as any non-Party.