(b) the notice of arbitration is accompanied:
(i) for a claim submitted to arbitration under Article 21.1(a) (Submission of a Claim to Arbitration), by the claimant's written waiver; and
(ii) for a claim submitted to arbitration under Article 21.1(b) (Submission of a Claim to Arbitration), by the claimant's and the enterprise's written waivers,
Of any right to initiate any proceeding before any court or administrative tribunal of either Party, or any other binding dispute settlement procedures, with respect to any measure alleged to constitute a breach of an obligation of the respondent under Section B (Substantive Obligations).
3. No claim may be submitted to arbitration under this Section if the claimant has initiated any proceeding before any court or administrative tribunal of either Party, or any other binding dispute settlement procedures, with respect to any measure alleged to constitute a breach of an obligation of the respondent under Section B (Substantive Obligations). For greater certainty, if an investor elects to submit a claim before any court or administrative tribunal of either Party, that election shall be definitive and the investor may not thereafter submit the claim to arbitration under this Section.
4. Notwithstanding subparagraph 2(b), the claimant (for claims brought under Article 21.1(a) (Submission of a Claim to Arbitration)) and the claimant or the enterprise (for claims brought under Article 21.1(b) (Submission of a Claim to Arbitration)) may initiate or continue an action that seeks interim injunctive relief and does not involve the payment of monetary damages before a court or an administrative tribunal of the respondent, provided that the action is taken for the sole purpose of preserving the claimant's or the enterprise's rights and interests during the pendency of the arbitration.
Article 25. Selection of Arbitrators
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 in accordance with this Section.
3. If a tribunal has not been constituted within 75 days from the date that a claim is submitted to arbitration under this Section, the Secretary-General, on the request of a disputing party, shall appoint, in his or her discretion and, to the extent practicable, in consultation with the disputing parties, the arbitrator or arbitrators not yet appointed. The Secretary-General shall appoint, as the presiding arbitrator, a person who (a) does not have the nationality of either disputing party and who is not a permanent resident of either Party, unless the disputing parties agree otherwise; (b) has expertise or experience in public international law, international investment law, or the resolution of disputes arising under international investment agreements; (c) is independent of, is not affiliated with, and does not take instructions from, either Party or the claimant; and, if applicable,
(d) fulfils the requirements of Article 22.2 (Investment Disputes in Financial Services).
4. The disputing parties may establish rules relating to expenses to be incurred by the tribunal, including arbitrators' remuneration. If the disputing parties do not agree on the remuneration of the arbitrators before the tribunal is constituted, reference should be made to the prevailing rate for arbitrators published by the International Centre for Settlement of Investment Disputes.
Article 26. Conduct of the Arbitration
1. The disputing parties may agree on the place of any arbitration under the arbitration rules applicable under Article 21.4 (Submission of a Claim to Arbitration). If the disputing parties fail to reach agreement on the place of arbitration, the tribunal shall determine the place in accordance with the applicable arbitration rules, provided that the place shall be in the territory of a party to the New York Convention.
2. The tribunal shall have the authority to accept and consider amicus curiae written submissions that may assist the tribunal in evaluating the submissions and arguments of the disputing parties from a person or entity that is not a disputing party (the "submitter"). Each submission shall be provided in English, and shall identify the submitter and any Party, other government, person, or organisation, other than the submitter, that has provided, or will provide, any financial or other assistance in preparing the submission. Where such submissions are admitted by the tribunal, the tribunal shall provide to the disputing parties a reasonable opportunity to respond to such submissions.
3. Without prejudice to a tribunal's authority to address other objections as a preliminary question, such as an objection that an investment dispute is not within the jurisdiction or the competence of the tribunal, a tribunal shall address and decide as a preliminary question any objection by the respondent that the claim is manifestly without legal merit.
(a) Such objection shall be submitted to the tribunal as soon as possible after the tribunal is constituted, and in no event later than the date the tribunal fixes for the respondent to submit its counter-memorial or, in the case of an amendment to the notice of arbitration referred to in Article 21.5 (Submission of a Claim to Arbitration), the date the tribunal fixes for the respondent to submit its response to the amendment.
(b) On receipt of an objection under this paragraph, the tribunal shall suspend any proceedings on the merits, establish a schedule for considering the objection consistent with any schedule it has established for considering any other preliminary question, and issue a decision or award on the objection, stating the grounds therefor.
(c) The respondent does not waive any objection as to the jurisdiction or competence of the tribunal or any argument on the merits merely because the respondent did or did not raise an objection under this paragraph or make use of the expedited procedure set out in the following paragraph.
4. In the event that the respondent so requests within 45 days after the tribunal is constituted, the tribunal shall decide on an expedited basis an objection by the respondent that the claim is manifestly without legal merit or any objection that the claim is not within the tribunal's jurisdiction or competence. The tribunal shall suspend any proceedings on the merits and issue a decision or award on the objection(s), stating the grounds therefor, no later than 150 days after the date of the request. However, if a disputing party requests a hearing, the tribunal may take an additional 30 days to issue the decision or award. Regardless of whether a hearing is requested, a tribunal may, on a showing of extraordinary cause, delay issuing its decision or award by an additional period of time, which may not exceed 30 days.
5. When it decides a respondent's objection under paragraph 3 or 4, the tribunal may, if warranted, award to the prevailing disputing party reasonable costs and attorneys' fees incurred in submitting or opposing the objection. In determining whether such an award is warranted, the tribunal shall consider whether either the claimant's claim or the respondent's objection is frivolous, and shall provide the disputing parties a reasonable opportunity to comment.
6. For greater certainty, a claimant has the burden of proving all elements of its claim, consistent with general principles of international law applicable to international arbitration, including, in the case of a claim of a breach of Article 6 (Minimum Standard of Treatment), that the respondent has breached a general and consistent practice of States that they follow from a sense of legal obligation.
7. A respondent may not assert as a defence, counterclaim, right of set-off, or otherwise that the claimant has received or will receive indemnification or other compensation for all or part of the alleged loss or damages pursuant to an insurance or guarantee contract.
8. A tribunal may order an interim measure of protection to preserve the rights of a disputing party, or to ensure that the tribunal's jurisdiction is made fully effective, including an order to preserve evidence in the possession or control of a disputing party, or to protect the tribunal's jurisdiction. A tribunal may not order attachment or enjoin the application of a measure alleged to constitute a breach referred to in Article 21 (Submission of a Claim to Arbitration). For the purposes of this paragraph, an order includes a recommendation.
9. At the request of a disputing party, a tribunal shall, before issuing an award on liability, transmit its proposed award to the disputing parties and to the non-disputing
Party. Within 60 days after the tribunal transmits its proposed award, only the disputing parties may submit written comments to the tribunal concerning any aspect of its proposed award. The tribunal shall consider any such comments and issue its award not later than 45 days after the expiration of the 60 day comment period.
Article 27. The Non-disputing Party
1. No later than 30 days after the date that such documents have been delivered to the respondent, the respondent shall deliver to the non-disputing Party a copy of:
(a) the notice of intent;
(b) the notice of arbitration;
(c) pleadings, memorials, and briefs submitted to the tribunal by a disputing party and any written submissions submitted pursuant to Article 26.2 and 26.3 (Conduct of the Arbitration) and Article 31 (Consolidation);
(d) minutes or transcripts of hearings of the tribunal, where available;
(e) orders, awards, and decisions of the tribunal; and
(f) any other document submitted to the tribunal, including redacted versions of confidential documents submitted in accordance with Article 28 (Transparency of Arbitral Proceedings).
2. On written notice to the disputing parties, the non-disputing Party may make a submission to a tribunal on any question of interpretation of this Agreement.
3. The non-disputing Party receiving confidential information pursuant to paragraph 1 shall treat the information as if it were a disputing party.
Article 28. Transparency of Arbitral Proceedings
1. Subject to paragraphs 2 and 4, the respondent shall, after receiving the following documents, make them available to the public at their cost:
(a) the notice of intent;
(b) the notice of arbitration;
(c) pleadings, memorials, and briefs submitted to the tribunal by a disputing party and any written submissions submitted pursuant to Article 26.2 and 26.3 (Conduct of the Arbitration), Article 27.2 (The Non-Disputing Party) and Article 31 (Consolidation);
(d) minutes or transcripts of hearings of the tribunal, where available; and
(e) orders, awards, and decisions of the tribunal.
2. The tribunal shall conduct hearings open to the public and shall determine, in consultation with the disputing parties, the appropriate logistical arrangements. However, any disputing party that intends to use information designated as confidential information in a hearing shall so advise the tribunal. The tribunal shall make appropriate arrangements to protect the information from disclosure including closing the hearing for the duration of any discussion of such information.
3. Nothing in this Section shall require a respondent to:
(a) disclose confidential information, or information which, if disclosed, would impede law enforcement; or
(b) furnish or allow access to information that it may withhold in accordance with Article 18 (Exceptions).
4. If confidential information is submitted to the tribunal, it shall be protected from disclosure in accordance with the following procedures:
(a) subject to subparagraph (d), neither the disputing parties nor the tribunal shall disclose to the non-disputing Party or to the public any confidential information where the disputing party that provided the information clearly designates it in accordance with subparagraph (b);
(b) any disputing party claiming that certain information constitutes confidential information shall clearly designate the information at the time it is submitted to the tribunal;
(c) a disputing party shall, at the same time that it submits a document containing information claimed to be confidential information, submit a redacted version of the document that does not contain the information. Only the redacted version shall be made public in accordance with paragraph 1; and
(d) the tribunal shall decide any objection regarding the designation of information claimed to be confidential information. If the tribunal determines that such information was not properly designated, the disputing party that submitted the information may:
(i) withdraw all or part of its submission containing such information; or
(ii) agree to resubmit complete and redacted documents with corrected designations in accordance with the tribunal's determination and subparagraph (c).
In either case, the other disputing party shall, whenever necessary, resubmit complete and redacted documents which either remove the information withdrawn under subparagraph (d)(i) by the disputing party that first submitted the information or redesignate the information consistent with the designation under subparagraph (d)(ii) of the disputing party that first submitted the information.
5. A disputing party may disclose to other persons in connection with the arbitral proceedings such documents as it considers necessary for the preparation of its case, but it shall require that any confidential information in such documents be protected.
6. Nothing in this Section authorises a respondent to withhold from the public information required to be disclosed by its law.
Article 29. Governing Law
1. Subject to paragraph 2, when a claim is submitted to arbitration under Article 21.1(a) or 21.1(b) (Submission of a Claim to Arbitration), the tribunal shall decide the issues in the investment dispute in accordance with this Agreement and applicable rules of international law.
2. A joint interpretation of the Parties of a provision of this Agreement shall be binding on a tribunal established under this Section, and any award must be consistent with that joint interpretation.
3. On the request of a respondent that asserts as a defence that the measure alleged to be a breach is covered by Article 17.1 (Non-Conforming Measures), Annex II (Reservations), or Annex III (Exceptions from Non-discriminatory Treatment as Compared with a Non-Party's Investors), the tribunal shall request the joint interpretation of the Parties on the issue. Within 90 days after the delivery of the request, the Parties shall submit in writing their joint interpretation to the tribunal. If the Parties fail to submit their joint interpretation within 90 days after the tribunal's request, the tribunal shall decide the issue.
Article 30. Expert Reports
Without prejudice to the appointment of other kinds of experts where authorised 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 31. Consolidation
1. Where two or more claims have been submitted separately to arbitration under Article 21.1 (Submission of a Claim to Arbitration) 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 with the agreement of all the disputing parties sought to be covered by the order or in accordance with this Article.
2. A disputing party that seeks a consolidation order under this Article shall deliver, in writing, a request to the Secretary-General and to all the disputing parties sought to be covered by the 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 finds within 30 days after receiving a request under paragraph 2 that the request is manifestly unfounded, a tribunal shall be established under this Article.
4. Subject to paragraph 5, unless all the disputing parties sought to be covered by the order otherwise agree, a tribunal established under this Article shall be constituted in accordance with Article 25 (Selection of Arbitrators) except that, for the purpose of Article 25.1 (Selection of Arbitrators), the claimants shall appoint a single arbitrator by agreement.
5. If, within 60 days after the Secretary-General receives a request made under paragraph 2, the respondent fails or the claimants fail to appoint an arbitrator in accordance with paragraph 4, the Secretary-General may be requested by any disputing party sought to be covered by the order, to appoint the arbitrator or arbitrators not yet appointed. If the respondent fails to appoint an arbitrator, the arbitrator to be appointed by the Secretary-General may be a natural person of the respondent, and if the claimants fail to appoint an arbitrator, the arbitrator to be appointed by the Secretary-General may be a natural person of the non-disputing Party.
6. Where a tribunal established under this Article is satisfied that two or more claims that have been submitted to arbitration under Article 21.1 (Submission of a Claim to Arbitration) have a question of law or fact in common, and arise out of the same events or circumstances, the tribunal may, in the interest of fair and efficient resolution of the investment disputes, and after hearing the disputing parties, by order:
(a) assume jurisdiction over, and hear and determine together, all or part of the claims;
(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 other investment disputes; or
(c) instruct a tribunal previously established under Article 25 (Selection of Arbitrators) to assume jurisdiction over, and hear and determine together, all or part of the claims, provided that:
(i) that tribunal, at the request of any claimant not previously a disputing party before that tribunal, shall be reconstituted with its original members, except that the arbitrator for the claimants shall be appointed pursuant to paragraphs 4 and 5; and
(ii) that tribunal shall decide whether any prior hearing shall be repeated.
7. Where a tribunal has been established under this Article, a claimant that has submitted a claim to arbitration under Article 21.1 (Submission of a Claim to Arbitration) 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 claimant;
(b) the nature of the order sought; and
(c) the grounds on which the order is sought.
The claimant shall deliver a copy of its request to the Secretary-General.
8. A tribunal established under this Article shall conduct its proceedings in accordance with this Section.
9. A tribunal established under Article 25 (Selection of Arbitrators) 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.
10. On application of a disputing party, a tribunal established under this Article, pending its decision under paragraph 6, may order that the proceedings of a tribunal established under Article 25 (Selection of Arbitrators) be stayed, unless the latter tribunal has already adjourned its proceedings.
Article 32. Awards
1. Where a tribunal makes a final 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.
2. For greater certainty, when an investor of a Party submits a claim to arbitration under Article 21.1(a) (Submission of a Claim to Arbitration), it may recover only loss or damage that it has incurred in its capacity as an investor of a Party.
3. A tribunal may also award costs and attorney's fees incurred by the disputing parties in connection with the arbitral proceeding and shall determine how and by whom those costs and attorney's fees shall be paid, in accordance with this Section and the applicable arbitration rules.
4. Subject to paragraph 1, where a claim is submitted to arbitration under Article 21.1(b) (Submission of a Claim to Arbitration):
(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 under applicable internal law in the relief provided in the award.
5. A tribunal may not award punitive damages.
6. An award made by a tribunal shall have no binding force except between the disputing parties and in respect of the particular case.
7. Subject to paragraph 8 and the applicable review procedure for an interim award, a disputing party shall abide by and comply with an award without delay.
8. A disputing party may not seek enforcement of a final award until:
(a) 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
(b) a court has dismissed or allowed an application to revise, set aside, or annul the award and there is no further appeal.
9. Each Party shall provide for the enforcement of an award in its area.
10. If the non-disputing Party considers that the respondent has failed to abide by or comply with a final award, on delivery of a written request by the non-disputing Party, Section D (Settlement of Disputes between the Parties) shall apply to this matter. If an arbitral panel is established pursuant to such application, the requesting Party may seek in such proceedings:
(a) a determination that the failure to abide by or comply with the final award is inconsistent with the obligations under this Agreement; and
(b) in accordance with the rules on the draft report of an arbitral panel under Section D (Settlement of Disputes between the Parties), a recommendation that the respondent abides by or complies with the final award.
11. A disputing party may seek enforcement of an award under the New York Convention, regardless of whether there are proceedings under paragraph 10.
12. A claim that is submitted to arbitration under this Section shall be considered to arise out of a commercial relationship or transaction for the purposes of Article I of the New York Convention.
Article 33. Service of Documents
Delivery of notice and other documents on a Party shall be made in accordance with Annex VI (Service of Documents on a Party under Section C (Settlement of Disputes between an Investor and the Host Party)). A Party shall promptly make publicly available and notify the other Party of any change in the place referred to in that Annex.
Section D. Settlement of Disputes between the Parties
Article 34. Settlement of Disputes between the Parties
Chapter 17 (Dispute Settlement) of the FTA shall apply mutatis mutandis to this Agreement
Section E. Final Provisions
Article 35. Committee on Investments
1. The Parties hereby establish a Committee on Investments, comprising government representatives of each Party.
2. The Committee shall meet on the request of either Party to consider any matter arising under this Agreement.
3. The Committee's functions include:
(a) to exchange information on relevant laws and regulations, and on investment opportunities;
(b) to review the implementation of this Agreement;
(c) to issue joint interpretations of any provisions of this Agreement, which shall be binding on a tribunal established under Section C (Settlement of Disputes between an Investor and the Host Party) or on an arbitral panel established under Section D (Settlement of Disputes between the Parties); and
(d) to review any other issues in connection with this Agreement.
Article 36. Application and Entry Into Force
1. The Annexes and footnotes to this Agreement constitute an integral part of this Agreement.
2. The entry into force of this Agreement is subject to the completion of the necessary internal legal procedures by each Party.
3. This Agreement shall enter into force 60 days after the date of the last notification by which the Parties inform each other that the procedures under paragraph 2 have been completed, or on such other date as may be agreed by the Parties.
4. This Agreement may be amended by the Parties by agreement in writing. All amendments to this Agreement shall enter into force in the same manner as stated in paragraphs 2 and 3.
5. All amendments shall, upon entry into force, constitute an integral part of this Agreement.
6. This Agreement shall remain in force unless a Party notifies the other Party in writing of its decision to terminate it. The termination of this Agreement shall be effective one year after the notice of termination has been received by the other Party. In respect of covered investments made prior to the date when the termination of this Agreement becomes effective, Articles 1 to 35 inclusive, as well as paragraph 1 of this Article shall remain in force for a period of 10 years.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed this Agreement.
DONE at Lima, Peru in two originals, this 18 day of November 2016, in the English language.
FOR THE GOVERNMENT FOR THE GOVERNMENT
OF THE HONG KONG SPECIAL OF THE REPUBLIC OF CHILE
ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA
Attachments
Annex I. Expropriation
The Parties confirm their shared understanding that:
1. A measure or a series of measures by a Party does not constitute an expropriation unless it interferes with a tangible or intangible property right or property interest in a covered investment.
2. Article 10.1 (Expropriation) addresses two situations. The first is direct expropriation, in which a covered investment is directly expropriated through formal transfer of title or outright seizure.
3. The second situation addressed by Article 10.1 (Expropriation) is indirect expropriation, in which a measure or a series of measures by a Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure.
(a) The determination of whether a measure or a series of measures by a Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by-case, fact-based inquiry that considers, among other factors:
(i) the economic impact of the measure or the series of measures, although the sole fact that a measure or a series of measures by a Party has an adverse effect on the economic value of an investment does not establish that an indirect expropriation has occurred,
(ii) the extent to which the measure or the series of measures interferes with distinct, reasonable investment-backed expectations (12), and
(iii) the character of the measure or the series of measures.
(b) Except in rare circumstances, such as when a measure or a series of measures is so severe in the light of its purpose that it cannot be reasonably viewed as having been adopted and applied in good faith, a non-discriminatory measure by a Party that is designed and applied to protect legitimate public welfare objectives, such as health, safety and the environment, does not constitute an indirect expropriation.
Annex II. Reservations
Schedule of the HKSAR
In accordance with Article 17.2 (Non-Conforming Measures), the HKSAR reserves the right to adopt or maintain any measure that does not conform to the obligations set out below with respect to the following sectors, subsectors or matters: