3. The provisions of:
(a) paragraph 2 do not prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with any investments, on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or carry out research and development in its territory;
(b) paragraphs 1(a), 1(b), 1(c), 2(a), and 2(b) do not apply to a qualification requirement for a good or service with respect to export promotion and foreign aid programs;
(c) paragraphs 1(b), 1(c), 1(f), 1(g), 1(h), 2(a), and 2(b) do not apply to procurement by a Party;
(d) paragraphs 2(a) and 2(b) do not apply to a requirement imposed by an importing Party relating to the content of a good necessary to qualify for a preferential tariff or preferential quota;
(e) paragraphs 1(f) and 1(g) do not apply:
(i) if a Party authorizes use of an intellectual property right in accordance with Article 31 (7) of the TRIPS Agreement, or to a measure requiring the disclosure of proprietary information that falls within the scope of, and is consistent with, Article 39 of the TRIPS Agreement; or
(ii) if the requirement is imposed or the requirement, commitment, or undertaking is enforced by a court, administrative tribunal, or competition authority to remedy an alleged violation of domestic competition law;
(f) paragraphs 1(b), 1(c), 1(f), 1(g), 2(a), and 2(b) shall not prevent a Party from adopting or maintaining a measure to achieve a legitimate public policy objective, provided that the measure:
(i) is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; and
(ii) does not impose restrictions greater than are required to achieve the objective;
(g) paragraph 1(f) do not preclude a regulatory body or judicial authority of a Party from requiring a person of the other Party to preserve and make available the source code of software, or an algorithm expressed in that source code, to the regulatory body for a specific investigation, inspection, examination, enforcement action, or judicial proceeding (8) , subject to safeguards against unauthorized disclosure.
Article 17.3. Senior Management and Boards of Directors
1. A Party shall not require that an enterprise of that Party that is a covered investment appoint to a senior management position an individual of any particular nationality.
2. A Party may require that up to a majority of the board of directors, or a committee thereof, of an enterprise of that Party that is a covered investment be of a particular nationality or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
3. A Party should encourage enterprises to consider greater diversity in senior management positions or on their board of directors, which may include a requirement to nominate women.
Article 17.14. Subrogation
1. If a Party or an agency of a Party makes a payment to one of its investors under a guarantee or a contract of insurance, or other form of indemnity it has entered into in respect of a covered investment:
(a) the other Party in whose territory the covered investment was made shall recognize the validity of the subrogation or transfer of any rights the investor would have possessed with respect to the covered investment but for the subrogation or transfer; and
(b) the investor shall be precluded from pursuing these rights to the extent of the subrogation or transfer, unless a Party or an agency of a Party authorizes the investor to act on its behalf.
Article 17.15. Responsible Business Conduct
1. The Parties reaffirm that investors and their investments shall comply with domestic laws and regulations of the host state, including laws and regulations on human rights, the rights of Indigenous peoples, gender equality, environmental protection, labour, anti-corruption, and taxation.
2. Each Party reaffirms the importance of internationally recognized standards, guidelines, and principles of responsible business conduct that have been endorsed or are supported by that Party, including the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, and shall encourage investors and enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate these standards, guidelines, and principles into their business practices and internal policies. These standards, guidelines, and principles address areas such as labour, environment, gender equality, human rights, community relations, and anti-corruption.
3. Each Party should encourage investors or enterprises operating within its territory to undertake and maintain meaningful engagement and dialogue, in accordance with international responsible business conduct standards, guidelines, and principles that have been endorsed or are supported by that Party, with Indigenous peoples and local communities.
Article 17.16. Denial of Benefits
1. A Party may, within a reasonable time and no later than its principal submission on the merits, such as the counter-memorial, in an arbitration under this Chapter, deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to investments of that investor if:
(a) an investor of a non-Party owns or controls the enterprise; and
(b) the denying Party adopts or maintains a measure with respect to the non‑Party or investors of the non-Party that prohibits transactions with the enterprise or would be violated or circumvented if the benefits of this Agreement were accorded to the enterprise or to its investment.
Article 17.17. Special Formalities and Information Requirements
1. Article 17.6 (National Treatment) shall not be construed to prevent a Party from adopting or maintaining any measure that prescribes special formalities in connection with covered investments, such as a requirement that investors be residents of the Party, that an investor register or otherwise notify the appropriate authorities of its covered investment, or that covered investments be legally constituted under the laws or regulations of the Party, provided that such formalities do not materially impair the protection afforded by a Party to investors of another Party and covered investments pursuant to this Chapter.
2. Notwithstanding Articles 17.6 (National Treatment) and 17.7 (Most‑Favoured‑Nation Treatment), a Party may require an investor of another Party or a covered investment to provide information concerning that investment solely for informational or statistical purposes. The Party shall protect such information that is confidential from any disclosure that would prejudice the competitive position of the investor or the covered investment. This paragraph shall not be construed to prevent a Party from obtaining or disclosing information in connection with the equitable and good faith application of its law.
Section C. Reservations, Exceptions, Exclusions
Article 17.18. Non-Conforming Measures
1. Articles 17.6 (National Treatment), 17.7 (Most-Favoured-Nation Treatment), 17.12 (Performance Requirements), and 17.13 (Senior Management and Boards of Directors) shall not apply to:
(a) any existing non-conforming measure maintained in the territory of a Party at:
(i) the central level of government, as set out by that Party in its Schedule to Annex I;
(ii) the regional level of government, as set out by that Party in its Schedule to Annex I; or
(iii) the level of government other than the central or regional levels;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Articles 17.6 (National Treatment), 17.7 (Most‑Favoured‑Nation Treatment), 17.12 (Performance Requirements), and 17.13 (Senior Management and Boards of Directors).
2. Articles 17.6 (National Treatment), 17.7 (Most-Favoured-Nation Treatment), 17.12 (Performance Requirements), and 17.13 (Senior Management and Boards of Directors) shall not apply to a measure that a Party adopts or maintains with respect to sectors, subsectors, or activities, as set out in its Schedule to Annex II (Reservations for Future Measures).
3. A Party shall not, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule to Annex II (Reservations for Future Measures), require an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
4. Articles 17.6 (National Treatment) and 17.7 (Most-Favoured-Nation Treatment) do not apply to a measure that relates to the protection of intellectual property rights (9) that is consistent with the TRIPS agreement, including any amendment of or waiver to the TRIPS Agreement that is in force for both Parties.
5. Articles 17.6 (National Treatment), 17.7 (Most-Favoured-Nation Treatment), and 17.13 (Senior Management and Boards of Directors) do not apply to:
(a) procurement by a Party; or
(b) a subsidy or grant provided by a Party, including a government-supported loan, a guarantee, or insurance.
Article 17.19. Exclusions
Section D (Investor-State Dispute Settlement), Section E (Expedited Arbitration), and Chapter 28 (Dispute Settlement) do not apply to the matters set out in Annex 17-A (Exclusions from Dispute Settlement).
Section D. Investor-State Dispute Settlement
Article 17.20. Scope and Purpose
1. Without prejudice to the rights and obligations of the Parties under Chapter 28 (Dispute Settlement), the Parties establish in this Section a mechanism for the settlement of investment disputes.
2. Under this Section, an investor of a Party may submit a claim that the other Party has breached an obligation under Section B (Investment Protections), other than Articles 17.3(4) (Relation to Other Chapters), 17.5 (Non-Derogation), 17.12 (Performance Requirements), 17.13(3) (Senior Management and Boards of Directors), or 17.15 (Responsible Business Conduct).
3. For greater certainty, an investor may not submit a claim under this Section if the investment has been made through fraudulent misrepresentation, concealment, corruption, or conduct amounting to an abuse of process.
Article 17.21. Request for Consultations
1. In the event of an investment dispute under this Agreement, an investor of a Party shall seek to resolve the dispute through consultations, which may include the use of non‑binding, third party procedures, such as good offices, conciliation, or mediation.
2. An investor of a Party shall deliver to the other Party a written request for consultations, which shall specify:
(a) whether the investor intends to claim under Articles 17.23(1) or 17.23(2) (Submission of a Claim to Arbitration);
(b) the name and address of the investor and evidence to establish that the investor is an investor of the other Party;
(c) the investment at issue and evidence to establish that the investor owns or controls the investment, including, if the investment is an enterprise, the name, address, and place of incorporation of the enterprise;
(d) if the investor is an enterprise, the corporate structure up to, and information on, any natural person that has ultimate ownership or control of that investor;
(e) for each claim:
(i) the provision of this Agreement alleged to have been breached; and
(ii) the factual basis for the alleged breach, including the measure at issue; and
(f) the relief sought and the approximate amount of damages claimed.
3. An investor of a Party may, when submitting a request for consultations, propose to hold the consultations by videoconference, telephone, or similar means of communication as appropriate. The other Party should give sympathetic consideration to that request, in particular if the investor is a micro, small, or medium-sized enterprise.
4. The request for consultations shall be submitted to the other Party under this Article no later than:
(a) three years from the date on which the investor or, as applicable, the enterprise referred to in Article 17.23(2) (Submission of a Claim to Arbitration), first acquired or should have first acquired knowledge of the alleged breach and knowledge that the investor or, as applicable, the enterprise, has incurred loss or damage by reason of, or arising out of, that breach; or
(b) if the investor or, as applicable, the enterprise, has initiated a claim or proceeding before an administrative tribunal or court under the law of a Party with respect to the measure at issue in the investor's request for consultations delivered pursuant to paragraph 2, two years after:
(i) the investor or, as applicable, the enterprise, ceases to pursue that claim; or
(ii) when that proceeding has otherwise ended;
provided that it is no later than seven years after the date on which the investor or, as applicable, the enterprise, first acquired or should have first acquired knowledge of the alleged breach and knowledge that the investor or, as applicable, the enterprise, has incurred loss or damage by reason of, or arising out of, that breach.
5. Neither a continuing breach nor the occurrence of similar or related acts or omissions may renew or interrupt the periods set out in paragraphs 4(a) and 4(b).
6. Unless otherwise agreed, consultations shall be held within 90 days of the delivery of the request for consultations pursuant to paragraph 2.
7. Unless otherwise agreed, the place of consultations shall be the capital city of the other Party.
8. If the investor has not submitted a claim under Article 17.23 (Submission of a Claim to Arbitration) within one year of the delivery of the request for consultations, the investor is deemed to have withdrawn its request for consultations and shall not submit a claim under this Section with respect to the same measure. This period may be extended by agreement between the investor of a Party and the other Party.
Article 17.22. Mediation
The disputing parties may at any time agree to have recourse to mediation. A respondent shall give sympathetic consideration to a request for mediation made by a micro, small, or medium-sized enterprise. Recourse to mediation is without prejudice to the legal position or rights of the disputing parties under this Section and is governed by the rules agreed to by the disputing parties, including any applicable rules for mediation adopted by the Joint Commission. If the disputing parties agree to have recourse to mediation, paragraphs 4, 5, and 8 of Article 17.21 (Request for Consultations) and all timelines pursuant to an arbitration under this section are suspended from the date on which the disputing parties agreed to have recourse to mediation, and shall resume on the date on which either disputing party decides to terminate the mediation. A decision by a disputing party to terminate the mediation shall be transmitted by way of letter to the mediator and the other disputing party.
Article 17.23. Submission of a Claim to Arbitration
1. An investor of a Party may make a claim that the other Party has breached an obligation in accordance with Article 17.20 (Scope and Purpose), and that the investor has incurred loss or damage by reason of, or arising out of, that breach, only if:
(a) the investor has fulfilled the requirements of Article 17.21 (Request for Consultations);
(b) 180 days have elapsed since the receipt by the other Party of a request for consultations under Article 17.21 (Request for Consultations);
(c) the claim relates to measures identified in the investor's request for consultations under Article 17.21 (Request for Consultations);
(d) the investor consents to dispute settlement in accordance with the procedures set out in this Agreement; and
(e) the investor and, if the claim is for loss or damage to an interest in an enterprise of the other Party that is a juridical 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 law of any Party, or other dispute settlement procedure, any proceeding with respect to the measure of the other Party that is alleged to be a breach referred to in Article 17.21(2) (Request for Consultations), except for a proceeding for injunctive, declaratory, or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of the other Party.
2. An investor of a Party, on behalf of an enterprise of the other Party that is a juridical person that the investor owns or controls directly or indirectly, may make a claim that the other Party has breached an obligation in accordance with Article 17.20 (Scope and Purpose), and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach, only if:
(a) the investor has fulfilled the requirements of Article 17.21 (Request for Consultations);
(b) 180 days have elapsed since the receipt by the other Party of a request for consultations under Article 17.21 (Request for Consultations);
(c) the claim relates to measures identified in the investor's request for consultations under Article 17.21 (Request for Consultations);
(d) the investor consents to dispute settlement in accordance with the procedures set out in this Agreement; and
(e) both the investor and the enterprise waive their right to initiate or continue before an administrative tribunal or court under the law of any Party, or other dispute settlement procedure, any proceeding with respect to the measure of the other Party that is alleged to be a breach referred to in Article 17.21(2) (Request for Consultations), except for a proceeding for injunctive, declaratory, or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of the other Party.
3. A consent and waiver required by this Article shall be in writing, shall be delivered to the respondent Party, and shall be included in the submission of a claim to arbitration.
4. Notwithstanding paragraph 3, a waiver from the enterprise under paragraph 1(e) or 2(e) is not required if the other Party has deprived the investor of control of the enterprise.
5. If an investor of a Party makes a claim under paragraph 2 and the investor or a non-controlling investor in the enterprise makes a claim under paragraph 1 arising out of the same events or circumstances, and two or more of the claims are submitted to dispute settlement under this Article, the claims should be heard together by a Tribunal constituted under Article 17.30 (Consolidation), unless the Tribunal finds that the interests of a disputing party would be prejudiced thereby.
6. An investor of a Party may submit a claim to dispute settlement under:
(a) the ICSID Convention, provided that both Parties are parties to the ICSID Convention;
(b) the ICSID Additional Facility Rules, if only one Party is a party to the ICSID Convention;
(c) the UNCITRAL Arbitration Rules; or
(d) any other rules on agreement of the disputing parties.
7. Except to the extent modified by this Agreement, the arbitration shall be governed by the existing version of the arbitration rules applicable under paragraph 6, unless otherwise agreed by both disputing parties.
8. If the claimant proposes rules pursuant to paragraph 6(d), the respondent Party shall reply to the claimant's proposal within 45 days of receipt of the proposal. If the disputing parties have not agreed on those rules within 60 days of receipt, the claimant may submit a claim under the rules provided for in paragraph 6(a), 6(b), or 6(c).
9. An investor of a Party may, when submitting a claim under this Article, propose that a sole member of a Tribunal should hear the claim. The respondent Party may give sympathetic consideration to that request, in particular if the investor is a micro, small, or medium-sized enterprise or the compensation or damages claimed are relatively low.
10. A claim is submitted to arbitration under this Article when:
(a) the request for arbitration under Article 36(1) of the ICSID Convention is received by the Secretary-General of ICSID;
(b) the request for arbitration under Article 2 of Schedule C of the ICSID Additional Facility Rules is received by the Secretariat of ICSID; or
(c) the notice of arbitration under Article 3 of the UNCITRAL Arbitration Rules is received by the respondent Party.
Article 17.24. Consent to Arbitration
1. Each Party consents to the submission of a claim to arbitration under this Section in accordance with the provisions of this Agreement, including the requirements of Articles 17.21 (Request for Consultations) and 17.23 (Submission of a Claim to Arbitration).
2. The consent under paragraph 1 and the submission of a claim to arbitration under Article 17.23 (Submission of a Claim to Arbitration) shall satisfy the requirement of:
(a) Chapter II of the ICSID Convention 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 17.25. Discontinuance
If the claimant fails to take a step in the proceeding within 180 days of the submission of a claim to arbitration under Article 17.23 (Submission of a Claim to Arbitration), or such other time period as agreed to by the disputing parties, the claimant is deemed to have withdrawn its claim and to have discontinued the proceeding. The Tribunal, if constituted, shall, at the request of the respondent Party, and after notice to the disputing parties, in an order take note of the discontinuance. After the order has been rendered the authority of the Tribunal shall cease.
Article 17.26. Arbitrators
1. Except in respect of a Tribunal established under Article 17.30 (Consolidation), and unless the disputing parties agree otherwise, the Tribunal shall be composed of three arbitrators. Each disputing party shall appoint one arbitrator, and the third arbitrator, who will be the presiding arbitrator, shall be appointed by agreement of, or pursuant to an appointment process agreed to by, the disputing parties. The disputing parties are encouraged to consider greater diversity in arbitrator appointments, including through the appointment of women.
2. Arbitrators should have expertise or experience in public international law, international investment law, international trade law, or dispute resolution arising under international investment or international trade agreements.
3. Arbitrators shall be independent of, and not be affiliated with or take instructions from, a Party or the disputing investor.
4. If the disputing parties do not agree on the remuneration of the arbitrators before the Tribunal is constituted, the prevailing ICSID rate for arbitrators shall apply.
5. If a Tribunal, other than a Tribunal established under Article 17.30 (Consolidation), has not been constituted within 90 days of the submission of a claim to arbitration, a disputing party may ask the Secretary-General of ICSID to appoint the arbitrator or arbitrators not yet appointed. In accordance with this Article, the Secretary-General of ICSID shall make the appointment at his or her own discretion and, to the extent practicable, shall make this appointment in consultation with the disputing parties. The Secretary-General of ICSID shall not appoint as presiding arbitrator a national of a Party.
6. Arbitrators shall abide by the Arbitrator Code of Conduct for Investor-State Dispute Settlement set out in Annex 17-B.
Article 17.27. Agreement to Appointment of Arbitrators by ICSID
1. For the purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator based on a ground other than nationality:
(a) the respondent Party agrees to the appointment of each individual member of a Tribunal established under the ICSID Convention or the ICSID Additional Facility Rules;
(b) an investor of a Party referred to in Article 17.23(1) (Submission of a Claim to Arbitration) may submit a claim to arbitration or continue a claim under the ICSID Convention or the ICSID Additional Facility Rules only if the investor agrees in writing to the appointment of each member of the Tribunal; and
(c) an investor of a Party referred to in Article 17.23(2) (Submission of a Claim to Arbitration) may submit a claim to arbitration or continue a claim under the ICSID Convention or the ICSID Additional Facility Rules only if the investor and the enterprise agree in writing to the appointment of each member of the Tribunal.
Article 17.28. Applicable Law and Interpretation
1. A Tribunal constituted under this Section shall apply this Agreement as interpreted in accordance with the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969, and other rules and principles of international law applicable between the Parties.
2. If serious concerns arise as regards matters of interpretation, the Committee on Services and Investment may recommend to the Joint Commission to adopt an interpretation of this Agreement. An interpretation adopted by the Joint Commission shall be binding on a Tribunal established under this Section. The Joint Commission may decide that an interpretation shall have binding effect from a specific date.
3. A Tribunal has no jurisdiction to determine the legality of a measure, alleged to constitute a breach of this Agreement, under the domestic law of a Party. In determining the consistency of a measure with this Agreement, the Tribunal may consider, as appropriate, the domestic law of a Party as a matter of fact. In doing so, the Tribunal shall follow the prevailing interpretation given to the domestic law by the courts or authorities of that Party, and any meaning given to domestic law by the Tribunal is not binding on the courts or authorities of that Party.
4. If an investor of a Party submits a claim to arbitration under Article 17.23 (Submission of a Claim to Arbitration), including a claim that a Party breached Article 17.9 (Minimum Standard of Treatment), the investor has the burden of proving all elements of its claim, consistent with the general principles of international law applicable to international arbitration.
Article 17.29. Preliminary Objections
1. Without prejudice to a Tribunal's authority to address other questions as a preliminary objection, a Tribunal shall address and decide as a preliminary question an objection by the respondent Party that, as a matter of law, a claim submitted is not a claim for which an award in favour of the investor may be made under this Agreement, including that a dispute is not within the competence of the Tribunal, or that a claim is manifestly without legal merit.
2. An objection under paragraph 1 shall be submitted to the Tribunal within 60 days of constitution of the Tribunal. The Tribunal shall suspend any proceeding on the merits and issue a decision or award on the objection, stating the grounds therefor, within 180 days of the objection. 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 disputing party requests a hearing, a Tribunal may, on a showing of extraordinary cause, delay issuing its decision or award by an additional brief period, which may not exceed 30 days.
3. When deciding an objection under paragraph 1, the Tribunal shall assume to be true the factual allegations in the claim to arbitration under Article 17.23 (Submission of a Claim to Arbitration), or any amendment to that claim. The Tribunal may also consider relevant facts not in dispute.
4. Whether or not a respondent Party raises an objection under paragraph 1 concerning the competence of the Tribunal, the respondent Party shall have the right to raise, and the Tribunal the authority to address and decide, a question pertaining to its competence in the course of the proceedings.
5. The provisions on costs in Article 17.36 (Final Award) shall apply to decisions or awards issued under this Article.
Article 17.30. Consolidation
1. If two or more claims have been submitted separately to arbitration under Article 17.23 (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, a 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 the terms of paragraphs 2 through 10.
2. A disputing party that seeks a consolidation order under this Article shall deliver, in writing, a request to the Secretary-General of ICSID to establish a Tribunal and shall specify in the request:
(a) the name of the respondent Party, or the investors, against which the order is sought;
(b) the nature of the order sought; and
(c) the grounds for the order sought.
3. The disputing party shall deliver a copy of the request to the respondent Party, or the investors, against which the order is sought.
4. Unless the disputing parties sought to be covered by the order agree to a different appointment process, the Secretary-General of ICSID shall, within 60 days of receiving the request, establish a Tribunal composed of three arbitrators. The Secretary-General of ICSID shall appoint one member who is a national of the respondent Party, one member who is a national of the Party of the investors that submitted the claims, and a presiding arbitrator who is not a national of a Party.
5. A Tribunal established under this Article shall be established under the UNCITRAL Arbitration Rules and shall conduct its proceedings in accordance with the UNCITRAL Arbitration Rules, except as modified by this Section.
6. If a Tribunal established under this Article is satisfied that the claims submitted to arbitration under Article 17.23 (Submission of a Claim to Arbitration) 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, by order:
(a) assume jurisdiction over, and hear and determine together, all or part of the claims; or