Title

AGREEMENT BETWEEN THE REPUBLIC OF ARGENTINA AND THE REPUBLIC OF HUNGARY ON THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS

Preamble

The Argentine Republic and the Republic of Hungary,

hereinafter referred to as the "Contracting Parties",

Desiring to intensify economic cooperation between both countries,

Aiming at creating favourable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party:

Recognizing that the promotion and protection of such investment on the basis on an agreement will be conducive to the stimulation of individual business initiatives and will increase prosperity in both States.

Have agreed as follows:

Body

Article 1. Definitions

For the purposes of this Agreement:

(1) The term "investment" means, in conformity with the laws and regulations of the Contracting Party in whose territory the investment was made, every kind of assets invested by an investor of one Contracting Party in the territory of the other Contracting Party, in accordance with the latter's laws. It includes in particular, though not exclusively:

a) movable and immovable property as well as any other property rights such as mortgages, liens and pledges;

b) shares, stocks and other kind of participation in companies:

c) title to money and claims to performance having an economic value; loans only being included when they are directly related to an investment specifies:

d) intellectual property rights, including copyrights, patents, industrial designs, trademarks, trade names, technical processes, know-how, and goodwill;

e) business concessions conferred by law or under contract, including concessions to search for, cultivate, extract or exploit natural resources.

This Agreement shall apply to all investments made before or after the date of entry into force, but the provisions of this Agreement shall not apply to any dispute, claim or difference, which arose before its entry into force.

(2) The term "investor" means:

a) Any natural person who is a national of a Contracting Party, in accordance with its laws.

b) Any legal person, including companies, organizations, associations constituted in accordance with the law in force in either Contracting Party and having its seat in the territory of that Contracting Party:

(3) The provisions of this Agreement shall not apply to the investments by natural persons who are nationals of one Contracting Party in the territory of the other Contracting Party if such persons have, at the time of the investment, been domiciled in the latter Contracting Party for more than two years, unless it is proved that the investment was admitted in its territory from abroad.

(4) The term "returns" means all amounts yielded by an investment such as profits, dividends, interests, royalties and other current income.

(5) The term "territory" means the territory of each Contracting Party, including those maritime areas adjacent to the outer limit of the territorial sea of the national territory, over which the Contracting Party concerned may, in accordance with international law, exercise sovereign rights or jurisdiction.

Article 2. Promotion of Investments

Each Contracting Party shall promote in its territory investments by investors of the other Contracting Party and shall admit such investments in accordance with its laws and regulations.

Article 3. Protection of Investments

(1) Each Contracting Party shall at all times ensure fair and equitable treatment of the investments by investors of the other Contracting Party and shall not impair the management, maintenance, use, enjoyment or disposal thereof through unjustified or discriminatory measures.

(2) Each Contracting Party, once it has admitted investments in its territory by investors of the other Contracting Party, shall grant full legal protection to such investments and shall accord a treatment which is no less favourable than that accorded to investments by its own investors or by investors of third States.

(3) If a Contracting Party has accorded special advantages to investors of any third State by virtue of agreements establishing free trade areas, customs unions, common markets, economic unions or similar institutions, or on the basis of interim agreements leading to such unions or institutions, that Contracting Party shall not be obliged to accord such advantages to investors of the other Contracting Party.

(4) The treatment granted under the present Article shall not extend to taxes, fees,  charges, and to fiscal deductions and exemptions granted by either Contracting Party to investors of third States by virtue of a double taxation agreement or other agreements regarding matters of taxation, or on the basis of reciprocity with a third State.

(5) The provisions of paragraph (2) of this Article shall not be construed so as to extend to the investors of the other Contracting Party the benefit of any treatment, preference or privilege resulting from the bilateral agreements providing for concessional financing concluded by the Republic of Argentina with Italy on 10 December 1987 and with Spain on 3 June 1988.

Article 4. Expropriation and Compensation

(1) Neither of the Contracting Parties shall take any measures of nationalization or expropriation or any other measures having the same effect against investments in its territory belonging to investors of the other Contracting Party unless the following conditions are complied with:

a) the measures are taken in the public interest;

b) on a non-discriminatory basis:

c) under due process of law;

d) the measures are accompanied by provisions for the payment of prompt, adequate and effective compensation. Such compensation shall amount to the market value of the expropriated investment immediately before the expropriation or before the impending expropriation became public knowledge, shall include interest from the date of expropriation at a normal commercial rate, shall be paid without delay and shall be effectively realizable and freely transferable.

(2) Investors of one Contracting Party who suffer losses of their investments in the territory of the other Contracting Party due to war or other armed conflict, a state of national emergency, revolt, insurrection or riot shall be accorded, with respect to restitution, indemnification, compensation or other settlement a treatment which is no less favourable than that accorded to its own investors or to investors of any third State.

Article 5. Transfers

(1) Each Contracting Party shall grant to investors of the other Contracting Party the unrestricted transfer of investments and returns, and in particular of:

a) the capital and additional sums necessary for the maintenance and development of the investments;

b) gains, profits, interests, dividends, and other current income:

c) funds in repayment of loans regularly contracted and documented and directly related to a specific investment;

d) royalties and fees;

e) the proceeds from a total or partial sale or liquidation of an investment;

f) compensation provided for in article 4.

(2) Transfers shall be effected without delay in freely convertible currency in the normal applicable exchange rate at the date of the transfer, in accordance with the procedures established by the Contracting Party in whose territory the investment was made, which shall not impair the substance of the right to transfer.

Article 6. Subrogation

(1) If a Contracting Party or an agency of a Contracting Party makes a payment to any of its investors under a guarantee or other form of indemnity it has granted in respect of an investment, the other Contracting Party shall recognize the transfer and exercising of any right or title in respect of such investments. The subrogated right or claim shall not be greater than the original right or claim of the investor.

(2) In the case of subrogation as defined in Paragraph (1) above, the investor shall not pursue a claim unless authorized to do so by the Contracting Party or any agency thereof.

Article 7. Implementation of other Rules

If the provisions of law of either Contracting Party or obligations under international law existing at present or established hereafter between the Contracting Parties in addition to the present Agreement or if any agreement between an investor of one Contracting Party and the other Contracting Party, contain rules, whether general or specific entitling investments by investors of the other Contracting Party to a treatment more favourable than is provided for in the present Agreement, such rules shall, to the extend that they are more favourable, prevail over the present Agreement.

Article 8. Consultations

Either Contracting Party may propose to the other Contracting Party to consult on any matter affecting the interpretation or application of the present Agreement. The other Contracting Party shall accord sympathetic consideration to and shall afford adequate opportunities for such consultation.

Article 9. Settlement of Disputes between the Contracting Parties

(1) Disputes between the Contracting Parties concerning the interpretation or application of this Agreement should, if possible, be settled through the diplomatic channel.

(2) If a dispute between the Contracting Parties cannot thus be settled within six months from the beginning of the negotiations, it shall upon the request of either Contracting Party be submitted to an arbitral tribunal.

(3) Such arbitral tribunal shall be constituted for each individual case in the following way. Within two months of the receipt of the request for arbitration, each Contracting Party shall appoint one member of the Tribunal. Those two members shall then select a national of a third State who on approval by the two Contracting Parties shall be appointed Chairman of the Tribunal. The Chairman shall be appointed within two months from the date of appointment of the other two members.

(4) If within the periods specified in paragraph (3) of this Article the necessary appointments have not been made, either Contracting Party may, in the absence of any other agreement, invite the President of the International Court of Justice to make the necessary appointments. If the President is a national of one of either Contracting Party or, if he is otherwise prevented from discharging the said function, the Vice-President shall be invited to make the necessary appointments. If the Vice-President is a national of either Contracting Party or if he too is prevented from discharging the said function, the member of the International Court of Justice next in seniority who is not a national of either Contracting Party shall be invited to make the necessary appointments.

(5) The arbitral tribunal shall reach its decision by a majority of votes. Such decision shall be binding on both Contracting Parties. Each Contracting Party shall bear the costs of its own member of the Tribunal and of its representation in the arbitral proceedings; the cost of the Chairman and the remaining costs shall in principle be borne in equal parts by the Contracting Parties. The tribunal may, however, in its decision direct that a higher proportion of costs shall be borne by one of the Contracting Parties and this award shall be binding on both Contracting Parties. The tribunal shall determine its own procedure.

Article 10. Settlement of Disputes between an Investor and the Host Contracting Party

(1) Any dispute which arises within the terms of this Agreement concerning an investment between an investor of a Contracting Party and the other Contracting Party shall, if possible be settled amicably.

(2) If the dispute cannot thus be settled within six months following the date on which the dispute has been raised by either party, it may be submitted, upon request of the investor, either to:

- the competent tribunal of the Contracting Party in whose territory the investment was made;

- international arbitration according to the provisions of paragraph (3).

Where an investor has submitted a dispute to the aforementioned competent tribunal of the Contracting Party where the investment has been made or to international arbitration, this choice shall be final.

(3) In case of international arbitration, the dispute shall be submitted, at the investor's choice, either to:

- The International Centre for the Settlement of Investment Disputes (ICSID) created by the Convention on the Settlement of Investment Disputes between States and Nationals of other States, opened for signature at Washington on 18 March 1965, once both Contracting Parties herein become thereof. As far as this provision is not complied with, each Contracting Party consents that the dispute be submitted to arbitration under the regulations of the ICSID Additional Facility for the Administration of Conciliation, Arbitration and Fact-Finding Proceedings, or

- an arbitration tribunal set up from case to case in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).

(4) The arbitration tribunal shall decide in accordance with the provisions of this Agreement, the laws of the Contracting Party involved in the dispute, including its rules on conflict of law, the terms of any specific agreement concluded in relation to such an investment and the relevant principles of international law.

(5) The arbitral decisions shall be final and binding for the parties in the dispute. Each Contracting Party shall execute them in accordance with its laws.

Article 11. Entry Into Force , Duration and Termination

(1) This Agreement shall enter into force on the first day of the second month following the date on which the Contracting Parties notify each other in writing that their constitutional requirements for the entry into force of this Agreement have been fulfilled. It shall remain in force until the expiration of twelve months from the date that either Contracting Party in writing notifies the other Contracting Party of its decision to terminate this Agreement.

(2) In respect of investments made prior to the date when the notice of termination of this Agreement becomes effective, the provisions of articles 1 to 10 shall remain in force for a further period of fifteen years from that date.

Conclusion

Done at Budapest on 5th February , 1993, in duplicate, in the Hungarian, Spanish and English languages, the three texts being equally authentic. In case there is any divergence of interpretation of the provisions, the English text shall, however, prevail.

FOR THE GOVERNMENT OF THE REPUBLIC OF ARGENTINA

FOR THE GOVERNMENT OF THE REPUBLIC OF HUNGARY