Title

Treaty between the Federal Republic of Germany and the State of Uganda concerning the Encouragement and Reciprocal Protection of Investments

Preamble

THE FEDERAL REPUBLIC OF GERMANY and THE STATE OF UGANDA

DESIRING to intensify economic cooperation between both States,

INTENDING to create favourable conditions for investments by nationals and companies of either State in the territory of the other State, and

RECOGNISING that encouragement and contractual protection of such investments are apt to stimulate private business initiative and to increase the prosperity of both nations,

HAVE AGREED AS FOLLOWS:

Body

Article 1.

Each Contracting Party shall in its territory promote as far as possible the investment of capital by nationals or companies of the other Contracting Party and admit such investments in accordance with its laws and regulations in force at the time of such approval. Each Contracting Party shall in any case accord such investments fair and equitable treatment.

Article 2.

(1) Neither Contracting Party shall subject investments owned or controlled by nationals or companies of the other Contracting Party in its territory to treatment less favourable than that which it accords to investments of its own nationals or companies or to investments of nationals or companies of any third State.

(2) As regards activities in connexion with investments neither Contracting Party shall subject nationals or companies of the other Contracting Party in its territory to treatment less favourable than that which it accords to its own nationals or companies or to nationals or companies of any third State.

Article 3.

(1) Investments by nationals or companies of either Contracting Party shall enjoy full protection as well as security in the territory of the other Contracting Party.

(2) Investments by nationals or companies of either Contracting Party shall not be expropriated in the territory of the other Contracting Party except for the public benefit and against compensation. Such compensation shall represent the equivalent of the investment expropriated; it shall be actually realizable, freely transferable, and shall be made without delay. Provision shall have been made in an appropriate manner at or prior to the time of expropriation for the determination and the giving of such compensation. The legality of any such expropriation and the amount of compensation shall be subject to review by due process of law.

(3) Nationals or companies of either Contracting Party whose investments suffer losses in the territory of the other Contracting Party owing to war or other armed conflict, revolution, a state of national emergency, or revolt, shall be accorded treatment no less favourable by such other Contracting Party than that Party accords to its own nationals or companies, as regards restitution, indemnification, compensation or other valuable consideration. Such payments shall be freely transferable.

(4) Nationals or companies of either Contracting Party shall enjoy most-favoured-nation treatment in the territory of the other Contracting Party in respect of the matters provided for in the present Article.

Article 4.

With respect to investments either Contracting Party shall guarantee to nationals or companies of the other Contracting Party the free transfer of the capital, of the returns from it and, in the event of liquidation, of the proceeds from such liquidation.

Article 5.

If either Contracting Party makes payment to any of its nationals or companies under a guarantee it has assumed in respect of an investment in the territory of the other Contracting Party, the latter Contracting Party shall, without prejudice to the rights of the former Contracting Party under Article 11, recognise the assignment, whether under a law or pursuant to a legal transaction, of any right or claim from such national or company to the former Contracting Party as well as the subrogation of that Contracting Party to any such right or claim, which that Contracting Party shall be entitled to assert to the same extent as its predecessor in title. As regards the transfer of payments to be made to the Contracting Party concerned by virtue of such assignment, paragraphs 2 and 3 of Article 3 as well as Article 4 shall apply mutatis mutandis.

Article 6.

(1) To the extent that those concerned have not made other arrangements recognised by the appropriate agencies of the Contracting Party in whose territory the investment is situate, transfers under paragraph 2 or 3 of Article 3, and under Article 4 or Article 5 shall be made without delay and at the rate of exchange effective for current transactions on the day the transfer is made.

(2) The rate of exchange effective for current transactions shall be based on the par value agreed with the International Monetary Fund and shall lie within the margins above or below parity in accordance with section 3 of Article IV of the Articles of Agreement of the International Monetary Fund.

(3) If on the date of transfer no rate of exchange within the meaning of paragraph 2 above exists in respect of either Contracting Party, the official rate fixed by such Contracting Party for its currency in relation to the US Dollar or to another freely convertible currency or to gold shall be applied. If no such rate has been fixed, the appropriate agencies of the Contracting Party in whose territory the investment is situate shall accept a rate of exchange that is fair and equitable.

Article 7.

(1) If the legislation of either Contracting Party or any international instrument to which either Contracting Party is or may hereafter become a Party contains a regulation, whether general or specific, entitling investments by nationals or companies of the other Contracting Party to a treatment more favourable than is provided for by the present Treaty, such regulation shall to the extent that it is more favourable prevail over the present Treaty.

(2) Either Contracting Party shall fulfil any other obligations it may have accepted with regard to investments in its territory by nationals or companies of the other Contracting Party.

Article 8.

(1) The term "investment" shall comprise every kind of asset and, more particularly, though not exclusively,

a) Movable and immovable property as well as any other rights in rem, such as mortgages, liens, pledges, usufructs and similar rights;

b) Shares in companies and other kinds of interest;

c) Claims to money or to any performance having an economic value;

d) Copyrights, industrial property rights, technical processes, trade-names, and good will;

e) Business concessions under public law including concessions to search for, extract or exploit natural resources.

Any alteration of the form in which assets are invested shall not affect their classification as investments.

(2) The term "returns" shall mean the amounts yielded by an investment for a definite period as profit or interest.

(3) The term "nationals" shall mean

a) In respect of the Federal Republic of Germany: Germans within the meaning of the Basic Law for the Federal Republic of Germany;

b) In respect of the State of Uganda: Ugandans within the meaning of Chapter II of the Constitution of Uganda.

(4) The term "companies" shall mean

a) In respect of the Federal Republic of Germany: any juristic person as well as any commercial or other company or association with or without legal personality, having its seat in the territory of the Federal Republic of Germany and lawfully existing consistent with legal provisions, irrespective of whether the liability of its partners, associates or members is limited or unlimited and of whether or not its activities are directed to the making of profits;

b) In respect of the State of Uganda: any juristic person as well as any commercial or other company or association with or without legal personality, having its seat in the territory of Uganda and lawfully existing consistent with legal provisions, irrespective of whether the liability of its partners, associates or members is limited or unlimited and of whether or not its activities are directed to the making of profits.

Article 9.

The present Treaty shall also apply to investments made prior to its entry into force by nationals or companies of either Contracting Party in the territory of the other Contracting Party consistent with the latter's legislation. The obligations of the Federal Republic of Germany under the Agreement of 27 February, 1953, on German External Debts shall not be affected by this Treaty.

Article 10.

Either Contracting Party shall grant national treatment within the framework of the present Treaty in consideration of the fact that national treatment in like matters is also granted by the other Contracting Party.

Article 11.

(1) Disputes concerning the interpretation or application of the present Treaty shall, if possible, be settled by the Governments of the two Contracting Parties.

(2) If a dispute cannot thus be settled, 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 as follows: Each Contracting Party shall appoint one member, and these two members shall agree upon a national of a third State as their chairman to be appointed by the Governments of the two Contracting Parties. Such members shall be appointed within two months, and such chairman within three months, from the date on which either Contracting Party has informed the other Contracting Party that it wants to submit the dispute to an arbitral tribunal.

(4) If the periods specified in paragraph 3 above are not observed, either Contracting Party may, in the absence of any other relevant agreement, invite the President of the International Court of Justice to make the necessary appointments. If the President is a national 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 decisions by a majority of votes. Such decisions shall be binding. Each Contracting Party shall bear the cost of its own member and of its counsel in the arbitral proceedings; unless otherwise decided by the tribunal, the cost of the chairman and the remaining costs shall be borne in equal parts by both Contracting Parties. In all other respects, the arbitral tribunal shall determine its own procedure.

Article 12.

The provisions of the present Treaty shall remain in force also in the event of a conflict arising between the Contracting Parties, without prejudice to the right of taking such temporary measures as are permitted under the general rules of international law. Measures of this kind shall be repealed not later than on the date of the actual termination of the conflict, irrespective of whether or not diplomatic relations have been re-established.

Article 13.

With the exception of the provisions in paragraph 8 of the Protocol, relating to air transport, the present Treaty shall also apply to Land Berlin, provided that the Government of the Federal Republic of Germany has not made a contrary declaration to the Government of Uganda within three months from the entry into force of the present Treaty.

Article 14.

(1) The present Treaty shall be subject to ratification and the instruments of ratification shall be exchanged as soon as possible in Bonn.

(2) The present Treaty shall enter into force one month after the day of the exchange of the instruments of ratification. It shall remain in force for a period of ten years and shall continue in force thereafter for an unlimited period unless denounced in writing by either Contracting Party one year before the expiry of the said period of ten years. After the expiry of the said period of ten years the present Treaty may be denounced at any time by either Contracting Party by giving one year's notice to the other Contracting Party.

(3) In respect of investments made prior to the date of termination of the present Treaty, the provisions of Articles 1 to 13 shall continue to be effective for a further period of twenty years from the date of termination of the present Treaty.

Conclusion

DONE at Kampala on the 29th November, 1966, in four originals, two each in the German and English languages, all four texts being equally authentic.

For the Federal Republic of Germany

Dr. Sarrazin

For the State of Uganda

L. Kalule-Settala

Attachments

On Signing the Treaty concerning the Encouragement and Reciprocal Protection of Investments, concluded between the Federal Republtc of Germany and the State of Uganda, the undersigned plenipotentiaries have, in addition, agreed on the following provisions which shall be regarded as an integral part of the said Treaty;

(1) Ad Article 1

(a) Investments made in accordance with the laws and regulations of either Contracting Party within the area of application of that Party's legal system by nationals or companies of the other Contracting Party, shall enjoy the full protection of the present Treaty.

(b) In respect of investments in the territory of Uganda this Treaty shaIl only apply to investments which have been approved under Uganda legislation for the protection of foreign investments or have received special approval for the application of this Treaty. The Government of Uganda shall give sympathetic consideration to the granting of such approvals.

(2) Ad Article 2

(a) The following shall, more particularly, though not exclusively, be deemed "activity" within the meaning of paragraph 2 of Article 2: the management, maintenance, use, and enjoyment of an investment. The following shall in particular be deemed "treatment less favourable" within the meaning of paragraph 2 of Article 2: restricting the purchase of raw or auxiliary materials, of power or fuel or of means of production or operation of any kind, impeding the marketing of products inside or outside the country, as well as any other measures having similar effect. Measures that have to be taken for reasons of public security and order, public health or morality shall not be deemed "treatment less favourable" within the meaning of Article 2.

(b) Article 2 paragraph 2 shall not apply to entry, sojourn, and activity as an employee.

(c) The most-favoured-nation treatment as understood in this Treaty shaIl not apply to privileges which either Contracting Party grants to nationals or companies of other States because of an existing customs union, free trade zone or because of the membership of a common market.

(d) In the interest of national economy either Contracting Party may, in approving an investment by nationals or companies of the other Contracting Party, make specific stipulations deviating from the treatment provided for in Article 2. If specific stipulations of that nature have been made, the provisions of Article 2 shaII, to that extent, not be applicable. Such specific stipulations to be effective shaIl be made in detail in the document of approval.

(3) Ad Article 3

The provisions of paragraph 2 of Article 3 shall also apply to the transfer of an investment to public ownership, to the subjection of an investment to public control, or to similar interventions by public authorities. Expropriation shall mean the taking away or restricting of any property right which in itself or in conjunction with other rights constitutes an investment.

(4) Ad Article 4

"Liquidation" within the meaning of Article 4 shall be deemed to include any disposal effected for the purpose of completely or partially giving up the investment concerned.

(5) Ad Article 5

The Contracting Party, to which the rights or claims have been transferred, shall have a legal position not more favourable than that of its predecessor in title.

(6) Ad Article 6

(a) A transfer shall be deemed to have been made "without delay" within the meaning of paragraph 1 of Article 6 if made within sum period as is normally required for the completion of transfer formalities. The said period shall commence on the day on which the relevant request has been submitted and may on no account exceed two months.

(b) In deviation from (a) above, either Contracting Party may in the document of approval reserve the right to subject nationals or companies of the other Contracting Party to restrictions of transfer of returns and liquidation proceeds under Article 4. Either Contracting Party shall apply such restrictions onIy to the extent required in specific cases by its balance of payments. In any event the following minimum transfer shall, however, be guaranteed:

(aa) Transfer of returns to the extent of annually twelve per cent of the value of the investment as at the date of the transfer;

(bb) Transfer, in the event of liquidation, of annually twenty per cent of the liquidation proceeds.

(7) Ad Article 8

(a) Returns from an investment as well as returns from reinvested returns, shall enjoy the same protection as the original investment.

(b) Without prejudice to any other method of determining nationality, any person in possession of a national passport issued by the appropriate authorities of either Contracting Party shall be deemed to be a national of that Party.

(8) Whenever goods or persons connected with the making of investments are to be transported, either Contracting Parly shall neither exclude nor hinder transportation enterprises of the other Contracting Party and shall issue permits as required to carry out such transportation. This includes the transportation of

(a) Goods directly intended, for an investment within the meaning of the present Treaty or acquired in the territory of either Contracting Party or of any third State by or on behalf of an enterprise in which assets within the meaning of the present Treaty are invested;

(b) Persons travelling in connection with the making of investments.

DONE at Kampala on the 29th November, 1966, in four originals, two each in the German and English languages, all four texts being equally authentic.

For the Federal Republic of Germany

Dr. Sarrazin

For the State of Uganda

L. Kalule-Settala