Title
AGREEMENT FOR THE RECIPROCAL PROMOTION AND PROTECTION OF INVESTMENTS BETWEEN THE ARGENTINE REPUBLIC AND THE UNITED ARAB EMIRATES
Preamble
The Argentine Republic and the United Arab Emirates (hereinafter referred to as "the Parties");
With a view to promoting greater economic cooperation for the mutual benefit of both Parties;
Highlighting the need for all foreign investment to be consistent with the promotion of the economic development of both Parties, as well as with the protection of the environment;
Stressing, also, that it is essential for all investments to be made and carried out in accordance with international law and the laws and regulations of the Party in whose territory the investment is made; and
With the aim of encouraging the sustainable development of the Parties and promoting and protecting investments made by investors of each Party in the territory of the other Party;
Have agreed as follows:
Body
Part I. Substantive Provisions
Article 1. Definitions
Por the purpose of this Agreement:
The term "ICSID" means the International Centre for Settlement of Investment Disputes (ICSID) established by the ICSID Convention;
The term "ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done in Washington,18 March 1965;
The term "investment" means any asset owned or controlled by an investor of a Party, either directly or indirectly, established in the territory of the other Party, in accordance with its laws and regulations and with characteristics such as: assumption of business risk, introduction of capital or other resources into the territory of the host Party and contribution to the economic development of that Party;
In particular, the term "investment" includes:
(a) an enterprise;
(b) shares, stock and other forms of equity participation in an enterprise;
(c) loans and other financial instruments allocated for the fulfilment of a productive investment;
(d) intellectual property rights under the terms of Article 15;
(e) turnkey, construction, management, production, concession and profit sharing agreements;
(f) Iicences, authorizations, permits and similar rights granted in accordance with the laws and regulations of each Party; (1)
(g) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens and pledges.
The term "investment" does not include:
(a) Sovereign debt of a Party or debt of a State enterprise, which shall be subject to the applicable law, jurisdiction, and terms and conditions established in each relevant instrument;
(b) debt securities such as bonds, debentures and any other financial instrument;
(c) monetary claims exclusively arising from commercial contracts for the sale of goods or services;
(d) judicial or administrative resolutions;
(e) in the case of the Argentine Republic, concessions to search for, explore, extract or exploit natural resources, and natural resources, which shall be subject to the laws and regulations of the Argentine Republic;
(f) in the case of the United Arab Emirates, concessions to search for, explore, extract or exploit natural resources, and natural resources, which shall not be covered by this Agreement.
The term "investor of a Party" means any natural or legal person who is a national of one of the Parties under the laws of the Party whose nationality is invoked and who makes an investment in the territory of the other Party;
The term "investor of a non-Party" means, with ·respect to a Party, an investor that makes an investment in the territory of that Party but which is not an investor of either Party;
The term "New York Convention" means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York, 10 June 1958;
The term "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights;
Licences, authorizations, permits or similar instruments that lack the features of an investment include those that do not give rise to protected rights under the domestic legislation. The term "national of a Party" means:
(a) natural persons who have the effective nationality of one of the Parties;
(b) legal persons constituted under the legislation of one of the Parties which have their principal place of business in the territory of such Party.
The term "principal place of business" means the place where the main management of the legal person is located and where it conducts its substantial business activities.
For greater certainty, a natural person having dual nationality will be deemed to be national only of the State of its effective nationality.
The term "national of a Party" excludes:
(a) natural persons permanently residing within the territory, or having the nationality, of the other Party;
(b) A legal person constituted under the legislation of one of the Parties which has its principal place of business within the territory of such Party and which is controlled by nationals of a third State or of the host Party;
(c) a legal person constituted under the legislation of such Party which does not conduct its substantial business activities within the territory of that Party.
The term "PCA" means the Permanent Court of Arbitration based in The Hague and established by the Convention for the Peaceful Adjustment of International Differences of 29 July 1899;
The term "disputing party" means either the claimant or the respondent; "disputing parties" means the claimant and the respondent;
The term "freely usable currency" means "freely usable currency" as determined by the International Monetary Fund under its Articles of Agreement;
The term "territory" means:
With respect to the ARGENTINE REPUBLIC: the territory subject to the sovereignty of the Argentine Republic, and the exclusive economic zone and the continental shelf with respect to which the Argentine Republic exercises sovereign rights or jurisdiction in accordance with its constitutional provisions, legal provisions and international law;
With respect to UNITED ARAB EMIRATES: the territory of the United Arab Emirates which is under its sovereignty as well as the area outside the territorial water, airspace and submarine areas over which the United Arab Emirates exercises sovereign and jurisdictional rights in respect of any activity carried on in its water, sea bed, subsoil, in connection with the exploration for or the exploitation of natural resources by virtue of its law and international law;
The term "UNCITRAL" means the United Nations Commission on International Trade Law;
The term "UNCITRAL Arbitration Rules" means the arbitration rules of the United Nations Commission on International Trade Law.
(1) Whether a type of licence, authorization, permit or similar instrument (including a concession, to the extent that it is of the same nature as this type of instrument) has the features of an investment depends on factors such as the nature and scope of the rights of the holder, pursuant to the legislation of the Party.
Article 2. Scope of Aplication
1. This Agreement shall only apply to measures adopted or maintained by a Party relating to:
(a) investors of the other Party;
(b) investments existing as of the effective date of entry into force of this Agreement or acquired or expanded thereafter;
(c) Any action, event or situation arising after the date of entry into force of this Agreement or which is directly related to events or actions taking place after such date.
2. This Agreement shall not apply to:
(a) The granting, suspension or renewal of subsidies or grants;
(b) govemment procurements.(2)
(2) The Parties deem the term government procurement to include both public contracts and public works.
Article 3. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the management, conduct, operation, and disposition of investments in its territory.
2. Each Party shall accord to investments treatment no less favourable than that it accords, in like circumstances, to investments of its own investors in its territory with respect to the management, conduct, operation, and other disposition of investments.
3. For greater certainty, whether a specific treatment is accorded in "like circumstances" pursuant to this Article will depend on the totality of the circumstances, including the distinction between investors or investments on the basis of legitimate public welfare objectives.
4. With respect to paragraph 1, each Party shall only admit the entry of investments established by investors of the other Party subject to its applicable laws and regulations.
Article 4. Most-favoured-nation Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of any other State with respect to the management, conduct, operation, and disposition of investments in its territory.
2. Each Party shall accord to investments of the other Party treatment no less favourable than that it accords, in like circumstances, to investments of investors of any other State in its territory with respect to their management, conduct, operation, and disposition.
3. For greater certainty, treatment accorded in "like circumstances" pursuant to this Article will depend on all the circumstances, including the distinction between investors or investment on the basis of legitimate objectives of public welfare.
4. For greater certainty, the provisions in this Article shall not apply to incorporate substantive provisions on treatment which are not contained in this Agreement or to exclude rights or powers of the host Party which are provided for herein.
5. For greater certainty, the treatment referred to in this Article does not apply to procedural or jurisdictional matters.
6. The provisions of this Article shall not apply to invoke a more favourable treatment accorded by either Party under:
(a) trade or tax agreements;
(b) free trade zones;
(c) customs unions;
(d) common markets;
(e) economic unions or other integration mechanisms; to which the host Party is or becomes a party.
7. The provisions of this Article shall not apply to invoke a more favourable treatment accorded by either Party under bilateral investment treaties or other agreements containing provisions relating to investments signed prior to the entry into force of this Agreement.
Article 5. Minimum Standard of Treatment
1. Each Party shall accord to investments treatment in accordance with the minimum standard of treatment to aliens under customary international law, including fair and equitable treatment and full protection and security.
2. For greater certainty, the concepts of "fair and equitable treatment" and "full protection and security" in paragraph 1 do not require treatment in addition to or beyond that which is required by the customary international law minimum standard oftreatment of aliens:
(a) "fair and equitable treatment" includes, taking into account the circumstances of the case, the obligation of the Parties not to incur in a denial of justice in criminal, civil or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world and to the extent that the conduct of the Parties is detrimental to the investor; and
(b) "full protection and security" requires each Party to provide the level of physical protection required under customary international law and does not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.
3. A determination that there has been a breach of another provision of this Agreement does not establish that there has been a breach of this Article.
4. Non-discriminatory and non-arbitrary legislative or regulatory measures adopted by either Party to protect general welfare objectives, such as public order, public health, public security, environmental protection and economic policy, and which give an investor of the other Party the same treatment as that accorded to its own investors or to investors of third States in like circumstances, shall not be deemed to breach the minimum standard of treatment.
Article 6. Expropriation and Compensation
1. No Party shall expropriate or nationalize an investment in its territory, either directly or indirectly, through measures equivalent to expropriation, except:
(a) for a public purpose;
(b) in a non-discriminatory manner;
(c) in accordance with due process of law;
(d) upon payment of compensation in accordance with paragraphs 4, 5 and 6.
2. For the purposes of this Article:
(a) direct expropriation means the formal transfer of ownership or property rights;
(b) indirect expropriation means an action or a series of actions by a Party tantamount to direct expropriation without formal transfer of ownership or property rights.
3. The Arbitral Tribunal will determine whether an action or a series of actions by either Party in a given case constitutes indirect expropriation or not based an assessment of the facts as to:
(a) whether the action or series of actions substantially affected an investment of an investor of the other Party made in the territory of the host Party, thus depriving the investor of the control and management of the investment;
(b) the economic impact of the governmental act; and
(c) the purpose and context of the governmental act.
4. The compensation referred to in paragraph 1 (d) shall:
(a) be paid without undue delay;
(b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place (the date of expropriation);
(c) not reflect any change in value occurring because the intended expropriation had become known earlier; and
(d) be fully realizable and freely transferable in accordance with the provisions of Article 7 (Transfers ).
5. If the fair market value is denominated in a freely usable currency, the compensation paid shall be no less than the fair market value on the date of expropriation, plus simple interest at a commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment.
6. If the fair market value is denominated in a currency that is not freely usable, the compensation paid, converted into the currency of payment at the market exchange rateprevailing on the date of payment, shall be no less than:
(a) the fair market value on the date of expropriation, converted into a freely usable currency at the market exchange rate prevailing on the date of payment, plus
(b) interest at simple and commercially reasonable rate for that freely usable currency, accrued from the date of expropriation until the date of payment.
7. This Article shall not apply to the issuance of compulsory licenses granted in relation to intellectual property rights or to the revocation, limitation or creation of intellectual property rights, to the extent that those actions are consistent with the TRIPS Agreement.
8. Non-discriminatory legislative or regulatory measures designed or applied by either Party to protect general welfare objectives, such as public order, public health, public security, environmental protection and economic policy, shall not constitute indirect expropriation.
Article 7. Transfers
1. Each Party, prior fulfilment of the requirements under its law and without unjustified delay, shall allow investors of the other Party to effect, in a freely convertible currency, transfers of:
(a) capital contributions;
(b) profits, dividends, and capital gains from the sale of all or any part of the investment or from its partial or complete liquidation;
(c) interest, royalty payments, management fees, and technical assistance fees;
(d) payments made under a contract; and
(e) payments made under Article 6 (Expropriation and Compensation).
2. No provision in this Agreement shall prevent any Party from establishing conditions on or temporarily prohibiting transfers pursuant to the provisions of its laws and regulations. In particular, a Party may adopt measures with regard to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) fulfilment of fiscal obligations;
(c) criminal or penal offences;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or monitor compliance with the regulations of the host Party;
(e) compliance with orders or judgments in judicial or administrative proceedings.
3. In the event of actual or imminent serious financial or balance of payments difficulties, the host Party may adopt or maintain temporary restrictions on the payments or transfers covered by this Article, including foreign exchange control measures consistent with the Articles of the Agreement of the International Monetary Fund.
Article 8. Treatment In Case of Armed Conflict or Civil Strife
Investors of a Party whose investments suffer losses in the territory of the other Party due to war or other armed conflict, revolution, state of national emergency, insurrection, civil disturbance or other similar events shall be accorded treatment by such Party no less favourable than that accorded to its investors or to investors of a third State with regards to any measures adopted in relation to such losses.
Article 9. Subrogation
1. Subject to the consent of the host Party, if the other Party, or any agency, institution, statutory body or corporation designated by such Party, makes a payment to an investor under a guarantee, a contract of insurance or another form of indemnity that it has entered into with respect to an investment, the host Party shall recognize the subrogation or transfer of any rights the investor would have possessed under this Agreement with respect to the investment if the subrogation has not turned effective.
2. Subject to paragraph 1, the investor shall be precluded from pursuing these rights to the extent of the subrogation.
Article 10. Taxation
1. No provision in this Agreement shall be applied to tax measures.
2. For greater certainty, nothing in this Agreement shall be construed to preclude the application of any existing or future agreement on double taxation and prevention of fiscal evasion between the Parties.
Article 11. Right to Regulate
For the purpose of this Agreement, the Parties recognise their right to regulate in their territories in order to achieve legitimate public policy objectives, such as national security, the protection of public health, safety, the environment, public morals, social and consumer protection, or the promotion and protection of cultural diversity.
Article 12. Investment and Environmental, Health and other Regulatory Objectives
1. The Parties recognize that it is inappropriate to encourage investments by relaxing domestic measures relating to health, environment or other regulatory objectives. Accordingly, a Party should not waive, relax or otherwise derogate from, or offer to waive, relax or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion or retention in its territory of an investment of an investor.
2. The Parties will endeavour not to derogate from, waive or relax measures as an encouragement for the expansion, retention or disposition in its territory of an investment of an investor of the other Party. Furthermore, the Parties will endeavour not to offer to derogate from, waive or relax the measures in question as an encouragement for the establishment, acquisition, expansion or retention in its territory of an investment of an investor of the other Party.
Article 13. Denial of Benefits
Either Party may at any time, even after the dispute. settlement mechanism set forth in Section B hereof has been activated, deny the benefits of this Agreement to:
(a) an investor of the other Party that is a legal person of such other Party and to investments of that investor, if an investor of a non-Party owns or controls the legal person and the legal person has no substantial business activities in the territory of such other Party;
(b) an investor of the other Party that is a legal person of such other Party and the investments of that investor, if an investor of the denying Party owns or controls the legal person and the legal person has no substantial business activities in the territory of such other Party;
(c) investments or investors that have been established or restructured with the primary purpose of gaining access to the dispute settlement mechanism provided for in Section B of this Agreement.
Article 14. Compliance with the Laws of the Host Party
The Parties acknowledge that:
(a) the investors and investments of each Party shall comply with the laws, regulations, and policies of the host Party with respect to the management, operation, and disposition of investments;
(b) investors shall not offer, promise or give any pecuniary advantage or benefit-either direct or indirect-to public officers of the host Party as an encouragement or reward for the performance of wrongful official acts or to obtain undue advantages;
(c) upon request of the host Party, investors shall endeavour to provide information about the background and practices of the legal person concerned for decision-making purposes or for statistical purposes.
Article 15. Regulatory Powers Relative to Intellectual Property Rights
Nothing in this Agreement shall be construed to restrict the right of the Parties to adopt measures related to intellectual property in conformity with the TRIPS Agreement, or with other treaties on intellectual property rights to which both Parties are party.