3. If the fair market value is denominated in a freely usable currency, the compensation referred to in paragraph 1 shall not be less than the fair market value on the date of expropriation, plus interest at a commercially reasonable rate for that currency, accrued from the date of expropriation to the date of payment.
4. If the fair market value is denominated in a currency that is not freely usable, the compensation referred to in paragraph 1 - converted into the currency of payment at the market rate of exchange prevailing on the date of payment - shall not be less than:
(a) the fair market value on the date of expropriation, converted into a freely usable currency at the market rate of exchange prevailing on that date, plus;
(b) interest at a commercially reasonable rate for that freely usable currency, accrued from the date of expropriation to the date of payment.
5. The affected investor shall be entitled, under the national law of the Party enforcing the expropriation, to a review of its case by a judicial or other independent authority of that Party, and to the valuation of its investment in accordance with the principles set forth in this Article.
6. The provisions of 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 such issuance, revocation, limitation or creation is consistent with the TRIPS Agreement.
Article 12.12. TRANSFERS
Each Party shall, in accordance with its law, permit investors of the other Contracting Party to make transfers freely and without undue delay of:
(a) capital contributions;
(b) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other charges, returns in kind and other amounts derived from the investment;
(c) proceeds from the sale or liquidation of all or part of the covered investment;
(d) payments made pursuant to a contract entered into by the investor, or the covered investment, including a loan agreement;
(e) payments made pursuant to paragraph 1 of Articles 12.10 and 12.11; and
(f) payments arising from the application of Section B.
2. Each Party shall permit transfers related to a covered investment to be made in freely usable currency at the market rate of exchange prevailing on the date of the transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay a transfer in currency or in kind through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or protection of creditors' rights (8);
(b) issuance, trading or dealing in securities, futures, options or derivatives;
(c) criminal offenses;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities; and
(e) ensuring compliance with awards or judgments rendered in judicial or administrative proceedings.
Article 12.13. DENIAL OF BENEFITS
A Party may deny the benefits of this Agreement to:
(a) an investor of the other Party that is an enterprise of that other Party and to investments of such investor if a person of a non-Party owns or controls the enterprise and the enterprise does not conduct substantial business activities in the territory of the other Party; or
(b) an investor of the other Party that is an enterprise of that other Party and to the investments of such investor if the enterprise does not carry on substantial business activities in the territory of any Party, other than the denying Party, and a person of the denying Party owns or controls the enterprise.
Article 12.14. SPECIAL FORMALITIES AND REPORTING REQUIREMENTS
1. Nothing in Article 12.2 shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with a covered investment, such as a requirement that investors be residents of the Party or that covered investments be constituted in accordance with the Party's laws or regulations, provided that such formalities do not significantly impair protection afforded by a Party to investors of the other Party and to investments covered under this Chapter.
2. Notwithstanding Articles 12.2 and 12.3, a Party may require an investor of the other Party or its covered investment to provide information concerning that investment solely for informational or statistical purposes. A Party may request information of a confidential nature only if its domestic law so permits. In such a case, that Party shall protect the information that is confidential from any disclosure that could adversely affect the competitive position of the investor or the covered investment. Nothing in this paragraph shall be construed to prevent a Party from obtaining or disclosing information relating to the equitable and good faith application of its domestic law.
Article 12.15. SUBROGATION
1. Where a Party or an agency authorized by it has provided insurance or some other financial guarantee against noncommercial risks in respect of an investment of one of its investors in the territory of the other Party, the latter Party shall recognize the rights of the former Party, or an agency authorized by it, to be subrogated to the rights of the investor where it has made a payment under such insurance or guarantee. The subrogated or transferred right or claim shall not be greater than the original right or claim of the investor.
2. Where a Party or a designated agency of the Party has made a payment to an investor of that Party and has assumed the rights and claims of the investor, that investor may not, unless it has been authorized to act on behalf of the Party or the designated agency of the Party that has made the payment, assert such rights and claims against the other Party.
Section B. INVESTOR-STATE DISPUTE SETTLEMENT
Article 12.16. CONSULTATIONS AND NEGOTIATION
1. In the event of a dispute concerning an investment, the disputing parties shall first seek to settle the dispute through consultations and negotiation, which may include the use of non-binding third-party procedures. The consultation and negotiation procedure shall be initiated by the request sent to the address designated in Annex 12-C. Such a request shall be sent to the respondent prior to the notice of intent referred to in Article 12.17 and shall include the information set forth in paragraphs 12.17.2(a), (b) and (c).
2. Consultations shall be held for a period of at least six months, which may be extended by agreement of the disputing parties, and may include face-to-face meetings in the capital of the respondent.
Article 12.17. SUBMISSION OF A CLAIM TO ARBITRATION
1. After the minimum period referred to in Article 12.16.2, if a disputing party considers that an investment dispute cannot be resolved through consultation and negotiation:
(a) the claimant, at its own expense, may submit to arbitration a claim alleging:
(i) that the respondent has breached an obligation under Section A, other than an obligation under Article 12.8, 12.9, or 12.14; and
(ii) the claimant has suffered loss or damage by reason of, or as a result of, such breach; and
(b) the claimant, on behalf of an enterprise of the respondent that is a legal person owned or controlled directly or indirectly by the claimant, may, in accordance with this Section, submit to arbitration a claim alleging:
(i) that the respondent has breached an obligation under Section A, other than an obligation under Article 12.8, 12.9, or 12.14; and
(ii) that the enterprise has suffered loss or damage by reason of or as a result of such breach.
2. Upon completion of the consultation and negotiation process under Article 12.16, the claimant shall deliver to the respondent a written notice of its intention to submit the claim to arbitration ("notice of intent") at least 90 days before a claim is submitted to arbitration under this Section. The notice shall specify:
(a) the name and address of the claimant and, if the claim is submitted on behalf of a corporation, the name, address and place of incorporation of the corporation;
(b) for each claim, the provision of Section A alleged to have been violated and any other applicable provision;
(c) the legal and factual issues on which each claim is based, including the relief at issue; and
(d) the relief sought and the approximate amount of damages claimed.
3. The claimant must also submit, together with its notice of intent, evidence establishing that it is an investor of the other Party.
4. After satisfying the conditions set out in paragraph 2 and Article 12.19, the claimant may submit the claim referred to in paragraph 1:
(a) in accordance with the ICSID Convention and the ICSID Rules of Procedure for Arbitral Proceedings, provided that both the respondent and the Party of the claimant are parties to the ICSID Convention;
(b) in accordance with the ICSID Additional Facility Rules, provided that either the respondent or the Party of the claimant is a party to the ICSID Convention;
(c) under the UNCITRAL Arbitration Rules; or
(d) if the disputing parties agree, before an ad hoc arbitration institution, or any other arbitration institution or under any other arbitration rules.
5. A claim shall be deemed to be submitted to arbitration under this Section when the claimant's notice or request for arbitration ("notice of arbitration"):
(a) referred to in Article 36(1) of the ICSID Convention, is received by the Secretary-General;
(b) referred to in Article 2 of Annex C of the ICSID Additional Facility Rules, is received by the Secretary-General;
(c) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules, is received by the respondent; or
(d) referred to any other arbitration institution or under any arbitration rules selected under paragraph 4(d), is received by the respondent.
Where, subsequent to the submission of a claim to arbitration, an additional claim is submitted under the same arbitral proceedings, it shall be deemed submitted to arbitration under this Section on the date of its receipt under the applicable arbitral rules and the time limitation set forth in Article 12.19 shall apply.
6. The arbitration rules applicable pursuant to paragraph 4, and in effect on the date of the claim or claims submitted to arbitration under this Section, shall govern the arbitration except to the extent that they are modified or supplemented by this Agreement.
7. Liability between the disputing parties for the bearing of expenses, including, where appropriate, the award of costs pursuant to Article 12.22, arising out of their participation in the arbitration shall be established:
(a) by the arbitral institution before which the claim has been submitted to arbitration, in accordance with its rules of procedure; or
(b) in accordance with the rules of procedure agreed upon by the disputing parties, where applicable.
8. The claimant shall deliver with the notice of arbitration referred to in paragraph 5:
(a) the name of the arbitrator appointed by the claimant; or
(b) the claimant's written consent to the appointment of such arbitrator by the Secretary-General.
Article 12.18. CONSENT OF EACH PARTY TO ARBITRATION
1. Each Party consents to the submission of a claim to arbitration under this Section in accordance with this Agreement.
2. The consent referred to in paragraph 1 and the submission of the claim to arbitration under this Section shall comply with the requirements set out in:
(a) Chapter II of the ICSID Convention (Jurisdiction of the Centre) and the ICSID Additional Facility Rules, which require the written consent of the parties to the dispute;
(b) Article II of the New York Convention, which requires an "agreement in writing"; and
Article I of the Inter-American Convention, which requires an agreement in writing.
Article 12.19. CONDITIONS AND LIMITATIONS ON EACH PARTY'S CONSENT
1. In order to submit a claim under this Section, domestic administrative procedures (9) must first be exhausted in accordance with applicable domestic law. These procedures shall not preclude the investor from requesting the consultations referred to in Article 12.16.
2. No claim may be submitted to arbitration under this Section if more than three years have elapsed from the date on which the claimant knew or should have known of the alleged breach under Article 12.17.1, and knowledge that the claimant, for claims brought under Article 12.17.1(a), or the enterprise, for claims brought under Article 12.17.1(b), suffered loss or damage.
3. No claim may be submitted to arbitration under this Section unless:
(a) the claimant consents in writing to arbitration in accordance with the procedures provided for in this Agreement; and
(b) the notice of arbitration referred to in Article 12.17.5 is accompanied by:
(i) for claims submitted to arbitration under Article 12.17.1(a), the written waiver of the claimant; and the written waiver of the claimant and the written waiver of the enterprise where the claim is made for loss or damage to its interest in an enterprise of the respondent Party that is a juridical person that the investor owns or controls directly or indirectly, at the time the notice is given; and
(ii) for claims submitted to arbitration under Article 12.17.1(b), of written waivers by the claimant and the enterprise of any right to initiate before any judicial or administrative tribunal under the law of any Party, or other dispute settlement procedures, any action with respect to any measure alleged to constitute a breach referred to in Article 12.17.
4. Notwithstanding paragraph 3(b), the claimant, for claims brought under Article 12.17.1(a), and the claimant or the enterprise, for claims brought under Article 12.17.1(b), may initiate or continue an interim measure of protection, not involving the payment of monetary damages, before a judicial or administrative tribunal of the respondent, provided that such measure is brought for the sole purpose of preserving the rights and interests of the claimant or the enterprise while the arbitration proceedings continue (10).
5. The waiver of an enterprise set forth in paragraph 3(b)(i) or 3(b)(ii) shall not be required only where it is alleged that the respondent deprived the claimant of control of the enterprise.
6. No claim may be submitted to arbitration under this Section if the claimant (for claims submitted under Article 12.17.1(a)) or the claimant or the enterprise (for claims submitted under Article 12.17.1(b)), has previously submitted the same alleged violation to an administrative or judicial tribunal of the respondent, or to any other binding dispute resolution procedure.
7. For greater certainty, if the Claimant elects to submit a claim described under this Section to an administrative or judicial tribunal of the Respondent or to any other binding dispute resolution mechanism, that election shall be final and the Claimant may not submit the same claim under this Section.
8. Failure to comply with any of the conditions precedent described in paragraphs 1 through 6 shall nullify the consent given by the Parties in Article 12.18.
Article 12.20. PROCEDURE WITH RESPECT TO PRUDENTIAL MEASURES
1. Where an investor submits a claim to arbitration under this Section and the respondent invokes as a defense Article 12.12.3, or Article 21.5 (Balance of Payments Safeguards Exception), the tribunal established under Article 12.21 shall, at the request of the respondent, request a written report from the Parties, or from each Party, on the issue of whether and to what extent the provisions indicated are a valid defense to the investor's claim. The tribunal may not proceed until it receives the report or reports pursuant to this paragraph, except as provided in paragraph 2.
2. Where, within 90 days of request, the tribunal has not received the report or reports, the tribunal may proceed to decide the matter.
Article 12.21. SELECTION OF ARBITRATORS
1. Unless the disputing parties agree otherwise, the tribunal shall be composed of three arbitrators, one arbitrator to be appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, to be appointed by agreement of the disputing parties.
2. The Secretary-General shall serve as appointing authority for the arbitrators in arbitration proceedings pursuant to this Section.
3. Arbitrators shall:
(a) have experience or expertise in public international law, international investment rules, or in the settlement of disputes arising under international investment agreements; and
(b) not be affiliated with, be bound by, or receive instructions from, either Party or the claimant.
4. Where a tribunal other than a tribunal established under Article 12.27 is not constituted within 90 days from the date on which the claim is submitted to arbitration under this Section, the Secretary-General shall, at the request of any disputing party, appoint, after consultation with the disputing parties, the arbitrator or arbitrators not yet appointed. Unless otherwise agreed by the Parties, the presiding arbitrator or arbitrators shall not be a national of either Party.
5. For the purposes of Article 39 of the ICSID Convention and Article 7 of Part C of the ICSID Additional Facility Rules, and without prejudice to objecting to an arbitrator on grounds other than nationality:
(a) the respondent accepts the appointment of each of the members of the tribunal established pursuant to the ICSID Convention or the ICSID Additional Facility Rules;
(b) the claimant referred to in Article 12.17.1(a) may submit a claim to arbitration under this Section, or continue a claim under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the claimant consents in writing to the appointment of each member of the tribunal; and
(c) the claimant referred to in Article 12.17.1(b) may submit a claim to arbitration under this Section, or continue a claim under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the claimant and the enterprise consent in writing to the appointment of each member of the tribunal.
Article 12.22. CONDUCT OF THE ARBITRATION
1. The disputing parties may agree on the legal place where any arbitration is to be held in accordance with the arbitration rules applicable under Article 12.17.4. In the absence of agreement between the disputing parties, the tribunal shall determine such place in accordance with the applicable arbitral rules, provided that the place is in the territory of a State that is a party to the New York Convention.
2. The tribunal shall have the authority to accept and consider written amicus curiae submissions from a person or entity that is a non-disputing party. Any non-disputing party that wishes to make written submissions to a tribunal (the applicant) may apply to the tribunal for permission in accordance with Annex 12-D.
3. Without prejudice to the tribunal's power to hear other objections as a preliminary question, such as an objection that the dispute is not within the tribunal's jurisdiction, a tribunal shall hear and decide as a preliminary question any objection by the respondent that, as a matter of law, the claim submitted is not a claim for which an award in favor of the claimant may be made under Article 12.28.
(a) Such objection shall be submitted to the tribunal as soon as practicable after the constitution of the tribunal, and in no event later than the date the tribunal fixes for the respondent to file its statement of defense (or in the case of an amendment to the notice of arbitration referred to in Article 12.17.5, the date the tribunal fixes for the respondent to file its response to the amendment).
(b) Upon receipt of an objection under this paragraph, the tribunal shall suspend any proceedings on the merits of the dispute, establish a timetable for consideration of the objection that is consistent with any timetable that has been established for consideration of any other preliminary issue and issue a decision or award on the objection, stating the grounds therefor.
(c) In deciding an objection under this paragraph, the tribunal shall take as true the factual allegations submitted by the claimant in support of any claim set forth in the notice of arbitration (or any amendment thereto) and, in disputes brought under the UNCITRAL Arbitration Rules, the statement of claim referred to in Article 18 of those rules. The tribunal may also consider any other relevant facts not in dispute.
(d) The Respondent does not waive any objection with respect to jurisdiction or any argument on the merits merely because it has or has not raised an objection under this paragraph, or avails itself of the expedited procedure set forth in paragraph 4.
4. If the respondent so requests, the tribunal shall, within 45 days after the date of the constitution of the tribunal, decide, in an expeditious manner, an objection under paragraph 3 and any other objection that the dispute is not within the competence of the tribunal. The tribunal shall suspend any action on the merits of the dispute and shall render a decision or award on such objection, stating the grounds therefor, not 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 has been requested, the tribunal may, upon a showing of extraordinary cause, delay issuing its decision or award for an additional brief period, which may not exceed 30 days.
5. When the tribunal decides a respondent's objection under paragraph 3 or 4, it may, if warranted, award to the prevailing disputing party reasonable costs and attorney's fees incurred in making or opposing the objection. In determining whether such an award is warranted, the tribunal shall consider whether the claimant's claim or the respondent's objection was frivolous, and shall give the disputing parties a reasonable opportunity to comment.
6. The respondent shall not assert as a defense, counterclaim or right of set-off or on any other ground that the claimant has received or will receive indemnification or other compensation for all or any part of the alleged damages pursuant to an insurance or surety agreement.
7. The tribunal may recommend an interim measure of protection to preserve the rights of a disputing party, or for the purpose of ensuring the full exercise of the tribunal's jurisdiction, including an order to preserve evidence in the possession or control of a disputing party or to protect the tribunal's jurisdiction. The tribunal may not order the attachment or prevent the enforcement of a measure that is alleged to be a breach referred to in Article 12.17.
8. In any arbitration conducted under this Section, at the request of any disputing party, the tribunal shall, before rendering a decision or award on liability, communicate its proposed decision or award to the disputing parties and to the Party of the claimant. Within 60 days after such proposed decision or award is communicated, the disputing parties may submit written comments to the tribunal concerning any aspect of its proposed decision or award. The tribunal shall consider such comments and render its decision or award not later than 45 days after the expiration of the 60-day comment period. This paragraph shall not apply to any arbitration in which an appeal is available under paragraph 9.
9. If a separate multilateral treaty enters into force between the Parties establishing an appellate body for the purpose of reviewing awards rendered by tribunals constituted under international trade or investment agreements to hear investment disputes, the Parties shall endeavor to reach agreement that such appellate body shall review awards rendered under Article 12.28 in arbitrations commenced after the multilateral treaty enters into force between the Parties.
Article 12.23. ARTICLE 12.23: TRANSPARENCY IN ARBITRAL PROCEEDINGS
1. Subject to paragraphs 2 and 4, the respondent shall, after receiving the following documents, make them available to the non-disputing party and to the public:
(a) the notice of intent referred to in Article 12.17.2;
(b) the notice of arbitration referred to in Article 12.17.5;
(c) the pleadings, statements of claim and explanatory notes submitted to the tribunal by a disputing party and any written communications submitted pursuant to Article 12.22 and Article 12.27;
(d) orders, awards and decisions of the tribunal; and
(e) minutes or transcripts of tribunal hearings, when available.
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 classified as protected information in a hearing shall so inform the tribunal. The tribunal shall make appropriate arrangements to protect the information from disclosure.
3. Nothing in this Section requires a respondent to make available protected information or to provide or permit access to information that it may withhold pursuant to Article 21.2 (Essential Security) and Article 21.4 (Disclosure of Information).
4. Any protected information that is submitted to the court shall be protected from disclosure in accordance with the following procedures:
(a) pursuant to paragraph (d), neither the disputing parties nor the tribunal shall disclose to the claimant Party or to the public any protected information, where the disputing party providing the information clearly so designates it in accordance with paragraph (b);
(b) any disputing party claiming that particular information constitutes protected information shall clearly designate it at the time it is submitted to the tribunal;
(c) a disputing party shall, at the same time it submits a document that contains information claimed to be protected information, submit a redacted version of the document that does not contain the information. Only the redacted version shall be provided to the non-disputing parties and shall be made public in accordance with paragraph 1; and
(d) the tribunal shall rule on any objection to the designation of information claimed to be protected 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 the submission containing such information; or.
(ii) agree to resubmit complete and redacted documents with corrected designations in accordance with the tribunal's determination and paragraph (c).
In either case, the other disputing party shall, where necessary, resubmit complete and redacted documents that omit the information withdrawn pursuant to paragraph (d)(i) by the disputing party that first submitted the information or redesignate the information in a manner consistent with the designation made pursuant to paragraph (d)(ii) of the disputing party that first submitted the information.
5. Nothing in this section requires a respondent to deny the public access to information that, under its law, is required to be disclosed.
Article 12.24. APPLICABLE LAW
1. Subject to paragraph 2, where a claim is brought under Article 12.17.1(a) or 12.17.1(b), the tribunal shall decide the issues in dispute in accordance with this Agreement and the prevailing rules of international law and, where applicable, the law of the Party in whose territory the investment was made.
2. A decision of the Commission declaring the interpretation of a provision of this Agreement under Article 20.1.3(c) (The Free Trade Commission) shall be binding on a tribunal established under this Section and any decision or award rendered by a tribunal shall be consistent with that decision.
Article 12.25. INTERPRETATION OF ANNEXES
1. Where the respondent raises as a defense that the measure alleged to be a breach is within the scope of Annex I or Annex II, the tribunal shall, at the request of the respondent, request an interpretation of the matter from the Commission. Within 60 days after delivery of the request, the Commission shall submit in writing to the tribunal any decision stating its interpretation under Article 20.1.3(c) (The Free Trade Commission).
2. The decision issued by the Commission under paragraph 1 shall be binding on the tribunal, and any decision or award issued by the tribunal shall be consistent with that decision. If the Commission fails to issue such a decision within 60 days, the tribunal shall decide the matter.
Article 12.26. EXPERT REPORTS
Without prejudice to the appointment of other types of experts where authorized by the applicable arbitration rules, the tribunal, at the request of a disputing party or, on its own initiative, unless the disputing parties do not agree, may appoint one or more experts to report in writing on any factual issue concerning environmental, health, safety or other scientific matters raised by a disputing party in a proceeding, on such terms and conditions as the disputing parties may agree.
Article 12.27. CONSOLIDATION OF PROCEEDINGS
1. In cases where two or more separate claims have been submitted to arbitration under Article 12.17.1, and the claims raise in common a question of fact or law and arise out of the same facts or circumstances, any disputing party may seek a consolidation order in accordance with the agreement of all disputing parties in respect of which the consolidation order is sought or in accordance with the terms of paragraphs 2 through 10.
2. A disputing party seeking a joinder order pursuant to this Article shall deliver a written request to the Secretary-General and to all disputing parties in respect of which the consolidation order is sought and shall specify in the request the following:
(a) the name and address of all disputing parties in respect of which the order of consolidation is sought;
(b) the nature of the consolidation order sought; and
(c) the basis on which the request is made.