(B) necessary to protect human, animal or plant life or health; or
(C) related to the preservation of non-renewable natural resources.
10. Subparagraphs 1 (b), (c), (f) and (g) and 5 (a) and (b) do not apply to government procurement.
11. This Article does not exclude the application of any commitment, obligation or requirement between private parties where a Party did not impose or require the commitment, obligation or requirement.
(3) For greater certainty, a condition for receipt or continuation of receipt of an advantage referred to in paragraph 5 does not constitute an "obligation or commitment" for the purposes of paragraph 1.
(4) The Parties recognize that a patent does not necessarily confer market power.
(5) The reference to Article 31 of the WTO TRIPS Agreement includes footnote 7 of that Article.
(6) For greater certainty, the reference to the WTO TRIPS Agreement in this paragraph includes the provisions of the Protocol amending the TRIPS Agreement, signed in Geneva on 6 December 2005.
127:. Non-conforming Measures
1. Articles 12.2, 12.3, 12.5 and 12.6 shall not apply to:
(A) any non-conforming measure existing or maintained by a Party in:
(I) the central or regional level of government, as stipulated by that Party in its Schedule to Annex I, or
(Ii) a local level of government;
(B) the continuation or prompt renewal of any non-conforming measure referred to in sub-paragraph (a); or
(C) amendment of any non-conforming measure referred to in subparagraph (a) provided that such amendment does not diminish the degree of conformity of the measure, as it was in force immediately before the amendment, with Articles 12.2, 12.3, 12.5 and 12.6.
2. Articles 12.2, 12.3, 12.5 and 12.6 shall not apply to any measure that a Party adopts or maintains, in relation to the sectors, sub-sectors or activities, as indicated in its Schedule of Annex II.
3. Articles 12.2 and 12.3 do not apply to any measure adopted under the exceptions under Articles 3, 4 and 5 of the WTO TRIPS Agreement.
4. Neither Party may, pursuant to any measure adopted after the date of entry into force of this Agreement and included in its Schedule to Annex II, require an investor of the other Party, by reason of its nationality, to Sell or otherwise dispose of an existing investment at the time the measure becomes effective.
5. The provisions of Articles 12.2, 12.3 and 12.5 shall not apply to:
(A) subsidies or grants made by a Party, including government-backed loans, guarantees and insurance; or,
(B) public procurement.
128:. Environmental Measures
1. The Parties recognize that it is inappropriate to promote investment by weakening or reducing the protections provided for in their internal environmental legislation. Accordingly, each Party shall endeavor to ensure that it shall not terminate or repeal or offer to waive or repeal such legislation in a manner that would weaken or reduce the protection afforded by such legislation as a means of encouraging the establishment, acquisition, expansion or Retention of an investment in its territory.
2. Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measures otherwise compatible with this Chapter which it deems appropriate to ensure that investments in its territory are made taking into account concerns in Environmental issues.
129:. Treatment In Case of Contention
1. Notwithstanding Article 12.7.5 (a), each Party shall accord to investors of the other Party and to investments covered, non-discriminatory treatment in respect of any measure it adopts or maintains in relation to losses sustained by Investments in its territory as a result of armed conflicts or civil strife.
2. Paragraph 1 shall not apply to existing measures relating to subsidies or grants that may be inconsistent with Article 12.2, with the exception of Article 12.7.5 (a).
1210:. Expropriation and Compensation
1. Neither Party shall nationalize or expropriate a covered investment, either directly or indirectly, through measures equivalent to expropriation or nationalization ("expropriation"), unless it is:
Or
(A) in the case of Honduras, because of necessity or public interest; Y
(B) in the case of Peru, because of public need or national security,
In accordance with due process, in a non-discriminatory manner and by the payment of prompt, adequate and effective compensation.
2. The compensation will be paid without delay and will be fully liquidable and freely transferable. Such compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation has taken place ("expropriation date"), and shall not reflect any change in value because the intention to expropriate met with Prior to the date of expropriation.
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 at the date of expropriation plus interest at a commercially reasonable rate for that currency, Accumulated 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 payment currency at the exchange rate prevailing on the date of payment - Shall not be less than:
(A) the fair market value at the date of expropriation converted into a freely usable currency at the market exchange rate prevailing on that date plus;
(B) interest at a commercially reasonable rate for that freely usable currency, accumulated from the date of expropriation to the date of payment.
5. The affected investor shall be entitled under the domestic law of the Party conducting the expropriation to a review of his case by a judicial or other independent authority of that Party and the valuation of his investment in accordance with The principles set out in this Article. (7) (8)
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 Compatible with Chapter 9 (Intellectual Property).
(7) For greater certainty, Article 12.10 will be interpreted in accordance with the provisions of Annex 12.10 on the explanation of indirect expropriation.
(8) For greater certainty, these terms refer to concepts of customary international law.
1211:. Transfers
1. Each Party shall permit all transfers relating to a covered investment to be made freely, without delay, into and into its territory. These transfers include:
(A) capital contributions;
(B) profits, dividends, interest, capital gains, royalty payments, administrative expenses, technical assistance and other charges, in-kind returns and other amounts derived from the investment;
(C) products derived from the sale or total or partial liquidation of the covered investment;
(D) payments made under a contract entered into by the investor, or the covered investment, including a loan agreement;
(E) payments made under paragraph 1 of Articles 12.9 and 12.10; and
(F) payments arising from the application of Section B.
2. Each Party shall permit transfers relating to a covered investment to be made in freely usable currency at the exchange rate prevailing in the market on the date of transfer.
3. Without prejudice to paragraphs 1 and 2, a Party may prevent or delay a monetary or in-kind transfer through the equitable, non-discriminatory and good faith application of its laws relating to:
(A) bankruptcy, insolvency or protection of the rights of creditors;
(B) issuance, trading or trading in securities, futures, options or derivatives;
(C) criminal offenses;
(D) financial reporting or record keeping of transfers where necessary to assist compliance with the law or with regulatory financial authorities; Y
(E) guarantee compliance with awards or judgments rendered in judicial or administrative proceedings.
(9) For greater certainty, the rights of creditors include, among others, rights derived from social security, public pensions or compulsory savings programs.
1212:. Denial of Benefits
A Party may deny the benefits of this Agreement to:
(A) an investor of the other Party who is an enterprise of that other Party and the investments of such investor if a person of a non-Party owns or controls the enterprise and the latter does not engage in substantial business activities in the other Party. Territory of the other Party; or
(B) an investor of the other Party who is an enterprise of that other Party and the investments of such investor if the enterprise does not engage in substantial business activities in the territory of any Party other than the denying Party; The denying Party owns or controls the company.
1213:. Special Formalities and Information Requirements
1. Nothing in Article 12.2 shall be construed to prevent a Party from adopting or maintaining a measure which prescribes special formalities related to a covered investment, such as a requirement that investors are residents of the Party or that the Covered investments are constituted under the Party's law or regulation, provided that such formalities do not significantly impair the protection afforded by one Party to investors of the other Party and investments covered under this Agreement.
2. Notwithstanding the provisions of Articles 12.2 and 12.3, a Party may require an investor of the other Party or its covered investment to provide information relating to such investment solely for informational or statistical purposes. The Party shall protect information that is confidential from any disclosure that would adversely affect the competitive position of the investor or the covered investment. Nothing in this paragraph shall be construed as an impediment for a Party to obtain or disclose information concerning the equitable and good faith application of its domestic law.
1214:. Subrogation
1. If a Party or a designated agency of the Party makes a payment to any of its investors under a security, contract of insurance or any other form of compensation granted in respect of an investment of an investor of that Party, the other Party shall recognize the subrogation or transfer of any right or claim of such investment. The right or claim subrogated or transferred 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 which made the payment, claim such rights and claims against the other Party.
Section B. Dispute Settlement Investor - State
1215:. Consultation and Negotiation
1. In the case of a dispute concerning an investment, the disputing parties must first attempt to settle the dispute through consultation and negotiation, which may include the use of third party non-binding procedures. The consultation and negotiation procedure will begin with the request sent to the address designated in Annex 12.15. Such request shall be sent to the respondent prior to the notification of intent, referred to in Article 12.16, and shall include the information indicated in subparagraphs 12.16.2 (a), (b) and (c).
2. The consultations shall be carried out for a minimum period of six (6) months and may include face-to-face meetings in the capital of the defendant.
1216:.
"Submission of a Claim to Arbitration
1. After the minimum period referred to in Article 12.15.2, in case a disputing party considers that a dispute concerning an investment through consultations and negotiation can not be resolved:
(A) the claimant, on his own account, may submit to arbitration a claim alleging:
(I) that the defendant has violated an obligation under Section A, other than an obligation under Article 12.8; and
(II) that the plaintiff has suffered losses or damages by virtue of or as a result of said breach.
(B) the claimant, on behalf of an enterprise of the defendant that is a legal person owned by the plaintiff or under its direct or indirect control, may, in accordance with this Section, submit to arbitration a claim alleging:
(I) that the defendant has violated an obligation under Section A, other than an obligation under Article 12.8; and
(Ii) that the company has suffered losses or damages by reason of said breach or as a result thereof.
2. At least ninety (90) days before a claim is submitted to arbitration under this Section, the claimant shall provide the defendant with written notice of his intention to submit the claim to arbitration ("notice of intent"). The notification shall specify:
(A) the name and address of the claimant and, where the claim is submitted on behalf of an undertaking, the name, address and place of incorporation of the undertaking;
(B) for each claim, the provision of Section A alleged to have been breached and any other applicable provision;
(C) the issues of fact and law on which each claim is based, including the measures in question; and
(D) the repair requested and the approximate amount of damages claimed.
3. The claimant must also provide, together with his notice of intent, evidence establishing that he is an investor of the other Party.
4. Whenever at least six (6) months have elapsed since the occurrence of the claim, and provided that the claimant has complied with the conditions set forth in Article 12.18, the claimant may submit the claim to Referred to in paragraph 1:
(A) in accordance with the ICSID Convention and the Rules of Procedure for ICSID Arbitral Proceedings, provided that both the respondent and the Claimant's Party are parties to the ICSID Convention;
(B) in accordance with the Additional Facility Rules of ICSID, provided that the defendant or the Claimant's Party is a party to the ICSID Convention;
(C) in accordance with the UNCITRAL Arbitration Rules; or
(D) if the disputing parties so agree, before an ad hoc arbitration institution, or before 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 notice or request for arbitration ("notice of arbitration") of the claimant:
(A) referred to in paragraph 1 of Article 36 of the ICSID Convention, is received by the Secretary-General;
(B) referred to in Article 2 of Annex C of the Additional Facility Rules of ICSID, to be received by the Secretary-General;
(C) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the writ of claim referred to in Article 18 of the UNCITRAL Arbitration Rules, is received by the defendant; or
(D) referred to by any other arbitration institution or under any arbitration rules selected under subparagraph 4 (d), is received by the respondent.
When, after the submission of a claim to arbitration, an additional claim is submitted under the same arbitration procedure, it shall be deemed to be submitted to arbitration under this Section on the date of its receipt under the applicable arbitration rules and the limitation of term Established in Article 12.18.
6. The arbitration rules applicable in accordance with paragraph 4, and which are in force on the date of the claim or claims that have been submitted to arbitration under this Section, shall govern the arbitration except to the extent that it is modified or supplemented by This Treaty.
7. The liability of the disputing parties for the assumption of expenses, including, where appropriate, the costs in accordance with Article 12.21 arising from their participation in the arbitration shall be established:
(A) by the arbitral institution to 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 together with the notice of arbitration referred to in paragraph 5:
(A) the name of the arbitrator appointed by the complainant; or
(B) the complainant's written consent for the Secretary-General to name such arbitrator.
1217:. Consent of Each Party to Arbitration
1. Each Party consents to submit a claim to arbitration under this Section and 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 indicated in:
(A) Chapter II of the ICSID Convention (Jurisdiction of the Center) and the Rules of the ICSID Additional Facility, which require the written consent of the parties to the dispute;
(B) Article II of the New York Convention, which requires a "written agreement"; and
(C) Article I of the Inter-American Convention, which requires an "agreement".
1218:. Conditions and Limitations to the Consent of Each Party
1. No claim may be submitted to arbitration under this Section if more than three (3) years have elapsed from the date on which the claimant had or should have been aware of the alleged violation under Article 12.16.1 and knowledge that the claimant, for claims under Article 12.16.1 (a), or the company, suffered losses or damages for claims under Article 12.16.1 (b).
2. 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; Y
(B) the notice of arbitration referred to in Article 12.16.5 is accompanied by:
(I) for claims submitted to arbitration under Article 12.16.1
(A) of the applicant's written resignation; And the written waiver of the claimant and the written waiver of the company where the claim is made for the loss or damage of its participation in an enterprise of the respondent Party which is a legal person that the investor owns or controls directly or Indirectly, at the time of notification; Y
(Ii) for claims submitted to arbitration under Article 12.16.1 (b), of the written resignations of the plaintiff and the company, of any right to initiate before any judicial or administrative tribunal under the law of any Party, or other dispute resolution proceedings, any action in respect of any measure alleged to have constituted a violation referred to in Article 12.16.
3. Notwithstanding sub-paragraph 2 (b), the claimant, for claims initiated under Article 12.16.1 (a), and the plaintiff or the company, for claims initiated under Article 12.16.1 (b), May initiate or continue a precautionary measure, which does not involve payment of monetary damages, before a judicial or administrative court of the defendant, provided that such action is brought solely for the purpose of preserving the rights and interests of the plaintiff or the company while Continue the arbitration process 10.
4. The waiver of an enterprise established in subparagraph 2 (b) (i) or 2 (b) (ii) shall not be required only where it is alleged that the defendant deprived the claimant of control of the enterprise.
5. No claim may be submitted to arbitration under this Section if the claimant (in the case of claims submitted under Article 12.16.1
(A) If the plaintiff or the company (in the case of claims submitted under Article 12.16.1 (b)) have previously submitted the same violation as is alleged before an administrative or judicial court of the defendant, or any other proceeding Settlement of binding disputes.
6. For greater certainty, if the plaintiff chooses to submit a claim described under this Section to an administrative or judicial court of the respondent or any other binding dispute settlement mechanism, that choice shall be final and the claimant may not submit the same claim Under this Section.
7. Failure to comply with any of the preconditions described in paragraphs 1 to 6 shall void the consent given by the Parties in Article 12.17.
1219:. Procedure Concerning Prudential Measures
1. When an investor submits a claim to arbitration under this Section and the defendant invokes as defense Article 12.11.3 or Article 18.5 (Measures to Safeguard the Balance of Payments), the court established in accordance with Article 12.16.1 (a) or Article 12.16.1 (b) shall request, at the request of that Party, a written report from the Parties, or from each Party, on the issue of whether the provisions indicated are a valid defense for the investor's claim and to a what extent. The court may not proceed until it receives the report or reports in accordance with this paragraph, except as provided in paragraph 2.
2. When, within ninety (90) days of requesting it, the court has not received the report (s), the court may proceed to resolve the matter.
(10) In a precautionary measure, including measures seeking to preserve evidence and property pending the processing of the claim submitted to arbitration, a defendant's judicial or administrative court in a dispute submitted to arbitration pursuant to Section B, shall apply the legislation National of that Party.
1220:. Selection of Arbitrators
1. Unless the disputing parties agree otherwise, the tribunal shall consist of three (3) arbitrators, one (1) arbitrator appointed by each of the disputing parties and the third, who shall be the chairman, shall be appointed by agreement of the Parties.
2. The Secretary General shall serve as the appointing authority for the arbitrators in the arbitration proceedings under this Section.
3. The arbitrators shall;
(A) have experience or expertise in public international law, international investment rules, or in the settlement of disputes arising out of international investment agreements;
(B) not depend upon any of the Parties or the complainant, nor be bound or receive instructions from any of them.
4. Where a tribunal other than that established under Article 12.26 is not entered within ninety (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 of the disputing parties, shall designate, after consultation with the same, the arbitrator or arbitrators who have not yet been appointed. Unless previously agreed otherwise, the chairperson of the court 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 Additional Facility Rules of ICSID, and without prejudice to objecting to an arbitrator for reasons other than nationality:
(A) the defendant accepts the appointment of each member of the tribunal established under the ICSID Convention or the ICSID Additional Facility Rules;
(B) the claimant referred to in Article 12.16.1 (a) may submit to arbitration a claim under this Section, or continue a claim under the ICSID Convention or the ICSID Additional Facility Rules, only to Condition that the complainant express his written consent to the appointment of each member of the court; and
(C) the claimant referred to in Article 12.16.1 (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 to Provided that the plaintiff and the undertaking express their written consent to the appointment of each member of the court.
1221:. Conduct of Arbitration
1. The disputing parties may agree in the legal seat where any arbitration is to be held in accordance with the applicable arbitration rules in accordance with Article 12.16.4. In the absence of agreement between the disputing parties, the tribunal shall determine that place in accordance with the applicable arbitration rules, provided that the place is in the territory of a State which is a party to the New York Convention.
2. The court shall be empowered to accept and consider amicus curiae written submissions from a person or entity that is not a disputing party. Any non-disputing party wishing to make written submissions before a court (the applicant) may request permission from the court, in accordance with Annex 12.21.
3. Notwithstanding the court's ability to hear other objections as preliminary issues, such as an objection that the dispute is not within the jurisdiction of the court, a court shall hear and decide as a preliminary question any objection by the respondent that, As a matter of law, the complaint submitted is not a claim in respect of which a favorable award may be made for the claimant in accordance with Article 12.27, for which:
(A) such objection shall be submitted to the court as soon as possible after the constitution of the court, and in no case later than the date fixed by the court for the respondent to submit his response to the application (or in the case of A modification of the notice of arbitration, referred to in Article 12.16.5, the date that the court sets for the respondent to submit its response to the amendment);
(B) at the time of receipt of an objection under this paragraph, the court shall suspend any action on the merits of the litigation, establish a timetable for the consideration of the objection that will be consistent with any schedule that has been established for consideration Of any other preliminary question and shall issue a decision or award on the objection, stating the grounds of the objection;
(C) in deciding on an objection under this paragraph, the court shall assume as factual the allegations of fact presented by the claimant for the purpose of supporting any claim (or any modification thereof) and, in disputes submitted in accordance with the UNCITRAL Arbitration Rules, the statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules. The court may also consider any other relevant facts that are not in dispute;
(D) the defendant does not waive any objection to competition or any substantive argument, simply because it has made an objection under this paragraph or makes use of the expedited procedure established in paragraph 4.
4. If the defendant so requests, within forty-five (45) days following the date of the establishment of the court, the tribunal shall decide, expeditiously, on an objection in accordance with paragraph 3 and Any other objection to the effect that the dispute is not within the jurisdiction of the court. The court shall suspend any action on the merits of the litigation and issue a decision or award on such objection, stating the grounds thereof, not later than one hundred and fifty (150) days after the date of the request. However, if a disputing party requests a hearing, the court may take thirty (30) additional days to issue the decision or award. Regardless of whether a hearing has been requested, the court may, for an extraordinary reason, delay the issuance of its decision or award for an additional short term, which may not exceed thirty (30) days.
5. When the court decides on a respondent's objection under paragraphs 3 or 4, it may, if warranted, grant the winning disputing party reasonable costs and attorneys' fees incurred in filing the objection or To oppose it. In determining whether such award is warranted, the court shall consider whether the plaintiff's claim or the respondent's objection were frivolous and shall afford the disputing parties reasonable opportunity to submit their comments.