Title
AGREEMENT BETWEEN JAPAN AND THE REPUBLIC OF ARMENIA FOR THE LIBERALISATION, PROMOTION AND PROTECTION OF INVESTMENT
Preamble
Japan and the Republic of Armenia (hereinafter referred to as "the Contracting Parties"),
Desiring to further promote investment in order to strengthen the economic relationship between the Contracting Parties;
Intending to further create stable, equitable, favourable and transparent conditions for greater investment by investors of a Contracting Party in the Territory of the other Contracting Party;
Recognising the growing importance of the progressive liberalisation of investment for stimulating initiative of investors and for promoting prosperity in both Contracting Parties;
Recognising that these objectives can be achieved without relaxing health, safety and environmental measures of general application; and
Recognising the importance of the cooperative relationship between labour and management in promoting investment between the Contracting Parties;
Have agreed as follows:
Body
Chapter I. INVESTMENT
Article 1. Definitions
For the purposes of this Agreement:
(a) the term "investment" means every kind of asset owned or controlled, directly or indirectly, by an investor, including:
(i) an enterprise and a branch of an enterprise;
(ii) shares, stocks or other forms of equity participation in an enterprise;
(iii) bonds, debentures, loans and other forms of debt;
(iv) futures, options and other derivatives;
(v) rights under contracts, including turnkey, construction, management, production or revenue-sharing contracts;
(vi) claims to money and to any performance under contract having a financial value;
(vii) intellectual property rights, including copyrights and related rights, patent rights and rights relating to utility models, trademarks, industrial designs, layout-designs of integrated circuits, new varieties of plants, trade names, indications of source or geographical indications and undisclosed information;
(viii) rights conferred pursuant to laws and regulations or contracts such as concessions, licences, authorisations and permits, including those for the exploration and exploitation of natural resources; and
(ix) any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges;
An investment includes the amounts yielded by an investment, in particular, profit, interest, capital gains, dividends, royalties and fees. A change in the form in which assets are invested does not affect their character as an investment.
(b) the term "investment agreement" means a written agreement between the central or local government or authority of a Contracting Party and an investor of the other Contracting Party or its investment that is an enterprise in the Territory of the former Contracting Party, on which the investor or the investment relies in establishing or acquiring an investment in the former Contracting Party;
Written agreement refers to an agreement in writing, executed by both parties, whether ina single instrument or in multiple instruments, that creates an exchange of rights and obligations, binding on both parties under the applicable law under subparagraph 11(b) of Article 24. For greater certainty, a unilateral act of an administrative or judicial authority, such as a permit, licence or authorisation issued by a Contracting Party solely in its regulatory capacity, or a decree, order or judgement, standing alone, and an administrative or judicial consent decree or order shall not be considered a written agreement.
(c) the term "investor of a Contracting Party" means:
(i) a natural person having the nationality of that Contracting Party in accordance with its applicable laws and regulations; or
(ii) an enterprise of that Contracting Party,
that seeks to make, is making or has made investments in the Territory of the other Contracting Party;
(d) the term "enterprise" means any legal person or any other entity duly constituted or organised under the applicable laws and regulations, whether or not for profit, and whether private or government owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, organisation or company;
(e) the term "enterprise of a Contracting Party" means an enterprise duly constituted or organised under the applicable laws and regulations of that Contracting Party;
(f) the term "investment activities" means establishment, acquisition, expansion, operation, management, maintenance, use, enjoyment and sale or other disposal of investments;
(g) the term "Territory" means, with respect to a Contracting Party, the territory of that Contracting Party, and the exclusive economic zone and the continental shelf with respect to which that Contracting Party exercises sovereign rights or jurisdiction in accordance with international law;
(h) the term "existing" means being in effect on the date of entry into force of this Agreement;
(i) the term "freely usable currency" means freely usable currency as defined under the Articles of Agreement of the International Monetary Fund;
(j) the term "the WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994;
(k) the term "the TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement;
(l) the term “claimant” means an investor of a Contracting Party that is a party to an investment dispute with the other Contracting Party;
(m) the term “respondent” means the Contracting Party that is a party to an investment dispute;
(n) the term “disputing party” means either the claimant or the respondent;
(o) the term “non-disputing Party” means the Contracting Party that is not a party to an investment dispute;
(p) the term “court” means, for Japan, a court of justice and, for the Republic of Armenia, a common jurisdiction court or an administrative court;
(q) the term “ICSID” means the International Centre for Settlement of Investment Disputes;
(r) the term “ICSID Additional Facility Rules” means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes;
(s) the term “ICSID Convention” means the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington, March 18, 1965;
(t) the term "New York Convention" means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958; and
(u) the term "UNCITRAL Arbitration Rules" means the Arbitration Rules of the United Nations Commission on International Trade Law.
Article 2. National Treatment
1. Each Contracting Party shall in its Territory accord to investors of the other Contracting Party and to their investments treatment no less favourable than the treatment it accords in like circumstances to its own investors and to their investments with respect to investment activities.
2. Paragraph 1 shall not be construed to prevent a Contracting Party from adopting or maintaining a measure that prescribes special formalities in connection with investment activities of investors of the other Contracting Party in its Territory, provided that such special formalities do not impair the substance of the rights of such investors under this Agreement.
Article 3. Most-Favoured-Nation Treatment
Each Contracting Party shall in its Territory accord to investors of the other Contracting Party and to their investments treatment no less favourable than the treatment it accords in like circumstances to investors of a non- Contracting Party and to their investments with respect to investment activities.
For greater certainty, the treatment referred to in this Article does not encompass international dispute settlement procedures or mechanisms under any international agreement.
Article 4. General Treatment
Each Contracting Party shall in its Territory accord to investments of investors of the other Contracting Party minimum standard of treatment of aliens in accordance with international law, including fair and equitable treatment and full protection and security.
Article 5. Access to the Courts
Each Contracting Party shall in its Territory accord to investors of the other Contracting Party treatment no less favourable than the treatment which it accords in like circumstances to its own investors or investors of a non- Contracting Party with respect to access to the courts and administrative agencies in all degrees of jurisdiction, both in pursuit and in defence of such investors' rights.
Article 6. Prohibition of Performance Requirements
1. Neither Contracting Party may impose or enforce any of the following requirements, or enforce any commitment or undertaking, in connection with investment activities of an investor of a Contracting Party or of a non-Contracting Party in its Territory:
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use or accord a preference to goods produced or services provided in its Territory, or to purchase goods or services from a natural person or an enterprise in its Territory;
(d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with an investment of the investor;
(e) to restrict sales of goods or services in its Territory that an investment of the investor produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;
(f) to restrict the exportation or sale for export;
(g) to appoint, as executives, managers or members of board of directors, individuals of any particular nationality;
(h) to transfer technology, a production process or other proprietary knowledge to a natural person or an enterprise in its Territory;
(i) to adopt:
(i) a given rate or amount of royalty under a licence contract; or
(ii) a given duration of the term of a licence contract,
in regard to any licence contract freely entered into between the investor and a natural person or an enterprise in its Territory, whether it has been entered into or not, provided that the requirement is imposed or the commitment or undertaking is enforced by an exercise of governmental authority of the Contracting Party;
A "licence contract" referred to in this subparagraph means any licence contract concerning transfer of technology, a production process, or other proprietary knowledge.
(j) to locate the headquarters of the investor for a specific region or the world market in its Territory;
(k) to hire a given number or percentage of its nationals;
(l) to achieve a given level or value of research and development in its Territory; or
(m) to supply one or more of the goods that the investor produces or the services that the investor provides to a specific region or the world market, exclusively from its Territory.
2. Neither Contracting Party may condition the receipt or continued receipt of an advantage, in connection with investment activities of an investor of a Contracting Party or of a non-Contracting Party in its Territory, on compliance with any of the following requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use or accord a preference to goods produced in its Territory, or to purchase goods from a natural person or an enterprise in its Territory;
(c) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with an investment of the investor;
(d) to restrict sales of goods or services in its Territory that an investment of the investor produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings; or
(e) to restrict the exportation or sale for export.
3. (a) Nothing in paragraph 2 shall be construed to prevent a Contracting Party from conditioning the receipt or continued receipt of an advantage, in connection with investment activities of an investor of a Contracting Party or of a non- Contracting Party in its Territory, on compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its Territory.
(b) Subparagraph 1(h) shall not apply when the requirement concerns the transfer of intellectual property rights which is undertaken in a manner not inconsistent with the TRIPS Agreement.
(c) Subparagraphs 1(h) and 1(i) shall not apply when the requirement is imposed or the commitment or undertaking is enforced by a court or competition authority to remedy an alleged violation of competition laws.
(d) Subparagraphs 2(a) and 2(b) shall not apply to requirements imposed by an importing Contracting Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.
4. Paragraphs 1 and 2 shall not apply to any requirement other than the requirements set out in those paragraphs.
Article 7. Non-Conforming Measures
1. Articles 2, 3 and 6 shall not apply to:
(a) any existing non-conforming measure that is maintained by the following, as set out in the Schedule of each Contracting Party in Annex I:
(i) the central government of a Contracting Party; or
(ii) a prefecture of Japan, or a region of the Republic of Armenia;
For the purpose of this Article, the term "region" means a marz or Yerevan city.
(b) any existing non-conforming measure that is maintained by a local government other than a prefecture or a region referred to in subparagraph (a) (ii);
(c) the continuation or prompt renewal of any non- conforming measure referred to in subparagraphs (a) and (b); or
(d) an amendment or modification to any non- conforming measure referred to in subparagraphs (a) and (b), provided that the amendment or modification does not decrease the conformity of the measure, as it existed immediately before the amendment or modification, with Articles 2, 3 and 6.
2. Articles 2, 3 and 6 shall not apply to any measure that a Contracting Party adopts or maintains with respect to sectors, sub-sectors or activities set out in its Schedule in Annex II.
3. Neither Contracting Party shall, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule in Annex II, require an investor of the other Contracting Party, by reason of its nationality, to sell or otherwise dispose of an investment that exists at the time when the measure becomes effective.
4. In cases where a Contracting Party makes an amendment or a modification to any existing non-conforming measure set out in its Schedule in Annex I or where a Contracting Party adopts any new or more restrictive measure with respect to sectors, sub-sectors or activities set out in its Schedule in Annex II after the date of entry into force of this Agreement, the Contracting Party shall, prior to the implementation of the amendment or modification or the new or more restrictive measure, or in exceptional circumstances, aS soon as possible thereafter:
(a) notify the other Contracting Party of detailed information on such amendment or modification, or such measure; and
(b) hold, upon request by the other Contracting Party, consultations in good faith with the other Contracting Party with a view to achieving mutual satisfaction.
5. Each Contracting Party shall endeavour, where appropriate, to reduce or eliminate the non-conforming measures specified in its Schedules in Annexes I and II respectively.
6. Articles 2 and 3 shall not apply to any measure covered by the exceptions to, or derogations from, obligations under Articles 3 and 4 of the TRIPS Agreement, as specifically provided in Articles 3 through 5 of the TRIPS Agreement.
7. Articles 2, 3 and 6 shall not apply to any measure that a Contracting Party adopts or maintains with respect to government procurement.
Article 8. Transparency
1. Each Contracting Party shall promptly publish, or otherwise make publicly available, its laws, regulations, administrative procedures, administrative rulings and judicial decisions of general application as well as international agreements which pertain to or affect the implementation and operation of this Agreement.
2. Each Contracting Party shall, upon request by the other Contracting Party, promptly respond to specific questions and provide that other Contracting Party with information on matters set out in paragraph 1.
3. Paragraphs 1 and 2 shall not be construed so as to oblige either Contracting Party to disclose confidential information, the disclosure of which would impede law enforcement or otherwise be contrary to the public interest, or which would prejudice privacy or legitimate commercial interests.
Article 9. Public Comment Procedures
Each Contracting Party shall, in accordance with its laws and regulations, endeavour to provide, except in cases of emergency or of purely minor nature, a reasonable opportunity for comments by the public before the adoption, amendment or repeal of regulations of general application that affect any matter covered by this Agreement.
Article 10. Measures Against Corruption
Each Contracting Party shall ensure that measures and efforts are undertaken to prevent and combat corruption regarding matters covered by this Agreement in accordance with its laws and regulations.
Article 11. Entry, Sojourn and Residence of Investors
Each Contracting Party shall, in accordance with its laws and regulations, give sympathetic consideration to applications for entry, sojourn and residence of a natural person having the nationality of the other Contracting Party and a personnel employed by, and an executive, a manager and a member of the board of directors of, an enterprise of the other Contracting Party, who wishes to enter the territory of the former Contracting Party and remain therein for the purpose of investment activities.
Article 12. Expropriation and Compensation
1. Neither Contracting Party shall expropriate or nationalise an investment in its Territory of an investor of the other Contracting Party or take any measure equivalent to expropriation or nationalisation (hereinafter referred to as "expropriation") except:
(a) for a public purpose;
(b) in a non-discriminatory manner;
(c) upon payment of:
(i) with respect to Japan, prompt after the expropriation, adequate and effective compensation in accordance with paragraphs 2 through 5; and
(ii) with respect to the Republic of Armenia, adequate and effective compensation prior to the expropriation in accordance with paragraphs 2 through 5; and
(d) in accordance with due process of law.
2. The compensation shall be equivalent to the fair market value of the expropriated investments at the time when the expropriation was publicly announced or when the expropriation occurred, whichever is earlier. The fair market value shall not reflect any change in value occurring because the expropriation had become publicly known earlier.
3. The compensation shall be paid without delay, shall include interest at a commercially reasonable rate accrued from the date of expropriation until the date of payment and shall be effectively realisable and freely transferable.
4. If payment is made in a freely usable currency, the compensation paid shall include interest, at a commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment.
5. If a Contracting Party elects to pay in a currency other than a freely usable currency, the compensation paid, converted into the currency of payment at the market rate of exchange prevailing on the date of payment, shall be no less than the sum of the following:
(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; and
(b) interest, at a commercially reasonable rate for that freely usable currency, accrued from the date of expropriation until the date of payment.
6. This Article does not apply to the issuance of compulsory licences granted in relation to intellectual property rights in accordance with the TRIPS Agreement, 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 13. Protection from Strife
1. Each Contracting Party shall accord to investors of the other Contracting Party that have suffered loss or damage relating to their investments in the Territory of the former Contracting Party due to armed conflict or a state of emergency such as revolution, insurrection, civil disturbance or any other similar event in the Territory of that former Contracting Party, treatment, as regards restitution, indemnification, compensation or any other settlement, that is no less favourable than that which it accords to its own investors or to investors of a non-Contracting Party, whichever is more favourable to the investors of the other Contracting Party.
2. Any payment as a means of settlement referred to in paragraph 1 shall be effectively realisable, freely transferable and freely convertible at the market exchange rate into freely usable currencies.
3. Neither Contracting Party shall be derogated from its obligation under paragraph 1 by reason of its measures taken pursuant to paragraph 2 of Article 16.
Article 14. Subrogation
If a Contracting Party or its designated agency makes a payment to any investor of that Contracting Party under an indemnity, guarantee or insurance contract, pertaining to an investment of such investor in the Territory of the other Contracting Party, the latter Contracting Party shall recognise the assignment to the former Contracting Party or its designated agency of any right or claim of such investor on account of which such payment is made and shall recognise the right of the former Contracting Party or its designated agency to exercise by virtue of subrogation any such right or claim to the same extent as the original right or claim of the investor. As regards payment to be made to that former Contracting Party or its designated agency by virtue of such assignment of right or claim and the transfer of such payment, the provisions of Articles 12, 13 and 15 shall apply mutatis mutandis.
Article 15. Transfers
1. Each Contracting Party shall ensure that all transfers relating to investments in its Territory of an investor of the other Contracting Party may be freely made into and out of its Territory without delay. Such transfers shall include, in particular, though not exclusively:
(a) the initial capital and additional amounts to maintain or increase investments;
(b) profits, interest, capital gains, dividends, royalties, fees or other current incomes accruing from investments;
(c) payments made under a contract including loan payments in connection with investments;
(d) proceeds of the total or partial sale or liquidation of investments;
(e) earnings and remuneration of personnel from abroad who work in connection with investments in the Territory of the former Contracting Party;
(f) payments made in accordance with Articles 12 and 13; and
(g) payments arising out of a dispute.
2. Each Contracting Party shall further ensure that such transfers may be made without delay in freely usable currencies at the market exchange rate prevailing on the date of the transfer.
3. Notwithstanding paragraphs 1 and 2, a Contracting Party may delay or prevent a transfer through the equitable, non-discriminatory and good-faith application of its laws and regulations relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities, futures, options or derivatives;