(a) An act or series of acts of a Party cannot constitute an expropriation unless it interferes with a tangible or intangible property right or with the essential attributes or powers of ownership of an investment;
(b) Paragraph 1 contemplates two situations. The first is direct expropriation, where an investment is nationalized or otherwise directly expropriated through the formal transfer of title or right of ownership. The second is indirect expropriation, where an act or series of acts by a Party has an effect equivalent to a direct expropriation without the formal transfer of title or right of ownership;
(c) The determination of whether an act or series of acts by a Party, in a specific factual situation, constitutes an indirect expropriation requires a factual, case-by-case inquiry that considers, among other factors:
(i) whether such act or series of acts substantially interfered with an investment in the territory of the Party receiving the investment belonging to an investor of the other Party, effectively depriving the investor of control or management of its investment;
(ii) the economic impact of the governmental act, although the fact that an act or series of acts of a Party has an adverse effect on the economic value of an investment does not, by itself, establish that an indirect expropriation has occurred, and
(iii) the objective and context of governmental action.
(d) Except in exceptional circumstances, non-discriminatory regulatory acts ofa Party that are designed and applied to protect legitimate public welfare objectives, such as public health (5), safety and the environment, do not constitute indirect expropriations.
3. The compensation referred to in paragraph 1 (c) shall:
(a) To be paid without delay;
(b) Be equivalent to the fair market value of the expropriated investment immediately before the expropriation measure was carried out (hereinafter referred to as the "expropriation date");
(c) Not reflecting any change in value because the intention to expropriate was known prior to the date of expropriation, and
(d) Be fully liquidable and freely transferable.
4. If the fair market value is denominated in a freely usable currency, the compensation referred to in paragraph 1(c) shall not be less than the fair market value on the date of expropriation, plus simple interest at a commercially reasonable rate for that cutrency, accrued from the date of expropriation to the date of payment.
5. If the fair market value is denominated in a currency that is not freely usable, the compensation referred to in paragraph 1(c), 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 at the date of expropriation, converted to a freely usable currency at the market rate of exchange prevailing on the date of payment, plus
(b) Simple interest, at a commercially reasonable rate for that freely usable cutrency, accrued from the date of expropriation to the date of payment.
6. This Article does not apply to the issuance of compulsory licenses granted in connection with intellectual property rights, or to the revocation, limitation, revocation, limitation, or revocation of intellectual property rights, or creation of such rights to the extent that such issuance, revocation, revocation, limitation or or creation is consistent with the TRIPS Agreement (6).
Article 8.9. Treatment In the Event of Armed Conflict or Civil Strife
Without prejudice to Article 8.11.6(b), with respect to measures such as restitution, indemnification, compensation, and other settlement, each Party shall accord to investors of the other Party that have suffered losses on their investments in the territory of that Party due to armed conflict or civil strife treatment no less favorable than that accorded to its own investors or investors of any non-Party.
Article 8.10. Senior Management and Boards of Directors
1. No Party may require a juridical person of that Party, as long as it is a protected investment, to appoint natural persons of a particular nationality to senior management positions.
2. A Party may require that a majority of the members of the board of directors, or a committee thereof, of a juridical person of that Party that is a protected investment be of a particular nationality, or be resident in the territory of the Party, provided that the requirement does not significantly impair the ability of the investor to exercise control over its investment.
Article 8.11. Nonconforming Measures
1. Articles 8.5, 8.6, and 8.10 shall not apply to:
(a) Any existing non-conforming measure at the central, regional, provincial, municipal or local level that is maintained by a Party;
(b) The continuation or prompt renewal of any nonconforming measure referred to in subparagraph (a), or
(c) The amendment or modification of any nonconforming measure referred to in subparagraph (a) to the extent that the amendment or modification does not diminish the degree of conformity of the measure as it existed immediately before the amendment or modification with Articles 8.5, 8.6 and 8.10.
2. Articles 8.5, 8.6 and 8.10 shall not apply to any measure that a Party adopts or maintains, in relation to sectors, subsectors or activities, as indicated in its Schedule to Annex 8.11.
3. No Party may require, pursuant to any measure adopted after the date of entry into force of this Agreement and included in its Schedule to Annex 8.11, an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
4. In the event that a Party adopts any measure after the entry into force of this Agreement with respect to sectors, subsectors or activities as set forth in its Schedule to Annex 8.11, the Party shall, to the extent possible, notify the other Party of such measure.
5. Articles 8.5 and 8.6 shall not apply to any measure that constitutes an exception to or derogation from the obligations under the TRIPS Agreement, as specifically provided for in that Agreement.
6. The provisions of Articles 8.5, 8.6 and 8.10 shall not apply with respect to:
(a) Public procurement, or
(b) Subsidies or grants provided by a Party, including government-backed loans, guarantees and insurance.
7. For greater certainty, any amendment or modification to a Party's Schedule to Annex 8.11 pursuant to this Article shall be made in accordance with Article 20.3 (Amendments).
8. For greater certainty, nothing in this Article shall apply to any measure affecting trade in services through commercial presence in any sector or sub-sector, whether or not listed in Chapter 9 (Trade in Services). With respect to investors ofa Party that have made a protected investment in a services sector or sub-sector and their investments, the Parties reserve the right to adopt future measures in all those sectors and sub-sectors not committed and not bound in the respective Schedules of specific commitments in Annex 9.6.
Article 8.12. Transfers (7)
1. Each Party shall permit all transfers relating to a protected investment to be made freely and without undue delay to and from its territory. Such transfers include:
(a) Capital contributions;
(b) Profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other charges;
(c) The proceeds from the sale or liquidation, in whole or in part, of the protected investment;
(d) Payments made under a contract to which the investor or the protected investment is a party, including payments made under a loan contract;
(e) Payments made pursuant to Article 8.8 and Article 8.9, and
(f) Payments arising from the application of Section B of this Chapter.
2. Each Party shall permit transfers of profits in kind relating to a protected investment to be executed as authorized or specified in a written agreement (8) between the Party and a protected investment or an investor of another Party.
3. Each Party shall permit transfers related to a protected investment to be made ina freely usable currency at the market rate of exchange prevailing on the date of the transfer.
4. No Party may require its investors to make transfers of their income, profits, earnings, profits or other amounts derived from or attributable to investments made in the territory of another Party, nor shall it penalize them for failure to make such transfers.
5. Notwithstanding paragraph 2, a Party may restrict transfers of earnings in kind in circumstances where it might otherwise restrict such transfers under this Agreement, including as provided in paragraph 6.
6. Without prejudice to paragraphs 1, 2 and 3 of this Article, a Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) Bankruptcy, insolvency or protection of creditors' rights (9);
(b) Compliance with resolutions, rulings or awards issued in judicial, administrative or arbitration proceedings (10);
(c) Issuance, trading or operations of securities, futures or derivatives;
(d) Criminal offenses, or
(e) Financial reporting or retention of transfer records when necessary to assist law enforcement or financial regulatory authorities.
Article 8.13. Subrogation
1. If a Party, or any authority, institution, statutory body, or corporation designated by the Party, makes a payment to an investor of the Party under a guarantee, insurance contract or other form of indemnification that the Party has entered into with respect to a protected investment, the other Party, in whose territory the protected investment was made, shall recognize the subrogation or transfer of any rights that the investor had possessed under this Chapter with respect to the protected investment, except for the subrogation.
2. The investor shall be precluded from claiming such rights to the extent of the subrogation.
Article 8.14. Investment and Environmental, Health and other Regulatory Objectives
The Parties recognize that it is inappropriate to encourage investment through a relaxation of domestic measures related to environmental, health or other regulatory objectives. Accordingly, no Party should waive or otherwise derogate from, relax or offer to waive, relax or derogate from such measures as a means of encouraging the establishment, acquisition, expansion or retention of an investor's investment in its territory. If a Party believes that the other Party has encouraged an investment in such a manner, the Parties shall consult with a view to preventing the implementation of such incentives.
Article 8.15. Denial of Benefits
A Party may deny the benefits of this Chapter to:
(a) An investor of another Party that is a juridical person of that other Party and the investments of such investor, ifan investor of a non-Party owns or controls the juridical person and the juridical person does not have substantial business activities in the territory of the other Party;
(b) An investor of another Party that is a juridical person of that other Party and the investments of such investor, if an investor of the denying Party owns or controls the juridical person and the juridical person does not have substantial business activities in the territory of that other Party, or
(c) An investor of another Party that is a juridical person of that other Party and to investments of such investor, where the juridical person of that other Party has been established or acquired with the main purpose of obtaining access to the dispute resolution mechanism incorporated in Section B of this Chapter.
For greater certainty, a Party may deny the benefits of this Chapter at any time, including after the submission of a claim to arbitration, in accordance with Article 8.24.
Article 8.16. Compliance with the Legislation of the Parties
The Parties recognize that:
1. Investors of a Party and their investments shall comply with the obligations under the laws of the other Party, otherwise consistent with this Chapter, with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in the territory of the other Party (11).
2. Investors of a Party and their investments shall not offer, promise or give any pecuniary advantage, gratuity, directly or indirectly, to public officials of the other Party as an inducement or recognition for improper official acts or to obtain undue advantage.
Article 8.17. Corporate Social Responsibility
The Parties reaffirm their commitment to internationally recognized standards, guidelines and principles of corporate social responsibility that have been adopted or are supported by the Parties, including the OECD Guidelines for Multinational Enterprises, and each Party shall endeavor to encourage persons operating in its territory or subject to its jurisdiction to voluntarily incorporate these standards, guidelines and principles into their business practices and internal policies. These standards, guidelines and principles address issues such as employment, environment, gender equality, human rights, community relations and anti-corruption.
Article 8.18. Special Formalities and Reporting Requirements
1. Nothing in Article 8.5 shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with a protected investment, such as a residency requirement for registration or a requirement that a protected investment be legally constituted under the laws or regulations of the Party, provided that such formalities do not significantly impair the protections afforded by the Party to investors of another Party and to protected investments in accordance with this Chapter.
2. Notwithstanding Article 8.5 and Article 8.6, a Party may require an investor of the other Party, or its protected investment, to provide information relating to that investment solely for informational or statistical purposes. The Party shall protect information that is confidential from any disclosure that could prejudice the competitive position of the investor or the protected investment. Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information relating to the equitable and good faith application of its legal system.
Article 8.19. General Exceptions
Provided that such measures are not applied in a manner that would constitute arbitrary or unjustifiable discrimination, and do not constitute a disguised restriction on international trade affecting investment, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining measures, including environmental measures, that it considers necessary to:
(a) To protect morals or maintain public order;
(b) Protect human, animal or plant life or health; or
(c) Protect the conservation of exhaustible natural resources, living or non- living, if such measures are made effective in conjunction with restrictions on domestic production or consumption.
Article 8.20. Regulatory Powers Relating to Intellectual Property Rights
Nothing in this Chapter shall be interpreted to mean that restrict the right of the receiving Party to adopt intellectual property measures that are in conformity with the TRIPS Agreement or with multilateral agreements concluded within the framework of the World Intellectual Property Organization.
Article 8.21. Future Negotiations
1. In the event that the Argentine Republic includes in the future, under another agreement or chapter on investments, the following:
(a) A list of any non-conforming measures maintained by the government or authority at the central, regional, provincial, municipal or local level, which are not subject to any or all of the obligations imposed by this Chapter; or
(b) Provisions that prevent a Party from conditioning the receipt of an advantage by the investor, or imposing on the investor obligations such as: meeting or exporting a certain degree or percentage of domestic content; granting preference to goods. The following are examples of such restrictions: to restrict sales in its territory of the goods or services that such investment produces or renders, by relating them to sales, to the volume or value of its exports, or to the foreign exchange earnings they generate,
the Argentine Republic shall notify such fact to the Republic of Chile within six (6) months of the entry into force of such agreement or chapter.
2. Subsequent to the notification set forth in paragraph 1, the Parties shall endeavor to negotiate in good faith the inclusion in this Chapter of the clauses referred to in subparagraphs 1(a) or 1(b).
3. Subsequent to the entry into force of this Agreement, at the request of either Party, the Parties shall consult in good faith for the purpose of reviewing the sectors, subsectors or activities included in the lists in Annex 8.11.
Section B. Dispute Settlement between a Party and an Investor of Another Party
Article 8.22. Request for Consultation
1. As far as possible, disputes shall be settled amicably.
2. The request for consultations must be submitted within three (3) years from the date on which the investor knew or should have known of the alleged violation and suffered loss or damage as a result thereof.
3. Unless a longer period is agreed upon, consultations shall be held within sixty (60) days from the date of receipt of the request for consultations pursuant to paragraph 5.
4. The Parties shall fix by mutual agreement the place of the consultation.
5. The investor requesting consultations shall submit to the Party a written request for consultations specifying:
(a) The name and address of the investor and, when the claim is made on behalf of a company, it shall include the name, address and place of incorporation of the company;
(b) The provisions of this Chapter alleged to have been breached and any other applicable provisions;
(c) The issues of fact and law on which the claim is based, and
(d) The relief sought and the approximate amount of damages claimed.
6. In the event that the investor has not submitted a claim under Article 8.24 within one (1) year from the filing of the request for consultations, the claimant shall be deemed to have withdrawn its request for consultations and may not submit a claim under this Section with respect to the same measures. Such period may be extended by mutual agreement.
7. For greater certainty, the initiation of consultations and negotiations pursuant to this Article shall not be construed as a recognition of the jurisdiction of any court or tribunal constituted in the future pursuant to this Section.
Article 8.23. Mediation
1. The disputing parties may agree at any time to resort to mediation.
2. Without prejudice to the status or rights of any of the disputing parties, mediation may be used in accordance with this Chapter, under the rules agreed upon by the disputing parties, including the rules on mediation that the Parties have adopted.
3. The mediator shall be appointed by agreement between the disputing parties. The disputing parties may also request that the Chairman of the ICSID Administrative Council appoint the mediator.
4. The disputing parties shall endeavor to reach a settlement of the dispute within ninety (90) days of the appointment of the mediator.
5. In the event that the disputing parties agree to resort to mediation, the time limits set out in Articles 8.22.2 and 8.22.6 shall be suspended from the date on which the disputing parties agree to resort to mediation until the date on which either disputing party decides to terminate the mediation. Any decision by a disputing party to terminate the mediation shall be communicated by letter sent to the mediator and to the other disputing party.
Article 8.24. Submission of a Claim to Arbitration
1. At least one hundred eighty (180) days after the disputing Party has received the written request for consultation under Article 8.22.2, the complainant:
(a) In its own name, it may submit to arbitration a claim under this Section alleging:
(i) that the respondent has breached an obligation set forth in Section A, other than Articles 8.14 and 8.17, with respect to the expansion, management, conduct, operation, and sale or other disposition of a covered investment, or
(ii) that the claimant has suffered loss or damage by reason of or as a result of such breach.
(b) 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 in which it alleges:
(i) that the respondent has breached an obligation set forth in Section A, other than Articles 8.14 and 8.17, with respect to the expansion, management, conduct, operation, and sale or other disposition of a covered investment, or
(ii) that the company has suffered loss or damage by reason of, or as a tesult of, such violation.
2. For greater certainty, no claim may be submitted to arbitration pursuant to this Section alleging a violation of any provision of the Agreement that is not an obligation of Section A, other than Articles 8.14 and 8.17. Likewise, a claim related to the establishment or acquisition of an investment may not be submitted to arbitration.
3. For greater certainty, an investor may not submit to arbitration a claim related to investments that have been established or carried out through acts of corruption.
4. Pursuant to paragraph 1, the claimant, with the agreement of the respondent, may submit the claim to arbitration:
(a) In accordance with the ICSID Convention, provided that both Contracting Parties are parties to the ICSID Convention;
(b) According to the UNCITRAL Arbitration Rules, or
(c) Before an ad hoc tribunal in accordance with arbitration rules mutually agreed upon by the disputing parties.
5. If the disputing parties do not reach an agreement within thirty (30) days of the date of the agreement (30) days after the respondent received the claimant's proposal to agree to submit a claim to arbitration pursuant to paragraph 4(a), (b) or (c), the claimant may submit it pursuant to any one of those paragraphs, at its choice.
6. The applicable arbitration rules shall govern nthe arbitration except as modified in this Section.
7. For greater certainty, an amicable settlement of a dispute may be agreed upon at any time, even after the claim has been filed in accordance with this Article.
Article 8.25. Conditions Precedent to the Submission of a Claim to Arbitration
1. The claimant, on its own behalf or on behalf of an enterprise of the respondent that is a legal person owned or controlled directly or indirectly by the claimant, may submit a claim to arbitration pursuant to this Section only if:
(a) Consents to submit to arbitration under the terms of the procedures set forth in this Chapter, and
(b) The claimant, and the enterprise if the claim concerns loss or damage to an interest in an enterprise of the other Party that is a juridical person owned or controlled directly or indirectly by the investor, waives its right to initiate or continue any proceedings before an administrative tribunal or court under the laws of either Party or other dispute settlement procedures with respect to the measure of the disputing Party alleged to be in violation of the provisions referred to in Section A, except for proceedings for injunctive, declaratory or extraordinary relief, not involving the payment of damages, before the administrative or judicial tribunal, provided that the action is brought for the sole purpose of preserving the rights and interests of the claimant or the enterprise while the arbitration is pending.
2. The consent and waiver required by this Article shall be in writing, delivered to the respondent and included in the submission of the claim to arbitration.
Article 8.26. Consent of Each Party to Arbitration
1. Each Party consents to submit a claim to arbitration under this Section and in accordance with this Chapter.
2. The consent referred to in paragraph 1 and the submission of the claim to arbitration under this Section shall be deemed to comply, as applicable, with the requirements set forth in:
(a) Chapter II of the ICSID Convention (Jurisdiction of the Centre), which requires the written consent of the parties to the dispute;
(b) Article II of the New York Convention, which requires an "agreement in writing," or
(c) Article I of the Inter-American Convention, which requires an "agreement".
Article 8.27. Third-party Financing
1. If there is third-party financing, the disputing party benefiting therefrom shall inform the other disputing party and the tribunal of the name and address of the financier.
2. The communication shall be made at the time of submission of a claim to arbitration, or, if the funding agreement has been concluded or the donation or grant has been made after submission of a claim, without delay as soon as the agreement has been concluded or the donation or grant has been made. Failure to comply with this obligation shall give rise to such penalties as may be prescribed by the court.
3. For the purposes of this Article, third-party funding means any funding provided by a person who is not a party to the dispute but who has an agreement with a disputing party to fund part or all of the costs of the proceeding, whether by donation or grant, or in return for a fee conditional on the outcome of the dispute.
Article 8.28. Number of Arbitrators and Method of Appointment
1. Except as provided in Article 8.31, and unless the disputing parties agree otherwise, the tribunal shall be composed of three arbitrators, one arbitrator appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, shall be appointed by agreement of the disputing parties.
2. Arbitrators shall have experience in public international law, international investment rules or in the settlement of disputes arising out of international investment agreements. They shall be impartial and independent of the Parties, the Claimant and its counsel, and shall not receive instructions from any of them. Arbitrators shall not intervene in the examination of any dispute that may give rise to a direct or indirect conflict of interest. They shall comply with the Code of Conduct in Chapter 18 (Dispute Resolution) and, in addition, with the International Bar Association Guidelines on Conflicts of Interest in International Arbitration. In addition, at the time of appointment they shall refrain from acting as counsel, party-appointed experts or witnesses in any pending investment dispute under this Chapter or any other international agreement.