10. Unless the disputing parties agree otherwise, an arbitral tribunal established under paragraph 4 shall comprise three arbitrators, one arbitrator appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the disputing parties. If the disputing investor or the disputing Party fails to appoint an arbitrator or arbitrators within 60 days from the date on which the investment dispute was submitted to arbitration, the Secretary-General of the International Centre for Settlement of Investment Disputes (hereinafter referred to in this Article as "ICSID"), may be requested by either of the disputing parties, to appoint the arbitrator or arbitrators not yet appointed from the ICSID Panel of Arbitrators subject to the requirements of paragraphs 11 and 12.
11. Unless the disputing parties agree otherwise, the third arbitrator shall not be a national of either Contracting Party, nor have his or her usual place of residence in the territory of either Contracting Party, nor be employed by either of the disputing parties, nor have dealt with the investment dispute in any capacity.
12. In the case of arbitration referred to in paragraph 4, each of the disputing parties may indicate up to three nationalities, the appointment of arbitrators of which is unacceptable to it. In this event, the Secretary-General of the ICSID may be requested not to appoint as arbitrator any person whose nationality is indicated by either of the disputing parties.
13. Unless the disputing parties agree otherwise, the arbitration shall be held in a country that is a party to the New York Convention.
14. An arbitral tribunal established under paragraph 4 shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.
15. The disputing Party shall deliver to the other Contracting Party:
(a) Written notice of the claim submitted to the arbitration no later than 30 days after the date on which the claim was submitted; and
(b) Copies of all pleadings filed in the arbitration.
16. On written notice to the disputing parties, the Contracting Party which is not the disputing Party may make submissions to the arbitral tribunal on a question of interpretation of this Agreement.
17. The arbitral tribunal may order an interim measure of protection to preserve the rights of the disputing investor, or to facilitate the conduct of arbitral proceedings, including an order to preserve evidence in the possession or control of either of the disputing parties. The arbitral tribunal shall not order attachment or enjoin the application of the measure alleged to constitute a breach referred to in paragraph 1.
18. The award rendered by the arbitral tribunal shall include:
(a) A judgment whether or not there has been a breach by the disputing Party of any obligation under this Agreement with respect to the disputing investor and its investments; and
(b) A remedy if there has been such breach. The remedy shall be limited to one or both of the following:
(i) Payment of monetary damages and applicable interest; and
(ii) Restitution of property, in which case the award shall provide that the disputing Party may pay monetary damages and any applicable interest in lieu of restitution.
Costs may also be awarded in accordance with the applicable arbitration rules.
19. The award rendered in accordance with paragraph 18 shall be final and binding upon the disputing parties. The disputing Party shall carry out without delay the provisions of the award and provide in its Area for the enforcement of the award in accordance with its relevant laws and regulations.
20. Neither Contracting Party shall give diplomatic protection, or bring an international claim, in respect of an investment dispute which the other Contracting Party and an investor of the former Contracting Party have consented to submit or submitted to arbitration set forth in paragraph 4, unless the other Contracting Party shall have failed to abide by and comply with the award rendered in such investment dispute. Diplomatic protection, for the purposes of this paragraph, shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the investment dispute.
Article 18. General and Security Exceptions
1. Notwithstanding any other provisions in this Agreement other than the provisions of Article 13, each Contracting Party may:A
(a) Take any measures which it considers necessary for the protection of its essential security interests;
(i) Taken in time of war, or armed conflict, or other emergency in that Contracting Party or in international relations; or
(ii) Relating to the implementation of national policies or international agreements respecting the non-proliferation of weapons;
(b) Take any measure in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security;
(c) Take any measure necessary to protect human, animal or plant life or health;
(d) Take any measure necessary for the maintenance of public order. The public order exceptions may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society; or
(e) Take any measure imposed for the protection of national treasures of artistic, historic or archaeological value.
2. In cases where a Contracting Party takes any measure, pursuant to paragraph 1 above, that does not conform with the obligations of the provisions of this Agreement other than the provisions of Article 13, that Contracting Party shall not use such measure as a means of avoiding its obligations.
3. In cases where a Contracting Party takes any measure, pursuant to paragraph 1 of this Article, that does not conform with the obligations of the provisions of this Agreement other than the provisions of Article 13, that Contracting Party shall, prior to the entry into force of the measure or as soon thereafter as possible, notify the other Contracting Party of the following elements of the measure: (a) sector and sub-sector or matter; (b) obligation or article in respect of the measure; (c) legal source of the measure; (d) succinct description of the measure; and (e) purpose of the measure.
Article 19. Temporary Safeguard Measures
1. A Contracting Party may adopt or maintain measures not conforming with its obligations under Article 2 relating to cross-border capital transactions and Article 15:
(a) In the event of serious balance-of-payments and external financial difficulties or threat thereof; or
(b) In cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies.
2. Measures referred to in paragraph 1 above:
(a) Shall be consistent with the Articles of Agreement of the International Monetary Fund, as may be amended, so long as the Contracting Party taking the measures is a party to the said Articles;
(b) Shall not exceed those necessary to deal with the circumstances set out in paragraph 1 above;
(c) Shall be temporary and shall be eliminated as soon as conditions permit;
(d) Shall be promptly notified to the other Contracting Party; and
(e) Shall avoid unnecessary damages to the commercial, economic and financial interests of the other Contracting Party.
3. Nothing in this Agreement shall be regarded as altering the rights enjoyed and obligations undertaken by a Contracting Party as a party to the Articles of Agreement of the International Monetary Fund, as may be amended.
Article 20. Prudential Measures
1. Notwithstanding any other provisions of this Agreement, a Contracting Party shall not be prevented from taking measures relating to financial services for prudential reasons, including measures for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by an enterprise supplying financial services, or to ensure the integrity and stability of its financial system.
2. In cases where a Contracting Party takes any measure, pursuant to paragraph 1 above, that does not conform with the obligations of the provisions of this Agreement, that Contracting Party shall not use such measure as a means of avoiding its obligations.
Article 21. Intellectual Property Rights
1. Nothing in this Agreement shall be construed so as to derogate from the rights and obligations under multilateral agreements in respect of protection of intellectual property rights to which the Contracting Parties are parties.
2. Nothing in this Agreement shall be construed so as to oblige either Contracting Party to extend to investors of the other Contracting Party and their investments treatment accorded to investors of a non-Contracting Party and their investments by virtue of multilateral agreements in respect of protection of intellectual property rights, to which the former Contracting Party is a party.
3. The Contracting Parties shall give due consideration to the adequate and effective protection of intellectual property rights and shall promptly consult with each other for this purpose at the request of either Contracting Party. Depending on the results of the consultation, each Contracting Party shall, in accordance with its applicable laws and regulations, take appropriate measures to remove the factors which are recognised as having adverse effects to the investments.
Article 22. Taxation
1. Nothing in this Agreement shall apply to taxation measures except as expressly provided for in paragraphs 2, 3 and 4 of this Article.
2. Article 1, paragraph 1 of Article 5, Articles 6, 9, 12, 25 and 27 shall apply to taxation measures.
3. Articles 16 and 17 shall apply to disputes under paragraph 2 above.
4. Article 23 shall apply to taxation measures regarding matters set out in paragraph 2 of this Article.
Article 23. Joint Committee
1. The Contracting Parties shall establish a Joint Committee (hereinafter referred to as "the Committee") with a view to accomplishing the objectives of this Agreement. The functions of the Committee shall be:
(a) To discuss and review the implementation and operation of this Agreement;
(b) To review the exceptional measures maintained, amended, modified or adopted pursuant to paragraph 1 of Article 8 for the purpose of contributing to the reduction or elimination of such exceptional measures;
(c) To discuss the exceptional measures adopted or maintained pursuant to paragraph 3 of Article 8 for the purpose of encouraging favourable conditions for investors of the Contracting Parties; and
(d) To discuss any other investment-related matters concerning this Agreement.
2. The Committee may, as necessary, make appropriate recommendations by consensus to the Contracting Parties for the more effective functioning or the attainment of the objectives of this Agreement.
3. The Committee shall be composed of representatives of the Contracting Parties. The Committee shall determine its own rules of procedure to carry out its functions.
4. The Committee may establish sub-committees and delegate specific tasks to such sub-committees. The Committee, upon mutual consent of the Contracting Parties, may hold joint meetings with the private sectors.
5. Unless otherwise decided by the Contracting Parties, the Committee shall meet once a year, and otherwise at the request of either Contracting Party.
Article 24. Environmental Measures
The Contracting Parties recognise that it is inappropriate to encourage investment by investors of the other Contracting Party by relaxing environmental measures. To this effect each Contracting Party should not waive or otherwise derogate from such environmental measures as an encouragement for the establishment, acquisition or expansion in its Area of investments by investors of the other Contracting Party.
Article 25. Observance of the Agreement by Local Governments
In fulfilling the obligations under this Agreement, each Contracting Party shall take such reasonable measures as may be available to it to ensure the observance of this Agreement by local governments in its Area.
Article 26. Denial of Benefits
1. A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is an enterprise of the other Contracting Party and to its investments if the enterprise is owned or controlled by an investor of a non-Contracting Party and the denying Contracting Party:
(a) Does not maintain diplomatic relations with the non-Contracting Party; or
(b) Adopts or maintains measures with respect to the non-Contracting Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Agreement were accorded to the enterprise or to its investments.
2. Subject to prior notification and consultation, a Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is an enterprise of the other Contracting Party and to its investments if the enterprise is owned or controlled by an investor of a non-Contracting Party and the enterprise has no substantial business activities in the Area of the other Contracting Party.
Article 27. Final Provisions
1. This Agreement shall enter into force on the thirtieth day after the date of exchange of diplomatic notes informing each other that their respective legal procedures necessary for the entry into force of this Agreement have been completed. It shall remain in force for a period of ten years after its entry into force and shall continue in force unless terminated as provided in paragraph 2 below. This Agreement shall also apply to all investments of investors of either Contracting Party acquired in the Area of the other Contracting Party in accordance with the applicable laws and regulations of that other Contracting Party prior to the entry into force of this Agreement.
2. A Contracting Party may, by giving one year's advance notice in writing to the other Contracting Party, terminate this Agreement at the end of the initial ten year period or at any time thereafter.
3. In respect of investments acquired prior to the date of termination of this Agreement, the provisions of this Agreement shall continue to be effective for a period of ten years from the date of termination of this Agreement.
4. This Agreement shall not apply to claims arising out of events which occurred, or to claims which had been settled, prior to its entry into force.
5. The Annexes to this Agreement shall form an integral part of this Agreement.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed this Agreement.
DONE in duplicate at Tokyo, on this sixteenth day of January, 2008, in the English language.
FOR JAPAN: 高村正彦
FOR THE LAO PEOPLE'S DEMOCRATIC REPUBLIC: Thongloun Sisoulith
Attachments
Reservations for Measures referred to in Subparagraph 1(a) of Article 8
"Obligations under this Agreement" specifies the obligations under Articles 2, 3 and 7 for which a non-conforming measure is maintained.
Part 1
Reservations of Japan
1. Sector of Matter
Agriculture, Forestry and Fisheries (Plant Breeder's Right)
Obligations under this Agreement
National Treatment (Article 2)
Most-Favoured Nation Treatment (Article 3)
2. Sector of Matter
Agriculture, Forestry and Fisheries, and Related Services (except fisheries within the territorial sea, internal waters, exclusive economic zone and continental shelf provided for in the reservation No. 5 in Reservations of Japan in Part 1 of Annex II)
Obligations under this Agreement
National Treatment (Article 2)
3. Sector of Matter
Air Transport
Obligations under this Agreement
National Treatment (Article 2)
Most-Favoured-Nation Treatment (Article 3)
Prohibition of Performance Requirements (Article 7)
4. Sector of Matter
Banking
Obligations under this Agreement
National Treatment (Article 2)
5. Sector or Matter
Drugs and Medicines Manufacturing
Obligations under this Agreement
National Treatment (Article 2)
6. Sector or Matter
Freight Forwarding Business
Obligations under this Agreement
National Treatment (Article 2)
Most-Favoured-Nation Treatment (Article 3)
Prohibition of Performance Requirements (Article 7)
7. Sector or Matter
Heat Supply
Obligations under this Agreement
National Treatment (Article 2)
8. Sector or Matter
Information and Communications
Obligations under this Agreement
National Treatment (Article 2)
Prohibition of Performance Requirements (Article 7)
9. Sector or Matter
Leather and Leather Products Manufacturing
Obligations under this Agreement
National Treatment (Article 2)
10. Sector or Matter
Matters Related to the Nationality of a Ship
Obligations under this Agreement
National Treatment (Article 2)
Prohibition of Performance Requirements (Article 7)
11. Sector or Matter
Mining
Obligations under this Agreement
National Treatment (Article 2)
12. Sector or Matter
Oil Industry
Obligations under this Agreement
National Treatment (Article 2)
13. Sector or Matter
Railway Transport
Obligations under this Agreement
National Treatment (Article 2)
14. Sector or Matter
Registration of Aircraft in the National Register
Obligations under this Agreement
National Treatment (Article 2)