(ii) that tribunal shall decide whether any prior hearing shall be repeated.
7. Where a tribunal has been established under this Article, a claimant that has submitted a claim to arbitration under Article 11.16.1 and that has not been named in a request made under paragraph 2 may make a written request to the tribunal that it be included in any order made under paragraph 6, and shall specify in the request:
(a) the name and address of the claimant;
(b) the nature of the order sought; and
(c) the grounds on which the order is sought.
The claimant shall deliver a copy of its request to the Secretary-General.
8. A tribunal established under this Article shall conduct its proceedings in accordance with the UNCITRAL Arbitration Rules, except as modified by this Section.
9. A tribunal established under Article 11.19 shall not have jurisdiction to decide a claim, or a part of a claim, over which a tribunal established or instructed under this Article has assumed jurisdiction.
10. On application of a disputing party, a tribunal established under this Article, pending its decision under paragraph 6, may order that the proceedings of a tribunal established under Article 11.19 be stayed, unless the latter tribunal has already adjourned its proceedings.
Article 11.26. Awards
1. Where a tribunal makes a final award against a respondent, the tribunal may award, separately or in combination, only:
(a) monetary damages and any applicable interest; and
(b) restitution of property, in which case the award shall provide that the respondent may pay monetary damages and any applicable interest in lieu of restitution.
2. A tribunal may also award costs and attorney's fees in accordance with this Section and the applicable arbitration rules.
3. Subject to paragraph 1, where a claim is submitted to arbitration under Article 11.16.1(b):
(a) an award of restitution of property shall provide that restitution be made to the enterprise;
(b) an award of monetary damages and any applicable interest shall provide that the sum be paid to the enterprise; and
(c) the award shall provide that it is made without prejudice to any right that any person may have in the relief under applicable domestic law.
4. A tribunal may not award punitive damages.
5. An award made by a tribunal shall have no binding force except between the disputing parties and in respect of the particular case.
6. Subject to paragraph 7 and the applicable review procedure for an interim award, a disputing party shall abide by and comply with an award without delay.
7. A disputing party may not seek enforcement of a final award until:
(a) in the case of a final award made under the ICSID Convention:
(i) 120 days have elapsed from the date the award was rendered and no disputing party has requested revision or annulment of the award; or
(ii) revision or annulment proceedings have been completed; and
(b) in the case of a final award under the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules, or the rules selected pursuant to Article 11.16.3(d):
(i) 90 days have elapsed from the date the award was rendered and no disputing party has commenced a proceeding to revise, set aside, or annul the award; or
(ii) a court has dismissed or allowed an application to revise, set aside, or annul the award and there is no further appeal.
8. Each Party shall provide for the enforcement of an award in its territory.
9. If the respondent fails to abide by or comply with a final award, on delivery of a request by the non-disputing Party, a panel shall be established under Article 20.8 (Establishment of Panel). The requesting Party may seek in such proceedings:
(a) a determination that the failure to abide by or comply with the final award is inconsistent with the obligations of this Agreement; and
(b) in accordance with Article 20.11 (Panel Report), a recommendation that the respondent abide by or comply with the final award.
10. A disputing party may seek enforcement of an arbitration award under the ICSID Convention or the New York Convention regardless of whether proceedings have been taken under paragraph 9.
11. A claim that is submitted to arbitration under this Section shall be considered to arise out of a commercial relationship or transaction for the purposes of Article I of the New York Convention.
Article 11.27. Service of Documents
Delivery of notice and other documents on a Party shall be made to the place named for that Party in Annex 11-H.
Section C. Definitions
Article 11.28. Definitions
For the purposes of this Chapter:
Centre means the International Centre for Settlement of Investment Disputes (ICSID) established by the ICSID Convention;
claimant means an investor of a Party that is a party to an investment dispute with the other Party;
disputing parties means the claimant and the respondent;
disputing Party means a Party against which a claim is made under Section B (Investor- State Dispute Settlement);
enterprise means an enterprise as defined in Article 1.4 (Definitions), and a branch of an enterprise;
enterprise of a Party means an enterprise constituted or organised under the law of a Party, and a branch of an enterprise of a Party located in the territory of a Party and carrying out business activities there;
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;
ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, 18 March 1965;
investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include:
(a) an enterprise;
(b) shares, stock and other forms of equity participation in an enterprise;
(c) bonds, debentures, other debt instruments and loans;
(d) futures, options and other derivatives;
(e) turnkey, construction, management, production, concession, revenue- sharing and other similar contracts;
(f) intellectual property rights;
(g) licences, authorisations, permits and similar rights conferred pursuant to domestic law; and
(h) other tangible or intangible, movable or immovable property and related property rights, such as leases, mortgages, liens and pledges.
For the purposes of this Agreement, a claim to payment that arises solely from the commercial sale of goods and services is not an investment, unless it is a loan that has the characteristics of an investment;
investment agreement means a written agreement between a national authority of a Party and a covered investment or an investor of the other Party, on which the covered investment or the investor relies in establishing or acquiring a covered investment other than the written agreement itself, that grants rights to the covered investment or investor:
(a) with respect to natural resources that a national authority controls, such as for their exploration, extraction, refining, transportation, distribution or sale;
(b) to supply services to the public on behalf of the Party, such as power generation or distribution, water treatment or distribution, or telecommunications; or
(c) to undertake infrastructure projects, such as the construction of roads, bridges, canals, dams, or pipelines, that are not for the exclusive or predominant use and benefit of the government;
investment authorisation means an authorisation that the foreign investment authority of a Party grants to a covered investment or an investor of the other Party;
investor of a non-Party means, with respect to a Party, an investor that attempts to make, is making, or has made an investment in the territory of that Party, that is not an investor of either Party;
investor of a Party means a Party or state enterprise thereof, or a national or an enterprise of a Party, that attempts to make, is making or has made an investment in the territory of the other Party, provided, however, that a national who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality;
New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958;
non-disputing Party means the Party that is not a party to an investment dispute;
protected information means confidential business information or information that is privileged or otherwise protected from disclosure under a Party's law;
respondent means the Party that is a party to an investment dispute; Secretary-General means the Secretary-General of ICSID; and
UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law.
ANNEX 11-A. Customary international law
The Parties confirm their shared understanding that "customary international law" generally and as specifically referenced in Article 11.5 results from a general and consistent practice of States that they follow from a sense of legal obligation. With regard to Article 11.5, the customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the economic rights and interests of aliens.
ANNEX 11-B. Expropriation
The Parties confirm their shared understanding that:
1. An action or a series of actions by a Party cannot constitute an expropriation unless it interferes with a tangible or intangible property right in an investment.
2. Article 11.7.1 addresses two situations. The first is direct expropriation, where an investment is nationalised or otherwise directly expropriated through formal transfer of title or outright seizure.
3. The second situation addressed by Article 11.7.1 is indirect expropriation, where an action or a series of actions by a Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure.
4. The determination of whether an action or a series of actions by a Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by-case, fact-based inquiry that considers all relevant factors relating to the investment, including:
(a) the economic impact of the government action, although the fact that an action or a series of actions by a Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;
(b) the extent to which the government action interferes with distinct, reasonable investment-backed expectations; and
(c) the character of the government action, including its objectives and context.
5. Except in rare circumstances, non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations.
ANNEX 11-C. Transfers
1. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining temporary safeguard measures in accordance with the laws and regulations of the Party with regard to payments and capital movements:
(a) in the event of serious balance-of-payments or external financial difficulties or threat thereof; or
(b) where, in exceptional circumstances, payments and capital movements between the Parties cause or threaten to cause serious difficulties for the operation of monetary policy or exchange rate policy in the Party concerned.
The measures referred to in paragraph 1:
(a) shall not exceed a period of one year, however, if extremely exceptional circumstances arise such that a Party seeks to extend such measures, the Party will coordinate in advance with the other Party concerning the implementation of any proposed extension;
(b) shall be consistent with the Articles of Agreement of the International Monetary Fund;
(c) shall avoid unnecessary damage to the commercial, economic and financial interests of the other Party;
(d) shall not exceed those necessary to deal with the circumstances described in paragraph 1;
(e) shall be temporary and phased out progressively as the situation described in paragraph 1 improves;
(f) shall not be confiscatory;
(g) shall promptly be notified to the other Party;
(h) shall be applied on a national treatment basis;
(i) shall ensure that the other Party is treated as favourably as any non-Party;
(j) shall not constitute a dual or multiple exchange rate practice;
(k) shall not restrict payments or transfers for current transactions, unless the imposition of such measures complies with the procedures stipulated in the Articles of Agreement of the International Monetary Fund; and
(l) shall not restrict payments or transfers associated with foreign direct investment.
ANNEX 11-D. Illustrative list of australian residency requirements
| Sector | Requirement |
| All | At least two of the directors of a public company must be ordinarily resident in Australia. |
| Professional services: Accounting, auditing and book-keeping services | At least one equity partner in a firm must be a permanent resident. |
| Research and development services: R&D services on social sciences and humanities | Permanent residency requirement for psychologists (Western Australia). |
| Maritime transport services: International transport (freight and passengers) | Part X of the Competition and Consumer Law 2010 requires that every ocean carrier who provides international liner cargo shipping services to or from Australia shall, at all times be represented by a person who is an individual resident in Australia (but not necessarily an Australian citizen) and has been appointed by the ocean carrier as the ocean carrier's agent for the purposes of Part X. |
ANNEX 11-E. Possibility of a bilateral appellate mechanism
Within three years after the date of entry into force of this Agreement, the Parties shall consider whether to establish a bilateral appellate body or similar mechanism to review awards rendered under Article 11.26 in arbitrations commenced after they establish the appellate body or similar mechanism.
ANNEX 11-F. Submission of a claim to arbitration
Korea
1. Notwithstanding Article 11.18.2, an investor of Australia may not submit to arbitration under Section B a claim that Korea has breached an obligation under Section A either:
(a) on its own behalf, under Article 11.16.1(a); or
(b) on behalf of an enterprise of Korea that is a juridical person that the investor owns or controls directly or indirectly, under Article 11.16.1(b),
if the investor or the enterprise, respectively, has alleged that breach of an obligation under Section A in any proceedings before a court or administrative tribunal of Korea.
2. For greater certainty, where an investor of Australia or an enterprise of Korea that is a juridical person that the investor owns or controls directly or indirectly makes an allegation that Korea has breached an obligation under Section A before a court or administrative tribunal of Korea, that election shall be final, and the investor may not thereafter allege that breach, on its own behalf or on behalf of the enterprise, in an arbitration under Section B.
ANNEX 11-G. Foreign investment policy
A decision by Australia with respect to whether or not to refuse, or impose orders or conditions on, an investment that is subject to review under Australia's foreign investment policy shall not be subject to the dispute settlement provisions of Section B.
ANNEX 11-H. Service of documents on a party under section b
Australia
Notices and other documents in disputes under Section B shall be served on Australia by delivery to:
Department of Foreign Affairs and Trade RG Casey Building
John McEwen Crescent
Barton ACT 0221 Australia
Korea
Notices and other documents in disputes under Section B shall be served on Korea by delivery to:
Office of International Legal Affairs Ministry of Justice of the Republic of Korea Government Complex, Gwacheon
Korea
ANNEX 11-I. Taxation and expropriation
The determination of whether a taxation measure, in a specific fact situation, constitutes an expropriation requires a case-by-case, fact-based inquiry that considers all relevant factors relating to the investment, including the factors listed in Annex 11-B and the following considerations:
(a) the imposition of taxes does not generally constitute an expropriation. The mere introduction of a new taxation measure, or the imposition of a taxation measure by more than one jurisdiction within a Party in respect of an investment, generally does not in and of itself constitute an expropriation;
(b) a taxation measure that is consistent with internationally recognised tax policies, principles, and practices should not constitute an expropriation. In particular, a taxation measure aimed at preventing the avoidance or evasion of taxation measures generally does not constitute an expropriation;
(c) a taxation measure that is applied on a non-discriminatory basis, as opposed to a taxation measure that is targeted at investors of a particular nationality or at specific taxpayers, is less likely to constitute an expropriation; and
(d) a taxation measure generally does not constitute an expropriation if it was already in force when the investment was made and information about the measure was publicly available.
Chapter 12. Government Procurement
Article 12.1. Scope
Application of Chapter
1. This Chapter shall apply to any measure regarding covered procurement.
2. For the purposes of this Chapter, "covered procurement" means a government procurement of goods, services or both:
(a) by any contractual means, including purchase, rental, hire purchase, or lease, with or without an option to buy, build-operate-transfer contracts and public works concessions contracts;
(b) for which the value, as estimated in accordance with this Article, equals or exceeds the relevant threshold specified in Annex 12-A;
(c) that is conducted by a procuring entity;
(d) that is not excluded from coverage by this Chapter; and
(e) subject to the conditions specified in Annex 12-A.
3. This Chapter shall not apply to:
(a) procurement of goods and services by a procuring entity of a Party from another entity of that Party, or between a procuring entity of a Party and a regional or local government of that Party;
(b) non-contractual agreements or any form of assistance that a Party provides, including grants, loans, equity infusions, fiscal incentives, subsidies, guarantees, and cooperative agreements;
(c) procurement for the direct purpose of providing foreign assistance;
(d) procurement of research and development services;
(e) procurement of goods and services outside the territory of the procuring Party, for consumption outside the territory of the procuring Party;
(f) public employment contracts;
(g) procurement conducted under the particular procedures or conditions of an international agreement relating to the stationing of troops or relating to the joint implementation by the signatory countries of a project, or under the particular procedures or conditions of an international organisation, or funded by international grants, loans, or other assistance to the extent that the provision of such assistance is subject to conditions inconsistent with this Chapter;
(h) procurement funded by grants or sponsorship payments received from a person other than a procuring entity of a Party;
(i) the acquisition or rental of land, buildings, or other immovable property or rights thereon where not part of an arrangement for procurement of construction services;
(j) procurement of financial advisory and asset management services pertaining to reserves held by each Party, including for the purposes of funding retirement benefits; or
(k) the procurement or acquisition of fiscal agency or depository services, liquidation and management services for regulated financial institutions, or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes, derivatives and other securities.
Valuation of Contracts