1. A Party may deny the benefits of this Agreement to an investor of the other Party that is an enterprise of the other Party and to its covered investments if persons of a non- Party own or control the enterprise and the denying Party (7):

(a) does not maintain diplomatic relations with the non- Party; or

(b) adopts or maintains measures with respect to the non- Party or a person of the non- 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. For the purpose of this Article, an enterprise is:

(a) "owned" by an investor if more than 50 percent of the equity interest in it is beneficially owned by the investor; and

(b) "controlled" by an investor if the investor has the power to name a majority of its directors or otherwise to legally direct its actions.

Article 12. Special Formalities and Information Requirements

1. Nothing in Article 3 (National Treatment) shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with covered investments, such as a requirement that covered investments be legally constituted or registered under the requirements of its legislation, provided that such formalities do not materially impair the protections afforded by the Party to investors of the other Party and to covered investments pursuant to this Agreement and are not used as means of avoiding the Party's commitments or obligations under this Agreement.

2. Notwithstanding Article 3 (National Treatment) and Article 4 (Most- Favoured-Nation Treatment), a Party may require an investor of the other Party or its covered investment to provide information concerning that investment solely for informational or statistical purposes. The Party shall protect such information that is confidential from any disclosure that would prejudice the competitive position of the investor or its covered investment.

Article 13. Non-Conforming Measures

1. Article 3 (National Treatment) and Article 4 (Most-Favoured-Nation Treatment) shall not apply to any measure covered by the exceptions to, or derogations from, obligations under the TRIPS Agreement.

2. Article 3 (National Treatment) and Article 4 (Most-Favoured-Nation Treatment) shall not apply to:

(a) any measure that a Party adopts or maintains with respect to government procurement;

(b) subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance;

(c) Any measure related to acquisition of rights to land and real estate.

3. For greater certainty, the Parties confirm their understanding that any requirement for nationality or residency of senior management or board of directors shall not be regarded inconsistent with Article 3 (National Treatment) and Article 4 (Most-Favoured-Nation Treatment).

4. Notwithstanding paragraphs 2 and 3, any existing measures, shall not, by themselves give rise to a breach of Article 3 (National Treatment) and Article 4 (Most-Favoured-Nation Treatment).

Article 14. General Exceptions

1. Notwithstanding Article 4 (Most-Favoured-Nation Treatment), nothing in this Agreement shall be construed so as to oblige a Party to extend to the investors of the other Party and to their covered investments the benefits of any treatment resulting from:

(a) any bilateral or multilateral international agreement for the promotion and protection of investments which was signed prior to the date of entry into force of this Agreement;

(b) any existing or future customs union, free trade area agreement, common market, economic union or similar international agreement, to which either Party is a party or may become a party; or

(c) any existing or future bilateral or multilateral agreement concerning intellectual property.

2. Subject to the requirement that such measures are not applied in an arbitrary or unjustifiable manner, and do not constitute a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting, maintaining or enforcing measures, including environmental measures, that are necessary to:

(a) protect human, animal or plant life or health;

(b) protect public morals or to maintain public order, provided that the public order exception may only be invoked where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society in accordance with Article XIV of the GATS;

(c) the protection of national treasures of artistic, historic or archaeological value;

(d) the conservation of living or non-living exhaustible natural resources, provided that such measures are made effective in conjunction with restrictions on domestic production or consumption; or

(e) secure compliance with the legislation which are not inconsistent with the provisions of this Agreement including those relating to:

i. the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contract (8);

ii. the protection of the privacy of the individual in relation to the processing and dissemination of personal data and the protection of confidentiality of personal records and accounts; and

iii. safety.

3. Nothing in this Agreement shall prevent the Parties from adopting or maintaining measures for prudential reasons, including:

(a) the protection of investors, depositors, policy holders, policy claimants, as well as financial market participants, or persons to whom a fiduciary duty is owed by a financial institution;

(b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and

(c) ensuring the integrity and stability of the Party's financial system.

Such measures shall be taken in good faith and shall not be used as means of avoiding a Party's commitments or obligations under this Agreement.

4. Nothing in this Agreement shall be construed:

(a) to require a Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests; or

(b) to preclude a Party from applying measures that it considers necessary for the fulfilment of its obligations under the United Nations Charter with respect to the maintenance or restoration of international peace or security, or for the protection of its own essential security interests, or in order to carry out obligations it has accepted for the purposes of maintaining international security.

Article 15. Senior Management and Board of Directors

1. Neither Party may require that an enterprise of that Party that is an investment of an investor of the other Party appoint to senior management positions, or as senior executives, a natural person of any particular nationality.

2. Without prejudice to paragraph 1, a Party may require that a majority or less of the board of directors, or any committee thereof, of an enterprise of that Party that is an investment of an investor of the other Party be of a particular nationality, or a resident in the Territory of the former Party, provided that:

(a) the requirement does not materially impair the ability of the investor to exercise control over its investment; and

(b) the nationality of members of the board or committee required thereunder is not of any non- Party which does not maintain diplomatic relations with the latter Party.

3. The provision of this Article shall be subject to the legislation of the Parties at the time of the entry into force of this Agreement.

Section C. Investor-State Dispute Settlement

Article 16. Consultation and Negotiation

1. In the event of an investment dispute, the claimant and the respondent should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding, third-party procedures.

2. The claimant shall deliver to the contact point of the respondent a written request for consultations and negotiations regarding an investment dispute setting out a brief description of facts regarding the measure or measures at issue.

3. For the purposes of this Article the Parties agree to establish Contact Points as follows:

(a) for Israel: the Ministry of Finance, Chief Economist Department, or its successor.

(b) for The United Arab Emirates: Ministry of Finance, International Organizations and Financial Relations Department.

4. For greater certainty, the initiation of consultations and negotiations shall not be construed as recognition of the jurisdiction of a tribunal.

Article 17. Submission of Claim to Arbitration

1. In the event that an investment dispute cannot be settled by consultation and negotiation according to Article 16 (Consultation and Negotiation) within six months from the date on which the claimant requested in writing the respondent for consultation and negotiation regarding an investment dispute, the claimant may submit the dispute to arbitration under this Article, claiming that:

(a) The respondent has breached an obligation under Section B (Investment Promotion and Protection); and

(b) The claimant has incurred loss or damage by reason of, or arising out of, that breach.

2. At least ninety days before submitting any claim to arbitration under this Section, a claimant shall deliver to the respondent a written notice of its intention to submit the claim to arbitration (notice of intent). The notice shall specify:

(a) the name and address of the claimant;

(b) for each claim, the provision of Section B (Investment Promotion and Protection) alleged to have been breached and any other relevant provisions;

(c) the legal and factual basis for each claim; and

(d) the relief sought and the approximate amount of damages claimed.

3. Provided that six months have elapsed since the claimant requested in writing the respondent for consultation and negotiation, the claimant may submit the dispute referred to in paragraph 2 to arbitration:

(a) under the ICSID Convention, provided that both Parties are parties to the ICSID Convention; or

(b) under the ICSID Additional Facility Rules, provided that either Party, but not both, is a party to the ICSID Convention; or

(c) under the UNCITRAL Arbitration Rules; or

(d) if the disputing parties agree, under any other arbitration institution or arbitration rules.

4. The claimant shall provide with the notice of arbitration:

(a) the name of the arbitrator that the claimant appoints; or

(b) the claimant's written consent for the Secretary-General to appoint that arbitrator.

5. A claim shall be deemed submitted to arbitration under this Article when the claimant's notice of or request for arbitration:

(a) referred to in paragraph 1 of Article 36 of the ICSID Convention is received by the Secretary-General of ICSID;

(b) referred to in Article 2 of Schedule C of the ICSID Additional Facility Rules is received by the Secretary-General of ICSID;

(c) referred to Article 3 of the UNCITRAL Arbitration Rules, together with the statement of claim referred to in Article 20 of the UNCITRAL Arbitration Rules, is received by the respondent; or

(d) under any other arbitration institution or arbitration rules selected under paragraph 3(d) is received by the respondent, unless otherwise specified by such institution or in such rules.

A claim asserted by the claimant for the first time after such notice of arbitration is submitted shall be deemed submitted to arbitration under this Section on the date of its receipt under the applicable arbitral rules.

Article 18. Consent of Each Party to Arbitration

1. Each Party hereby consents to the submission of a claim to arbitration under this Article in accordance with this Agreement.

The consent under paragraph 1 and the submission of a claim to arbitration under this Article shall be deemed to satisfy the requirements of:

(a) Agreement II of the ICSID Convention or the ICSID Additional Facility Rules for written consent of the parties; and

(b) Article II of the New York Convention for an agreement in writing.

Article 19. Conditions and Limitations on Consent of Each Party

1. No claim may be submitted to arbitration under this Article if more than three years have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged under Article 17(1) (Submission of Claim to Arbitration) and knowledge that the claimant has incurred loss or damage.

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 set out in this Article;

(b) the notice of arbitration is accompanied, for claims submitted to arbitration under Article 17 (Submission of Claim to Arbitration), by the claimant's written waiver of any right to initiate or continue, before any administrative tribunal or court under the law of either Party, or other dispute settlement procedures, including those in other bilateral or multilateral agreements which both Parties are parties to, any proceeding with respect to the subject matter of its claim or to any measure alleged to constitute a breach referred to in Article 17 (Submission of Claim to Arbitration); and

(c) no judgment or award has been delivered on the subject matter of the dispute with regard to any measure alleged to constitute a breach referred to in Article 17 (Submission of Claim to Arbitration) before any administrative tribunal or court under the law of either Party (10), other dispute settlement procedures or under the mechanisms mentioned in subparagraph (b). For greater certainty, if a local court has delivered a judgment on the subject matter of the dispute with regard to any measure alleged to constitute a breach referred to in Article 17(2) (Submission of Claim to Arbitration), an investor may not submit a claim to arbitration under the mechanisms mentioned in subparagraph (b).

3. Notwithstanding subparagraphs 2(b) and 2(c), the claimant may initiate or continue an action that seeks interim injunctive relief that does not involve the payment of monetary damages before an administrative tribunal or court of justice under the law of the respondent, provided that the action is brought for the sole purpose of preserving the claimant's rights and interests during the pendency of the arbitration.

Article 20. Selection of Arbitrators

1. Unless the disputing parties otherwise agree, the tribunal 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. The arbitrators appointed by each party may be nationals of the Parties or of countries with which both Parties maintain diplomatic relations.

2. The Secretary-General shall serve as appointing authority for an arbitration under this Section, in accordance with paragraph 3. If the Secretary-General is a national of either Party or a national of a non-Party that does not maintain diplomatic relations with either Party or otherwise prevented from discharging the said function, the Deputy Secretary-General shall be invited to make the appointment.

3. Ifa tribunal has not been constituted under the periods specified in the rules of arbitration provided in Article 17(3)(a)-(d) (Submission of Claim to Arbitration) or within ninety days of the date a claim is submitted to arbitration under this Section, the Secretary-General, on the request of a disputing party, shall appoint, in his or her discretion, the arbitrator or arbitrators not yet appointed. The Secretary-General shall not appoint a national of either Party as the presiding arbitrator unless the disputing parties otherwise agree.

4. For purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator on a ground other than nationality:

(a) the respondent agrees to the appointment of a national of the other Party to a tribunal established under the ICSID Convention or the ICSID Additional Facility Rules; and

(b) a claimant referred to in Article 17(1) (Submission of Claim to Arbitration) may submit a claim to arbitration under this Section, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the claimant agrees in writing to the appointment of a national of the other disputing party as a member of the tribunal.

5. Subject to the rights of the parties to the dispute provided for in this section to choose a national of each Party as an arbitrator, all arbitrators referred to under this section may not be nationals of states not having diplomatic relations with both Parties.

Article 21. Conduct of Arbitrators

The arbitrators shall:

(a) have experience or expertise in public international law, international investment rules, or in dispute settlement derived from international investment agreements;

(b) be independent from the Parties and the claimant, and not be affiliated with or receive instructions from any of them;

(c) not take instructions from any organisation or government with regard to matters before the tribunal for which they are appointed;

(d) avoid creating an appearance of bias and not be influenced by self-interest, outside pressure, political considerations, public clamour, loyalty to a Party, disputing party or any other person involved or participating in the proceeding, fear of criticism or financial, business, professional, family or social relationships or responsibilities;

(e) not, directly or indirectly, incur any obligation, or accept any benefit, enter into any relationship, or acquire any financial interest that would in any way interfere, or appear to interfere, with the proper performance of their duties, or that is likely to affect their impartiality;

(f) not use their position as a member to advance any personal or private interests and avoid actions that may create the impression that others are in a special position to influence them;

(g) perform their duties thoroughly and expeditiously throughout the course of the proceeding, and with fairness and diligence;

(h) avoid engaging in ex parte contacts concerning the proceeding; and

(i) consider only those issues raised in the proceeding and which are necessary for a decision or award and not delegate this duty to any other person.

Article 22. Place of Arbitration

1. The claimant and the respondent may agree on the Place of Arbitration.

2. If the claimant and the respondent fail to reach an agreement regarding the Place of Arbitration, the tribunal shall, in consultation with the disputing parties, determine the Place of Arbitration provided:

(a) that the place shall be in the territory of a Party or in the area of a non-Party that is a party to the New York Convention;

(b) that the determined Place of Arbitration is in accordance with the applicable arbitrational rules;

(c) that the tribunal has taken the disputing parties' views and interests into consideration, including with regard to the financial burden of the arbitration procedure; and

(d) that if determined location is in the territory of a non-Party it shall be a non- Party with which both Parties have diplomatic relations.

Article 23. Conduct of the Arbitration

1. In an arbitration procedure under this Section, the respondent shall not assert, as a defense, counterclaim, right of setoff or otherwise, that the claimant has received or will receive indemnification or other compensation for all or part of the alleged damages pursuant to an insurance or guarantee contract.

2. Unless the disputing parties have agreed to another expedited procedure for making preliminary objections, the Party which is the party to a dispute may, no later than 60 days after the constitution of the tribunal, and in any event before the first session of the tribunal, file an objection that a claim is manifestly without legal merit. The Party which is the party to the dispute shall specify as precisely as possible the basis for the objection. The tribunal, after giving the disputing parties the opportunity to present their observations on the objection, shall, at its first session or promptly thereafter, notify the disputing parties of its decision on the objection. The decision of the tribunal shall be without prejudice to the right of the Party which is the party to the dispute to file an objection to the jurisdiction of the tribunal or to object, in the course of the proceedings, that a claim lacks legal merit.

3. The tribunal may order security for costs upon request of the respondent. The tribunal shall especially consider ordering security for costs when there is a reason to believe:

(a) that the claimant will be unable or unwilling to pay, if ordered to do so, a reasonable part of attorney fees and other costs to the Party which is the party to the dispute; or

(b) that the claimant has divested assets to avoid the consequences of the arbitral proceedings.

Should the claimant fail to pay the security for costs ordered by the tribunal within the time period set by the tribunal, the tribunal may order the suspension or termination of the arbitral proceedings.

Article 24. Governing Law

1. Subject to paragraph 3 of this Article, when a claim is submitted under this Section, the tribunal shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.

2. For greater certainty, the tribunal shall be bound by the interpretation given to the domestic law by the courts or authorities which are competent to interpret the relevant domestic law, and any meaning given to the relevant domestic law made by the tribunal shall not be binding upon the courts and the authorities of either Party. The tribunal does not have jurisdiction to determine the legality of a measure, alleged to constitute a breach of this Agreement, under the domestic laws and regulations of the disputing Party.

3. In cases where reference to the WTO Agreement is made in an arbitration procedure under this Section, the tribunal shall consider relevant interpretation in reports of panels and the WTO Appellate Body adopted by the WTO Dispute Settlement Body regarding substantially equivalent rights or obligations of the Parties under the WTO Agreement, or any other multilateral treaty that deals with the same subject matter.

Article 25. Awards

1. Where a tribunal makes a final award against a respondent, the tribunal may award:

(a) monetary damages and applicable interest;

(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; or

(c) both.

2. A tribunal may at its own discretion also award costs and attorney's fees in accordance with this Section and the applicable arbitration rules.

3. Without Prejudice to paragraph 2, the monetary value of the award made under paragraph 1 shall not exceed monetary value of the loss or damage caused to the investor as a result of the breach determined by the tribunal.

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 the applicable arbitration rules and any applicable review procedure for an award available under these rules, the award shall be final and binding. A disputing party shall abide by and comply with an award without delay.

7. Each Party shall provide for the enforcement of an award in its territory.

8. A disputing party may seek enforcement of an arbitration award under the ICSID Convention if the award was given pursuant to the submission of the investment dispute to arbitration in accordance with Articles 17(3)(a) or 3(b) (Submission of Claim to Arbitration) or the New York Convention if the award was given pursuant to the submission of the investment dispute to arbitration in accordance with Articles 17(3)(c) or (d) (Submission of Claim to Arbitration).

Section D. Settlement of Dispute between the Parties

Article 26.

1. Each Party shall afford adequate opportunity for consultation, through diplomatic channels, regarding any dispute with the other Party concerning the interpretation or application of this Agreement.

2. Any dispute between the Parties as to the interpretation and application of this Agreement, not satisfactorily adjusted by diplomacy in accordance with paragraph 1 within a period of six months from notification of the dispute, shall upon request by either Party be referred for decision to an arbitration board.

3. Unless otherwise provided for in this Article, or in the absence of an agreement between the Parties to the contrary, the UNCITRAL Arbitration Rules shall apply to the proceedings of the arbitration board. However, these rules may be modified by the Parties or modified by the arbitrators appointed pursuant to paragraph 4, provided that both Parties agree to the modification. The arbitration board may, for its part, determine its own rules and procedures.

4. Within sixty days from the date of receipt by either Party from the other Party of a note requesting arbitration of the dispute, each disputing party shall appoint an arbitrator. The two arbitrators shall select a third arbitrator who, upon approval by both Parties, shall be appointed as the Chairperson, provided that the third arbitrator shall not be a national of either Party. The Chairperson shall be appointed within sixty days from the date of appointment of the other two arbitrators. All arbitrators may not be nationals of states not having diplomatic relations with both Parties. The UNCITRAL Arbitration Rules applicable to appointing members of three-member panels shall apply mutatis mutandis to other matters relating to the appointment of the arbitrators of the arbitration board provided that the appointing authority referenced in those rules shall be the Secretary-General of the Permanent Court of Arbitration at The Hague. If the Secretary-General of the Permanent Court of Arbitration at The Hague is a national of either Party, a national of a state not having diplomatic relations with both Parties, or otherwise prevented from discharging the said function, the Deputy Secretary-General of the Permanent Court of Arbitration at The Hague shall be invited to make the appointment.

5. Unless otherwise agreed by the Parties, all submissions of documents shall be made and all hearings shall be completed within a period of one hundred and eighty days from the date of selection of the third arbitrator. The arbitration board shall decide the dispute by a majority of votes in accordance with this Agreement and the rules of international law applicable to the subject matter, within sixty days from the date of the final submissions of documents or the date of the closing of the hearings, whichever is the later. Such decision shall be final and binding.

6. Each Party shall bear the cost of the arbitrator of its choice and its representation in the arbitral proceedings. The cost of the Chairperson of the arbitration board in discharging his or her duties and the remaining costs of the arbitration board shall be borne equally by the Parties.

7. Subject to the rights of the Parties provided for in this section to choose a national as an arbitrator, all arbitrators referred to under this section may not be nationals of states not having diplomatic relations with both Parties.