(ii) a local level of goverment;
(b) the continuation or prompt renewal of any nonconforming measure referred to in subparagraph (a); or
(c) the modification of any non-conforming measure referred to in subparagraph (a) above. (a) provided that such modification does not diminish the degree of conformity of the measure, as in effect immediately prior to the modification, with Articles 12.5, 12.6, 12.9 and 12.10;
(d) Articles 12.5, 12.6, 12.9 and 12.10 shall not apply to any measure that a Party adopts or maintains, in relation to sectors, sub-sectors or activities, as indicated in its Schedule to Annex Il.
2. Article 12.6 shall not apply to treatment accorded by a Party pursuant to any Treaty or International Agreement, or with respect to sectors, subsectors, or activities, as set out in its Schedule to Annex Ill.
3. Neither 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 Il, 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. Articles 12.5, 12.6 and 12.10 shall not apply to:
(a) public procurement; or
(b) the continuation or prompt renewal of any nonconforming measure referred to in subparagraph (a); or
(c) the modification of any non-conforming measure referred to in subparagraph (a) above. (a) provided that such modification does not diminish the degree of conformity of the measure, as in effect immediately prior to the modification, with Articles 12.5, 12.6, 12.9 and 12.10;
(d) Articles 12.5, 12.6, 12.9 and 12.10 shall not apply to any measure that a Party adopts or maintains, in relation to sectors, sub-sectors or activities, as indicated in its Schedule to Annex Il.
2. Article 12.6 shall not apply to treatment accorded by a Party pursuant to any Treaty or International Agreement, or with respect to sectors, subsectors, or activities, as set out in its Schedule to Annex Ill.
3. Neither 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 Il, 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. Articles 12.5, 12.6 and 12.10 shall not apply to:
(a) public procurement; or
(b) subsidies or grants provided by a Party, including government-backed loans, guarantees and insurance.
Article 12.13. Special Formalities and Information Requirements
1. Nothing in Article 12.5 shall be construed to prevent a Party from adopting or maintaining a measure prescribing special formalities in connection with a covered investment, such as a requirement that investors be residents of the Party or that covered investments be constituted in accordance with the Party's laws or regulations, provided that such formalities do not significantly impair the protection afforded by a Party to investors of the other Party and covered investments under this Chapter.
2. Notwithstanding Articles 12.5 and 12.6, a Party may require an investor of the other Party or its covered investment to provide information relating to that investment solely for informational or statistical purposes. The Party shall protect business information that is confidential from any disclosure that could adversely affect the competitive position of the investor or the covered investment. Nothing in this paragraph shall be construed to prevent a Party from obtaining or disclosing information relating to the equitable and good faith application of its laws.
Article 12.14. Compensation for Damage or Loss
Investors of a Party and covered investments that suffer losses due to war, armed conflict, or civil disturbance in the territory of the other Party shall receive from the other Party, in respect of redress, indemnification, compensation or other settlement, treatment no less favorable than that accorded to its investors or to investments of its own investors, or to investors or investments of investors of any third State.
Article 12.15. Subrogation
1. Where a Party or an agency authorized by it has provided insurance or some other financial guarantee against non-commercial risks in respect of an investment of one of its investors in the territory of the other Party, the latter Party shall recognize the rights of the former Party, or agency authorized by it, to subrogate itself to the rights of the investor when it has made a payment under such insurance or guarantee.
2. Where a Party or an agency authorized by it has paid its investor and by virtue thereof has assumed its rights and benefits, such investor may not claim such rights and benefits from the other Party, unless expressly authorized by the first Party.
Article 12.16. Investment and the Environment
Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investments in its territory are made in compliance with the ecological or environmental laws of that Party.
Section B. Investor-State Dispute Settlement
Article 12.17. Consultation and Negotiation
Any dispute arising between an investor of a Party and the other Party shall be settled by the parties to a dispute, to the extent possible, by amicable agreement. Any dispute shall be communicated in writing by the investor to the Party receiving the investment, including a justification of the facts and points of law underlying the communication.
Article 12.18. Submission of a Claim
1. In the case of administrative acts, in order to submit a claim to the domestic forum or to the arbitration provided for in this Article, it shall be indispensable to previously exhaust governmental or administrative remedies, by the investor or its investment, when the legislation of the Party so requires. Such exhaustion may in no case exceed a period of six (6) months from the date of its initiation by the investor and shall not prevent the investor from requesting the consultations referred to in paragraph 3 of this Article.
2. To submit a claim to arbitration under this Chapter on the grounds that the respondent has breached its obligation not to deny justice and thereby failed to accord fair and equitable treatment in accordance with customary international law, the investor shall have exhausted domestic jurisdictional remedies, unless:
(a) there is no remedy in the domestic legislation of the Party for the protection of the right alleged to have been violated; or if there is a remedy, the principle of due process embodied in the principal legal systems of the world is not guaranteed;
(b) has not been allowed access to domestic remedies, or has been prevented from exhausting them; or
(c) there is unjustified delay in the decision on the aforementioned appeals. 3. Nothing in this Article shall be construed to prevent the parties to a dispute, by mutual agreement, from resorting to mediation or conciliation, ad hoc or institutional, before or during the arbitration proceedings.
4. In the event that a disputing party considers that an investment dispute cannot be resolved through consultation and negotiation:
(a) the claimant, at its own expense, may submit to arbitration a claim alleging:
(i) that the Respondent has breached an obligation under Section A; and
(ii) that the claimant has suffered loss or damage by reason of or as a result of such breach;
(b) the claimant, 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 alleging:
(i) that the Respondent has breached an obligation under Section A, and
(ii) that the company has suffered loss or damage by reason of, or as a result of, such breach.
5. If the dispute cannot be resolved in this manner within nine days of the date of the dispute (9) months from the date of the written communication referred to in Article 12.17, the dispute may be submitted, at the option of the investor, to:
(a) an ad-hoc arbitral tribunal which, unless otherwise agreed by the disputing parties, shall be established in accordance with the UNCITRAL Arbitration Rules; or
(b) the ICSID Convention and the Rules of Procedure Applicable to ICSID Arbitration Proceedings, provided that both the respondent and the Party of the claimant are parties to the ICSID Convention; or
(c) the ICSID Additional Facility Rules provided that either the respondent or the Party of the claimant, but not both, is a party to the ICSID Convention; or
(d) an arbitral tribunal under another arbitration institution or under other arbitration rules agreed upon by the Parties.
6. Whenever the period of time provided for in paragraph 5 of this Article has elapsed and at least ninety (90) days before a claim is submitted to arbitration under this Section, the claimant shall deliver to the respondent a written notice of its intention to submit the claim to arbitration. The notice shall specify:
(a) the name and address of the claimant and if the claim is submitted on behalf of a company, the name, address and place of incorporation of the company;
(b) for each claim, the provision of this Chapter alleged to have been violated;
(c) the grounds for each claim, namely:
(i) questions of fact and law; (ii) losses or damages generated to the investment; and
(iii) the causal link between the violation of the Chapter and the loss or damage to the investment; and
(d) the relief sought and the approximate amount of damages claimed.
7. No claim may be submitted to arbitration under this Section unless:
(a) the plaintiff consents in writing to submit to arbitration, in accordance with the procedures provided for in this Agreement; and
(b) the request for arbitration is accompanied:
(i) of the claimant's written waiver of claims submitted to arbitration under this Article; and
(ii) of the claimant's and the enterprise's written waivers of claims submitted to arbitration under this Article;
of any right to initiate before any judicial or administrative tribunal under the law of any Party, or other dispute settlement procedures, any action with respect to any measure alleged to constitute a breach referred to in this Article.
8. Notwithstanding paragraph 7(b), a claimant for claims initiated under this Article may initiate or continue an interim measure of protection, not involving the payment of monetary damages, before a judicial or administrative tribunal of the respondent, provided that such measure is brought for the sole purpose of preserving the rights and interests of the claimant or the enterprise during the pendency of the arbitration. (7)
Article 12.19. Consent of Each Party to Arbitration
Each Party gives its irrevocable consent in advance that any dispute relating to an investment may be submitted to any of the arbitral proceedings referred to in Article 12.18(5)(b), (c) and (d).
Article 12.20. Venue of Arbitration Proceedings
The disputing parties may agree on the legal place where any arbitration is to be held in accordance with the applicable arbitral rules, in accordance with Article 12.18(5). In the absence of agreement between the disputing parties, the Tribunal shall determine such place in accordance with the applicable arbitral rules, provided that the place is in the territory of a State that is a party to the New York Convention.
Article 12.21. Selection of Arbitrators
1. Unless the disputing parties agree otherwise, the Tribunal shall be composed of three (3) 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. In the event that a disputing party fails to appoint an arbitrator or if no agreement is reached on the appointment of the President of the Tribunal, the Secretary General shall appoint the arbitrators in the arbitration proceedings in accordance with this Section.
3. If a tribunal has not been constituted within seventy-five (75) days from the date on which the claim was submitted to arbitration pursuant to this Section, the Secretary-General shall, at the request of a disputing party, appoint within a period not to exceed ninety (90) days under this Section the arbitrator or arbitrators not yet appointed. (8) In any event, the majority of the arbitrators shall not be nationals of the disputing Party or nationals of the Party of the disputing investor.
4. The Secretary General shall appoint the President of the Tribunal within ninety (90) days of the request referred to in paragraph 3. In the event that there is no agreement between the parties after the Secretary-General has proposed three (3) candidates for President of the Tribunal from the list pursuant to paragraph 5 of this Article, and no arbitrator is available on the list to preside over the Tribunal, the Secretary-General shall appoint, from the ICSID Panel of Arbitrators, the President of the Tribunal, provided that he or she is of a nationality other than that of the disputing Party or the Party of the disputing investor.
5. As of the date of entry into force of this Agreement, the Parties shall establish and maintain a list of sixteen (16) arbitrators as potential presidents of the Tribunal, who meet the requirements of the ICSID Convention and the rules referred to in Article 12.18 and who have experience in international and investment law. Each Party shall nominate four (4) candidates for President. In the event of the death or resignation of a member of the list, the appointing Party shall designate another person to replace him or her for the remainder of the term for which he or she was appointed.
6. For the purposes of Article 39 of the ICSID Convention and Article 7 of Part C of the ICSID Additional Facility Rules, and without prejudice to objecting to an arbitrator on grounds other than nationality:
(a) the respondent accepts the appointment of each of the members of the Tribunal established in accordance with this Article, or alternatively with the Agreement of the ICSID CONVENTION or with the Rules of ICSID Additional Facility Rules;
(b) the claimant referred to in Article 12.18 (4) (a) may pursue a claim under the ICSID Convention or the ICSID Additional Facility Rules only on condition that at the preliminary hearing under ICSID Arbitration Rule 21 or under Article 29 of the ICSID Additional Facility Arbitration Rules, the claimant consents in writing to the appointment of each member of the Tribunal; and
(c) the claimant referred to in Article 12.18(4)(b) may pursue a claim under the ICSID Convention or the ICSID Additional Facility Rules only on condition that at the preliminary hearing under ICSID Arbitration Rule 21 or under Article 29 of the ICSID Additional Facility Arbitration Rules, the claimant and the enterprise consent in writing to the appointment of each of the members of the Tribunal.
Article 12.22. Conditions and Limitations on Parties' Consent
1. The investor may not file a claim if more than three (3) years have elapsed from the date on which the investor knew or should have known of the alleged violation of this Chapter, as well as of the losses or damages suffered.
2. Once the investor has initiated a proceeding before a competent tribunal of the Party in whose territory the investment was admitted or has notified the other Party of its intention to initiate any of the arbitral proceedings referred to in Article 12.18(5), the choice of one or the other proceeding shall be final.
Article 12.23. Conduct of the Arbitration
1. The Parties shall refrain from dealing through diplomatic channels with matters related to disputes between a Party and an investor of the other Party, which are subject to judicial proceedings or international arbitration pursuant to the provisions of this Section, except in the event that one of the disputing parties has not complied with the court judgment or the award of the arbitral tribunal, under the terms set forth in the respective judgment or arbitral award.
2. A non-disputing Party may make oral or written submissions to the Tribunal concerning the interpretation of this Agreement.
3. The Tribunal shall have the authority to accept and consider amicus curiae briefs from a person or entity that is not a disputing party. Each submission must be submitted in Spanish or with a Spanish translation and identify its owner and any person or organization that has provided or will provide any financial or other assistance in the preparation of the submission.
4. In order to accept and consider an amicus curiae brief, the Court must ensure:
(a) the matters in dispute are of public interest, and the resolution of which could affect, directly or indirectly, persons other than the disputing parties; and
(b) the person or entity submitting the amicus curiae brief proves to the Tribunal a legitimate interest in submitting the brief and demonstrates to the Tribunal the expertise and independence necessary for his or her brief to be of assistance to the Tribunal.
5. The Tribunal shall decide preliminary objections, such as objections as to jurisdiction or admissibility, before deciding on the merits of the case. A tribunal shall also hear and decide as a preliminary question any objection by the respondent that, as a matter of law, the claim submitted is not a claim in respect of which an award in favor of the claimant may be made under Article 12.29.
(a) Such objection shall be submitted to the Tribunal as soon as possible after the constitution of the Tribunal, and in no event later than the date the Tribunal fixes for the Respondent to file its Statement of Defense (or in the case of an amendment to the Request for Arbitration, the date the Tribunal fixes for the Respondent to file its Answer to the amendment).
(b) Upon receipt of an objection under this paragraph, the Tribunal shall suspend any action on the merits of the dispute, establish a timetable for consideration of the objection that shall be consistent with any timetable that has been established for consideration of any other preliminary issue and issue a decision or award on the objection, setting forth the grounds therefor.
(c) In deciding an objection under this paragraph, the Tribunal shall take as true the factual allegations submitted by the claimant in support of any claim contained in the Request for Arbitration (or any modification thereof) and, in disputes brought under the UNCITRAL Arbitration Rules, the Statement of Claim referred to in Article 18 of the UNCITRAL Arbitration Rules. The Tribunal may also consider any other relevant facts not in dispute.
(d) The respondent does not waive any objection with respect to jurisdiction or any substantive argument, merely because it has or has not raised an objection under this paragraph, or avails itself of the expedited procedure set forth in paragraph 6.
6. If the Respondent so requests, the Tribunal shall, within forty-five (45) days after the constitution of the Tribunal, decide, in an expeditious manner, an objection under paragraph 5 and any other objection that the dispute is not within the jurisdiction of the Tribunal. The Tribunal shall suspend any action on the merits of the dispute and shall render a decision or award on such objection, stating the basis thereof, not later than one hundred and fifty (150) days after the date of the request. However, if a disputing party requests a hearing, the Tribunal may take an additional thirty (30) days to issue the decision or award. Regardless of whether a hearing has been requested, the Tribunal may, upon a showing of extraordinary cause, delay rendering its decision or award for an additional brief period, which may not exceed thirty (30) days.
7. When the Tribunal decides a respondent's objection under paragraph 4 or 5, it shall, if warranted, award to the prevailing disputing party reasonable costs and attorney's fees incurred in raising or opposing the objection. In determining whether such an award is warranted, the Tribunal shall consider whether the claimant's claim or the respondent's objection was frivolous, and shall give the disputing parties a reasonable opportunity to comment. In the case of a frivolous claim the Tribunal shall order the claimant to pay the costs.
8. (a) In any arbitration conducted pursuant to this Section, at the request of any disputing party, the Tribunal shall, before rendering a decision or award on liability, communicate its proposed decision or award to the disputing parties and to the non-disputing Parties. Within sixty (60) days after such proposed decision or award is communicated, the disputing parties may submit written comments to the Tribunal concerning any aspect of its proposed decision or award. The Tribunal shall consider such comments and render its decision or award no later than forty-five (45) days after the expiration of the sixty (60) day comment period.
(b) Paragraph (a) shall not apply to any arbitration conducted pursuant to this Section in which an appeal is available under paragraph 9.
9. If a separate multilateral treaty enters into force between the Parties establishing an appellate body for the purpose of review of arbitral awards rendered by tribunals constituted under international trade or investment agreements to hear investment disputes, the Parties shall endeavor to reach an agreement that would cause such appellate body to review awards rendered pursuant to Article 12.29 of this Section in arbitrations commenced after such treaty enters into force for the Parties.
Article 12.24. Transparency of Arbitral Proceedings
1. Subject to paragraphs 2 and 4, the Respondent shall promptly deliver to the non-disputing Parties the following documents and make them available to the public:
(a) the notice of intent;
(b) the request for arbitration;
(c) the pleadings, statements of claim and explanatory notes submitted to the Tribunal by a disputing party and any written communications submitted pursuant to Articles 12.23 and 12.28;
(d) minutes or transcripts of Tribunal hearings, when available; and (e) orders, awards and decisions of the Tribunal.
2. Unless a reasoned objection by a disputing party is duly considered by the Tribunal and subject to its decision, the Tribunal shall conduct hearings open to the public and determine, in consultation with the disputing parties, the appropriate logistical arrangements. However, any disputing party intending to use at a hearing information classified as protected information shall so inform the Tribunal. The Tribunal shall make appropriate arrangements to protect the information from disclosure.
3. Nothing in this Section requires the Respondent to make available protected information or to provide or permit access to information that it may withhold pursuant to Article 19.2 (National Security) or Article 19.4 (Disclosure of Information).
4. Any protected information submitted to the Tribunal shall be protected from disclosure in accordance with the following procedures:
(a) subject to subparagraph (d), neither the disputing parties nor the Tribunal shall disclose to any non-disputing Party or to the public any protected information when the disputing party providing the information clearly designates it as such in accordance with subparagraph (b);
(b) any disputing party claiming that certain information constitutes protected information shall clearly designate it at the time it is submitted to the Tribunal;
(c) a disputing party shall, at the same time it submits a document containing information claimed to be protected information, submit a redacted version of the document that does not contain the protected information. Only the redacted version shall be provided to the non-disputing Parties and shall be made public in accordance with paragraph 1; and
(d) the Tribunal shall decide any objection to the designation of information claimed to be protected information. If the Tribunal determines that such information was not properly designated, the disputing party that submitted the information may:
(i) remove all or part of the presentation containing such information, or
(ii) agree to resubmit complete and redacted documents with corrected designations in accordance with the Tribunal's determination and (c).
In any event, the other disputing party shall, where necessary, resubmit complete and redacted documents, which either omit the information withdrawn pursuant to subparagraph (i) by the disputing party that first submitted the information or redesignate the information in a manner consistent with the designation made pursuant to subparagraph (ii) of the disputing party that first submitted the information.
5. Nothing in this Section requires a respondent to deny the public access to information that, under its law, must be disclosed.
Article 12.25. Applicable Law
1. The dispute settlement mechanisms provided for in this Section shall be based on the provisions of this Chapter, international law and customary international law, general principles of law and the national law of the Party in whose territory the investment has been made, including the rules relating to conflicts of laws.
2. A decision of the Commission declaring the interpretation of a provision of this Chapter under Article 17.1 (Treaty Administrative Commission) shall be binding on a tribunal established under this Section and any decision or award rendered by the tribunal shall be consistent with that decision.
Article 12.26. Interpretation of Annexes
1. Where the Respondent raises as a defense that the measure alleged to be in breach is within the scope of Annex I, Annex Il or Annex Ill, the Tribunal shall, at the request of the Respondent, request the Commission for an interpretation of the matter. Within sixty (60) days of the delivery of the request, the Commission shall submit in writing to the Tribunal any decision stating its interpretation, pursuant to Article 17.1 (Treaty Administrative Commission).
2. The decision rendered by the Commission pursuant to paragraph 1 shall be binding on the Tribunal and any decision or award rendered by the Tribunal shall be consistent with that decision. If the Commission fails to issue such a decision within sixty (60) days, the Tribunal shall decide the matter.
Article 12.27. Expert Reports
Without prejudice to the appointment of other types of experts where authorized by the applicable arbitration rules, the Tribunal, at the request of a disputing party or, unless the disputing parties do not agree, on its own initiative, may appoint one or more experts to report in writing on any factual issue concerning environmental, health, safety or other scientific matters raised by a disputing party in a proceeding, on such terms and conditions as the disputing parties may agree.
Article 12.28. Joinder of Proceedings
1. Where two or more separate claims have been submitted to arbitration under Article 12.18(5) and the claims raise in common a question of law or fact and arise out of the same facts or circumstances, any disputing party may seek a consolidation order pursuant to the agreement of all disputing parties in respect of which the consolidation order is sought or in accordance with the terms of paragraphs 2 through 8.
2. A disputing party seeking a consolidation order pursuant to this Article shall deliver a request, in writing, to the Secretary-General and to all disputing parties in respect of which the consolidation order is sought and shall specify in the request the following:
(a) the name and address of all disputing parties in respect of whom the joinder order is sought;
(b) the nature of the requested consolidation order; and
(c) the basis on which the request is supported.
3. Unless the Secretary-General determines, within thirty (30) days after receipt of a request pursuant to paragraph 2, that the request is manifestly unfounded, a tribunal shall be established under this Article.
4. Unless otherwise agreed by all the disputing parties in respect of which the consolidation order is sought, the Tribunal to be established pursuant to this Article shall consist of three (3) arbitrators:
(a) an arbitrator appointed by agreement of the claimants;
(b) an arbitrator appointed by the respondent; and
(c) the presiding arbitrator appointed by the Secretary General, who shall not be a national of either Party.
5. If, within sixty (60) days after receipt by the Secretary-General of the request made pursuant to paragraph 2, the respondent or the claimants fail to appoint an arbitrator pursuant to paragraph 4, the Secretary-General shall, at the request of any of the disputing parties in respect of which the order for consolidation is sought, appoint the arbitrator or arbitrators not yet appointed. If the respondent fails to appoint an arbitrator, the Secretary-General shall appoint a national of the disputing party and, if the claimants fail to appoint an arbitrator, the Secretary-General shall appoint a national of a party of the claimants. The appointment shall be made in accordance with Article 12.21(3).
6. In the event that the Tribunal established pursuant to this Article has found that two or more claims under Article 12.18 (5), raising a common question of law or fact, and arising out of the same facts or circumstances, have been submitted to arbitration, the Tribunal may, in the interest of reaching a fair and efficient resolution of the claims and after hearing the disputing parties, by order:
(a) assume jurisdiction over and hear and determine jointly all or part of the claims;
(b) assume jurisdiction over and hear and determine one or more claims, the determination of which it considers would contribute to the resolution of the other claims; or
(c) direct a Tribunal previously established under Article 12.21 to assume jurisdiction over and hear and determine jointly all or part of the claims, provided that:
(i) that Tribunal, at the request of any claimant that was not previously a disputing party before that Tribunal, is reinstated with its original members, except that the arbitrator on the claimants' side shall be appointed under paragraphs 4(a) and 5; and
(ii) that tribunal decides whether to repeat any previous hearing.
7. Where a Tribunal has been established under this Article, a claimant who has submitted a claim to arbitration under Article 12.18(5), and whose name is not mentioned in an application made under paragraph 2, may make a written application to the Tribunal for the purpose of having such claimant included in any order made under paragraph 6 and shall specify in the application:
(a) the name and address of the claimant;
(b) the nature of the order for joinder sought; and
(c) the grounds on which the application is based.
The claimant shall deliver a copy of its request to the Secretary General.
8. A Tribunal established under this Article shall conduct the proceedings in accordance with the UNCITRAL Arbitration Rules, except as modified by this Section.
9. A Tribunal established under Article 12.21 shall not have jurisdiction to decide a claim, or part of a claim, in respect of which a Tribunal established or instructed under this Article has assumed jurisdiction.
10. On the request of a disputing party, a tribunal established under this Article may, pending its decision under paragraph 6, order that the proceedings of a Tribunal established under Article 12.21 be adjourned, unless the latter Tribunal has already adjourned its proceedings.
Article 12.29. Awards
1. Arbitral awards shall be final and binding only upon the disputing parties and only in respect of the particular case.