Title
AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF TÜRKIYE AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES CONCERNING THE RECIPROCAL PROMOTION AND PROTECTION OF INVESTMENTS
Preamble
The Government of the Republic of Tiirkiye and the Government of the United Arab Emirates hereinafter referred to as "the Contracting Parties";
Desiring to promote greater economic cooperation between them, particularly with respect to investment by investors of one Contracting Party in the territory of the other Contracting Party;
Recognizing that agreement upon the treatment to be accorded such investment will stimulate the flow of capital and technology and the economic development of the Contracting Parties;
Agreeing that fair and equitable treatment of investments is desirable in order to maintain a stable framework for investment and will contribute to maximizing effective utilization of economic resources and improve living standards; and
Convinced that these objectives can be achieved without relaxing health, safety, and environmental measures of general application as well as internationally recognized labor rights;
Having resolved to conclude an agreement concerning the reciprocal promotion and protection of investments;
Have agreed as follows:
Body
Article 1. Definitions
For the purposes of this Agreement;
1. The term "claimant" means an investor of a Contracting Party that is a party to an investment dispute with the other Contracting Party;
2. The term "covered investment" means, with respect to a Contracting Party, an investment:
(a) in its territory;
(b) directly or indirectly owned or controlled by an investor of the other Contracting Party; and
(c) existing on the date of the entry into force of this Agreement, or made or acquired thereafter;
3. The term "disputing party" means either the claimant or the respondent; "disputing parties" means the claimant and the respondent;
4. The term "enterprise" means an entity constituted or organized under the law of a Contracting Party whether or not for profit, whether privately or governmentally owned or controlled, including any company, corporation, trust, partnership, sole proprietorship joint venture, business association and a branch of any such entity;
5. The term "freely usable currency" means "freely usable currency" as determined by the International Monetary Fund under its Articles of Agreement;
6. The term "ICSID" means the International Centre for Settlement of Investment Disputes (ICSID) established by the ICSID Convention;
7. The term "ICSID Additional Facility Rules" means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Center for Settlement of Investment Disputes;
8. The term "ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done in Washington, 18 March 1965;
9. The term "investment" means every kind of asset, owned or controlled, directly or indirectly by an investor of a Contracting Party, which is connected with business activities, acquired for the purpose of establishing lasting economic relations in the territory of the other Contracting Party in conformity with its laws and regulations, and that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, the assumption of risk and shall include in particular, but not exclusively:
(a) an enterprise;
(b) movable and immovable property, as well as any other rights such as mortgages, leases, liens, pledges, and any other similar rights as defined in conformity with the laws and regulations of the Contracting Party in whose territory the property is situated;
(c) reinvested returns;
(d) claims to money or any other rights having a financial value related to an investment;
(e) shares, stocks, or any other form of participation in companies;
(f) industrial and intellectual property rights, in particular patents, industrial designs, technical processes, as well as trademarks, goodwill, and know-how;
(g) business concessions conferred by law or by contract, excluding concessions related to natural resources;
(h) bonds, debentures, and other forms of debt instruments in an enterprise.
For greater certainty, the term "Investment" shall not include:
(a) claims to money that arises from:
(i) commercial transactions for sales of goods and services;
(ii) extension of credit for financing commercial trade.
(b) However, sovereign debt of a Contracting Party or debt of a state enterprise shall be subjected to the applicable law, jurisdiction, and terms and conditions established in each relevant instrument;
10. The term "investor" means:
(a) natural persons having the nationality of a Contracting Party according to its laws;
(b) an enterprise incorporated or constituted under the law in force of a Contracting Party and having their registered offices together with substantial business activities in the territory of that Contracting Party;
who have made an investment in the territory of the other Contracting Party.
11. The term "investor of a Contracting Party" means any natural or legal person who is a national of one of the Contracting Parties under the laws of the Contracting Party whose nationality is invoked and who makes an investment in the territory of the other Contracting Party;
12. The term "investor of a non-Contracting Party" means, with respect to a Contracting Party, an investor that makes an investment in the territory of that Contracting Party but which is not an investor of either Contracting Party;
13. The term "laws and regulations" means, in respect of either Contracting Party, the laws and regulations applicable in the territory of that Contracting Party;
14. The term "measures" include a law, regulation, rule, procedure, decision, administrative action, requirement, practice, or any other form of measure by a Contracting Party or applicable in the territory of that Contracting Party;
15. The term "New York Convention" means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York, 10 June 1958;
16. The term "respondent" means the Contracting Party that is a party to an investment dispute;
17. The term "national of a Contracting Party" means:
(a) a natural person who is a national of a Contracting Party in accordance with its laws and regulations;
(b) legal persons constituted under the legislation of one of the Contracting Parties which have their principal place of business in the territory of such Contracting Party.
18. The term "returns" means the amounts yielded by an investment and includes, in particular, though not exclusively, profit, interest, capital gains, royalties, fees, and dividends;
19. The "territory" means:
(a) in respect of the Republic of Tiirkiye; the land territory, internal waters, the territorial sea and the airspace above them, as well as the maritime areas over which Türkiye has sovereign rights or jurisdiction for the purpose of exploration, exploitation, and preservation of natural resources whether living or non-living, pursuant to international law.
(b) in respect of the United Arab Emirates; the territory of the United Arab Emirates which is under its sovereignty as well as the area outside the territorial waters, airspace, and submarine areas over which the United Arab Emirates exercises sovereign and jurisdictional rights in respect of any activity carried on in its waters, seabed, subsoil in connection with the exploration for or the exploitation of the natural resources in accordance with international law.
20. The term "UNCITRAL Arbitration Rules" means the arbitration rules of the United Nations Commission on International Trade Law, as revised in 2010 or as subsequently agreed between the Contracting Parties.
Article 2. Scope of Application
1. This Agreement shall apply to investments in the territory of one Contracting Party, made in accordance with its national laws and regulations, by investors of the other Contracting Party, whether prior to or after the entry into force of the present Agreement. However, this Agreement shall not apply to any disputes that have arisen before its entry into force.
2. For greater certainty, this Agreement shall not be applicable to investments in the pre- establishment phase.
3. This Agreement substitutes and replaces the Agreement between the Republic of Turkey and the United Arab Emirates concerning the Reciprocal Promotion and Protection of Investments, signed on September 28, 2005 in Abu Dhabi, which will be terminated on the date of entry into force of this Agreement. The disputes submitted to arbitration after the date of the entry into force of this Agreement shall be settled in accordance with the provisions of this Agreement.
Article 3. Promotion and Protection of Investments
1. Subject to its laws and regulations, each Contracting Party shall encourage and promote in its territory as far as possible investments by investors of the other Contracting Party.
2. Investments of investors of each Contracting Party shall at all times be accorded treatment in accordance with customary international law minimum standard of treatment, including "fair and equitable treatment" and "full protection and security" in the territory of the other Contracting Party. Neither Contracting Party shall in any way impair the management, maintenance, use, operation, enjoyment, extension, sale, liquidation or disposal of such investments by unreasonable or discriminatory measures.
3. Each Contracting Party shall accord to an investment treatment in accordance with the customary international law minimum standard of treatment of aliens, including "fair and equitable treatment" and "full protection and security", where the violation of the "fair and equitable treatment" means, the following:
(a) denial of justice in criminal, civil or administrative proceedings;
(b) fundamental breach of due process of law;
(c) manifest arbitrariness;
(d) targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; or
(e) abusive treatment of investors, such as coercion, duress, and harassment.
4. "Full protection and security" requires each Contracting Party to take such measures as may be reasonably necessary to ensure the physical protection and security of the investment of an investor of the other Contracting Party.
5. The concepts of "fair and equitable treatment" and "full protection and security" in paragraph 2 do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.
6. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of paragraph 2 of this Article.
Article 4. Most Favored Nation Treatment
1. Each Contracting Party shall accord to the investors of the other Contracting Party and their investments treatment no less favorable than that accorded, in like circumstances, to investors of a third State and their investments, with respect to the management, conduct, operation, and disposal of investments.
2. It is understood that the reference to "like circumstances" in paragraph 1 requires a comprehensive examination, on a case-by-case basis, of all the circumstances of an investment, including, but not limited to:
(a) its effects on third parties and the local community;
(b) its effects on the local, regional, or national environment, including the cumulative effects of all investments in a jurisdiction on the environment;
(c) the sector in which the investor is located;
(d) the objective of the measure concerned; and
(e) the regulatory process generally applied to the measure concerned.
The review referred to in this paragraph shall not be limited or biased in favour of any one factor.
3. For greater certainty, the treatment referred to in paragraph 1 shall not include dispute settlement mechanisms, procedural or judicial matters, or commitments concerning the host Contracting Parties' substantive obligations under this Agreement or other international agreements.
4. The provisions of this Article relating to most-favoured-nation treatment shall not be construed as obliging a Contracting Party to extend to the investors of the other Contracting Party the benefit of any treatment, preference, or privilege which results from:
(a) an existing or future trade area, customs union, common market or similar international agreement to which either Contracting Party is or may become a party; or
(b) any international agreement or arrangement relating wholly or mainly to taxation or any domestic legislation relating wholly or mainly to taxation.
5. The provisions of this Article shall not apply to government contracts, grants, and loans, guarantees, and insurance given to governmentally owned enterprises.
Article 5. National Treatment
1. Subject to its laws and regulations, each Contracting Party shall accord to the investors of the other Contracting Party and to their investments treatment no less favourable than the treatment it accords in like circumstances to its own investors and to their investments, with respect to the management, conduct, operation, and disposal of investments.
2. The provisions of this Agreement shall not apply to government procurement and subsidies, grants, or loans to governmentally owned enterprises.
Article 6. General Exceptions
1. The provisions of Articles 4 and 5 of this Agreement shall not oblige the Contracting Parties to accord the investments of investors of the other Contracting Party the same treatment that it accords to the investments of its own investors with regard to the acquisition of land, real estates, and real rights thereof and these rights shall be governed by the laws and regulations of the host Contracting Party.
2. Nothing in this Agreement shall be construed:
(a) to require any Contracting Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests;
(b) to prevent any Contracting Party from taking any actions that it considers necessary for the protection of its essential security interests:
(i) relating to the traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishments;
(ii) taken in time of war or other emergency in international relations; or
(iii) relating to the implementation of national policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or
(c) to prevent any Contracting Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
3. The adoption, maintenance or enforcement of such measures is subject to the requirement that they are not applied in an arbitrary or unjustifiable manner or do not constitute a disguised restriction on investments of investors of the other Contracting Party.
Article 7. Expropriation and Compensation (1)
1. Investments shall not be expropriated, nationalized or subject, directly or indirectly, to measures of similar effects (hereinafter referred as expropriation) except for a public purpose, in a non-discriminatory manner, upon payment of prompt, adequate and effective compensation, and in accordance with due process of law and the general principles of treatment provided for in Article 3 of this Agreement.
2. Non-discriminatory legal measures designed and applied to protect legitimate public welfare objectives, such as health, safety, and environment, do not constitute indirect expropriation.
3. The determination of whether a measure or series of measures of a Contracting Party constitute measures having equivalent effect to expropriation requires a case-by-case, fact-based inquiry that considers:
(a) the economic impact of the measure or series of measures, although the sole fact that a measure or series of measures of the Contracting Party has an adverse effect on the economic value of an investment does not establish that such measure or series of measures constitute measures having equivalent effect to expropriation or nationalization;
(b) the extent to which the measure or series of measures interfere with distinct, reasonable investment-backed expectations arising out of the Contracting Party's prior binding explicit written commitment directly and specifically to the investor; and
(c) the character of the measure or series of measures, including their nature, purpose, duration, and rationale.
4. Compensation shall be equivalent to the market value of the expropriated investment before the expropriation was taken or became public knowledge. Compensation shall be paid without delay and be freely transferable as described in Article 10.
5. Compensation shall be payable in a freely convertible currency, and in the event that payment of compensation is delayed, it shall include an appropriate interest rate from the date of expropriation until the date of payment.
6. The investor whose investments are expropriated shall have the right, under the law of the expropriating Contracting Party, to contest and to prompt review by a judicial or other competent authority of that Contracting Party of its expropriation and of valuation of its investments in accordance with the principles set out in this Article.
7. Subject to international law on State immunities, the Government assets of a Contracting Party shall be immune from nationalization, expropriation, blocking, or freezing, and shall not be subject to such measures under any request by a third party.
8. This Article does not apply to the issuance of compulsory licences granted in relation to intellectual property rights, or to revocation, limitation, or creation of intellectual property rights, to the extent that such issuance, revocation, limitation, or creation is consistent with the applicable domestic law and regulations of either Contracting Party and international agreements on intellectual property of which both Contracting Parties are signatories.
Article 8. Right to Regulate
1. The Contracting Parties reaffirm their right to regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, social services, public education, safety, environment or public morals, social or consumer protection, privacy, and data protection.
2. For greater certainty, the mere fact that a Contracting Party regulates, including through a modification of its laws and regulations, in a manner that negatively affects an investment or interferes with an investor's expectations, including its expectations of profits, does not amount to a breach of an obligation under this Agreement.
3. For greater certainty, a Contracting Party's decision not to issue, renew or maintain a subsidy or grant:
(a) in the absence of any specific commitment under law or contract to issue, renew, or maintain that subsidy or grant; or
(b) if the decision is made in accordance with the terms or conditions attached to the issuance, renewal, or maintenance of the subsidy or grant if any,
does not constitute a breach of the provisions of this Agreement.
4. For greater certainty, nothing in this Agreement shall be construed as preventing a Contracting Party from discontinuing the granting of a subsidy or requesting its reimbursement where such measure has been ordered by a competent court, administrative tribunal, or other competent authority, or requiring that Contracting Party to compensate the investor therefore.
Article 9. Compensation for Losses
1. Investors of either Contracting Party whose investments suffer losses in the territory of the other Contracting Party owing to war, insurrection, civil disturbance, or other similar events shall be accorded by such other Contracting Party treatment no less favorable than that accorded to its own investors or to investors of any third State, whichever is the most favorable treatment, as regards any measures it adopts in relation to such losses.
2. Without prejudice to paragraph 1, investors of one Contracting Party who in any of the situations referred to in that paragraph suffer losses in the territory of the other Contracting Party resulting from:
(a) requisitioning of their property by its forces or authorities; or
(b) destruction of their property by its forces or authorities, which was not caused in combat action or was not required by the necessity of the situation;
shall be accorded restitution or compensation, which in either case shall be prompt, adequate, and effective, resulting payments shall be freely convertible.
Article 10. Repatriation and Transfers
1. Each Contracting Party shall guarantee in good faith all transfers related to an investment to be made freely, and without delay into and out of its territory, such transfers include:
(a) the initial capital and additional amounts to maintain or increase investment;
(b) returns;
(c) proceeds from the sale or liquidation of all or any part of an investment;
(d) compensation pursuant to Articles 7 and 9;
(e) reimbursements and interest payments deriving from loans in connection with the investments;
(f) salaries, wages, and other remunerations received by the nationals of one Contracting Party who have obtained in the territory of the other Contracting Party the corresponding work permits related to an investment;
(g) payments arising from an investment dispute.
2. Transfers shall be made in the convertible currency in which the investment has been made or in any freely usable currency at the rate of exchange in force at the date of the transfer unless otherwise agreed by the investor and the hosting Contracting Party.
3. Where, in exceptional circumstances, payments and capital movements cause or threaten to cause serious balance of payments difficulties, each Contracting Party may temporarily restrict transfers, provided that such restrictions are imposed on a non-discriminatory and in good faith basis and are consistent with the Articles of the Agreement of the International Monetary Fund.
Article 11. Prohibition of Performance Requirements
A Contracting Party shall not impose or enforce the following requirements or enforce a commitment or undertaking in connection with the expansion, management, conduct, or operation of a covered investment or any other investment in its territory;
(a) to export a given level or percentage of a good or service;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use, or accord a preference to a good produced or service provided in its territory, or to purchase a good or service from a person in its territory;
(d) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that investment;
(e) to restrict sales of a good or service in its territory that the investment produces or provides by relating those sales to the volume or value of its exports or foreign exchange earnings; or
(f) to transfer technology, a production process or other proprietary knowledge to a person in its territory.
Article 12. Subrogation
1. If one of the Contracting Parties has a public insurance or guarantee scheme to protect investments of its own investors against non-commercial risks, and if an investor of this Contracting Party has subscribed to it, any subrogation of the insurer under the insurance contract between this investor and the insurer, shall be recognized by the other Contracting Party.
2. The insurer is entitled by virtue of subrogation to exercise the rights and enforce the claims of that investor and shall assume the obligations related to the investment. The subrogated rights or claims shall not exceed the original rights or claims of the investor.
3. Disputes between a Contracting Party and an insurer shall be settled in accordance with the provisions of Article 13 of this Agreement.