Title
BILATERAL INVESTMENT AGREEMENT BETWEEN THE TAIPEI ECONOMIC AND CULTURAL CENTER IN INDIA AND THE INDIA TAIPEI ASSOCIATION IN TAIPEI
Preamble
Preamble
The Taipei Economic and Cultural Center in India ("TECC") and The India Taipei Association in Taipei ("ITA") (hereinafter referred to as the "Party" individually or the "Parties" collectively);
Desiring to promote bilateral cooperation between the Parties with respect to foreign investments;
Recognizing that the promotion and the protection of investments of investors of the territory of a Party, in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activity, to the development of economic cooperation between them and to the promotion of sustainable development; and
Reaffirming the right of the authorities to regulate investments in their territory in accordance with their and policy objectives.
Have agreed as follows:
Body
Chapter I. Preliminary
Article 1. Definitions
For the purposes of this Agreement:
1.1 "confidential information" means business confidential information, e.g. confidential commercial, financial or technical information which could result in material loss or gain or prejudice a disputing party's competitive position, and information that is privileged or otherwise protected from disclosure under the law of the territory in which investment is made;
1.2 "enterprise" means:
(a) any legal entity constituted, organised and operated in compliance with the law of the territory in which investment is made, including any company,limited liability partnership or a joint venture; and
(b) a branch of any such entity established in accordance with the law of the territory in which the investment is made and carrying out business activities there.
1.3 "investment" means an enterprise, directly or indirectly, owned or controlled in good faith by an investor in accordance with the law of the territory in which the investment is made, taken together with the assets of the enterprise, which has the characteristics of an investment such as the commitment of capital or other resources, certain duration, the expectation of gain or profit, the assumption of risk and sufficient contribution to the development of the Party in whose territory the investment is made. An enterprise may possess the following assets:
(a) shares, stocks and other forms of equity instruments of the enterprise or in another enterprise;
(b) a debt instrument or security of another enterprise;
(c) a loan to another enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the loan is at least three years;
(d) licenses, permits, authorisations or similar rights conferred in accordance with the law of the territory in which investment is made;
(e) rights conferred by contracts, including turnkey, construction, management, production, revenue-sharing, of a long-term nature such as those to cultivate, extract or exploit natural resources in accordance with the law of the territory; or
(f) Intellectual property as provided in Article 1 of the Trade Related Aspects of Intellectual Property Rights (TRIPs), refers to all categories of intellectual property that are the subject of Sections] through 7 of Part II of the TRIPs Agreement; and
(g) moveable or immovable property and related rights;
(h) any other interests of the enterprise which involve substantial economic activity and out of which the enterprise derives significant financial value;
For greater clarity, indirect investment means an investment made by an investor through a legal entity of a territory of a non-Party, where such legal entity is substantially owned or controlled, directly by the investor.
For greater clarity, investment does not include the following assets of an enterprise:
(i) portfolio investments of the enterprise or in another enterprise; For greater certainty, portfolio investments means investment through capital instruments where such investment is less than 10 percent of the post issue paid-up capital on a fully diluted basis of a listed enterprise or less than 10 percent of the paid up value of each series of capital instruments of a listed enterprise;
(ii) debt securities issued by an authority or an enterprise owned or controlled by an authority, or loans to an authority or an enterprise owned or controlled by an authority;
(ii) any pre-operational expenditure relating to admission, establishment, acquisition or expansion of the enterprise incurred before the commencement of substantial business operations of the enterprise in the territory where the investment is made;
(iv) claims to money that arise solely from commercial contracts for the sale of goods or services by a natural person or enterprise in the territory to an enterprise in the other territory;
(v) goodwill, brand value, market share or similar intangible rights;
(vi) claims to money that arise solely from the extension of credit in connection with any commercial transaction;
(vii) an order or judgment sought or entered in any judicial, administrative or arbitral proceeding; and
(viii) any other claims to money that do not involve the kind of interests or operations set out in the definition of investment in this Agreement.
1.4 "investor" means a natural or juridical person of a territory, other than a branch or representative office, that has made an investment in the other territory ;
For the purposes of this definition, a "juridical person" means:
(a) a legal entity that is constituted, organised and operated under the law of the territory and that has substantial business activities in that territory; or
(b) a legal entity that is constituted, organised and operated under the laws of a territory and that is directly or indirectly owned or controlled by a natural person of that territory or by a legal entity mentioned under subparagraph (a) herein.
1.5 "local authority" includes (a) an urban local body/authority, municipal body or village level body or (b) an enterprise owned or controlled by an urban local body/authority, municipal body or a village level body.
1.6 "measure" includes a law, regulation, rule, procedure, decision, administrative action, requirement or practice.
1.7 The term "Pre-investment activity" includes any activities undertaken by the investor or its enterprise prior to the establishment of the investment in accordance with the law of the territory in which the investment is made. Any activity undertaken by the investor or its investment pursuant to compliance with sectoral limitations on foreign equity, and other limits and conditions applicable under any law relating to the admission of investments in the territory where the investment is made in specific sectors falls within the meaning of "Pre-investment activity".
1.8 "Regional Authority" means an authority at the level of state/union territory but does not include local authority.
1.9 "Territory" in respect of the Parties means the territory, including the territorial seas and any maritime areas situated beyond the territorial seas, over which the authorities of the respective territories of the Parties exercise jurisdiction in accordance with international law and its relevant laws.
1.10 "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April, 1994.
1.11 The Annexures, Provisos and Footnotes in this Agreement constitute an integral part of this Agreement and are to be accorded the same effect as other provisions in this Agreement.
Article 2. Scope and General Provisions
2.1 This Agreement shall apply to measures adopted or maintained in the territory in which investment is made, relating to investments of investors of the other territory, in its territory, in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter, and which have been admitted in the territory in accordance with its law, regulations and policies.
2.2 Subject to the provisions of Chapter III of this Agreement, nothing in this Agreement shall extend to any Pre-investment activity related to establishment, acquisition or expansion of any investment, or to any measure related to such Pre-investment activities, including terms and conditions under such measure which continue to apply post-investment to the management, conduct, operation, sale or other disposition of such investments.
2.3 This Agreement shall not apply to claims arising out of events which occurred, or claims which have been raised prior to the entry into force of this Agreement.
2.4 This Agreement shall not apply to:
(a) any measure by a local authority;
(b) any law or measure regarding taxation, including measures taken to enforce taxation obligations;
For greater certainty, it is clarified that where the authority of a territory in which investment is made decides that conduct alleged to be a breach of its obligations under this Agreement is a subject matter of taxation, such decision, whether before or after the commencement of arbitral proceedings, shall be non-justiciable and it shall not be open to any arbitration tribunal to review such decision.
(c) the issuance of compulsory licenses granted in relation to intellectual property rights, or to the revocation, limitation or creation of intellectual property rights under domestic law, to the extent that such issuance, revocation, limitation or creation is consistent with the obligations under the WTO Agreement;
(d) procurement by the authorities of a territory;
(e) subsidies or grants provided by the authorities of a territory;and
(f) services supplied in the exercise of authority by the relevant body or authority of a territory. For the purposes of this provision, a service supplied in the exercise of authority means any service which is not supplied on a commercial basis.
Chapter II. Obligations of Authorities of a Territory
Article 3. Treatment of Investments
3.1 Investments made by investors shall not be subject to measures, by authorities of the territory in which the investment is made, which constitute a violation of customary international law through:
(a) Denial of justice in any judicial or administrative proceedings; or
(b) fundamental breach of due process; or
(c) targeted discrimination on manifestly unjustified grounds, such as gender, race or religious belief; or
(d) manifestly abusive treatment, such as coercion, duress and harassment.
3.2 Investments of investors of the other territory and investors with respect to their investments shall be accorded full protection and security. For greater certainty, "full protection and security" only refers to the authorities of the territory of a Party's obligations relating to physical security of investors and to investments made by the investors of the other territory and not to any other obligation whatsoever.
3.3 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 this Article.
3.4 In considering an alleged breach of this article, an Arbitral Tribunal shall take account of whether the investor or, as appropriate, the locally established enterprise, pursued action for remedies before domestic courts or tribunals prior to initiating a claim under this Agreement.
Article 4. Non-discrimination
4.1 Investor or investments made by investors of the other territory shall be accorded treatment no less favourable treatment than that accorded, in like circumstances, to its own investors or to investments by such investors with respect to the management, conduct, operation, sale or other disposition of investments in a territory.
4.2 The treatment accorded under Article 4.1 means, with respect to a Regional authority, treatment no less favourable than the treatment accorded, in like circumstances, by that Regional authority to investors, and to investments of investors, of the territory of which it forms a part.
Article 5. Expropriation
5.1 An investment of an investor of the other territory may not be nationalized or expropriated (hereinafter "expropriate") either directly or through measures having an effect equivalent to expropriation, except for reasons of public purpose, in accordance with the due process of law and on payment of adequate compensation. Such compensation shall be adequate and be at least equivalent to the fair market value of the expropriated investment immediately on the day before the expropriation takes place ("date of expropriation"), and shall not reflect any change in value occurring because the intended expropriation had become known earlier. Valuation criteria shall include going concern value, asset value including declared tax value of tangible property, and other criteria, as appropriate, to determine fair market value.
5.2 Payment of compensation shall be made in a freely convertible currency. Interest on payment of compensation, where applicable, shall be paid in simple interest at a commercially reasonable rate from the date of expropriation until the date of actual payment. On payment, compensation shall be freely transferable in accordance with Article 6 [Transfers].
5.3 The Parties confirm their shared understanding that:
(a) Expropriation may be direct or indirect:
(i) direct expropriation occurs when an investment is nationalised or otherwise directly expropriated through formal transfer of title or outright seizure; and
(ii) indirect expropriation occurs if a measure or series of measures of the authorities of the territory has an effect equivalent to direct expropriation, in that it substantially or permanently deprives the investor of the fundamental attributes of property in its investment, including the right to use, enjoy and dispose of its investment, without formal transfer of title or outright seizure.
(b) The determination of whether a measure or a series of measures
have an effect equivalent to expropriation requires a case-by-case, fact-based inquiry, that takes into consideration:
(i) the economic impact of the measure or series of measures, although the sole fact that a measure or series of measures has an adverse effect on the economic value of an investment does not establish that an indirect expropriation has occurred;
(ii) the duration of the measure or series of measures of the authorities of the territory;
(iii) the character of the measure or series of measures, notably their object, context and intent; and
(iv) whether a measure by the authorities of the territory breaches a prior binding written commitment to the investor whether by contract, licence or other legal document.
5.4 For the avoidance of doubt, an action taken by the authorities of the territory in its commercial capacity shall not constitute expropriation or any other measure having similar effect.
5.5 Non-discriminatory regulatory measures by the authorities of the territory or measures or awards by judicial bodies of the territory that are designed and applied to protect legitimate public interest or public purpose objectives such as public health, safety and the environment shall not constitute expropriation under this Article.
5.6 In considering an alleged breach of this Article, an Arbitral Tribunal shall take account of whether the investor or, as appropriate, the locally established enterprise, pursued action for remedies before domestic courts or tribunals prior to initiating a claim under this Agreement.
Article 6. Transfers
6.1 Subject to the law of a territory, all funds of an investor of the other territory related to an investment in the territory shall be permitted to be freely transferred and on a non-discriminatory basis. Such funds may include:
(a) contributions to capital;
(b) profits, dividends, capital gains and proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment;
(c) interest, royalty payments, management fees, and technical assistance and other fees;
(d) payments made under a contract, including a loan agreement; (e) payments made pursuant to Article 5 [Expropriation], Article 7(Compensation for losses] and under Chapter IV.
6.2 Unless otherwise agreed to between the Parties, currency transfer under Article 6.1 shall be permitted in the currency of the original investment or any other convertible currency. Such transfer shall be made at the prevailing market rate of exchange on the date of transfer.
6.3 Nothing in this Agreement shall prevent the authorities of the territory from conditioning or preventing a transfer through a good faith application of its law, including actions relating to:
(a) bankruptcy, insolvency or the protection of the rights of the creditors;
(b) compliance with judicial, arbitral or administrative decisions and awards;
(c) compliance with labour obligations;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
(e) issuing, trading or dealing in securities, futures, options, or derivatives;
(f) compliance with the law on taxation;
(g) criminal or penal offences and the recovery of the proceeds of crime;
(h) social security, public retirement, or compulsory savings schemes, including provident funds, retirement gratuity programs and employees insurance programs;
(i) severance entitlements of employees;
(j) requirement to register and satisfy other formalities imposed by the Central Bank and other relevant authorities of the territory of a Party; and
(k) in the case of ITA, requirements to lock-in initial capital investments, as provided in the authority's Foreign Direct Investment (FDI Policy, where applicable, provided that, any new measure which would require a lock-in period for investments will not apply to existing investments.
6.4 Notwithstanding anything in Article 6.1 and 6.2 to the contrary, an authority of a territory may temporarily restrict transfers in the event of serious balance-of-payments difficulties or threat thereof, or in cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies.
Article 7. Compensation for Losses
Investments of investors of one territory which suffer losses owing to war or other armed conflict, a state of national emergency or civil disturbances in other territory, will be given treatment, as regards restitution, indemnification, compensation or other settlement, no less favourable than that which the authorities of the latter territory accord to their own investors or to investors of any non-Party territory. Resulting payments shall be freely transferable.
Article 8. Subrogation
8.1 If an authority of a territory or its designated agency makes a payment to any of its investors under a guarantee or a contract of insurance it has entered into in respect of an investment, the validity of the subrogation in favour of such authority or agency thereof to any right or title held by the investor shall be recognized in the other territory.
8.2 An authority of a territory or its designated agency thereof which is subrogated to the rights of an investor in accordance with paragraph 1 of this Article shall be entitled in all circumstances to the same rights as those of the investor in respect of the investment. Such rights may be exercised by the authority or its designated agency thereof, or by the investor if the said authority or any agency thereof so authorizes.
Article 9. Entry and Sojourn of Personnel
Subject to the law in the territories relating to the entry and sojourn of non- citizens and on the basis of reciprocity, an authority of the territory shall permit natural persons of the other territory employed by the investor or the locally established enterprise to enter and remain in its territory for the purpose of engaging in activities connected with the investment.
Article 10. Transparency
10.1. Each Party shall, to the extent possible, ensure that the laws, regulations, procedures, and administrative rulings of general application in respect of any matter covered by this Agreement are promptly published or otherwise made available in such a manner as to enable interested persons and the other Party to become acquainted with them.
10.2 Each Party shall, as provided for in the laws and regulations in its territory: (a) publish any such measure that it proposes to adopt; and (b) provide interested persons and the other Party a reasonable opportunity to comment on such proposed measures.
10.3 Each Party shall, upon request by the other Party, promptly respond to specific questions from and provide information to the other Party with respect to matters referred to in Article 10.1.
10.4 Nothing in this Agreement shall require a Party to furnish or allow access to confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular juridical persons, public or private.
Chapter III. Investor Obligations
Article 11. Compliance with Laws
The Parties reaffirm and recognize that:
(a) Investors and their investments shall comply with all laws, regulations, procedures and administrative rulings of the territory of a Party concerning the establishment, acquisition, management, operation and disposition of investments.
(b) Investors and their investments shall not, either prior to or after the establishment of an investment, offer, promise, or give any undue pecuniary advantage, gratification or gift whatsoever, whether directly or indirectly, to a public servant or official of the territory of a Party as an inducement or reward for doing or forbearing to do any official act or obtain or maintain other improper advantage nor shall be complicit in inciting, aiding, abetting, or conspiring to commit such acts.
(c) Investors and their investments shall comply with the provisions of law of the territory concerning taxation, including timely payment of their tax liabilities.
(d) An investor shall provide such information as the authorities of territory may require concerning the investment in question and the corporate history and practices of the investor, for purposes of decision making in relation to that investment or solely for statistical purposes.
Article 12. Corporate Social Responsibility
Investors and their enterprises operating within each territory shall endeavour to voluntarily incorporate internationally recognized standards of corporate social responsibility in their practices and internal policies, such as statements of principle that have been endorsed or are supported by the authorities of the territories. These principles may address issues such as labour, the environment, human rights, community relations and anti-corruption.
Chapter IV. Settlement of Investment Disputes
Article 13. Scope and Definitions
13.1 Without prejudice to the rights and obligations of the authorities of the territories under Chapter V, this Chapter establishes a mechanism for the settlement of disputes between an investor and the authorities of the other territory.
13.2 This Chapter shall only apply to a dispute between the authorities of a territory and an investor of the other territory with respect to its investment, arising out of an alleged breach of an obligation of the authorities of the territory under Chapter Il of this Agreement, other than the obligation under Articles 9 [Entry and Sojourn of Personnel] and Article10 [Transparency] of this Agreement.
13.3 The Arbitral Tribunal constituted under this Chapter shall only decide claims in respect of a breach of this Agreement as set out in Chapter II, except under Articles 9 [Entry and Sojourn of Personnel] and Article10 [Transparency], and not disputes arising solely from an alleged breach of a contract between the authorities of the territory and an investor. Such disputes shall only be resolved by the domestic courts or in accordance with the dispute resolution provisions set out in the relevant contract.
13.4 An investor may not submit a claim to arbitration under this Chapter if the investment has been made through fraudulent misrepresentation, concealment, corruption, money laundering,conduct amounting to an abuse of process,or similar illegal mechanisms.
13.5 In addition to other limits on its jurisdiction, the Arbitral Tribunal constituted under this Chapter shall not have the jurisdiction to:
(a) review the merits of a decision made by a judicial authority of the territory; or
(b) accept any claim that is or has been subject of an arbitration under Chapter V.
13.6 A dispute between an investor and the authorities of the territory shall proceed sequentially in accordance with this Chapter.
13.7 For the purposes of this Chapter:
(a) "Defending Party" means the authorities of the territory against which a claim is made under this Article.
(b) "disputing party" means a Defending Party or a disputing investor.
(c) "disputing parties" means a disputing investor and a Defending Party.
(d) "disputing investor" means an investor of a territory that makes a claim against the authorities of the other territory on its behalf under this Article, and where relevant, includes an investor of a territory that makes aclaimon behalf of the locally established enterprise.
(e) "Non-disputing Party" means the authorities of the territory to this Agreement which is not a party to a dispute under Chapter IV of this Agreement.
(f) "UNCITRAL Arbitration Rules" means the arbitration rules of the United Nations Commission on International Trade Law.
(g) "New York Convention" means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards done at New York on 10 June, 1958.
(h) "ICC Arbitration Rules" means the Rules of Arbitration of the International Chamber of Commerce, in force as from 1 January 2012 and as amended thereafter.