Title

AGREEMENT BETWEEN THE UNITED ARAB EMIRATES AND THE EASTERN REPUBLIC OF URUGUAY FOR PROMOTION AND PROTECTION RECIPROCAL OF INVESTMENTS

Preamble

The United Arab Emirates and the Eastern Republic of Uruguay (hereinafter referred to as the "Contracting Parties")

Desiring to promote greater economic co-operation, with respect to investments made by investors of one Contracting Party in the territory of the other Contracting Party, on the basis of mutual benefit

Recognizing that an agreement for the reciprocal promotion and protection of investments will stimulate the flow of capital and the economic development of the Contracting Parties;

Accepting that a stable framework for investment will enhance the effective use of economic resources and improve living standards;

Desiring to achieve these objectives in a manner consistent with the protection of health, safety and the environment in line with public policy objectives;

Encouraging the sustainable development of the Contracting Parties

Have agreed as follows:

Body

Article 1. Definitions

For the purposes of this Agreement:

1. The term "investor of a Contracting Party" means a natural or legal person of that Contracting Party which has made an investment in the territory of the other Contracting Party:

(a) a natural person means a national of a Contracting Party in accordance with its laws and regulations

(b) a legal person of a Contracting Party means any legal entity duly constituted or organised under the laws and regulations of that Contracting Party, whether for profit or not and whether public or private, such as a company, partnership, commercial association, sole proprietorship or other entity, having its headquarters (1) in the territory of that other Contracting Party, and carrying out significant business activities in the territory of that other Contracting Party;

2. The term "investment" (2) means any type of asset owned or controlled, directly or indirectly, by investors of one Contracting Party in the territory of the other Contracting Party in accordance with its laws and regulations, and shall include the following:

(a) movable and immovable property as well as any related property rights such as mortgages, pledges, usufruct;

(b) shares, capital stock and other forms of participation in companies;

c) bonds, debentures, loans and other forms of debt and rights or interest derived therefrom;

(d) intellectual property rights, as defined in multilateral agreements concluded under the auspices of the World Intellectual Property Organization, to the extent that both Contracting Parties are parties thereto, including copyrights and related rights, industrial property rights, trademarks, patents, trade secrets, trade names and trade dress.

The investment is:

"owned" by an investor, if more than fifty percent of the equity interest benefits the investor;

"controlled" by an investor if the investor has the power to appoint the majority of its directors or otherwise legally direct its shares;

Changes in the manner in which assets are invested will not affect their investment character, provided that such changes do not contradict the approvals granted, if any, to the assets originally invested.

Consequently, the investments will not be:

(i) financial claims arising exclusively from:

i.i) commercial contracts for the sale of goods or services by a national or legal entity in the territory of a Contracting Party to a legal entity in the territory of the other Contracting Party; or

i.ii) the extension of credit in connection with a commercial transaction, such as a financial exchange; or

(ii) any other pecuniary claim not involving the rate of interest set out in subparagraphs (a) to (d);

For greater certainty, to qualify as an investment, an asset must have the characteristics of an investment, such as the contribution of capital or other resources, the expectation of gain or profit, and the assumption of risk. Market share and expectation of profit are not in themselves considered an investment.

In the case of the United Arab Emirates, this Agreement shall not include natural resources.

In the case of the Eastern Republic of Uruguay, the exploration, exploitation and extraction of natural resources are conferred in accordance with the laws and regulations in force.

3. The term "national" means:

(a) for the United Arab Emirates, a natural person who holds the citizenship of the United Arab Emirates in accordance with its laws and regulations

(b) for the Eastern Republic of Uruguay, a natural person who holds the citizenship of Uruguay in accordance with its laws and regulations.

4, The term "return" refers to income from an investment and includes, in particular but not exclusively: profits, dividends, capital gains, interest, royalties and any other rights.

5. The term "freely convertible currency" means any currency that is widely used in international transactions and has liquidity in the major exchange markets, as determined by the International Monetary Fund in accordance with the Articles of Agreement of the International Monetary Fund and amendments thereto.

6. The term "territory" means with respect to:

(a) the Eastern Republic of Uruguay: the territory, internal waters, territorial sea, airspace under its sovereignty, exclusive economic zone and continental shelf, in respect of which the Eastern Republic of Uruguay exercises sovereign rights and jurisdiction in accordance with international law and its domestic laws and regulations.

(b) the United Arab Emirates means the territory of the United Arab Emirates, its territorial waters, airspace and submarine areas over which the United Arab Emirates exercises sovereignty, in accordance with international law and the laws of the United Arab Emirates sovereign rights, including the Exclusive Economic Zone and the mainland and islands under its jurisdiction in respect of any activities carried on in its waters, on the seabed and in the subsoil thereof in connection with the exploration or exploitation of natural resources under its law and international law.

Article 2. Promotion and Encouragement of Investments

1. Each Contracting Party shall encourage and create the most favourable conditions possible for investors of the other Contracting Party to make investments in its territory and to admit such investments in accordance with its laws and regulations.

2. In order to encourage the flow of mutual investments, each Contracting Party shall use its best endeavours to inform the other Contracting Party, at the request of either Contracting Party, of investment opportunities in its territory.

Article 3. Investment Protection

1. Investments of investors of one Contracting Party made in the territory of another Contracting Party in accordance with the laws and regulations of the latter Contracting Party shall at all times be treated fairly and equitably and shall be afforded full protection and security in accordance with customary international law.

2. Paragraph 1 sets forth the minimum standards of customary international law for the treatment of aliens as the standard of treatment to be accorded to investments of investors of the other Contracting Party. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that required by that standard and do not create additional substantive rights. The obligation in Paragraph 1 to ensure

(a) "fair and equitable treatment" includes the obligation of the Contracting Party not to deny justice in criminal, civil or administrative proceedings in accordance with the principle of due process of law; and

(b) "full protection and security" requires that each Contracting Party provide the level of police protection required under customary international law.

3. A determination that there has been a violation of another provision of this Article or of another international agreement does not establish that there has been a violation of this Article.

4. Neither Contracting Party shall impede, by arbitrary or discriminatory measures, the development, management, use, expansion, sale and, where appropriate, liquidation of investments in its territory of investors of the other Contracting Party.

5. In accordance with its laws and regulations, each Contracting Party shall, to the extent possible, make available to the public its laws and regulations of general application relating to investments.

6. Each Contracting Party shall, in accordance with its laws and regulations, grant investors of the other Contracting Party the right of access to its courts, administrative tribunals, agencies and all other judicial authorities.

Article 4. National Treatment

1. Subject to its laws and regulations, each Contracting Party shall accord to investments of investors of the other Contracting Party in its territory only with respect to the management, maintenance, use, expansion or sale of their investments, treatment no less favourable than that which would be accorded in like circumstances (3) to investments of its own investors, whichever is more favourable to the investments of the investors concerned.

2. Each Contracting Party shall accord to investors of the other Contracting Party in its territory only as regards the management, maintenance, use, expansion or sale of their investments, treatment no less favourable than that which would be accorded in like circumstances (4) to its own investors, whichever is more favourable to the investors concerned.

3. National treatment as provided for in paragraphs 1 and 2 shall not apply to the following

(a) government procurement;

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

(c) fiscal measures

Article 5. Most-favoured-nation Treatment

1. Each Contracting Party shall accord to investors of the other Contracting Party in its territory only as regards the management, maintenance, use, expansion or sale of their investments, treatment no less favourable than that which would be accorded in like circumstances (5) to investors and investments of any third State, whichever is more favourable to the investors and investments in question.

2. The provisions of paragraph 1 of this Article shall not be construed as requiring a Contracting Party to extend to investors of the other Contracting Party the benefit of any treatment, preference or privilege which might be extended to them by the former Contracting Party under

(a) any present or future customs, economic or monetary union, free trade area or similar international agreement to which either Contracting Party is or may become a party;

(b) any international agreement or arrangement, in whole or in part, relating to taxation matters.

Without prejudice to any other investment agreement or international trade agreement that the Contracting Parties may have entered into with non-Contracting Parties before or after the entry into force of this Agreement, most-favoured-nation treatment shall not apply to procedural or judicial matters.

4. The most-favoured-nation treatment referred to in paragraph 1 of this Article does not include the treatment accorded to investors of a non-Contracting Party and their investments by provisions relating to the settlement of disputes concerning investments, such as the mechanism set out in Articles 10 and 11, which are provided for in other international investment treaties or trade agreements between a Contracting Party and a non-Contracting Party.

5. Most-favoured-nation treatment under paragraph 1 shall not apply to

(a) government procurement;

(b) subsidies or grants provided by a Contracting Party, including government-supported loans, guarantees and insurance; 0

(c) fiscal measures.

Article 6. Performance Requirements

Neither Contracting Party may impose mandatory measures in its territory on investments by investors of the other Contracting Party, relating to the purchase of materials, means of production, operation, transport, marketing or export of its products or similar orders. If such measures are duly taken by either Contracting Party because they are necessary for compliance with economic adjustments, or otherwise, such measures shall be taken in a non-discriminatory or arbitrary manner against the investor and its investment, they shall be taken in a less competitive manner in similar circumstances. (6)

Article 7. Compensation for Damage or Loss

1. Where investments made by investors of either Contracting Party suffer loss or damage due to war or another armed conflict, civil disturbance, state of national emergency, revolution, revolt or similar events in the territory of the other Contracting Party, they shall be treated by the latter Contracting Party, as regards restitution, compensation or other settlement, no less favourably than the treatment which the latter Contracting Party would accord to its own investors or to investors of any third State, whichever is more favourable to the investors concerned.

2. Notwithstanding the provisions of paragraph 1 of this Article, investors of a Contracting Party who, in any of the circumstances referred to in that paragraph, suffer damage or loss in the territory of the other Contracting Party as a result of

(a) requisition of their property or part thereof by the forces or authorities of the latter Contracting Party; or

(b) destruction of their property or part thereof by the forces or authorities of the latter Contracting Party, other than in battle or as a result of necessity;

prompt, adequate and effective compensation or restitution shall be made to it for damage or loss sustained during the period of requisition or as a result of the destruction of its property in accordance with Article 9.

Article 8. Expropriation

1. A Contracting Party shall not directly or indirectly expropriate or nationalize in its territory an investment of an investor of the other Contracting Party or take measures having an equivalent effect (hereinafter referred to as "expropriation") unless the following conditions occur simultaneously, with prior notification to the other Contracting Party

(a) for public purposes;

(b) on a non-discriminatory basis;

(c) in accordance with due process of law; and

(d) in conjunction with the payment of prompt, adequate and effective compensation.

2. The amount of compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place or before the imminent expropriation became publicly known, whichever is earlier. shall include interest at the applicable commercial rate from the date of expropriation until the date of payment.

3. Where fair market value cannot be established, compensation may be determined on an equitable basis taking into account relevant factors and circumstances, such as the capital invested, the nature and duration of the investment and the replacement value.

4. Compensation shall be payable without delay, shall be effectively realizable and shall be freely transferable into a freely convertible currency.

5. An investor of one Contracting Party affected by an expropriation by the other Contracting Party shall have the right to a prompt review of his case, including the valuation of his investment and the payment of compensation in accordance with the provisions of this Article, by a judicial or other competent and independent authority of the Contracting Party concerned.

6. Where a Contracting Party expropriates the assets of a legal person constituted in its territory in accordance with its laws and regulations and in which investors from another Contracting Party participate, it shall ensure that the provisions of this Article shall apply to its participation in such legal person in such a manner as to guarantee adequate and effective compensation to such investors.

7. This Article does not apply to the issuance of compulsory licences granted in relation to intellectual property rights or to the revocation, limitation or creation of intellectual property rights, to the extent that such issuance, revocation, limitation or creation complies with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Article 9. Transfers

1. In accordance with its laws and regulations in force in the territory of the Contracting Party, each Contracting Party shall ensure that all payments connected with an investment in its territory by an investor of the other Contracting Party may be freely transferred into and out of its territory without undue delay. Such transfers shall include, in particular, but not be limited to

(a) initial capital and additional amounts to maintain or increase an investment;

(b) returns (8);

(c) payments made on a contractual basis, including repayments under a loan agreement;

(d) proceeds from the sale or liquidation of all or any part of an investment;

(e) payments of compensation under Articles 7 and 8 of this Agreement;

(f) payments under Article 10 of this Agreement;

(g) payments arising from the settlement of a dispute relating to an investment in accordance with Article 11;

(h) earnings and other remuneration of personnel hired from abroad in connection with an investment,

2. Each Contracting Party shall ensure that transfers under paragraph 1 of this Article are made without unnecessary delay and in a freely convertible currency at the exchange or market rate prevailing on the date of transfer and in accordance with the laws and regulations in force in the territory of the Contracting Party where the investments are made.

Notwithstanding paragraphs 1 and 2 of this Article, a Contracting Party may, in accordance with its laws and regulations, in good faith and on an equitable and non-discriminatory basis, defer or prevent transfers in accordance with its laws and regulations with respect to

(a) bankruptcy, insolvency or protection of creditor's rights

(b) criminal offences;

(c) issuing, trading or dealing in securities and derivative products;

(d) financial disclosure or registration of transfers where necessary to assist financial regulatory or law enforcement authorities; or

(e) ensuring compliance with orders or judgments in legal proceedings.

4. A Contracting Party may adopt or maintain measures that do not comply with paragraphs 1 and 2 of this Article:

(a) in case of serious balance of payments and financial difficulties or threat thereof;

(b) in cases where, in exceptional circumstances, capital movements cause or threaten to cause serious difficulties for macroeconomic management, in particular monetary or exchange rate policies.

5. The measures referred to in paragraph 4 0 of this Article:

(a) shall be in accordance with the Articles of Agreement of the International Monetary Fund with respect to capital movements;

(b) shall not be discriminatory or arbitrary between the investor and the investor of a Third Party;

(c) not exceed what is necessary to meet the circumstances set out in paragraph 4 of this article;

(d) be temporary and shall be discontinued as soon as conditions permit; and

(e) be promptly notified to the other Contracting Party;

(f) shall not be used as a means for the Parties to avoid a commitment or obligation under this Article.

Article 10. Subrogation

1. If the Contracting Party or its designated agency makes a payment under a guarantee of indemnity or a contract of insurance granted in respect of an investment of an investor in the territory of the other Contracting Party, the latter Contracting Party shall recognize:

(a) the assignment of any right or claim of such investor to the former Contracting Party or its designated agency; and

(b) the right of the former Contracting Party or its designated agency to exercise by subrogation any right and claim to the same extent as its predecessor in title.

With respect to payments made to that prior Contracting Party or its designated agency pursuant to such assignment of right or claim and the transfer of such payment, the provisions of Articles 8 and 9 shall apply mutatis mutandis.

2. This Article does not recognize under Article 11 the right of a Contracting Party or its designated agency to make a claim solely on the ground that any of them has made a payment on the basis of an indemnity, guarantee or insurance contract against commercial risk.

3. Notwithstanding paragraph 1, subrogation shall take place after the prior consent of the State in which the investment is made.

Article 11. Settlement of Disputes between a Contracting Party and an Investor of the other Contracting Party

1. This Article applies to disputes between a Contracting Party (hereinafter referred to as "Disputing Party") and an investor of the other Contracting Party (hereinafter referred to as "Disputing Investor") regarding an alleged breach of an obligation of the former Contracting Party under this Agreement, which causes loss or damage to the investor (hereinafter referred to as "investment disputes").

2. To enter into consultations and negotiations, the investor shall send the Contracting Party written notice of the consultation or negotiations. The notice of consultations or negotiations shall specify:

(a) the name and address of the Disputing Investor

(b) the provisions of this Agreement alleged to have been breached;

(c) the factual and legal basis of the claim;

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

3. An investor of a Contracting Party having an investment dispute with the other Contracting Party shall initially seek to resolve it amicably through consultations and negotiations which may include the use of non-binding third party procedures.

4. If the investment dispute cannot be resolved amicably through such consultations and negotiations within six months after receipt of the notice of consultations or negotiations, the investor may submit the investment dispute for resolution in accordance with one of the following alternatives:

(a) the competent court of the Contracting Party in whose territory the investment was made; or

(b) arbitration in accordance with the International Centre for Settlement of Investment Disputes (ICSID) established by the Convention on the Settlement of Investment Disputes between States and Nationals of other States of March 18, 1965, done at Washington, DC, if this Convention applies to the Contracting Parties; or

(c) an Ad Hoc Arbitral Tribunal composed of three arbitrators under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).

5. Once a disputing investor has submitted an investment dispute under one of the specific dispute resolution procedures under Paragraph 4, the election shall be final.

6. An investor may not bring an investment dispute alleging a breach, or otherwise invoke Article 5 (Most-Favoured-Nation Treatment) on the grounds that another international agreement contains most-favoured-nation rights or obligations,

7. At least ninety (90) days before submitting any investment dispute to international arbitration under this Article, the disputing investor shall deliver to the disputing Party written notice of its intention to submit the investment dispute to arbitration (hereinafter referred to in this Article as "notice of intent"). The notice of intent shall specify:

(a) the name and address of the disputing investor and investment;

(b) the provisions of this Agreement alleged to have been breached and any other relevant provisions;