Title
BILATERAL INVESTMENT TREATY BETWEEN THE GOVERNMENT OF THE REPUBLIC OF UZBEKISTAN AND THE GOVERNMENT OF THE REPUBLIC OF INDIA
Preamble
Preamble
The Government of the Republic of Uzbekistan and the Government of the Republic of India (hereinafter referred to as the "Party" individually or the "Parties" collectively);
Desiring to promote bilateral cooperation between the Parties with respect to foreign investments; and
Recognizing that the reciprocal promotion and the protection of investments of investors of one Party in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activities, to the flow of capital, technologies, to the development of mutually favorable economic cooperation between them and to the promotion of sustainable development, and will increase prosperity in both States, and
Reaffirming the right of Parties to regulate investments in the territories of their States in accordance with their laws and policy objectives.
Have agreed as follows:
Body
Chapter I. Preliminary
Article 1. Definitions
For the purposes of this Treaty:
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 to a disputing party's competitive position, and information that is privileged or otherwise protected from disclosure under the laws of the Party;
1.2 "Designated Representative" means:
(i) for India, Secretary/Additional Secretary/Joint Secretary., Department of Economic Affairs, Ministry of Finance, Government of India.
(ii) for the Republic of Uzbekistan, the Ministry of Investments and Foreign Trade and Ministry of Justice.
1.3 "enterprise" means:
(i) any legal entity constituted, organised and operated in compliance with the laws of the Party, including any company, corporation, limited liability partnership or a joint venture; and
(ii) a branch of any such entity established in the territory of a Party in accordance with its laws and carrying out business activities there.
1.4 "investment" means an enterprise constituted, organised and operated in good faith by an investor in accordance with the laws of the Party in whose territory the investment is made, taken together with the assets of the enterprise, 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 a significance for the development of the Party in whose State's 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 laws of the Party;
(e) rigihts conferred by contracts of a long-term nature such as those to cultivate, extract or exploit natural resources in accordance with the laws of the Party, or
(f) Copyrights, know-how and intellectual property rights such as patents, trademarks, industrial designs and trade names, to the extent they are recognized under the laws of the Party; and
(g) movable 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, investment does not include the following assets of an enterprise:
(i) portfolio investments of the enterprise or in another enterprise;
(ii) debt securities issued by a government or government-owned or controlled enterprise, or loans to a government or government-owned or controlled enterprise;
(iii) 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 of the Party where the investment is made;
(iv) claims to money that arise solely from commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of another Party;
(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;
(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 Treaty.
1.5 "investor" means a natural or juridical person of a Party, other than a branch or representative office, that has made an investment in the territory of the other Party;
For the purposes of this definition,
a "natural person" means a national or citizen of a Party in accordance with its laws. A natural person who is a dual national or citizen shall be deemed to be exclusively a national or citizen of the country of her or his dominant and effective nationality/citizenship, where she/he ordinarily or permanently resides.
a "juridical person" means:
(a) a legal entity that is constituted, organised and operated under the laws of that Party and that has substantial business activities in the territory of that Party; or
(b) a legal entity that is constituted, organised and operated under the laws of that Party and that is directly or indirectly owned or controlled by a natural person of that Party or by a legal entity mentioned under sub-clause (a) herein.
1.6 "laws" includes:
(i) the Constitution, legislation, subordinate/delegated legislation, laws & bylaws, rules & regulations, ordinance, notifications, administrative measures/executive actions at all levels of government pursuant to law, as amended, interpreted or modified from time to time, and legally binding in the territory of the Party;
(ii) decisions, judgments, orders and decrees by Courts, regulatory authorities, judicial and administrative institutions having the legally binding force within the territory of a Party.
1.7 "local government" includes:
(i) In respect of India: An urban local body, municipal corporation or village level government; and in respect of Uzbekistan: Authorities in Regions, Districts and Cities-Khokimiyats; or
(ii) an enterprise owned or controlled by an urban local body, a municipal corporation or a village level government.
1.8 "measure" includes a law, regulation, rule, statutory procedure, decision or administrative action pursuant to laws.
1.9 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 laws of the Party where 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 laws relating to the admission of investments in the Party where the investment is made in specific sectors falls within the meaning of "Pre-investment activity".
1.10 "Sub-national government" means a State Government or a Union Territory administration in the case of India but does not include local governments.
1.11 "Territory" means:
(i) In respect of India: the territory of the Republic of India in accordance with the Constitution of India, including its territorial waters and the airspace above it and other maritime zones including the Exclusive Economic Zone and continental shelf over which the Republic of India has sovereignty, sovereign rights, or exclusive jurisdiction in accordance with its laws and the 1982 United Nations Convention on the Law of the Sea and international law.
(ii) In respect of the Republic of Uzbekistan the territory, including the land area, internal waters and the territorial sea and air space above them, as well as any area beyond its territorial sea within which the Republic of Uzbekistan has sovereign rights and jurisdiction in respect of any activity carried on in connection with the exploration for or exploitations of resources of the seabed and its subsoil and superjacent water resources in accordance with international law and its laws.
1.12 "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April, 1994.
1.13 The Annexures, Provisos and Footnotes in this Treaty constitute an integral part of it and are to be accorded the same effect as other provisions in this Treaty.
Article 2. Scope and General Provisions
2.1 This Treaty shall apply to measures adopted or maintained by a Party relating to investments of investors of another Party in its territory, in existence as of the date of entry into force of this Treaty or established, acquired, or expanded thereafter, and which have been admitted by a Party in accordance with its laws.
2.2 Subject to the provisions of Chapter Ill of this Treaty, nothing in this Treaty 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 Treaty 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 Treaty.
2.4 This Treaty shall not apply to:
(i) any measure by a local government;
(ii) any law or measure regarding taxation, including measures taken to enforce taxation obligations. For greater certainty, it is clarified that where the State in which investment is made decides that conduct alleged to be a breach of its obligations under this Treaty is a subject matter of taxation, such decision of that State, 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.
(iii) the issuance of compulsory licenses 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 is consistent with the international obligations of Parties under the WTO Agreement.
(iv) government procurement by a Party;
(v) subsidies or grants provided by a Party; (vi) services supplied in the exercise of governmental authority by the relevant body or authority of a Party. For the purposes of this provision, a service supplied in the exercise of governmental authority means any service which is not supplied on a commercial basis.
Article 3. Right of State to Regulate
3.1 In accordance with customary international law, the Party to this Treaty shall take regulatory or other measures to ensure that development in its territory is consistent with the goals and principles of sustainable development, and other legitimate social, economic, environmental or any other public policy objectives.
3.2 Except where the rights of a Party to this Treaty are expressly stated as an exception to the obligation of this Treaty, a Party's pursuit of its rights to regulate shall be understood as embodied within a balance of the rights and obligations of Investors and Investments and the Parties, as set out in the Treaty.
3.3 For greater certainty, non-discriminatory measures taken by a Party to this Treaty to comply with its international obligations under other treaties shall not constitute a breach of this Treaty.
Chapter II. Obligations of Parties
Article 4. Treatment of Investments
4.1 No Party shall subject investments made by investors of the other Party to measures which constitute a violation of customary international law (1) through:
(i) denial of justice in any judicial or administrative proceedings; or
(ii) fundamental breach of due process; or
(iii) targeted discrimination on manifestly unjustified grounds, such as gender, race or religious belief; or
(iv) manifestly abusive treatment, such as coercion, duress and harassment.
4.2 Each Party in accordance with its laws, shall accord in its territory to investor or to investments made by investors of the other Party full protection and security. For greater certainty, "full protection and security" only refers to a Party's obligations in accordance with its laws, relating to physical security of investors and to investments made by the investors of the other Party and not to any other obligation whatsoever.
4.3 A determination that there has been a breach of another provision of this Treaty, or of a separate international agreement, does not establish that there has been a breach of this Article.
4.4 In considering an alleged breach of this article, a 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 Treaty.
Article 5. National Treatment
5.1 Each Party shall not apply to investments of the other Party and to investors with respect to their investments, measures that accord less favourable treatment than that it accords, in like circumstances, (2) to its own investors or to investments by such investors with respect to the management, conduct, operation, sale or other disposition of investments in its territory.
5.2 The treatment accorded by a Party under Article 5.1 means, with respect to a Sub-national government, treatment no less favourable than the treatment accorded, in like circumstances, by that Sub-national government to investors, and to investments of investors, of the Party of which it forms a part.
Article 6. Expropriation and Compensation
6.1Neither Party may nationalize or expropriate an investment of an investor (hereinafter "expropriate") of the other Party either directly or through measures having an effect equivalent to expropriation, except for reasons of public purpose (3), in accordance with the due process of law of the State 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, market value including declared tax value of tangible property, and such compensation shall not be greater than an amount determined with reference to actual loss (excluding incidental, consequential and special amounts, such as future profits, as well as intangible asset losses and assets outside the scope of this agreement).
6.2 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 7.
6.3 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 a Party 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 of a Party 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 a Party;
(iii) the character of the measure or series of measures, notably their object, context and intent; and
(iv) whether a measure by a Party breaches the Party's prior binding written commitment to the investor whether by contract, licence or other legal document.
6.4 For the avoidance of doubt, the Parties agree that an action taken by a Party in its commercial capacity shall not constitute expropriation or any other measure having similar effect.
6.5 Non-discriminatory regulatory measures by a Party or measures or awards by judicial bodies of a Party 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.
6.6 In considering an alleged breach of this Article, a Tribunal shall take account of whether the investor or, as appropriate, the locally-established enterprise with the participation of the investors of the other Party, pursued action for remedies before domestic courts or tribunals prior to initiating a claim under this Treaty.
Article 7. Transfers
7.1 Subject to its laws, each Party shall permit all funds of an investor of the other Party related to an investment in its territory to be freely transferred and on a non-discriminatory basis. Such funds may include:
(i) contributions to capital;
(ii) 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;
(iii) interest, royalty payments, management fees, and technical assistance and other fees;
(iv) payments made under a contract, including a loan agreement;
(v) payments made pursuant to Article 6 [Expropriation], Article 8 [Compensation for losses] and under Chapter IV.
7.2 Unless otherwise agreed to between the Parties, currency transfer under Article 7.1 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.
7.3 Nothing in this Treaty shall prevent a Party from conditioning or preventing a transfer through a good faith application of its laws, including actions relating to:
i. bankruptcy, insolvency or the protection of the rights of the creditors;
ii. compliance with judicial, arbitral or administrative decisions and awards;
iii. compliance with labour obligations;
iv. financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
v. issuing, trading or dealing in securities, futures, options, or derivatives;
vi. compliance with the laws on taxation;
vii. criminal or penal offenses and the recovery of the proceeds of crime;
viii. social security, public retirement, or compulsory savings schemes, including provident funds, retirement gratuity programs and employees insurance programs;
ix. severance entitlements of employees;
x. requirement to register and satisfy other formalities imposed by the Central Bank and other relevant authorities of a Party; and
xi. Requirements to lock-in initial capital investments, as provided in Party's Foreign Direct Investment (FOi) Policy, where applicable, provided that, any new measure which would require a lock-in period for investments will not apply to existing investments.
7.4 Notwithstanding anything in Article 7 .1 and 7 .2 to the contrary, the Parties 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 8. Compensation for Losses
Each Party shall accord to investors of another Party, and to investments by such investors, non-discriminatory treatment with respect to measures, including restitution, indemnification, compensation or other settlement, it adopts or maintains relating to losses suffered by investments in its territory owing to war or other armed conflict, civil strife, state of national emergency.
Article 9. Subrogation
9.1 If a Party or its designated agency makes a payment to any of its investors under an indemnity, guarantee, or contract of insurance given in respect of an investment, the other Party shall recognize the validity of the subrogation in favour of such Party or agency thereof to any right or title held by the investor.
9.2 A Party 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 Party or its designated agency thereof, or by the investor if the Party or any agency thereof so authorizes. The rights to subrogation must not exceed the initial rights of the investor.
Article 10. Entry and Sojourn of Personnel
Subject to its laws relating to the entry and sojourn of non-citizens and on the basis of reciprocity, each Party shall permit natural persons of the other Party employed by the investor or the locally established enterprise with the participation of the investors of the other Party to enter and remain in its territory for the purpose of engaging in activities connected with the investment.
Article 11. Transparency
11.1 Each Party shall, to the extent possible, ensure that the laws, regulations, procedures, and administrative rulings of general application of their State in respect of any matter covered by this Treaty 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.
11.2 Each Party shall, as provided for in its laws: (i) publish any such measure that it proposes to adopt; and (ii) provide interested persons and the other Party a reasonable opportunity to comment on such proposed measures.
11.3 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 11.1.
11.4 Nothing in this Treaty 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.
11.5 Nothing in this Treaty prevents one Party from requiring an investor of the other Party or its investments to provide routine information concerning those investments solely for informative or statistical purposes.
Chapter III. Investor Obligations
Article 12. Compliance with Laws
The parties reaffirm and recognize that:
(i) Investors and their investments shall comply with all laws, regulations, administrative guidelines and policies of a Party's State concerning the establishment, acquisition, management, operation and disposition of investments.
(ii) 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 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.
(iii) lnvestors and their investments shall comply with the provisions of laws of the Parties concerning taxation, including timely payment of their tax liabilities.
(iv) An investor shall provide such information as the Parties 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.
(v) Investors are prohibited from investing by fraudulent misrepresentation, concealment, corruption, money laundering or conduct amounting to abuse of process or similar illegal mechanisms.
Article 13. Corporate Social Responsibility
Investors and their enterprises operating within the territory of each Party 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 Parties. These principles may address issues such as labour, the environment, human rights, community relations and anti-corruption.
Chapter IV. Settlement of Disputes between an Investor and a Party
Article 14. Scope and Definitions
14.1 Without prejudice to the rights and obligations of the Parties under Chapter V, this Chapter establishes a mechanism for the settlement of disputes between an investor and a Defending Party.