Chapter 10 - Investment

Article
10.1:
Definitions

For the purposes of this Chapter:

(a) Centre means the International Centre for Settlement of Investment
Disputes (ICSID) established by the ICSID Convention;

(b) claimant means an investor of a Party that is a party to
an investment dispute with the other Party;

(c) disputing parties means the claimant and the
respondent;

(d) disputing party means either the claimant or the
respondent;

(e) enterprise means an enterprise as defined in Article
2.1(f) (Definitions of General Application – General
Definitions), and a branch of an enterprise;

(f) enterprise of a Party means an enterprise constituted or
organised under the law of a Party, and a branch located in the
territory of a Party and carrying out business activities
there;

(g) freely
usable currency means freely usable currency as determined
by the International Monetary Fund under its Articles of
Agreement;

(h) ICSID
Additional Facility Rules means the Rules Governing the
Additional Facility for the Administration of Proceedings by
the Secretariat of the International Centre for Settlement of
Investment Disputes;

(i) ICSID
Convention means the Convention on the Settlement of
Investment Disputes between States and Nationals of other
States, done at Washington, March 18, 1965;

(j) investment means every asset that an investor owns or
controls, directly or indirectly, that has the characteristics
of an investment, including such characteristics as the
commitment of capital or other resources, the expectation of
gain or profit, or the assumption of risk. Forms that an
investment may take include:

(i)
an enterprise;

(ii)
shares, stock, and other forms of equity participation in an
enterprise;

(iii)
bonds, debentures, loans and other debt
instruments^10-[7]; but do not include a debt instrument of a
Party or of a state enterprise;

(iv)
futures, options and other derivatives;

(v) rights under
contract, including turnkey, construction, management,
production, concession, or revenue-sharing contracts;

(vi)
intellectual property rights;

(vii) rights conferred
pursuant to domestic law, such as concessions, licences,
authorisations, and permits;^10-[8] and

(viii) other tangible or
intangible, movable or immovable property, and related property
rights, such as leases, mortgages, liens, and pledges;

but investment does not mean an order or judgment entered in
a judicial or administrative action;

(k) investor of a non-Party means, with respect to a Party,
an investor that attempts to make, is making, or has made an
investment in the territory of that Party, that is not an
investor of either Party;

(l) New
York Convention means the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral Awards,
done at New York, June 10, 1958;

(m) non-disputing
Party means the Party that is not a party to an investment
dispute;

(n) respondent means the Party that is a party to an
investment dispute;

(o) Secretary-General means the Secretary-General of
ICSID;

(p) tribunal means an arbitration tribunal established under
Article 10.19 or 10.26; and

(q) UNCITRAL Arbitration Rules means the arbitration
rules of the United Nations Commission on International Trade
Law.

Section A - Investment

Article 10.2:
Scope and Coverage^10-[9]

1. This
Chapter applies to measures adopted or maintained by a Party
relating to:

(a)
investors of the other Party;

(b)
covered investments; and

(c) with respect
to Article 10.7 all investments in the territory of the
Party.

2. In the event of
any inconsistency between this Chapter and another Chapter, the
other Chapter shall prevail to the extent of the
inconsistency.

3. A
requirement by a Party that a service supplier of the other
Party post a bond or other form of financial security as a
condition of providing a service into its territory does not of
itself make this Chapter applicable to measures adopted or
maintained by a Party relating to the provision of that
cross-border service. This Chapter applies to that
Party's treatment of the posted bond or financial
security to the extent that such bond or financial security is
a covered investment.

4. This
Chapter does not apply to:

(a) measures
adopted or maintained by a Party to the extent that they are
covered by Chapter 12 (Financial Services); and

(b) any act or
fact that took place or any situation that ceased to exist
before the date of entry into force of this Agreement, except
as provided in Annex 10-E paragraph 2.

Article 10.3:
National Treatment

1. Each
Party shall accord to investors of the other Party treatment no
less favourable than that it accords, in like circumstances, to
its own investors with respect to the establishment,
acquisition, expansion, management, conduct, operation, and
sale or other disposition of investments in its territory.

2. Each
Party shall accord to covered investments treatment no less
favourable than that it accords, in like circumstances, to
investments in its territory of its own investors with respect
to the establishment, acquisition, expansion, management,
conduct, operation, and sale or other disposition of
investments.

Article
10.4:
Most-Favoured-Nation
Treatment^10-[10]

1. Each
Party shall accord to investors of the other Party treatment no
less favourable than that it accords, in like circumstances, to
investors of any non-Party with respect to the establishment,
acquisition, expansion, management, conduct, operation, and
sale or other disposition of investments in its territory.

2. Each
Party shall accord to covered investments treatment no less
favourable than that it accords, in like circumstances, to
investments in its territory of investors of any non-Party with
respect to the establishment, acquisition, expansion,
management, conduct, operation, and sale or other disposition
of investments.

Article 10.5: Minimum Standard of
Treatment^10-[11]

1. Each
Party shall accord to covered investments treatment in
accordance with customary international law, including fair and
equitable treatment and full protection and security.

2. For
greater certainty, paragraph 1 prescribes the customary
international law minimum standard of treatment of aliens as
the minimum standard of treatment to be afforded to covered
investments. The concepts of "fair and equitable
treatment" and "full protection and security"
do not require treatment in addition to or beyond that which is
required by that standard, and do not create additional
substantive rights. The obligation in paragraph 1 to
provide:

(a) "fair
and equitable treatment" includes the obligation not to
deny justice in criminal, civil, or administrative adjudicatory
proceedings in accordance with the principle of due process
embodied in the principal legal systems of the world; and

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

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.

Article 10.6: Treatment in Case of
Strife

1.
Notwithstanding Article 10.9.5(b), each Party shall accord to
investors of the other Party, and to covered investments, with
respect to measures it adopts or maintains relating to losses
suffered by investments in its territory owing to armed
conflict or civil strife treatment no less favourable than that
it accords, in like circumstances, to:

(a)
its own investors and their investments; or

(b)
investors of any non-Party and their investments.

2.
Notwithstanding paragraph 1, if an investor of a Party, in the
situations referred to in paragraph 1, suffers a loss in the
territory of the other Party resulting from:

(a) requisitioning
of its covered investment or part thereof by the latter's
forces or authorities; or

(b) destruction of
its covered investment or part thereof by the latter's
forces or authorities, which was not required by the necessity
of the situation,

the latter Party shall provide the investor restitution,
compensation or both in the event of a partial restitution,
which in any case shall be prompt, adequate, and effective, and
with respect to compensation, in accordance with paragraphs 2
to 4 of Article 10.11, mutatis mutandis.

3.
Paragraph 1 does not apply to existing measures relating to
subsidies or grants that would be inconsistent with Article
10.3 but for Article 10.9.5(b).

Article
10.7:
Performance Requirements

Mandatory Performance Requirements

1. Neither
Party may impose or enforce any of the following requirements,
or enforce any commitment or undertaking, in connection with
the establishment, acquisition, expansion, management, conduct,
operation, or sale or other disposition of an investment of an
investor of a Party or of a non-Party in its territory:

(a) to export a given level or percentage of goods or services;

(b) to achieve a given level or percentage of domestic content;

(c) to purchase, use, or accord a preference to goods produced in
its territory, or to purchase goods from persons in its
territory;

(d) to relate in
any way the volume or value of imports to the volume or value
of exports or to the amount of foreign exchange inflows
associated with such investment;

(e) to restrict
sales of goods or services in its territory that such
investment produces or supplies by relating such sales in any
way to the volume or value of its exports or foreign exchange
earnings;

(f) to transfer a particular technology, a production process, or
other proprietary knowledge to a person in its territory;
or

(g) to supply exclusively from the territory of the Party the goods
that it produces or the services that it supplies to a specific
regional market or to the world market.

Advantages Subject to Performance Requirements

2.
Neither Party may condition the receipt or continued receipt of
an advantage, in connection with the establishment,
acquisition, expansion, management, conduct, operation, or sale
or other disposition of an investment in its territory of an
investor of a Party or of a non-Party, on compliance with any
of the following requirements:

(a) to achieve a given level or percentage of domestic content;

(b) to purchase, use, or accord a preference to goods produced in
its territory, or to purchase goods from persons in its
territory;

(c) to relate in
any way the volume or value of imports to the volume or value
of exports or to the amount of foreign exchange inflows
associated with such investment; or

(d) to restrict
sales of goods or services in its territory that such
investment produces or supplies by relating such sales in any
way to the volume or value of its exports or foreign exchange
earnings.

Exceptions and Exclusions

3.
(a)
Nothing in paragraph 2 shall be construed to prevent a Party
from conditioning the receipt or continued receipt of an advantage,
in connection with an investment in its territory of an investor
of a Party or of a non-Party, on compliance with a requirement to
locate production, supply a service, train or employ workers,
construct or expand particular facilities, or carry out research and
development, in its territory.

(b)
Paragraph 1(f) does not apply:

(i)
when a Party authorises use of an intellectual property right
in accordance with Article 31^10-[12] of the TRIPS Agreement, or
to measures requiring the disclosure of proprietary information
that fall within the scope of, and are consistent with, Article
39 of the TRIPS Agreement; or

(ii)
when the requirement is imposed or the commitment or
undertaking is enforced by a court, administrative tribunal, or
competition authority to remedy a practice determined after
judicial or administrative process to be anti-competitive under
the Party's competition laws^10-.[13]

(c) Provided that
such measures are not applied in an arbitrary or unjustifiable
manner, or do not constitute a disguised restriction on
international trade or investment, paragraphs 1(b), (c), and
(f), and 2(a) and (b), shall not be construed to prevent a
Party from adopting or maintaining measures, including
environmental measures:

(i)
necessary to secure compliance with laws and regulations that
are not inconsistent with this Agreement;

(ii)
necessary to protect human, animal, or plant life or health;
or

(iii)
related to the conservation of living or non-living exhaustible
natural resources.

(d) Paragraphs
1(a), (b), and (c), and 2(a) and (b), do not apply to
qualification requirements for goods or services with respect
to export promotion and foreign aid programs.

(e) Paragraphs
1(b), (c), (f), and (g), and 2(a) and (b), do not apply to
government procurement.

(f)
Paragraphs 2(a) and (b) do not apply to requirements imposed by
an importing Party relating to the content of goods necessary
to qualify for preferential tariffs or preferential quotas.

4. For
greater certainty, paragraphs 1 and 2 do not apply to any
requirement other than the requirements set out in those
paragraphs.

5. This
Article does not preclude enforcement of any commitment,
undertaking, or requirement between private parties, where a
Party did not impose or require the commitment, undertaking, or
requirement.

Article
10.8:
Senior Management and Boards of Directors

1. Neither
Party may require that an enterprise of that Party that is a
covered investment appoint to senior management positions
individuals of any particular nationality.

2. A Party
may require that a majority or less of the board of directors,
or any committee thereof, of an enterprise of that Party that
is a covered investment, be of a particular nationality, or
resident in the territory of the Party, provided that the
requirement does not materially impair the ability of the
investor to exercise control over its investment.

Article
10.9:
Non-Conforming Measures

1. Articles
10.3, 10.4, 10.7, and 10.8 do not apply to:

(a)
any existing non-conforming measure that is maintained by a
Party at:

(i) the central level of government, as set out by that Party in its Schedule to Annex I;

(ii) a regional level of government, as set out by that Party in its Schedule to Annex I; or

(iii) a local level of government;

(b) the
continuation or prompt renewal of any non-conforming measure
referred to in subparagraph (a); or

(c) an amendment
to any non-conforming measure referred to in subparagraph (a)
to the extent that the amendment does not decrease the
conformity of the measure, as it existed immediately before the
amendment, with Articles 10.3, 10.4, 10.7, and 10.8.

2.
Articles 10.3, 10.4, 10.7, and 10.8 do not apply to any measure
that a Party adopts or maintains with respect to sectors,
subsectors, or activities, as set out in its Schedule to Annex
II.

3. Neither
Party may, under any measure adopted after the date of entry
into force of this Agreement and covered by its Schedule to
Annex II, require an investor of the other Party, by reason of
its nationality, to sell or otherwise dispose of an investment
existing at the time the measure becomes effective.

4. Articles
10.3 and 10.4 do not apply to any measure that is an exception
to, or derogation from, the obligations under Article 17.5
(National Treatment – Intellectual Property Chapter) as
specifically provided for in that Article.

5. Articles
10.3, 10.4, and 10.8 do not apply to:

(a)
government procurement; or

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

Article
10.10:
Transfers^10-[14]

1. Each
Party shall permit all transfers relating to a covered
investment to be made freely and without delay into and out of
its territory. Such transfers include:

(a)
contributions to capital;

(b) profits,
dividends, interest, capital gains, royalty payments,
management fees, and technical assistance and other fees;

(c) proceeds from
the sale of all or any part of the covered investment or from
the partial or complete liquidation of the covered
investment;

(d) payments made
under a contract entered into by the investor, or the covered
investment, including payments made pursuant to a loan
agreement;

(e) payments made
pursuant to paragraphs 1 and 2 of Article 10.6 and Article
10.11; and

(f)
payments arising under Section B.

2. Each
Party shall permit returns in kind relating to a covered
investment to be made as authorised or specified in a written
agreement between the Party and a covered investment or an
investor of the other Party.

3. Each
Party shall permit transfers relating to a covered investment
to be made in a freely usable currency at the market rate of
exchange prevailing on the date of transfer.

4.
Notwithstanding paragraphs 1 to 3, a Party may prevent or delay
a transfer through the equitable, non-discriminatory, and good
faith application of its laws relating to:

(a)
bankruptcy, insolvency, or the protection of the rights of
creditors;

(b)
issuing, trading, or dealing in securities, futures or
derivatives;

(c)
criminal or penal offences;

(d) financial
reporting or record keeping of transfers when necessary to
assist law enforcement or financial regulatory authorities;
or

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

5.
Notwithstanding paragraph 2, a Party may restrict transfers of
returns in kind in circumstances where it could otherwise
restrict such transfers under this Agreement, including as set
out in paragraph 4.

Article
10.11: Expropriation and Compensation^10-[15]

1. Neither
Party may expropriate or nationalise a covered investment
either directly or indirectly through measures equivalent to
expropriation or nationalisation ("expropriation"),
except:

(a)
for a public purpose;

(b)
in a non-discriminatory manner;

(c) on payment of
prompt, adequate, and effective compensation in accordance with
paragraphs 2 to 4; and

(d)
in accordance with due process of law.

2.
Compensation shall:

(a)
be paid without delay;

(b) be equivalent
to the fair market value of the expropriated investment
immediately before the expropriation took place ("the
date of expropriation");

(c) not reflect
any change in value occurring because the intended
expropriation had become known earlier; and

(d)
be fully realisable and freely transferable.

3. If the
fair market value is denominated in a freely usable currency,
the compensation paid shall be no less than the fair market
value on the date of expropriation, plus interest at a
commercially reasonable rate for that currency, accrued from
the date of expropriation until the date of payment.

4. If the
fair market value is denominated in a currency that is not
freely usable, the compensation paid – converted into the
currency of payment at the market rate of exchange prevailing
on the date of payment – shall be no less than:

(a) the fair
market value on the date of expropriation, converted into a
freely usable currency at the market rate of exchange
prevailing on that date; plus

(b) interest, at a
commercially reasonable rate for that freely usable currency,
accrued from the date of expropriation until the date of
payment.

5. This
Article does not apply to the issuance of compulsory licences
granted in relation to intellectual property rights in
accordance with the TRIPS Agreement, or to the revocation,
limitation, or creation of intellectual property rights, to the
extent that such revocation, limitation, or creation is
consistent with Chapter 17 (Intellectual Property).

Article
10.12:
Special Formalities and Information Requirements

1. Nothing
in Article 10.3 shall be construed to prevent a Party from
adopting or maintaining a measure that prescribes special
formalities in connection with covered investments, such as a
requirement that investors be residents of the Party or that
covered investments be legally constituted under the laws or
regulations of the Party, provided that such formalities do not
materially impair the protections afforded by a Party to
investors of the other Party and covered investments pursuant
to this Chapter.

2.
Notwithstanding Articles 10.3 and 10.4, a Party may require an
investor of the other Party, or a covered investment, to
provide information concerning that investment solely for
informational or statistical purposes. The Party shall
protect such information that is confidential from any
disclosure that would prejudice the competitive position of the
investor or the covered investment. Nothing in this
paragraph shall be construed to prevent a Party from otherwise
obtaining or disclosing information in connection with the
equitable and good faith application of its domestic law.

Article
10.13:
Denial of Benefits

Subject to prior notification and consultation, a Party may
deny the benefits of this Chapter to an investor of the other
Party and to investments of that investor if the investor is an
enterprise:

(a) owned or
controlled either by persons of a non-Party or of the denying
Party; and

(b) has no
substantive business operations in the territory of the other
Party.

Section B - Investor-State Dispute
Settlement

Article
10.14:
Scope of Investor-State Dispute Settlement

Section B applies where there is a dispute between a Party
and an investor of the other Party relating to a covered
investment made in the territory of a Party in accordance with
its laws, regulations and investment policies.

Article
10.15:
Consultations and Negotiations

1. In the
event of an investment dispute, the claimant and the respondent
shall initially seek to resolve the dispute through
consultations and negotiations, which may include the use of
non-binding, third-party procedures. Such consultations
shall be initiated by a written request for consultations
delivered by the claimant to the respondent.

2. The
parties shall endeavour to commence consultations within 30
days of receipt by the respondent of the request for
consultations, unless the disputing parties otherwise
agree.

3. With the
objective of resolving an investment dispute through
consultations, a claimant shall make all reasonable efforts to
provide the respondent, prior to the commencement of
consultations, with information regarding the legal and factual
basis for the investment dispute.

4. For
greater certainty, the initiation of consultations and
negotiations shall not be construed as recognition of the
jurisdiction of the tribunal.

Article
10.16:
Submission of a Claim to Arbitration

1. If an
investment dispute has not been resolved within six months of
the receipt by the respondent of a request for
consultations:

(a) the claimant,
on its own behalf, may submit to arbitration under this Section
a claim that:

(i) the respondent has breached an obligation under Section A; and

(ii) the claimant has incurred loss or damage by reason of, or arising out of, that breach; and

(b) the claimant,
on behalf of an enterprise of the respondent that is a
juridical person that the claimant owns or controls directly or
indirectly, may submit to arbitration under this Section a
claim that:

(i) the respondent has breached an obligation under Section A; and

(ii) the enterprise has incurred loss or damage by reason of, or arising out of, that breach.

2. At least
90 days before submitting any claim to arbitration under this
Section, a claimant shall deliver to the respondent a written
notice of its intention to submit the claim to arbitration
("notice of intent"). The notice shall
specify:

(a) the name and
address of the claimant and, where a claim is submitted on
behalf of an enterprise, the name, address, and place of
incorporation of the enterprise;

(b) for each
claim, the provision of this Agreement alleged to have been
breached and any other relevant provisions;

(c)
the legal and factual basis for each claim; and

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

3. A
claimant may submit a claim referred to in paragraph 1:

(a) under the
ICSID Convention, provided that both the non-disputing Party
and the respondent are parties to the ICSID Convention;

(b) under the
ICSID Additional Facility Rules, provided that either the
non-disputing Party or the respondent, but not both, is a party
to the ICSID Convention;

(c)
under the UNCITRAL Arbitration Rules; or

(d) if the
disputing parties agree, to any other arbitration institution
or under any other arbitration rules.

4. A claim
shall be deemed submitted to arbitration under this Section
when the claimant's notice of or request for arbitration
("notice of arbitration") is received under the
applicable arbitral rules.

5. The
arbitration rules applicable under paragraph 3, and in effect
on the date the claim or claims were submitted to arbitration
under this Section, shall govern the arbitration except to the
extent modified by this Agreement.

6. The
claimant shall provide with the notice of arbitration referred
to in paragraph 4:

(a)
the name of the arbitrator that the claimant appoints; or

(b) the
claimant's written consent for the Secretary-General to
appoint the claimant's arbitrator.

Article
10.17:
Consent of each Party to Arbitration

1. Each
Party consents to the submission of a claim to arbitration
under this Section in accordance with this Agreement.

2. The
consent under paragraph 1 and the submission of a claim to
arbitration under this Section shall be deemed to satisfy the
requirements of:

(a) Chapter II of
the ICSID Convention (Jurisdiction of the Centre) and the ICSID
Additional Facility Rules for written consent of the parties to
the dispute;

(b) Article II of
the New York Convention for an "agreement in
writing"; and

(c)
Article 1 of the UNCITRAL Arbitration Rules.

Article 10.18: Conditions and Limitations on Consent of
each Party

1. No claim
may be submitted to arbitration under this Section if more than
three years have elapsed from the date on which the claimant
first acquired, or should have first acquired, knowledge of the
breach alleged under Article 10.16.1 causing loss or damage to
a claimant or covered investment.

2. No claim
may be submitted to arbitration under this Section unless:

(a) the claimant
consents in writing to arbitration in accordance with the
procedures set out in this Agreement; and

(b)
the notice of arbitration referred to in Article 10.16.6 is
accompanied:

(i) for claims submitted to arbitration under Article 10.16.1(a), by the claimant's written waiver; and

(ii) for claims submitted to arbitration under Article 10.16.1(b), by the claimant's and the enterprise's written waivers,

of any right to initiate or continue before any
administrative tribunal or court under the law of either Party,
or other dispute settlement procedures, any proceeding with
respect to the events alleged to give rise to the claimed
breach.

3. No claim
may be submitted to arbitration, if the claimant referred to in
Article 10.16.1(a) or 10.16.1(b), has alleged the breach of an
obligation under Section A in proceedings before a court or an
administrative tribunal of a Party, or other binding dispute
settlement procedure. For greater certainty, if an
investor elects to submit a claim, of the type previously
described to a court or administrative tribunal of the Party,
that election shall be definitive and the investor may not
thereafter submit the claim to arbitration under this
Section.

4.
Notwithstanding paragraph 2(b), the claimant (for claims
brought under Article 10.16.1(a)) and the claimant or the
enterprise (for claims brought under Article 10.16.1(b)) may
initiate or continue an action that seeks interim injunctive
relief and does not involve the payment of monetary damages
before a judicial or administrative tribunal of the respondent,
provided that the action is brought for the sole purpose of
preserving the claimant's or the enterprise's
rights and interests during the pendency of the
arbitration.

5. Neither Party
shall give diplomatic protection, or bring an international
claim, in respect of a dispute which one of its investors and
the other Party shall have consented to submit or have
submitted to conciliation or arbitration under Article 10.17,
unless such other Party has failed to abide by and comply with
the award rendered in such dispute. Diplomatic
protection, for the purposes of this paragraph, shall not
include informal diplomatic exchanges for the sole purpose of
facilitating a settlement of the dispute.

Article
10.19:
Selection of Arbitrators

1. Unless
the disputing parties otherwise agree, the tribunal shall
comprise three arbitrators, one arbitrator appointed by each of
the disputing parties and the third, who shall be the presiding
arbitrator, appointed by agreement of the disputing parties and
who shall be a national of a third country.

2.
Arbitrators shall have expertise or experience in public
international law, international trade or international
investment rules, and be independent of, and not be affiliated
with or take instructions from, either Party or the
claimant.

3. The
Secretary-General shall serve as appointing authority for an
arbitration under this Section.

4. If a
tribunal has not been constituted within 75 days from the date
that a claim is submitted to arbitration under this Section,
the Secretary-General, on the request of a disputing party,
shall appoint, in his or her discretion, the arbitrator or
arbitrators not yet appointed.

5.
Pursuant to paragraph 1, where the disputing parties have
agreed on a sole arbitrator or each individual member of the
tribunal and one or more of those arbitrators has the
nationality of one of the disputing parties, the appointment
shall be in writing.

6. Subject
to paragraph 7:

(a) the costs of
arbitration shall be born equally by the disputing parties
unless the tribunal decides otherwise; and

(b)
the prevailing ICSID rate for arbitrators shall apply.

7. The
disputing parties may establish rules relating to expenses
incurred by the tribunal, including arbitrators'
remuneration.

8. Even
without the consent of the tribunal that he or she was a
member, where any arbitrator appointed as provided for in this
Section resigns or becomes unable to act, a successor shall be
appointed in the same manner as prescribed for the appointment
of the original arbitrator and the successor shall have all the
powers and duties of the original arbitrator.

Article
10.20:
Conduct of the Arbitration

1. The
disputing parties may agree on the legal place of any
arbitration under the arbitral rules applicable under Article
10.16.3(b), (c) or (d). If the disputing parties fail to
reach agreement, the tribunal shall determine the place in
accordance with the applicable arbitral rules, provided that
the place shall be in the territory of a State that is a party
to the New York Convention.

2. The
tribunal shall have the authority to accept and consider amicus curiae written submissions that may assist the
tribunal in evaluating the submissions and arguments of the
disputing parties from a person or entity that is not a
disputing party (the "submitter"). The
submissions shall be provided in both Spanish and English, and
shall identify the submitter and any Party, other government,
person, or organisation, other than the submitter, that has
provided, or will provide, any financial or other assistance in
preparing the submission. Where such submissions are
admitted by the tribunal, the tribunal shall provide to the
parties an opportunity to respond to such written
submissions.

3. Without
prejudice to a tribunal's authority to address other
objections as a preliminary question, such as an objection that
a dispute is not within the jurisdiction or the competence of
the tribunal, a tribunal shall address and decide as a
preliminary question any objection by the respondent that the
claim is manifestly without legal merit.

(a) Such objection
shall be submitted to the tribunal as soon as possible after
the tribunal is constituted, and in no event later than the
date the tribunal fixes for the respondent to submit its
counter-memorial (or, in the case of an amendment to the notice
of arbitration referred to in Article 10.16.4, the date the
tribunal fixes for the respondent to submit its response to the
amendment).

(b) On receipt of
an objection under this paragraph, the tribunal shall suspend
any proceedings on the merits, establish a schedule for
considering the objection consistent with any schedule it has
established for considering any other preliminary question, and
issue a decision or award on the objection, stating the grounds
therefor.

(c) The respondent does
not waive any objection as to the jurisdiction or competence of
the tribunal or any argument on the merits merely because the
respondent did or did not raise an objection under this
paragraph or make use of the expedited procedure set out in the
following paragraph.

4. In the
event that the respondent so requests within 45 days after the
tribunal is constituted, the tribunal shall decide on an
expedited basis an objection under paragraph 3 or any objection
that the dispute is not within the tribunal's
jurisdiction or competence. The tribunal shall suspend
any proceedings on the merits and issue a decision or award on
the objection(s), stating the grounds therefor, no later than
150 days after the date of the request. However, if a
disputing party requests a hearing, the tribunal may take an
additional 30 days to issue the decision or award.
Regardless of whether a hearing is requested, a tribunal may,
on a showing of extraordinary cause, delay issuing its decision
or award by an additional brief period of time, which may not
exceed 30 days.

5. When it
decides a respondent's objection under paragraph 3 or 4,
the tribunal may, if warranted, award to the prevailing
disputing party reasonable costs and attorneys' fees
incurred in submitting or opposing the objection. In
determining whether such an award is warranted, the tribunal
shall consider whether either the claimant's claim or the
respondent's objection was frivolous, and shall provide
the disputing parties a reasonable opportunity to comment.

6. A
respondent may not assert as a defence, counterclaim, right of
set-off, or otherwise that the claimant has received or will
receive indemnification or other compensation for all or part
of the alleged loss or damages pursuant to an insurance or
guarantee contract.

7. A
tribunal may order an interim measure of protection to preserve
the rights of a disputing party, or to ensure that the
tribunal's jurisdiction is made fully effective,
including an order to preserve evidence in the possession or
control of a disputing party or to protect the tribunal's
jurisdiction. A tribunal may not order attachment or
enjoin the application of a measure alleged to constitute a
breach referred to in Article 10.16. For the purposes of
this paragraph, an order includes a recommendation.

8. At the
request of a disputing party, a tribunal shall, before issuing
an award on liability, transmit its proposed award to the
disputing parties and to the non-disputing Party. Within
60 days after the tribunal transmits its proposed award, only
the disputing parties may submit written comments to the
tribunal concerning any aspect of its proposed award. The
tribunal shall consider any such comments and issue its award
not later than 45 days after the expiration of the 60 day
comment period.

Article 10.21: The non-disputing Party

1. No later
than 30 days after the date that such documents have been
delivered to the respondent, the respondent shall deliver to
the non-disputing Party a copy of:

(a)
the notice of intent referred to in Article 10.16.2;

(b)
the notice of arbitration referred to in Article 10.16.4;

(c) pleadings,
memorials, and briefs submitted to the tribunal by a disputing
party and any written submissions submitted pursuant to
paragraphs 2 and 3 of Article 10.20 and Article 10.26;

(d)
minutes or transcripts of hearings of the tribunal, where
available;

(e)
orders, awards, and decisions of the tribunal; and

(f) any other
document submitted to the tribunal, including redacted versions
of confidential documents submitted in accordance with Article
10.22.

2. On
written notice to the disputing parties, the non-disputing
Party may make a submission to a tribunal on any question of
interpretation of this Agreement.

3. The
non-disputing Party receiving confidential information pursuant
to paragraph 1 shall treat the information as if it were a
disputing party.

Article
10.22:
Transparency of Arbitral Proceedings

1. Subject
to paragraphs 2 and 4, the respondent shall, after receiving
the following documents, make them available to the public at
their cost:

(a)
the notice of intent referred to in Article 10.16.2;

(b)
the notice of arbitration referred to in Article 10.16.4;

(c) pleadings,
memorials, and briefs submitted to the tribunal by a disputing
party and any written submissions submitted pursuant to
paragraphs 2 and 3 of Article 10.20, Article 10.21.2 and
Article 10.26;

(d)
minutes or transcripts of hearings of the tribunal, where
available; and

(e)
orders, awards, and decisions of the tribunal.

2. The
tribunal shall conduct hearings open to the public and shall
determine, in consultation with the disputing parties, the
appropriate logistical arrangements. However, any
disputing party that intends to use information designated as
confidential business information or information that is
privileged or otherwise protected from disclosure under a
Party's law in a hearing shall so advise the
tribunal. The tribunal shall make appropriate
arrangements to protect the information from disclosure
including closing the hearing for the duration of any
discussion of confidential information.

3. Nothing
in this Section requires a respondent to disclose information
which would impede law enforcement or information that is
privileged or otherwise protected from disclosure under a
Party's law or to furnish or allow access to information
that it may withhold in accordance with Article 22.2 (Security
Exceptions – General Provisions and Exceptions Chapter)
or Article 22.5 (Disclosure of Information – General
Provisions and Exceptions Chapter).

4.
Information that may be designated as confidential information
is limited to any sensitive factual information that is not
available in the public domain.

5.
Confidential business information or information that is
privileged or otherwise protected from disclosure under a
Party's law shall, if such information is submitted to
the tribunal, be protected from disclosure in accordance with
the following procedures:

(a) Subject to
subparagraph (d), neither the disputing parties nor the
tribunal shall disclose to the non-disputing Party or to the
public any confidential business information or information
that is privileged or otherwise protected from disclosure under
a Party's law where the disputing party that provided the
information clearly designates it in accordance with
subparagraph (b);

(b) Any disputing
party claiming that certain information constitutes
confidential business information or information that is
privileged or otherwise protected from disclosure under a
Party's law shall clearly designate the information at
the time it is submitted to the tribunal;

(c) A disputing
party shall, at the same time that it submits a document
containing information claimed to be confidential business
information or information that is privileged or otherwise
protected from disclosure under a Party's law, submit a
redacted version of the document that does not contain the
information. Only the redacted version shall be made
public in accordance with paragraph 1; and

(d) The tribunal
shall decide any objection regarding the designation of
information claimed to be confidential business information or
information that is privileged or otherwise protected from
disclosure under a Party's law. If the tribunal
determines that such information was not properly designated,
the disputing party that submitted the information may:

(i) withdraw all or part of its submission containing such information; or

(ii) agree to resubmit complete and redacted documents with corrected designations in accordance with the tribunal's determination and subparagraph (c).

In either case, the other disputing party shall, whenever
necessary, resubmit complete and redacted documents which
either remove the information withdrawn under subparagraph
(d)(i) by the disputing party that first submitted the
information or redesignate the information consistent with the
designation under subparagraph (d)(ii) of the disputing party
that first submitted the information.

6. A
disputing party may disclose to other persons in connection
with the arbitral proceedings such confidential documents as it
considers necessary for the preparation of its case, but it
shall require that any confidential information in such
documents is protected.

7. Nothing
in this Section authorises a respondent to withhold from the
public information required to be disclosed by its laws.

Article
10.23:
Governing Law

1. Subject
to paragraph 2, when a claim is submitted under Article
10.16.1(a)or Article 10.16.1(b), the tribunal shall decide the
issues in dispute in accordance with this Agreement and
applicable rules of international law.

2. A
decision of the Joint FTA Committee issuing its interpretation
of a provision of this Agreement under Article 20.1.3(f) (Joint
FTA Committee – Institutional Arrangements Chapter) shall
be binding on a tribunal established under this Section, and
any award must be consistent with that decision.

Article 10.24: Interpretation of Annexes

1. Where a
respondent asserts as a defence that the measure alleged to be
a breach is within the scope of a non-conforming measure set
out in Annex I or Annex II, the tribunal shall, on request of
the respondent, request the interpretation of the Joint FTA
Committee on the issue. The Joint FTA Committee shall
submit in writing any decision issuing its interpretation under
Article 20.1.3(f) (Joint FTA Committee – Institutional
Arrangements Chapter) to the tribunal within 60 days of
delivery of the request.

2. A
decision issued by the Joint FTA Committee under paragraph 1
shall be binding on the tribunal, and any award must be
consistent with that decision. If the Joint FTA Committee
fails to issue such a decision within 60 days, the tribunal
shall decide the issue.

Article 10.25: Expert Reports

Without prejudice to the appointment of other kinds of
experts where authorised by the applicable arbitration rules, a
tribunal, at the request of a disputing party or, unless the
disputing parties disapprove, on its own initiative, may
appoint one or more experts to report to it in writing on any
factual issue concerning environmental, health, safety or other
scientific matters raised by a disputing party in a proceeding,
subject to such terms and conditions as the disputing parties
may agree.

Article
10.26:
Consolidation

1. Where two
or more claims have been submitted separately to arbitration
under Article 10.16.1 and the claims have a question of law or
fact in common and arise out of the same events or
circumstances, any disputing party may seek a consolidation
order with the agreement of all the disputing parties sought to
be covered by the order or in accordance with the terms of
paragraphs 2 to 10.

2. A
disputing party that seeks a consolidation order under this
Article shall deliver, in writing, a request to the
Secretary-General and to all the disputing parties sought to be
covered by the order and shall specify in the request:

(a) the names and
addresses of all the disputing parties sought to be covered by
the order;

(b)
the nature of the order sought; and

(c)
the grounds on which the order is sought.

3. Unless
the Secretary-General finds within 30 days after receiving a
request under paragraph 2 that the request is manifestly
unfounded, a tribunal shall be established under this
Article.

4. Subject
to paragraph 5, unless all the disputing parties sought to be
covered by the order otherwise agree, a tribunal established
under this Article shall be constituted in accordance with
Article 10.19 except that, for the purpose of Article 10.19.1,
the claimants shall appoint a single arbitrator by
agreement.

5. If,
within 60 days after the Secretary-General receives a request
made under paragraph 2, the respondent fails or the claimants
fail to appoint an arbitrator in accordance with paragraph 4,
the Secretary-General may be requested by any disputing party
sought to be covered by the order, to appoint the arbitrator or
arbitrators not yet appointed. If the respondent fails to
appoint an arbitrator, the arbitrator to be appointed by the
Secretary-General may be a national of the respondent, and if
the claimants fail to appoint an arbitrator, the arbitrator to
be appointed by the Secretary-General may be a national of the
Party other than the respondent.

6. Where a
tribunal established under this Article is satisfied that two
or more claims that have been submitted to arbitration under
Article 10.16.1 have a question of law or fact in common, and
arise out of the same events or circumstances, the tribunal
may, in the interest of fair and efficient resolution of the
claims, and after hearing the disputing parties, by order:

(a) assume
jurisdiction over, and hear and determine together, all or part
of the claims;

(b) assume
jurisdiction over, and hear and determine one or more of the
claims, the determination of which it believes would assist in
the resolution of the others; or

(c) instruct a
tribunal previously established under Article 10.19 to assume
jurisdiction over, and hear and determine together, all or part
of the claims, provided that:

(i) that tribunal, at the request of any claimant not previously a disputing party before that tribunal, shall be reconstituted with its original members, except that the arbitrator for the claimants shall be appointed pursuant to paragraphs 4 and 5; and

(ii) that tribunal shall decide whether any prior hearing shall be repeated.

7. Where a
tribunal has been established under this Article, a claimant
that has submitted a claim to arbitration under Article 10.16.1
and that has not been named in a request made under paragraph 2
may make a written request to the tribunal that it be included
in any order made under paragraph 6, and shall specify in the
request:

(a)
the name and address of the claimant;

(b)
the nature of the order sought; and

(c)
the grounds on which the order is sought.

The claimant shall deliver a copy of its request to the
Secretary-General.

8. A
tribunal established under this Article shall conduct its
proceedings in accordance with Section B of this Agreement.

9. A
tribunal established under Article 10.19 shall not have
jurisdiction to decide a claim, or a part of a claim, over
which a tribunal established or instructed under this Article
has assumed jurisdiction.

10. On application of a
disputing party, a tribunal established under this Article,
pending its decision under paragraph 6, may order that the
proceedings of a tribunal established under Article 10.19 be
stayed, unless the latter tribunal has already adjourned its
proceedings.

Article
10.27:
Awards

1. Where a
tribunal makes a final award against a respondent, the tribunal
may award, separately or in combination, only:

(a)
monetary damages and any applicable interest;

(b) restitution of
property, in which case the award shall provide that the
respondent may pay monetary damages and any applicable interest
in lieu of restitution.

A tribunal may also award costs and attorneys' fees in
accordance with this Section and the applicable arbitration
rules.

2. Subject
to paragraph 1, where a claim is submitted to arbitration under
Article 10.16.1(b):

(a) an award of restitution of property shall provide that restitution be made to the enterprise;

(b) an award of monetary damages and any applicable interest shall provide that the sum be paid to the enterprise; and

(c) the award shall provide that it is made without prejudice to any right that any person may have in the relief under applicable domestic law.

3. A
tribunal may not award punitive damages.

4. An award
made by a tribunal shall have no binding force except between
the disputing parties and in respect of the particular
case.

5. Subject
to paragraph 6 and the applicable review procedure for an
interim award, a disputing party shall abide by and comply with
an award without delay.

6. A
disputing party may not seek enforcement of a final award
until:

(a)
in the case of a final award made under the ICSID
Convention:

(i) 120 days have elapsed from the date the award was rendered and no disputing party has requested revision or annulment of the award; or

(ii) revision or annulment proceedings have been completed; and

(b) in the case of
a final award under the ICSID Additional Facility Rules, the
UNCITRAL Arbitration Rules, or the rules selected pursuant to
Article 10.16.5(d):

(i) 90 days have elapsed from the date the award was rendered and no disputing party has commenced a proceeding to revise, set aside, or annul the award; or

(ii) a court has dismissed or allowed an application to revise, set aside, or annul the award and there is no further appeal.

7. Each
Party shall provide for the enforcement of an award in its
territory.

8. A
disputing party may seek enforcement of an arbitration award
under the ICSID Convention, or the New York Convention
regardless of whether actions have been taken under Article
10.18.5.

9. A claim
that is submitted to arbitration under this Section shall be
considered to arise out of a commercial relationship or
transaction for the purposes of Article I of the New York
Convention.

Article
10.28:
Service of Documents

Delivery of notice and other documents on a Party shall be
made to the place named for that Party in Annex 10-F.

Annex 10-A

Customary International Law

The Parties confirm their shared understanding that
"customary international law" generally and as
specifically referenced in Article 10.5 results from a general
and consistent practice of States that they follow from a sense
of legal obligation. The customary international law
minimum standard of treatment of aliens refers, for the
purposes of this Agreement, to all customary international law
principles that protect the economic rights and interests of
aliens.

Annex 10-B

Expropriation

The Parties confirm their shared understanding that:

1. An action
or a series of actions by a Party cannot constitute an
expropriation unless it interferes with a tangible or
intangible property right or property interest in an
investment.

2. Article
10.11.1 addresses two situations. The first is direct
expropriation, where an investment is nationalised or otherwise
directly expropriated through formal transfer of title or
outright seizure.

3. The
second situation addressed by Article 10.11.1 is indirect
expropriation, where an action or series of actions by a Party
has an effect equivalent to direct expropriation without formal
transfer of title or outright seizure.

(a)
The determination of whether an action or series of actions by
a Party, in a specific fact situation, constitutes an indirect
expropriation, requires a case-by-case, fact-based inquiry that
considers, among other factors:

(i) the economic impact of the government action, although the fact that an action or series of actions by a Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;

(ii) the extent to which the government action interferes with distinct, reasonable investment-backed expectations; and

(iii) the character of the government action.

(b)
Except in rare circumstances, non-discriminatory regulatory
actions by a Party that are designed and applied to protect
legitimate public welfare objectives, such as public health,
safety, and the environment, do not constitute indirect
expropriations.

Annex 10-C

Transfers

Chile

1. Chile
reserves the right of the Central Bank of Chile (Banco
Central de Chile) to maintain or adopt measures in
conformity with Law 18.840, Constitutional Organic Law of the
Central Bank of Chile (Ley 18.840, Ley Orgánica
Constitucional del Banco Central de Chile) or other
legislation, in order to ensure currency stability and the
normal operation of domestic and foreign payments. For
this purpose, the Central Bank of Chile is empowered to
regulate the supply of money and credit in circulation and
international credit and foreign exchange operations. The
Central Bank of Chile is empowered as well to issue regulations
governing monetary, credit, financial, and foreign exchange
matters. Such measures include, inter alia, the
establishment of restrictions or limitations on current
payments and transfers (capital movements) to or from Chile, as
well as transactions related to them, such as requiring that
deposits, investments or credits from or to a foreign country,
be subject to a reserve requirement (encaje).

2.
Notwithstanding paragraph 1, the reserve requirement that the
Central Bank of Chile can apply pursuant to Article 49 Nº
2 of Law 18.840, shall not exceed 30 per cent of the amount
transferred and shall not be imposed for a period which exceeds
two years.

3. When
applying measures under this Annex, Chile, as established in
its legislation, shall not discriminate between Australia and
any third country with respect to transactions of the same
nature.

Annex 10-D

DL 600

Chile

1. The
obligations and commitments contained in this Chapter do not
apply to Decree Law 600, Foreign Investment Statute (Decreto
Ley 600, Estatuto de la Inversión Extranjera)
(hereinafter referred to in this Annex as "DL
600"), and to Law 18.657, Foreign Capital Investment Fund
Law (Ley 18.657, Ley de Fondos de Inversión de
Capital Extranjero), to the continuation or prompt renewal
of such laws, to amendments to those laws or to any special
and/or voluntary investment regime that may be adopted in the
future by Chile.

2. For
greater certainty, it is understood that the Foreign Investment
Committee of Chile has the right to accept and reject
applications to invest through DL 600 and Law 18.657.
Additionally, the Foreign Investment Committee has the right to
regulate the terms and conditions of foreign investment under
DL 600 and Law 18.657.

3.
Nowithstanding paragraphs 1 and 2, Chile shall accord to an
investor of Australia or its investment that is a party to an
investment contract under DL 600, the better of the treatment
required under Section A of this Chapter or the treatment under
the investment contract.

4. Chile
shall permit an investor of Australia or its investment that
has entered into an investment contract under DL 600 to amend
the investment contract to make it consistent with the
obligation referred to in paragraph 3.

5.
Notwithstanding any other provision in this Agreement, Chile
may prohibit an investor of Australia or a covered investment
from transferring from Chile proceeds of the sale of all or any
part of an investment made pursuant to a contract under DL 600
for up to one year after the date that the investor or covered
investment transferred funds to Chile to establish the
investment.

Annex 10-E

Termination of the Bilateral Investment
Agreement

1. Without
prejudice to paragraph 2, the Parties agree that the
"Agreement between the Government of Australia and the
Government of the Republic of Chile on the Reciprocal Promotion
and Protection of Investments", and its Protocol, signed
in Canberra on 9 July 1996, (hereafter the "IPPA"),
will terminate on the date of entry into force of the present
Agreement.

2. The IPPA
shall continue to apply to any investment (as defined in the
IPPA) which was made before the entry into force of this
Agreement with respect to any act, fact or situation which
originated before the entry into force of this Agreement.

3.
Notwithstanding paragraph 2, an investor may only submit a
claim under Article 11 of the IPPA (Settlement of disputes
between a Contracting Party and an investor of the other
Contracting Party) within three years from the date of entry
into force of this Agreement.

4. The
Parties agree that this Annex constitutes an amendment to
Article 12 of the IPPA and is effective to terminate the
IPPA.

Annex 10-F

Service of Documents on a Party under
Section B

Australia

Notices and other documents in disputes under Section B
shall be served on Australia by delivery to:

Department of Foreign Affairs and Trade

Chile

Notices and other documents in disputes under Section B
shall be served on Chile by delivery to:

Dirección de Asuntos Jurídicos del Ministerio
de Relaciones
Exteriores de la República de Chile

Teatinos 180

Santiago, Chile

• ^10-[7]Some forms of debt, such as bonds,
  debentures, and long-term notes, are more likely to have the
  characteristics of an investment, while other forms of debt,
  such as claims to payment that are immediately due and result
  from the sale of goods or services, are less likely to have
  such characteristics.
• ^10-[8] Whether a particular right conferred
  pursuant to domestic law, as referred to in subparagraph
  (vii), has the characteristics of an investment depends on
  such factors as the nature and extent of the rights that the
  holder has under the domestic law of the Party. Among
  such rights that do not have the characteristics of an
  investment are those that do not create any rights protected
  under domestic law. For greater certainty, the
  foregoing is without prejudice to whether any asset
  associated with such right has the characteristics of an
  investment.
• ^10-[9] For greater certainty, this
  Chapter is subject to and shall be interpreted in accordance
  with Annexes 10-A through 10-D.
• ^10-[10]For greater certainty, Article 10.4
  does not apply to the dispute settlement procedures set out
  in Section B of this Chapter, including requirements as to
  time.
• ^10-[11]For greater certainty, Article 10.5
  shall be interpreted in accordance with Annex 10-A.
• ^10-[12]The reference to Article 31 includes
  footnote 7 to Article 31.
• ^10-[13]The Parties recognise that a patent
  does not necessarily confer market power.
• ^10-[14]For greater certainty, Article 10.10
  is subject to Annex 10-C.
• ^10-[15]For greater certainty, Article 10.11
  shall be interpreted in accordance with Annex 10-B.