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| Agreement between the United Mexican States and the Republic of Austria on the Promotion and Protection of Investments | ||||||||||||||||||||||||||||
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THE UNITED MEXICAN STATES AND THE REPUBLIC OF AUSTRIA, hereinafter referred to as “Contracting Parties”; DESIRING to create favourable conditions for greater economic co-operation between the Contracting Parties; RECOGNIZING that the promotion and protection of investments may strengthen the readiness for such investments and hereby make an important contribution to the development of economic relations; CONSIDERING that a bilateral agreement is aimed at granting and assuring equal treatment of investors of both Contracting Parties in accordance with the principles of international reciprocity; HAVING IN MIND that the entry and the expansion of investments in their territory by investors of the other Contracting Party are subject to relevant instruments of the OECD in the field of international investments; HAVE AGREED AS FOLLOWS: Definitions For the purpose of this Agreement
(b) an enterprise constituted or organised under the applicable law of a Contracting Party; (2) “investment by an investor of a Contracting Party” means every kind of asset in the territory of one Contracting Party, owned or controlled, directly or indirectly, by an investor of the other Contracting Party, including:
(b) shares, stocks and other forms of equity participation in an enterprise as referred to in subparagraph (a), and rights derived therefrom; (c) bonds, debentures, loans and other forms of debt and rights derived therefrom; (d) rights under contracts, including turnkey, construction, management, production or revenue-sharing contracts; (e) claims to money and claims to performance pursuant to a contract having an economic value; (f) intellectual and industrial property rights as defined in the multilateral agreements concluded under the auspices of the World Intellectual Property Organisation, including copyright, trademarks, patents, industrial designs and technical processes, know-how, trade secrets, trade names and goodwill; (g) rights conferred by law or contract such as concessions, licenses, authorisations or permits to undertake an economic activity; (h) any other tangible or intangible, movable or immovable property, or any related property rights, such as leases, mortgages, liens, pledges or usufructs. However, this shall not apply to credits or loans provided by an investor of a Contracting Party to an enterprise of the other Contracting Party which is owned or controlled by that investor. (3) “enterprise” means a legal person or any entity constituted or organised under the applicable law of a Contracting Party, whether or not for profit, and whether private or government owned or controlled, including a corporation, trust, partnership, sole proprietorship, branch, joint venture, association or organisation. (4) “returns” means the amounts yielded by an investment and, in particular, profits, interests, capital gains, dividends, royalties, license and other fees. (5) “territory” means with respect to each Contracting Party the land territory, internal waters, maritime and airspace under its sovereignty, including the exclusive economic zone and the continental shelf where the Contracting Party exercises, in conformity with international law, sovereign rights and jurisdiction. Promotion and Admission of Investments
(2) The legal extension, alteration or transformation of an investment is to be considered a new investment. Treatment and Protection of Investments
(2) A Contracting Party shall not impair by unreasonable or discriminatory measures the management, operation, maintenance, use, enjoyment, sale and liquidation of an investment by investors of the other Contracting Party. (3) Each Contracting Party shall accord to investors of the other Contracting Party and to their investments treatment no less favourable than that it accords to its own investors and their investments or to investors of any third country and their investments with respect to the management, operation, maintenance, use, enjoyment, sale and liquidation of an investment, whichever is more favourable to the investor. (4) No provision of this Agreement shall be construed as to oblige a Contracting Party to extend to the investors of the other Contracting Party and to their investments the present or future benefit of any treatment, preference or privilege resulting from:
(b) any international agreement, international arrangement or domestic legislation regarding taxation. Transparency
(2) Each Contracting Party shall promptly respond to specific questions and provide, upon request, information to the other Contracting Party on matters referred to in paragraph (1). (3) No Contracting Party shall be required to furnish or allow access to information concerning particular investors or investments the disclosure of which would impede law enforcement or would be contrary to its laws and regulations protecting confidentiality. Expropriation and Compensation
(b) on a non-discriminatory basis, (c) in accordance with due process of law, and (d) accompanied by payment of compensation in accordance with paragraphs (2) and (3) below
(b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation occurred. The fair market value shall not reflect any change in value occurring because the expropriation had become publicly known earlier. Valuation criteria shall include, inter alia, the capital invested, replacement value, appreciation, current returns and goodwill. Any other appropriate valuation criteria may be considered to determine the fair market value. (c) include interest at a commercial rate established on a market basis for the currency of payment from the date of expropriation until the date of actual payment. (d) be fully realisable and freely transferable. (4) Article 3, paragraph (4) does not apply to this Article. Compensation for Losses An investor of a Contracting Party which has suffered a loss relating to its investment in the territory of the other Contracting Party due to war or to other armed conflict, state of emergency, revolution, insurrection, civil disturbance, or any other similar event, or acts of God or force majeure, in the territory of the latter Contracting Party, shall be accorded by the latter Contracting Party, as regards restitution, indemnification, compensation or any other settlement, treatment no less favourable than that which it accords to its own investors or to investors of any third state, whichever is most favourable to the investor. Transfers
b) returns; c) payments made under a contract including a loan agreement; d) proceeds from the sale or liquidation of all or any part of an investment; e) payments of compensation under Articles 5 and 6; f) payments arising out of the settlement of a dispute. (3) In the absence of a market for foreign exchange, the rate to be used shall be the most recent exchange rate for conversion of currencies into Special Drawing Rights. (4) Notwithstanding paragraph (1) b), a Contracting Party may restrict the transfer of a return in kind in circumstances where the Contracting Party is permitted under the GATT 1994 to restrict or prohibit the exportation or the sale for export of the product constituting the return in kind. Nevertheless, a Contracting Party shall ensure that transfers of returns in kind may be effected as authorised or specified in an investment agreement, investment authorisation, or other written agreement between the Contracting Party and an investor or investment of the other Contracting Party. (5) Notwithstanding paragraphs (1) to (3), a Contracting Party may prevent a transfer through the equitable, non-discriminatory and in good faith application of measures relating to bankruptcy or insolvency or to protect the rights of creditors, relating to or ensuring compliance with laws and regulations on the issuing, trading and dealing in securities, futures and derivatives, reports or records of transfer, or in connection with criminal offenses and orders or judgments in administrative and adjudicatory proceedings, provided that such measures and their application shall not be used as a means of avoiding the Contracting Party’s commitments or obligations under this Agreement. (6) In case of serious balance of payments difficulties or the threat thereof, each Contracting Party may temporarily, but only for a period not exceeding twelve months, restrict transfers of proceeds from the sale or liquidation of all or any part of an investment. These restrictions would be imposed on an equitable, non-discriminatory and in good faith basis. Subrogation If a Contracting Party or its designated agency makes a payment under an indemnity, guarantee or contract of insurance against non-commercial risks given in respect of an investment by an investor in the territory of the other Contracting Party, the latter Contracting Party shall recognise the assignment of any right or claim of such investor to the former Contracting Party or its designated agency and the right of the former Contracting Party or its designated agency to exercise by virtue of subrogation any such right or claim to the same extent as its predecessor in title. As regards the transfer of payments to the Contracting Party concerned by virtue of such assignment, Articles (5), (6) and (7) of the present Agreement shall apply mutatis mutandis. However, in case of a dispute, only the investor or a designated agency organised under private law may initiate, or participate in, proceedings before a national tribunal or submit the case to international arbitration in accordance with the provisions of Part one of Chapter two of this Agreement. Other Obligations Each Contracting Party shall observe any other obligation it has assumed in writing, with regard to investments in its territory by investors of the other Contracting Party. Disputes arising from such obligations shall be settled under the terms of the contracts underlying the obligations.
PART ONE: Settlement of Disputes between an Investor and a Contracting Party Scope and Standing (1) This Part applies to disputes between a Contracting Party and an investor of the other Contracting Party concerning an alleged breach of an obligation of the former under this Agreement which causes loss or damage to the investor or its investment. An enterprise that is an investment by an investor of the other Contracting Party may not submit a claim to arbitration under this Part. (2) If an investor of a Contracting Party or his investment that is an enterprise initiates proceedings before a national tribunal with respect to a measure that is alleged to be a breach of this Agreement, the dispute may only be submitted to arbitration under this Part if the competent national tribunal has not rendered judgment in the first instance on the merits of the case. The foregoing does not apply to administrative proceedings before the administrative authorities executing the measure that is alleged to be a breach. (3) Without prejudice to Article (18), paragraphs (5) and (6), in case an investor of a Contracting Party submits a claim to arbitration, neither the investor, nor his enterprise, may initiate or continue proceedings before a national tribunal. Means of Settlement, Time Periods (1) Such a dispute should, if possible, be settled by negotiation or consultation. If it is not so settled, the investor may choose to submit it for resolution:
b) in accordance with any applicable previously agreed dispute settlement procedure, or c) in accordance with this Article to:
ii) the Centre under the rules governing the Additional Facility for the Administration of Proceedings by the Secretariat of the Centre, if the Contracting Party of the investor or the Contracting Party to the dispute, but not both, is a party to the ICSID Convention; iii) a sole arbitrator or an ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (“UNCITRAL”); iv) the International Chamber of Commerce, by a sole arbitrator or an ad hoc tribunal under its rules of arbitration. (3) A dispute may be submitted for resolution pursuant to paragraph (1) c), provided that six months have elapsed since the events giving rise to the claim occurred and provided that the investor has delivered to the Contracting Party, party to the dispute, written notice of his intention to submit a claim to arbitration at least 60 days in advance, but not later than 4 years from the date the investor first acquired or should have acquired knowledge of the events which gave rise to the dispute. Contracting Party Consent Each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration in accordance with this Part. Formation of the Arbitral Tribunal (1) Unless the parties to the dispute agree otherwise, the arbitral tribunal shall comprise three members. Each party to the dispute shall appoint one member and these two members shall agree upon a third member as their chairman. (2) Members of arbitral tribunals shall have experience in international law and investment matters. (3) If an arbitral tribunal has not been constituted within 90 days from the date the claim was submitted to arbitration, either because a party to the dispute failed to appoint a member or the elected members failed to agree upon a chairman, the Secretary General of ICSID, on the request of any of the parties to the dispute, shall be kindly asked to appoint, in his discretion, the member or members not yet appointed. Nevertheless, the Secretary General of ICSID, when appointing a chairman, shall assure that the chairman is a national of neither of the Contracting Parties. Consolidation (1) A tribunal of consolidation established under this Article shall be installed under the UNCITRAL Arbitration Rules and shall conduct its proceedings in accordance with those Rules, except as modified by this Part. (2) Proceedings will be consolidated in the following cases:
b) when two or more claims are submitted to arbitration arising from common legal and factual issues. Place of Arbitration Any arbitration under this Part shall, at the request of any party to the dispute, be held in a state that is party of the New York Convention. Claims submitted to arbitration under this Part shall be considered to arise out of a commercial relationship or transaction for purpose of Article 1 of the New York Convention. Indemnification A Contracting party shall not assert as a defense, counter-claim, right of set-off or for any other reason, that indemnification or other compensation for all or part of the alleged losses or damages has been received or will be received pursuant to an indemnity, guarantee or insurance contract. Applicable Law A tribunal established under this Part shall decide the dispute in accordance with this Agreement and applicable rules and principles of international law. Awards and Enforcement (1) Arbitration awards may provide the following forms of relief:
b) pecuniary compensation, which shall include interest from the time the loss or damage was incurred until the time of payment; c) restitution in kind in appropriate cases, provided that the Contracting Party may pay pecuniary compensation in lieu thereof where restitution is not practicable; and d) with the agreement of the parties to the dispute, any other form of relief. (3) The final award will only be published if there is written agreement by both parties to the dispute. (4) An arbitral tribunal shall not order a Contracting Party to pay punitive damages. (5) Each Contracting Party shall, in its territory, make provision for the effective enforcement of awards made pursuant to this Article and shall carry out without delay any such award issued in a proceeding to which it is party. (6) An investor may seek enforcement of an arbitration award under the ICSID Convention or the New York Convention. Exclusions The disputes settlement provisions of this Part shall not apply to the resolutions adopted by a Contracting Party which, for national security reasons, prohibit or restrict the acquisition of an investment in its territory, owned or controlled by its nationals, by investors of the other Contracting Party, according to the legislation of each Contracting Party. Scope, Consultations, Mediation and Conciliation Disputes between the Contracting Parties concerning the interpretation or application of this Agreement shall, as far as possible, be settled amicably or through consultations, mediation or conciliation. Should the Contracting Parties agree on a controversial issue, a written understanding shall be drafted and approved by the Contracting Parties. Initiation of Proceedings (1) At the request of either Contracting Party a dispute concerning the interpretation or application of this Agreement may be submitted to an arbitral tribunal for decision not earlier than four months after such request has been notified to the other Contracting Party. (2) A Contracting Party shall not initiate proceedings under this Part for a dispute regarding the infringement of rights of an investor which that investor has submitted to proceedings under Part 1 of this Chapter, unless the other Contracting Party has failed to abide by or comply with the award rendered in that dispute. In this case, the arbitral tribunal established under this Part, on delivery of a request by a Contracting Party whose investor was a party to the dispute, may award:
(b) a recommendation that the other Contracting Party abide by or comply with the final award. Formation of the Tribunal (1) Such arbitral tribunal shall be constituted ad hoc as follows: Each Contracting Party shall appoint one member and these two members shall agree upon a national of a third State as their chairman. Such members shall be appointed within two months from the date one Contracting Party has informed the other Contracting Party, that it intends to submit the dispute to an arbitral tribunal, the chairman of which shall be appointed within two further months. (2) If the periods specified in paragraph (1) are not observed, either Contracting Party may, in the absence of any other relevant arrangement, invite the President of the International Court of Justice to make the necessary appointments. If the President of the International Court of Justice is a national of either of the Contracting Parties or if he is otherwise prevented from discharging the said function, the Vice-President or, in case of his inability, the member of the International Court of Justice next in seniority should be invited under the same conditions to make the necessary appointments. (3) Members of an arbitral tribunal shall be independent and impartial. Applicable law, Default Rules (1) The arbitral tribunal will decide disputes in accordance with this Agreement and the applicable rules and principles of international law. (2) The arbitral tribunal shall determine its own procedures, including recourse to the Permanent Court of Arbitration Optional Rules for Arbitrating Disputes, unless the Contracting Parties agree otherwise. The arbitral tribunal shall reach its decision by a majority of votes. Awards (1) The arbitral tribunal, in its award, shall set out its findings of law and fact, together with the reasons therefore, and may, at the request of a Contracting Party, award the following forms of relief:
b) a recommendation that a Contracting Party brings its actions into conformity with its obligations under this Agreement; or c) any other form of relief to which the Contracting Party against whom the award is made consents. Costs Each Contracting Party shall pay the cost of its representation in the proceedings. The cost of the arbitral tribunal shall be paid for equally by the Contracting Parties, unless the tribunal directs that they be shared differently. Protocol The annexed Protocol is an integral part of this Agreement. Application of the Agreement (1) This Agreement shall apply to investments made in the territory of either Contracting Party in accordance with its legislation by investors of the other Contracting Party prior to as well as after the entry into force of this Agreement. (2) This Agreement applies in the territory of the Contracting Parties and at all levels of government. (3) This Agreement shall not apply to claims which have been settled or procedures which have been initiated prior to its entry into force. Consultations Each Contracting Party may propose to the other Contracting Party consultations on any matter relating to this Agreement. These consultations shall be held at a place and at a time agreed upon through diplomatic channels. Entry into Force
(2) This Agreement shall enter into force 60 days after the date on which the last notification referred to in paragraph (1) above has been received by the Contracting Party in question. Duration and Termination (1) This Agreement shall be in force for an initial period of ten years and shall remain in force thereafter for an indefinite period of time, unless terminated in accordance with paragraph (2). (2) Either Contracting Party may terminate this Agreement at the end of the initial ten years period or at any time thereafter, by given a twelve months written notice to the other through diplomatic channels. (3) With respect to investments made before termination of this Agreement, its provisions shall continue to be effective with respect to such investments for a period of ten years after the date of termination
On signing the Agreement between the United Mexican States and the Republic of Austria on the Promotion and Protection of Investments, the undersigned plenipotentiaries have, in addition, agreed on the following provisions which shall be regarded as an integral part of the said Agreement: Ad Article (1) (a) For greater clarity, the Contracting Parties agree to cover under Article (1), paragraph (2) and under Article (7) only those investments which are created for the purpose of establishing lasting economic relations with an undertaking such as, in particular, investments which give the possibility of exercising an effective influence on the management thereof. (b) The term “indirectly” shall cover only those situations where both the subsidiary and its investment are located in the territory of the same Contracting Party. Pursuant to Article (10), an alleged breach of this Agreement must be causally linked to loss or damage to the investor or its investment for the investor to have standing to bring the claim against the host State. Notwithstanding, if a damage were imminent, it would not need to have been incurred before the dispute is submitted to arbitration but, in any case, the damage must have had occurred in order for the arbitral tribunal to decide accordingly, except in the case of Article (18), paragraph (1) a) and d). AGREED MINUTES of the meeting between a delegation of the United Mexican States and a delegation of the Republic of Austria on an Agreement on the promotion and protection of investments. On 18th February 1998, a fourth round of negotiations took place in Paris between a delegation of the United Mexican States and a delegation of the Republic of Austria, in order to prepare the text for an Agreement on the promotion and protection of investments. The negotiations took place in a very open, constructive a friendly atmosphere. Complete consensus on the text of the Agreement was reached. Both delegations confirm the importance of this Agreement and their intention to take all necessary steps for the expeditious signature, ratification and entry into force of the agreed text. The names of the members of both delegations are stated in Annex I. The agreed text is attached as Annex II. Paris, 18th February 1998.
Annex I
The delegation of the Republic of Austria:
The delegation of the United Mexican States:
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