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| Agreement between the Government of the Kingdom of Sweden and the Government of the United Mexican States Concerning the Promotion and Reciprocal Protection of Investments | ||||||||||
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The Government of the Kingdom of Sweden and the Government of the United Mexican States, desiring to intensify economic cooperation to the mutual benefit of both countries and to maintain fair and equitable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party, recognising that the promotion and reciprocal protection of such investments favour the expansion of the economic relations between the two Contracting Parties and stimulate investment initiatives, have agreed as follows: Definitions For the purposes of this Agreement:
(b) shares and other kinds of interest in an enterprise; (c) claims to money, to other assets or to any performance having an economic value except for:
(ii) the extension of a credit in connection with a commercial transaction, such as trade financing; (iii) credits with a maturity of less than three years, (d) intellectual property rights, technical processes, trade names, know-how and goodwill; (e) interests arising from the commitment of capital or other resources in the territory of a Contracting Party to economic activity in such territory, such as under
(ii) contracts where remuneration depends substantially on the production, revenues or profits of an enterprise; payment obligation from, or the granting of a credit to a Contracting Party or to a state enterprise is not considered an investment. (2) "investor" shall mean with regard of a Contracting Party:
(b) legal persons constituted under the laws of that Contracting Party, (3) "returns" shall mean the amounts yielded by an investment and in particular, though not exclusively, include profit, interest, capital gains, dividends, royalties or fees. (4) "territory" shall mean the land territory, the internal water and the territorial sea of each Contracting Party as well as the exclusive economic zone, the seabed and subsoil, over which the Contracting Party exercises, in accordance with international law, sovereign rights or jurisdiction. Promotion and Protection of Investments
(2) Each Contracting Party shall, subject to its laws and regulations relating to the entry, stay and work of a natural person, examine in good faith and give sympathetic consideration to requests by investors of the other Contracting Party and key personnel who are employed by such investors including family members, to enter, leave and remain in its territory for the purpose of carrying out activities connected with the making or the management, use, enjoyment or disposal of an investment. (3) Investment by investors of a Contracting Party shall at all times be accorded fair and equitable treatment in accordance with the relevant international standards under International Law. Neither Contracting Party shall impair by arbitrary or discriminatory measures the management, maintenance, use, enjoyment or disposal of such investments. National and Most Favoured Nation Treatment of Investments
(2) Notwithstanding the provisions of paragraph (1) of this Article, a Contracting Party shall not be obliged to extend to investors of the other Contracting Party and their investments the benefits of any treatment, preference or privilege which are extended, on account of membership of or association with a customs union, a common market or a free trade area, to investors of a third state and their investments. (3) This Article shall not be applicable to tax measures. Nothing in this Agreement shall affect the rights and obligations of either Contracting Party derived from any tax convention. In the event of any inconsistency between the provisions of this Agreement and any tax convention, the provisions of the latter shall prevail. Expropriation and Compensation
(b) on a non-discriminatory basis; (c) in accordance with due process of law; and (d) on payment of compensation in accordance with paragraphs 2 and 3. (3) Compensation shall be paid without delay, be fully realisable and freely transferable. In the event that the payment of compensation is delayed, such compensation shall be paid in an amount which would put the investor in a position no less favourable than the position in which it would have been had the compensation been paid immediately on the date of expropriation, including interest at a commercially reasonable rate from the date of expropriation until the date of payment. Compensation for losses Investors of either Contracting Party who suffer losses of their investments in the territory of the other Contracting Party due to war or other armed conflict, a state of national emergency, revolt, insurrection or riot shall be accorded, with respect to restitution, indemnification, compensation or other settlement, a treatment which is no less favourable than that accorded to its own investors or to investors of any third State. Resulting payments shall be transferable without delay in a freely convertible currency. Transfers
(b) the proceeds from a total or partial sale or liquidation of an investment; (c) payments made under contract including a loan agreement; (d) compensation under Articles 4 and 5; and (e) earnings and other remuneration of personnel engaged from abroad working in connection with an investment. (3) Notwithstanding paragraph (1) above, a Contracting Party may delay or prevent a transfer through the equitable, non-discriminatory and good faith application of measures:
(b) relating to or ensuring compliance with laws and regulations:
(ii) concerning reports or records of transfers, or (4) In case of serious balance of payments difficulties or the threat thereof, each Contracting Party may temporarily restrict transfers provided that such a Contracting Party implements measures or a programme in accordance with the International Monetary Fund standards. These restrictions would be imposed on an equitable, non-discriminatory and good faith basis. Subrogation
(2) Unless agreed otherwise in writing by the Contracting Parties, in case of a dispute, only the investor or a privately owned legal person to which the Contracting Party, its designated agency or the investor has assigned its rights may initiate, or participate in proceedings before a national tribunal or submit the case to international arbitration in accordance with the provisions of Chapter II, Section I. Scope and Standing
(2) An investor of a Contracting Party may submit to arbitration, either on its own behalf or on behalf of an enterprise constituted or organized under the laws of the other Contracting Party being an investment of such an investor, a claim arising out of an alleged breach of an obligation under this Agreement by the latter Contracting Party which causes loss or damage to the investor or its investment. (3) An investor of one Contracting Party may not allege that the Contracting Party has breached an obligation under this Agreement both in arbitration and in proceedings before a national court or administrative tribunal of the latter Contracting Party. Where an enterprise constituted or organized under the laws of a Contracting Party being an investment of an investor of the other Contracting Party, alleges in proceedings before a national court or administrative tribunal that the former Contracting Party has breached an obligation under this Agreement, the investor may not allege the breach in an arbitration under this Agreement. (4) An enterprise that is an investment may not make a claim under this Section. (5) Only claims arising out of events which occurred after the entry into force of this Agreement may be submitted to arbitration. (6) An investor may submit a claim to arbitration only if it, and when it acts on behalf of an enterprise constituted or organised under the laws of the other Contracting Party being an investment of such an investor, both the investor and the enterprise waive their right to initiate or continue before any administrative tribunal or court or other dispute settlement procedures, any proceedings with respect to the measure of the disputing Contracting Party that is alleged to be a breach of the Agreement, except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of the disputing Contracting Party. (7) Where a disputing Contracting Party has deprived a disputing investor of control of an enterprise a waiver from the enterprise under paragraph 6 shall not be required. Means of Settlement, time periods and notification
(2) If the dispute can not be settled according to paragraph (1) and provided that six months have elapsed from the date on which the investor through written notice to the Contracting Party raised the dispute, and written notice of his intention to submit a claim to arbitration has been given 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, the investor may choose to submit the dispute for resolution in accordance with this Article to:
i) 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 disputing Contracting Party, but not both, is party to the ICSID Convention; iii) an ad hoc arbitration tribunal established under the current Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL); iv) the International Chamber of Commerce, by an ad hoc tribunal under its rules of arbitration.
b) the provisions of this Agreement alleged to have been breached and any other relevant provisions; c) the issues and the factual basis for the claim; and d) the relief sought and the approximate amount of damages claimed. Place of Arbitration Any arbitration shall be held in a State that is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on June 10, 1958 (the “New York Convention”). Claims submitted to arbitration shall be considered to arise out of a commercial relationship or transaction for the purpose of Article 1 of the New York Convention. Contracting Party Consent Each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration in accordance with this Section. Written Agreement of the Disputing Parties to International Arbitration The consent given by a Contracting Party in Article 11 together with either the written submission of the dispute to arbitration by the investor pursuant to Article 10 or the investor's advance written consent to such submission, shall constitute the written consent and the written agreement of the parties to the dispute to its submission for settlement for the purposes of Chapter II of the ICSID Convention, the ICSID Additional Facility Rules, Article 1 of the UNCITRAL Arbitration Rules, the Rules of Arbitration of the ICC, and Article II of the New York Convention. The consent includes the assumption of jurisdiction over the dispute by a tribunal constituted under Article 14 on consolidated proceedings for multiple claims. Formation of the Arbitral Tribunal
(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, on request of any of the parties to the dispute, the member or members not yet appointed shall be nominated by an appointing authority. For arbitration under Article 9 paragraph i) to iii) the appointing authority shall be the Secretary-General of ICSID and for arbitration under Article 9 paragraph iv) the appointing authority shall be the International Court of Arbitration of the ICC. The chairman of the arbitral tribunal shall not be a national of either of the Contracting Parties. Consolidation of Multiple Claims
(2) The Contracting Party, party to the dispute, shall deliver the request to each investor party to the proceedings sought to be consolidated. (3) 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 Section. The members of the Arbitral Tribunal shall be appointed by the Secretary-General of ICSID. (4) The arbitral tribunal shall assume jurisdiction over all or part of the disputes and the other arbitral proceedings shall be stayed or adjourned, as appropriate if, after considering the views of the parties, it decides that to do so would best serve the interest of fair and efficient resolution of the disputes and that the disputes fall within the scope of this Article. (5) At the request of the Contracting Party, party to the dispute, the arbitral tribunal established under this Article may decide, on the same basis and with the same effect as under paragraph 4, whether to assume jurisdiction over all or part of a dispute falling within the scope of this Article which is submitted to arbitration after the initiation of consolidation proceedings. Indemnification A Contracting Party, party to the dispute, shall not assert as a defence, 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. Nonetheless, the Contracting Party may require evidence that the compensating party agrees to that the investor exercises the right to claim compensation. Applicable Law An arbitral tribunal established under this Section shall decide the dispute in accordance with this Agreement and applicable rules and principles of international law. Awards and Enforcement
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 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 applicable arbitration rules apply to the publication of an award. (4) An arbitral tribunal shall not order a Contracting Party to pay punitive damages. (5) Each Contracting Party shall, carry out without delay any award made pursuant to this Article issued in proceedings to which it is a party and shall, in its territory, make provision for the effective enforcement of such awards. Exclusions The dispute settlement provisions of this Section shall not apply to the resolutions adopted by a Contracting Party which, in accordance with its legislation, and for national security reasons, prohibit or restrict the acquisition by investors of the other Contracting Party of an investment in the territory of the former Contracting Party, owned or controlled by its nationals. Disputes between the Contracting Parties
(2) If the dispute cannot thus be settled within six months, following the date on which such negotiations were requested by either Contracting Party, it shall at the request of either Contracting Party be submitted to an arbitral tribunal. (3) The arbitral tribunal shall be set up from case to case, each Contracting Party appointing one member. These two members shall then agree upon a national of a third State as their chairman, to be appointed by the Governments of the two Contracting Parties. The members shall be appointed within two months, and the chairman within four months, from the date either Contracting Party, has advised the other Contracting Party of its wish to submit the dispute to an arbitral tribunal. (4) If the time limits referred to in paragraph (3) of this Article have not been complied with, 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. (5) If the President of the International Court of Justice is prevented from discharging the function provided for in paragraph (4) of this Article or is a national of either Contracting Party, the Vice-President shall be invited to make the necessary appointments. If the Vice-President is prevented from discharging the said function or is a national of either Contracting Party, the most senior member of the Court who is not incapacitated or a national of either Contracting Party shall be invited to make the necessary appointments. (6) The arbitral tribunal shall decide disputes on the basis of the provisions of this Agreement and applicable rules and principles of international law. (7) The arbitral tribunal shall reach its decision by a majority of votes, the decision being final and binding on the Contracting Parties. Each Contracting Party shall bear the cost of the member appointed by that Contracting Party as well as the costs for its representation in the arbitration proceedings; the cost of the chairman as well as any other costs shall be borne in equal parts by the two Contracting Parties. The arbitral tribunal may, however, in its decision direct that a higher proportion of costs shall be borne by one of the Contracting Parties. In all other respects, the procedure of the arbitration tribunal shall be determined by the tribunal itself. (8) A Contracting Party, party to the dispute, shall not initiate proceedings under this Article for a dispute regarding the infringement of rights of an investor which that investor has submitted or has agreed to submit to proceedings under Chapter II, Section I, unless the Contracting Party, party to the dispute, has failed to abide by or comply with an award rendered by such a tribunal. The requesting Contracting Party may seek in such proceedings:
(b) a recommendation that the Party abide by or comply with the final award. Application of the Agreement This Agreement shall apply to all investments, whether made before or after its entry into force, but shall not apply to any dispute concerning an investment arising out of events which occurred, or any claim concerning an investment which was settled, before its entry into force. Entry into Force, Duration and Termination
(2) This Agreement shall remain in force for a period of ten years. Thereafter it shall remain in force until the expiration of twelve months from the date that either Contracting Party in writing notifies the other Contracting Party of its decision to terminate this Agreement. (3) In respect of investments made prior to the date when the notice of termination of this Agreement becomes effective, the provisions of Articles 1 to 20 shall remain in force for a further period of ten years from that date. In witness whereof the undersigned, duly authorised to this effect, have signed this Agreement. Done at................on................................in duplicate in the Swedish, the Spanish and the English languages, the three texts being equally authentic. In case of divergence of interpretation the English text shall prevail.
On signing the Agreement concerning the promotion and reciprocal protection of investments between the Kingdom of Sweden and the Government of the United Mexican States, 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, paragraph 1 The exclusion of certain items from the definition of the term "investment" is without prejudice to other rights and obligations connected with such items. Ad Article 1 paragraph (1)(a)
2. With regard to the ownership or control of an enterprise, "own or control" means that the enterprise is:
(ii) "controlled" by an investor of a Contracting Party, if such an investor has the majority of the voting rights in such an enterprise, attached to its shares. Done at................on................................in duplicate in the Swedish, the Spanish and the English languages, the three texts being equally authentic. In case of divergence of interpretation the English text shall prevail.
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