Chapter Eleven

Subchapter A - Investment

Article 1101: Scope

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

Party relating to:

(a) investors of another Party;

(b) investments of investors of another Party in the

territory of the Party existing at the date of entry

into force of this Agreement as well as to investments

made or acquired thereafter by such investors; and

(c) with respect to Article 1106, all investments in the

territory of the Party existing at the date of entry

into force of this Agreement as well as to investments

made or acquired thereafter.

2. A Party has the right to perform exclusively the economic

activities set out in Annex III and to refuse to permit the

establishment of investment in such activities.

3. This Chapter does not apply to Chapter Fourteen (Financial

Services) except to the extent specifically provided therein.

4. Nothing in this Chapter shall be construed to prevent a

Party from providing a service or performing a function such as

law enforcement, correctional services, income security or

insurance, social security or insurance, social welfare, public

education, public training, health, and child care, in a manner

that is not inconsistent with this Chapter.

Article 1102: National Treatment

1. Each Party shall accord to investors of another Party

treatment no less favorable 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.

2. Each Party shall accord to investments of investors of

another Party treatment no less favorable than that it accords,

in like circumstances, to investments of its own investors with

respect to the establishment, acquisition, expansion, management,

conduct, operation and sale or other disposition of investments.

3. The treatment accorded by a Party under paragraphs 1 and 2

means, with respect to a state or province, treatment no less

favorable than the most favorable treatment accorded, in like

circumstances, by such state or province to investors, and to

investments of investors, of the Party of which it forms a part.

4. For greater certainty, no Party shall:

(a) impose on an investor of another Party a requirement

that a minimum level of equity in an enterprise in the

territory of the Party be held by its nationals, other

than nominal qualifying shares for directors or

incorporators of corporations; or

(b) require an investor of another Party, by reason of its

nationality, to sell or otherwise dispose of an

investment in the territory of the Party.

Article 1103: Most-Favored-Nation Treatment

1. Each Party shall accord to investors of another Party

treatment no less favorable than that it accords, in like

circumstances, to investors of another Party or of a non-Party

with respect to the establishment, acquisition, expansion,

management, conduct, operation and sale or other disposition of

investments.

2. Each Party shall accord to investments of investors of

another Party treatment no less favorable than that it accords,

in like circumstances, to investments of investors of another

Party or of a non-Party with respect to the establishment,

acquisition, expansion, management, conduct, operation and sale

or other disposition of investments.

Article 1104: Non-discriminatory Treatment

Each Party shall accord to investors of another Party and to

investments of investors of another Party the better of the

treatment required by Articles 1102 and 1103 ("non-discriminatory

treatment").

Article 1105: Minimum Standard of Treatment

1. Each Party shall accord to investments of investors of

another Party treatment in accordance with international law,

including fair and equitable treatment and full protection and

security.

2. Without prejudice to paragraph 1 and notwithstanding Article

1108 (8) (b), each Party shall accord to investors of another

Party, and to investments of investors of another Party,

non-discriminatory treatment with respect to measures it

maintains or adopts relating to losses suffered by investments in

its territory owing to armed conflict or civil strife.

3. Paragraph 2 shall not apply to existing measures related to

subsidies or grants that are inconsistent with Article 1102.

Article 1106: Performance Requirements

1. A Party shall not impose the following requirements, or

enforce any commitment or undertaking, in connection with the

establishment, acquisition, expansion, management, conduct or

operation 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 or services provided in its territory, or to

purchase goods or services 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 provides by relating

such sales in any way to the volume or value of its

exports or foreign exchange earnings;

(f) to transfer technology, a production process or other

proprietary knowledge to a person in its territory,

except when the requirement is imposed or the

commitment or undertaking is enforced by a court,

administrative tribunal or competition authority to

remedy an alleged violation of competition laws; or

(g) to act as the exclusive supplier of the goods it

produces or services it provides to a specific region

or world market.

2. A requirement that an investment use a technology to meet

generally applicable health, safety or environmental

standards-related measures, as defined in Article 915, shall not

be construed to be inconsistent with paragraph 1(f). For greater

certainty, Articles 1102, 1103 and 1104 shall apply to such

requirements.

3. A Party shall not condition the receipt or continued receipt

of an advantage, in connection with investments in its territory

of investors of a Party or of a non-Party, on compliance with any

of the following requirements:

(a) to purchase, use or accord a preference to goods

produced in its territory, or to purchase goods from

producers in its territory;

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

content;

(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 provides by relating

such sales in any way to the volume or value of its

exports or foreign exchange earnings.

4. Nothing in paragraph 3 shall be construed to prevent a Party

from conditioning the receipt or continued receipt of an

advantage, in connection with investments in its territory of

investors of a Party or of a non-Party, on compliance with a

requirement to locate production, provide a service, train or

employ workers, construct or expand particular facilities, or

carry out research and development, in its territory.

5. Paragraphs 1 and 3 do not apply to any requirements other

than the requirements listed in those paragraphs.

Article 1107: Senior Management and Boards of Directors

1. A Party shall not require that an enterprise of the Party

that is an investment of an investor of another Party appoint to

senior management positions individuals of any particular

nationality.

2. A Party may require that a majority of the board of

directors, or any committee thereof, of an enterprise of the

Party that is an investment of an investor of another Party, 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 1108: Reservations and Exceptions

1. Articles 1102, 1103, 1106 and 1107 do not apply to:

(a) any existing non-conforming measure that is maintained

by:

(i) a Party at the federal level, as described in its

Schedule to Annex I or III,

(ii) a state or province, for two years after the date

of entry into force of this Agreement, and

thereafter as described by a Party in its Schedule

to Annex I, or

(iii) a local 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

1102, 1103, 1106 and 1107.

2. A Party shall have two years from the date of entry into

force of this Agreement to describe in its Schedule to Annex I

any existing non-conforming measure maintained by a state or

province.

3. A Party shall not be required to describe in its Schedule to

Annex I any existing non-conforming measure that is maintained by

a local government.

4. To the extent indicated by a Party in its Schedule to Annex

II, Articles 1102, 1103, 1106 and 1107 do not apply to any

measure adopted or maintained by a Party with respect to the

sectors, subsectors or activities as described therein.

5. Any measure adopted by a Party in a manner consistent with

paragraph 4 shall not require an investor of another Party, by

reason of its nationality, to sell or otherwise dispose of an

investment existing at the time the measure becomes effective.

6. Articles 1102 and 1103 do not apply to any measure that is

an exception to, or derogation from, the obligations under

Article 1703 (National Treatment) as specifically provided for in

that Article.

7. Article 1103 does not apply to treatment accorded by a Party

pursuant to agreements or with respect to sectors described in

Annex IV.

8. Articles 1102, 1103 and 1107 do not apply to:

(a) procurement of goods or services by a Party or a state

enterprise; or

(b) subsidies and grants provided by a Party or a state

enterprise, including government-supported loans,

guarantees and insurance.

9. The provisions of:

(a) Article 1106(1)(a), (b) and (c), and (3)(a) and (b) do

not apply to qualification requirements for goods or

services with respect to export promotion and foreign

aid programs;

(b) Article 1106(1)(b), (c), (f) and (g), and (3)(a) and

(b) do not apply to procurement of goods or services by

a Party or a state enterprise; and

(c) Article 1106(3)(a) and (b) do not apply to requirements

imposed by an importing Party related to the content of

goods necessary to qualify for preferential tariffs or

preferential quotas.

Article 1109: Transfers

1. Each Party shall permit all transfers and international

payments ("transfers") relating to an investment of an investor

of another Party in the territory of the Party to be made freely

and without delay. Such transfers include:

(a) profits, dividends, interest, capital gains, royalty

payments, management fees, technical assistance and

other fees, returns in kind, and other amounts derived

from the investment;

(b) proceeds from the sale of all or any part of the

investment or from the partial or complete liquidation

of the investment;

(c) payments made under a contract entered into by the

investor, or its investment, including payments made

pursuant to a loan agreement;

(d) payments made pursuant to Article 1110; and

(e) payments arising under Subchapter B.

2. Each Party shall permit transfers to be made in a freely

usable currency at the market rate of exchange prevailing on the

date of transfer with respect to spot transactions in the

currency to be transferred.

3. No Party shall require its investors to transfer, or

penalize its investors who fail to transfer, the income,

earnings, profits or other amounts derived from, or attributable

to, an investment in the territory of another Party.

4. Notwithstanding paragraphs 1 and 2, a Party may prevent 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;

(c) criminal or penal offenses;

(d) reports of transfers of currency or other monetary

instruments; or

(e) ensuring the satisfaction of judgments in adjudicatory proceedings.

5. Paragraph 3 shall not be construed to prevent a Party from

imposing any measure through the equitable, non-discriminatory

and good faith application of its laws relating to the matters

set out in subparagraphs (a) through (e) of paragraph 4.

6. A Party may restrict transfers of returns in kind only in

circumstances in which it could otherwise restrict such transfers

under this Agreement.

Article 1110: Expropriation and Compensation

1. No Party shall directly or indirectly nationalize or

expropriate an investment of an investor of another Party in its

territory or take a measure tantamount to nationalization or

expropriation of such an investment ("expropriation"), except:

(a) for a public purpose;

(b) on a non-discriminatory basis;

(c) in accordance with due process of law and the general

principles of treatment provided in Article 1105; and

(d) upon payment of compensation in accordance with

paragraphs 2 to 6.

2. Compensation shall be equivalent to the fair market value of

the expropriated investment immediately before the expropriation

took place ("date of expropriation"), and shall not reflect any

change in value occurring because the intended expropriation had

become known earlier. Valuation criteria shall include going

concern value, asset value (including declared tax value of

tangible property) and other criteria, as appropriate to

determine fair market value.

3. Compensation shall be paid without delay and be fully

realizable.

4. If payment is made in a G7 currency, compensation shall

include interest at a commercially reasonable rate for that

currency from the date of expropriation until the date of actual

payment thereof.

5. If a Party elects to pay in a currency other than a G7

currency, the amount paid on the date of payment, if converted

into a G7 currency at the market rate of exchange prevailing on

that date, shall be no less than if the amount of compensation

owed on the date of expropriation had been converted into that G7

currency at the market rate of exchange prevailing on that date,

and interest had accrued at a commercially reasonable rate for

that G7 currency from the date of expropriation until the date of

payment.

6. Upon payment, compensation shall be freely transferable as

provided in Article 1109.

7. This Article does not apply to the issuance of compulsory

licenses granted in relation to intellectual property rights, or

the revocation, limitation or creation of intellectual property

rights to the extent that such issuance, revocation, limitation

or creation is consistent with Chapter Seventeen (Intellectual

Property).

8. For purposes of this Article and for greater clarity, a non-

discriminatory measure of general application shall not be

considered a measure tantamount to an expropriation of a debt

security or loan covered by this Chapter solely on the ground

that the measure imposes costs on the debtor that cause it to

default on the debt.

Article 1111: Special Formalities and Information Requirements

1. Nothing in Article 1102 shall be construed to prevent a

Party from adopting or maintaining a measure that prescribes

special formalities in connection with the establishment of

investments by investors of another Party, such as a requirement

that investors be residents of the Party or that investments be

legally constituted under the laws and regulations of the Party,

provided that such formalities do not impair the substance of the

benefits of any of the provisions in this Chapter.

2. Notwithstanding Articles 1102 and 1103, a Party may require,

from an investor of another Party or its investment, routine

business information, to be used solely for informational or

statistical purposes, concerning that investment in its

territory. The Party shall protect such business information as

is confidential from disclosure that would prejudice the

investor's or the investment's competitive position. Nothing in

this paragraph shall preclude a Party from otherwise obtaining or

disclosing information in connection with the equitable and good

faith application of its laws.

Article 1112: Relationship to Other Chapters

1. In the event of any inconsistency between a provision of

this Chapter and a provision of another Chapter, the provision of

the other Chapter shall prevail to the extent of the

inconsistency.

2. A requirement by a Party that a service provider of another

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 the provision of that

cross-border service. This Chapter shall apply to that Party's

treatment of the posted bond or financial security.

Article 1113: Denial of Benefits

1. Each Party reserves the right to deny to an investor of

another Party that is an enterprise of such Party and to

investments of such investor the benefits of this Chapter if

investors of a non-Party own or control the enterprise and:

(a) the denying Party does not maintain diplomatic

relations with the non-Party; or

(b) the denying Party adopts or maintains measures with

respect to the non-Party that prohibit transactions

with the enterprise or that would be violated or

circumvented if the benefits of this Chapter were

accorded to the enterprise or to its investments.

2. Subject to prior notification and consultation in accordance

with Articles 1803 (Notification and Provision of Information)

and 2006 (Consultations), respectively, each Party reserves the

right to deny to an investor of another Party that is an

enterprise of such Party and to investments of such investors the

benefits of this Chapter if investors of a non-Party own or

control the enterprise and the enterprise has no substantial

business activities in the territory of the Party under whose

laws it is constituted or organized.

Article 1114: Environmental Measures

1. Nothing in this Chapter shall be construed to prevent a

Party from adopting, maintaining, or enforcing any measure,

otherwise consistent with this Chapter, that it considers

appropriate to ensure that investment activity in its territory

is undertaken in a manner sensitive to environmental concerns.

2. The Parties recognize that it is inappropriate to encourage

investment by relaxing domestic health, safety or environmental

measures. Accordingly, a Party should not waive or otherwise

derogate from, or offer to waive or otherwise derogate from, such

measures as an encouragement for the establishment, acquisition,

expansion, or retention in its territory of an investment of an

investor. If a Party considers that another Party has offered

such an encouragement, it may request consultations with the

other Party and the two Parties shall consult with a view to

avoiding any such encouragement.

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Subchapter B - SETTLEMENT OF DISPUTES BETWEEN A PARTY AND

AN INVESTOR OF ANOTHER PARTY

Article 1115: Purpose

This Subchapter establishes a mechanism for the settlement

of investment disputes that assures both equal treatment among

investors of the Parties in accordance with the principle of

international reciprocity and due process before an impartial

tribunal.

Article 1116: Claim by an Investor of a Party on Behalf of

Itself

1. An investor of a Party may submit to arbitration under this

Subchapter a claim that another Party has breached:

(a) a provision of Subchapter A; or

(b) Article 1502(3)(a) (Monopolies and State Enterprises)

or Article 1503(2) (State Enterprises) where the

alleged breach pertains to the obligations of

Subchapter A,

and that the investor has incurred loss or damage by reason of,

or arising out of, that breach.

2. An investor may not make a claim if more than three years

have elapsed from the date on which the investor first acquired,

or should have first acquired, knowledge of the alleged breach

and knowledge that the investor has incurred loss or damage.

Article 1117: Claim by an Investor of a Party on Behalf of an

Enterprise

1. An investor of a Party, on behalf of an enterprise of

another Party that is a juridical person that the investor owns

or controls directly or indirectly, may submit to arbitration

under this Subchapter a claim that the other Party has breached:

(a) a provision of Subchapter A; or

(b) Article 1502 (3)(a) (Monopolies and State Enterprises)

or Article 1503(2) (State Enterprises) where the

alleged breach pertains to the obligations of

Subchapter A;

and that the enterprise has incurred loss or damage by reason of,

or arising out of, that breach.

2. An investor may not make a claim on behalf of an enterprise

described in paragraph 1 if more than three years have elapsed

from the date on which the enterprise first acquired, or should

have first acquired, knowledge of the alleged breach and

knowledge that the enterprise has incurred loss or damage.

3. Where an investor makes a claim under this Article and the

investor or a non-controlling investor in the enterprise makes a

claim under Article 1116 arising out of the same events which

gave rise to the claim under this Article, and two or more of the

claims are submitted to arbitration under Article 1120, the

claims should be heard together by a Tribunal established

pursuant to Article 1125, unless the Tribunal finds that the

interests of a disputing party would be prejudiced thereby.

4. An investment may not make a claim under this Subchapter.

Article 1118: Settlement of a Claim Through Consultation and

Negotiation

The disputing parties should first attempt to settle a claim

through consultation or negotiation.

Article 1119: Notice of Intent to Submit a Claim to Arbitration

The disputing investor shall give to the disputing Party

written notice of its intention to submit a claim to arbitration

at least 90 days before the claim is submitted, which notice

shall specify:

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

(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.

Article 1120: Submission of a Claim to Arbitration

1. Except as provided in Annex 1120.1, and provided that six

months have elapsed since the events giving rise to a claim, a

disputing investor may submit the claim to arbitration under:

(a) the ICSID Convention, provided that both the disputing

Party and the Party of the investor are parties to the

Convention;

(b) the Additional Facility Rules of ICSID, provided that

either the disputing Party or the Party of the

investor, but not both, is a party to the ICSID

Convention; or

(c) the UNCITRAL Arbitration Rules.

2. The applicable arbitration rules shall govern the

arbitration except to the extent modified by this Subchapter.

Article 1121: Conditions Precedent to Submission of a Claim to

Arbitration

1. A disputing investor may submit a claim under Article 1116

to arbitration only if:

(a) the investor consents to arbitration in accordance with

the provisions of this Subchapter; and

(b) both the investor and an enterprise of another Party

that is a juridical person that the investor owns or

controls directly or indirectly, waive their right to

initiate or continue before any administrative tribunal

or court under the domestic law of any Party any

proceedings with respect to the measure of the

disputing Party that is alleged to be a breach of

Subchapter A of this Chapter, Article 1502(3)(a)

(Monopolies and State Enterprises) or Article 1503(2)

(State Enterprises), except for proceedings for

injunctive, declaratory or other extraordinary relief,

not involving the payment of damages, before an

administrative tribunal or court under the domestic law

of the disputing Party.

2. A disputing investor may submit a claim under Article 1117

to arbitration only if both the investor and the enterprise:

(a) consent to arbitration in accordance with the

provisions of this Subchapter; and

(b) waive their right to initiate or continue before any

administrative tribunal or court under the domestic law

of any Party any proceedings with respect to the

measure of the disputing Party that is alleged to be a

breach of Subchapter A of this Chapter, Article

1502(3)(a) (Monopolies and State Enterprises) or

Article 1503(2) (State Enterprises), except for

proceedings for injunctive, declaratory or other

extraordinary relief, not involving the payment of

damages, before an administrative tribunal or court

under the domestic law of the disputing Party.

3. A consent and waiver required by this Article shall be in

writing, shall be given to the disputing Party, and shall be

included in the submission of a claim to arbitration.

Article 1122: Consent to Arbitration

1. Each Party consents to the submission of a claim to

arbitration in accordance with the provisions of this Subchapter.

2. The consent given by paragraph 1 and the submission by a

disputing investor of a claim to arbitration in accordance with

the provisions of this Subchapter shall satisfy the requirement

of:

(a) Chapter II of the ICSID Convention (Jurisdiction of the

Center) and the Additional Facility Rules for written

consent of the parties;

(b) Article II of the New York Convention for an agreement

in writing; and

(c) Article I of the Inter-American Convention for an

agreement.

Article 1123: Number of Arbitrators and Method of Appointment

Subject to Article 1125, and unless the disputing parties

agree otherwise, the Tribunal shall consist of three arbitrators.

One arbitrator shall be appointed by each of the disputing

parties. The third, who shall be the presiding arbitrator, shall

be appointed by agreement of the disputing parties.

Article 1124: Constitution of Tribunal When a Party Fails to

Appoint an Arbitrator or the Disputing Parties Are

Unable to Agree on a Presiding Arbitrator

1. The Secretary-General of ICSID shall serve as appointing

authority for an arbitration under this Subchapter.

2. If a Tribunal has not been constituted within 90 days from

the date that a claim is submitted to arbitration, the Secretary-

General, at the request of either disputing party:

(a) shall appoint the arbitrator or arbitrators not yet

appointed in his discretion, except for the presiding

arbitrator; and

(b) shall appoint the presiding arbitrator in accordance

with paragraph 3.

3. The Secretary-General shall appoint the presiding arbitrator

from the list of presiding arbitrators described in paragraph 4.

In the event that no such presiding arbitrator is available to

serve, the Secretary-General shall appoint a presiding arbitrator

who is not a national of any of the Parties from the ICSID Panel

of Arbitrators.

4. As of the date of entry into force of this Agreement, the

Parties shall have jointly designated, without regard to

nationality, 45 presiding arbitrators meeting the qualifications

of the rules referred to in Article 1120 and experienced in

international law and investment.

5. Subject to paragraph 8, where a disputing investor submits a

claim to arbitration under the ICSID Convention or the Additional

Facility Rules, each Party agrees:

(a) to the appointment by the investor of a national of the

Party of the investor as an arbitrator; and

(b) to the appointment by the Secretary-General of a

national of the Party of the investor as an arbitrator

or as a presiding arbitrator.

6. Subject to paragraph 8, a disputing investor described in

Article 1116 may submit a claim to arbitration, or continue a

claim, under the ICSID Convention or the Additional Facility

Rules, only on the following conditions:

(a) where the disputing Party appoints a national of the

disputing Party as an arbitrator, the investor agrees

in writing to the appointment; and

(b) where the Secretary-General appoints a national of the

disputing Party as an arbitrator or as a presiding

arbitrator, the investor agrees in writing to the

appointment.

7. Subject to paragraph 8, a disputing investor described in

Article 1117(1) may submit a claim to arbitration, or continue a

claim, under the ICSID Convention or the Additional Facility

Rules, only on the following conditions:

(a) where the disputing Party appoints a national of the

disputing Party as an arbitrator, the investor and the

enterprise agree in writing to the appointment; and

(b) where the Secretary-General appoints a national of the

disputing Party as an arbitrator or as a presiding

arbitrator, the investor and the enterprise agree in

writing to the appointment.

8. A disputing party:

(a) in the case of a claim submitted to arbitration under

the ICSID Convention, may propose, under Article 57 of

the Convention, the disqualification of a member of the

Tribunal on account of any fact indicating a manifest

lack of the qualities required by paragraph 1 of

Article 14 of the Convention; and

(b) in the case of a claim submitted to arbitration under

the Additional Facility Rules, may propose, under

Article 14 of the Rules, the disqualification of a

member of the Tribunal on account of any fact

indicating a manifest lack of the qualities required by

Article 9 of the Rules.

Article 1125: Consolidation

1. A Tribunal established under this Article shall be

established under the UNCITRAL Arbitration Rules, and shall

conduct its proceedings in accordance with those Rules, except as

modified by this Subchapter.

2. Where a Tribunal established under this Article is satisfied

that claims have been submitted to arbitration under Article 1120

that have a question of law or fact in common, the Tribunal may,

in the interests of fair and efficient resolution of the claims,

and after hearing the disputing parties, order that the Tribunal:

(a) shall assume jurisdiction over, and hear and determine

together, all or part of the claims; or

(b) shall 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.

3. A disputing party that seeks an order under paragraph 2

shall request the Secretary-General of ICSID to establish a

Tribunal and shall specify in the request:

(a) the name of the disputing Party or disputing parties

against which the order is sought;

(b) the nature of the order sought; and

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

4. The disputing party shall give to the disputing Party or

disputing parties against which the order is sought a copy of the

request.

5. Within 60 days of receipt of the request, the Secretary-

General of ICSID shall establish a Tribunal consisting of three

arbitrators. The Secretary-General shall appoint the presiding

arbitrator from the roster described in paragraph 4 of Article

1124. In the event that no such presiding arbitrator is

available to serve, the Secretary-General shall appoint a

presiding arbitrator, who is not a national of any of the

Parties, from the ICSID Panel of Arbitrators. The Secretary-

General shall appoint the two other members from the roster

described in paragraph 4 of Article 1124, and to the extent not

available from that roster, from the ICSID Panel of Arbitrators,

and to the extent not available from that panel, in the

discretion of the Secretary-General. One member shall be a

national of the disputing Party and one member shall be a

national of the Party of the disputing investors.

6. Where a Tribunal has been established under this Article, a

disputing party that has not been named in a request made under

paragraph 3 may make a written request to the Tribunal that it be

included in an order made under paragraph 2, and shall specify in

the request:

(a) the party's name and address;

(b) the nature of the order sought; and

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

7. A disputing party described in paragraph 6 shall give a copy

of its request to the parties named in a request made under

paragraph 3.

8. A Tribunal established under Article 1120 shall not have

jurisdiction to decide a claim, or a part of a claim, over which

a Tribunal established under this Article has assumed

jurisdiction.

9. A disputing Party shall give to the Secretariat of the

Commission, within 15 days of receipt by the disputing Party, a

copy of:

(a) a request for arbitration made under paragraph 1 of

Article 36 of the ICSID Convention;

(b) a notice for arbitration made under Article 2 of the

Additional Facility Rules; or

(c) a notice of arbitration given under the UNCITRAL

Arbitration Rules.

10. A disputing Party shall give to the Secretariat of the

Commission a copy of a request made under paragraph 3 of this

Article:

(a) within 15 days of receipt of the request, in the case

of a request made by a disputing investor;

(b) within 15 days of making the request, in the case of a

request made by the disputing Party.

11. A disputing Party shall give to the Secretariat of the

Commission a copy of a request made under paragraph 6 of this

Article within 15 days of receipt of the request.

12. The Secretariat of the Commission shall maintain a public

register consisting of the documents referred to in paragraphs 9,

10 and 11.

Article 1126: Notice

A disputing Party shall deliver to the other Parties:

(a) written notice of a claim that has been submitted to

arbitration within 30 days from the date that the claim

is submitted; and

(b) copies of all pleading filed in the arbitration.

Article 1127: Participation by a Party

On written notice to the disputing parties, a Party may make

submissions to a Tribunal on a question of interpretation of this

Agreement.

Article 1128: Documents

A Party shall be entitled to receive from the disputing

Party at the cost of the requesting Party:

(a) a copy of the evidence that has been tendered to the

Tribunal; and

(b) a copy of the written argument of the disputing

parties.

Article 1129: Place of Arbitration

Unless the disputing parties agree otherwise, a Tribunal

shall hold an arbitration in the territory of a Party which is a

party to the New York Convention, selected in accordance with:

(a) the Additional Facility Rules if the arbitration is

under those rules or the ICSID Arbitration Rules; or

(b) the UNCITRAL Arbitration Rules if the arbitration is

under those rules.

Article 1130: Governing Law

A Tribunal established under this Subchapter shall decide

the issues in dispute in accordance with this Agreement and

applicable rules of international law.

Article 1131: Interpretation of Annexes

1. Where a disputing Party asserts as a defense that the

measure alleged to be a breach of this Chapter is within the

scope of an exception set forth in Annex I, Annex II, Annex III

or Annex IV, on request of the disputing Party, the Tribunal

shall request the interpretation of the Commission on this

question. The Commission shall have 60 days to submit its

interpretation in writing to the Tribunal.

2. If the Commission submits to the Tribunal an agreed

interpretation, the interpretation shall be binding on the

Tribunal. If the Commission fails to submit an agreed

interpretation or fails to submit an agreed interpretation within

such 60 day period, the Tribunal shall decide the issue of

interpretation of the exception.

Article 1132: Report from an Expert

Without prejudice to the appointment of other kinds of

experts where authorized 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 1133: Interim Measures of Protection

A Tribunal may take such measures as it deems necessary to

preserve the respective rights of the disputing parties, or to

ensure that the Tribunal's jurisdiction is made fully effective.

Such measures may include, but are not limited to, orders to

preserve evidence in the possession or control of a disputing

party, or to protect the Tribunal's jurisdiction. An interim

measure of protection may not include an order of attachment or

an order to enjoin the application of the measure alleged to be

the breach of Subchapter A of this Chapter, Article 1502(3)(a)

(Monopolies and State Enterprises) or Article 1503(2) (State

Enterprises). For purposes of this paragraph, an order includes

a recommendation.

Article 1134: Final Award

1. Where a Tribunal makes a final award against a Party, the

Tribunal may award only:

(a) monetary damages, and any applicable interest; or

(b) restitution of property, in which case the award shall

provide that the disputing Party may pay monetary

damages, and any applicable interest, in lieu of

restitution.

2. Subject to paragraph 1, where a claim is made under

paragraph 1 of Article 1117:

(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 order a Party to pay punitive damages.

Article 1135: Finality and Enforcement of Award

1. An award made by a Tribunal is binding on the disputing

parties but shall have no binding force except between the

disputing parties and in respect of the particular case.

2. Subject to paragraph 3, a disputing party shall abide by and

comply with an award without delay.

3. 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 Additional

Facility Rules of ICSID or the UNCITRAL Arbitration

Rules:

(i) 3 months 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.

5. Each Party undertakes to provide for the enforcement in its

territory of an award.

6. If a Party fails to abide by or comply with the terms of a

final award under this Subchapter, the Commission provided for in

Chapter Twenty (Institutional Arrangements and Dispute Settlement

Procedures) shall, upon delivery of a request by any other Party

whose investor was party to the investment dispute, establish a

panel under Article 2008(1). The requesting Party may seek in

such proceedings:

(a) a determination that the failure to abide by and comply

with the terms of the final award is inconsistent with

the obligations of this Agreement; and

(b) a recommendation that the defaulting Party abide by or

comply with the terms of the final award.

7. A disputing investor may seek enforcement of an arbitration

award under the ICSID Convention, the New York Convention or the

Inter-American Convention regardless of whether proceedings have

been taken under paragraph 6.

8. A claim that is submitted to arbitration shall be considered

to arise out of a commercial relationship or transaction for

purposes of Article I of the New York Convention and Article I of

the Inter-American Convention.

Article 1136: General

1. Time when a Claim is Submitted to Arbitration: A claim is

submitted to arbitration under this Subchapter when:

(a) the notice of registration of the request to institute

arbitration proceedings has been dispatched by the

Secretary-General of ICSID in accordance with paragraph

3 of Article 36 of the ICSID Convention;

(b) the certificate of registration of the notice for

arbitration has been dispatched by the Secretary-

General of ICSID in accordance with Article 4 of

Schedule C of the Additional Facility Rules; or

(c) the notice of arbitration given under the UNCITRAL

Arbitration Rules is received by the disputing Party.

2. Receipts under Insurance or Guarantee Contracts: In an

arbitration under this Subchapter, a Party shall not assert, as a

defense, counterclaim, right of set off or otherwise, that the

investor concerned has received or will receive, pursuant to an

insurance or guarantee contract, indemnification or other

compensation for all or part of its alleged

damages.

Article 1137: Exclusions

1. Without prejudice to the applicability or non-applicability

of the dispute settlement provisions of this Subchapter or of

Chapter Twenty (Institutional Arrangements and Dispute Settlement

Procedures) to other actions taken by a Party pursuant to Article

2102 (National Security), a decision by a Party to prohibit or

restrict the acquisition of an investment in its territory by an

investor of another Party, or its investment, pursuant to that

Article shall not be subject to such provisions.

2. The dispute settlement provisions of this Subchapter and of

Chapter Twenty shall not apply to the matters described in Annex

1137.2.

Article 1138: Definitions

For purposes of this Chapter:

disputing Party means a Party against which a claim is made under

Subchapter B;

disputing party means the disputing investor or the disputing

Party;

disputing parties means the disputing investor and the disputing Party;

enterprise means an "enterprise" as defined in Article 201,

except that it shall also include a branch;

enterprise of a Party means an enterprise constituted or

organized under the laws and regulations of a Party, and a

branch;

equity or debt securities includes voting and non-voting shares,

bonds, convertible debentures, stock options and warrants;

G7 Currency means the currency of Canada, Germany, France, Italy,

Japan, the United States or the United Kingdom of Great Britain

and Northern Ireland;

ICSID Convention means the Convention on the Settlement of

Investment Disputes between States and Nationals of other States

done at Washington, March 18, 1965;

ICSID means the International Centre for Settlement of Investment

Disputes;

Inter-American Convention means the Inter-American Convention on

International Commercial Arbitration, done at Panama, January 30,

1975;

investment means:

(a) an enterprise;

(b) an equity security of an enterprise;

(c) a debt security of an enterprise

(i) that is an affiliate of the investor, or

(ii) where the original maturity of the debt security

is at least three years,

but does not include a debt security, regardless of original

maturity, of a state enterprise;

(d) a loan to an enterprise,

(i) that is an affiliate of the investor, or

(ii) where the original maturity of the loan is at

least three years,

but does not include a loan, regardless of original

maturity, to a state enterprise;

(e) an interest in an enterprise that entitles the owner to

share in the income or profits;

(f) an interest in an enterprise that entitles the owner to

share in the assets on dissolution, other than a debt

security or a loan excluded from sub-paragraph (c) or

(d);

(g) real estate or other property (tangible and intangible)

acquired in the expectation or used for the purpose of

economic benefit or other business purposes;

(h) interests arising from the commitment of capital or

other resources in the territory of a Party to economic

activity in such territory, such as under:

(i) contracts involving the presence of an investor's

property in the territory of the Party (including

turnkey or construction contracts, or

concessions), or

(ii) contracts where the remuneration depends

substantially on the production, revenues or

profits of an enterprise.

But investment does not mean,

(i) claims to money that arise solely from:

(i) commercial contracts for the sale of goods or

services by a national or enterprise in the

territory of one Party to an enterprise in the

territory of another Party, or

(ii) the extension of credit in connection with a

commercial transaction, such as trade financing,

other than a loan covered by sub-paragraph (d), or

(j) any other claims to money,

which do not involve the kinds of interests set out in sub-

paragraphs (a) through (h);

investment of an investor of a Party means an investment owned or

controlled directly or indirectly by an investor of such Party;

investor of a Party means a Party or state enterprise thereof, or

a national or an enterprise of such Party, that seeks to make,

makes or has made an investment;

investor of a non-Party means an investor other than an investor

of a Party, that makes, seeks to make or has made an investment;

New York Convention means the United Nations Convention on the

Recognition and Enforcement of Foreign Arbitral Awards, done at

New York, June 10, 1958;

Tribunal means an arbitration tribunal established under Article

1120 or 1125; and

UNCITRAL Arbitration rules means the arbitration rules of the

United Nations \Commission on International Trade Law, approved

by the United Nations General Assembly on December 15, 1976.

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ANNEX 1120.1

Submission of Claims to Arbitration

1. An investor of another Party may not allege that Mexico has

breached:

(a) a provision of Subchapter A; or

(b) Article 1502(3)(a) (Monopolies and State Enterprises)

or Article 1503(2) (State Enterprises) where the

alleged breach pertains to the obligations of

Subchapter A,

both in an arbitration under this Subchapter and in proceedings

before a Mexican court or administrative tribunal.

2. Where an enterprise of Mexico that is a juridical person

that an investor of another Party owns or controls directly or

indirectly alleges in proceedings before a Mexican court or

administrative tribunal that Mexico has breached:

(a) a provision of Subchapter A; or

(b) Article 1502(3)(a) (Monopolies and State Enterprises)

or Article 1503(2) (State Enterprises) where the

alleged breach pertains to the obligations of

Subchapter A,

the investor may not allege the breach in an arbitration under

this Subchapter.

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ANNEX 1137.2

Exclusions from Dispute Settlement

CANADA

A decision by Canada following a review under the Investment

Canada Act, with respect to whether or not to permit an

acquisition that is subject to review, shall not be subject to

the dispute settlement provisions of Subchapter B or of Chapter

Twenty (Institutional Arrangements and Dispute Settlement

Procedures).

MEXICO

A decision by the National Commission on Foreign Investment

("Comisión Nacional de Inversiones Extranjeras") following a

review pursuant to Annex I, page I-M-7, with respect to whether

or not to permit an acquisition that is subject to review, shall

not be subject to the dispute settlement provisions of Subchapter

B or of Chapter Twenty (Institutional Arrangements and Dispute

Settlement Procedures).