AGREEMENT
BETWEEN
THE
GOVERNMENT OF THE REPUBLIC OF
INDIA
AND
THE
GOVERNMENT OF THE REPUBLIC OF
FOR
THE
PROMOTION AND PROTECTION
OF
INVESTMENTS
The
Government of the
Republic
of
India
and the Government of the Republic of (hereinafter
referred to as the "Contracting Parties");
Desiring to create
conditions favourable for fostering greater investment by investors of one State
in the territory of the other State;
Recognizing that the
encouragement and reciprocal protection under International agreement of such
investment will be conducive to the stimulation of individual business
initiative and will increase prosperity in both States;
Have
agreed as follows:
ARTICLE
1
Definitions
For
the purposes of this Agreement:
(a)
“Companies”
means:
(i)
in respect of
India
:
corporations, firms and associations incorporated or constituted or established
under the law in force in any part of
India
;
(ii)
in respect of ……..
(b)
“investment” means every kind of asset established or acquired
including changes in the form of such investment, in accordance with the
national laws of the Contracting Party in whose territory the investment is made
and in particular, though not exclusively, includes:
(i)
movable and immovable property as well as other rights such as mortgages,
liens or pledges;
(ii)
shares in and stock and
debentures of a company and any other similar forms of participation in a
company;
(iii)
rights to money or to any performance under contract having a financial
value;
(iv)
intellectual property rights, in
accordance with the relevant laws of the respective Contracting Party;
(v)
business concessions conferred by law or
under contract, including concessions to search for and extract oil and
other minerals;
(c)
“investors” means any national or company of a Contracting Party,
which has made an investment in the territory of other Contracting Party;
(d) “
nationals” means:
(i)
In
respect of
India
: persons deriving their status as Indian nationals
from the law in force in
India
;
(ii)
In respect of ………..
(e)
“returns”
means the monetary amounts yielded by an investment such as profit, interest,
capital gains, dividends, royalties and fees;
(f) "territory"
means:
(a)
in respect of India :
the territory of the Republic
of India including
its territorial waters and
the airspace above it and other
maritime zones including the Exclusive Economic
Zone and continental shelf over
which the Republic of India has
sovereignty, sovereign rights or
exclusive jurisdiction in accordance with
its laws in force, the l982
United Nations Convention on the Law of the Sea and International Law.
(b) in respect of
………
ARTICLE
2
Scope
of the Agreement
This
Agreement shall apply to
all investments made by
investors of
either Contracting Party in
the territory of the other Contracting Party, accepted as
such in accordance with its laws and regulations, whether made before
or after
the coming into force
of this Agreement.
ARTICLE
3
Promotion
and Protection of Investment
(1)
Each Contracting Party shall
encourage and create favourable
conditions for investors of the other
Contracting Party to make
investments in its territory, and
admit such
investments in accordance with its laws
and
policy.
(2)
Investments and returns of investors of each Contracting Party shall at
all times be accorded fair and equitable treatment
in the
territory of
the other Contracting Party.
ARTICLE
4
National
Treatment and Most-Favoured-Nation
Treatment
(l)
Each
Contracting Party
shall accord
to investments
of investors
of the
other Contracting
Party, treatment which shall
not be less favourable than that
accorded either
to investments
of its own or
investments of investors of any third State.
(2)
In addition, each Contracting
Party shall accord to
investors of
the other
Contracting Party, including
in respect of returns on
their investments, treatment
which shall not be less
favourable than that accorded to
investors of any third State.
(3)
The provisions of paragraphs (l) and (2) above shall not
be construed
so as to oblige
one Contracting Party to
extend to
the investors of the other the benefit of any treatment,
preference or
privilege resulting from:
(a)
any existing
or future customs unions or
similar international agreement
to which it is or
may become a party, or
(b) any
matter pertaining wholly or
mainly to taxation.
ARTICLE
5 *
Expropriation
(1)
Investments
of investors
of either
Contracting Party shall not be nationalised, expropriated or subjected
to measures
having effect equivalent
to nationalisation or
expropriation (hereinafter referred to
as " expropriation") in
the territory
of the other
Contracting Party except for
a public purpose in accordance with
law on a non-discriminatory basis
and against fair
and equitable
compensation. Such
compensation shall
amount to the genuine value
of the
investment expropriated
immediately before
the expropriation
or before
the impending
expropriation became public
knowledge, whichever is the earlier,
shall include interest at
a fair and equitable rate until the date of payment,
shall be
made without
unreasonable delay, be
effectively realizable and
be freely transferable.
(2)
The investor affected shall have right, under
the law of the
Contracting Party
making the
expropriation, to
review, by
a judicial
or other independent
authority of that Party, of his or its
case and of the valuation
of his
or its
investment in
accordance with the principles set out in this paragraph.
The Contracting Party making the expropriation shall make every endeavour
to ensure that such review is carried out promptly.
(3)
Where a Contracting Party expropriates the assets of
a company which is incorporated or constituted under the
law in force in any part of
its own territory, and in which investors
of the other Contracting Party
own shares, it shall ensure
that the provisions of paragraph (1) of this
Article are applied to the extent necessary
to ensure fair and equitable
compensation in respect of their
investment to
such investors
of the
other Contracting Party who are owners of those shares.
---------------------------------------------
*
The term “expropriation” in this article shall be interpreted in accordance
with Annex on interpretation of this article.
ARTICLE
6
Compensation
for Losses
Investors
of one
Contracting Party
whose investments in
the territory of the other
Contracting Party suffer losses owing to war or other armed conflict, a
state of national
emergency or civil disturbances in
the territory of
the latter Contracting Party shall be
accorded by
the latter Contracting Party treatment, as regards restitution,
indemnification, compensation
or other settlement, no less
favourable than that which the latter Contracting
Party accords to its own investors or to investors
of any
third State. Resulting
payments shall be freely transferable.
ARTICLE
7
Repatriation
of Investment and Returns
(l)
Each
Contracting Party shall permit all funds of an investor of the other Contracting
Party related to an investment in its territory
to be freely transferred, without
unreasonable delay and on a non-discriminatory
basis. Such funds may include:
(a)
Capital and additional capital amounts
used to maintain and increase investments;
(b)
Net operating profits including dividends and interest in proportion to
their share-holdings;
(c)
Repayments of any loan
including interest thereon,
relating to the investment;
(d)
Payment of
royalties and
services fees relating to the
investment;
(e)
Proceeds from sales of their shares;
(f)
Proceeds received by investors in case
of sale or partial sale or liquidation;
(g)
The earnings of citizens/nationals of one Contracting Party who work in
connection with investment in the territory of the other Contracting Party.
(2)
Nothing in
paragraph (l) of this
Article shall affect the
transfer of
any compensation
under Article 6 of this Agreement.
(3)
Unless otherwise agreed to between the parties, currency transfer under
paragraph (1) of this Article
shall be permitted in the currency
of the original Investment or
any other convertible currency.
Such transfer shall be made at the prevailing market rate of exchange on
the date of transfer.
ARTICLE
8
Subrogation
Where
one Contracting Party or
its designated agency has
guaranteed any
indemnity against
non-commercial risks in respect of
an investment by any of its
investors in
the territory
of the
other Contracting
Party and has made payment to such investors in respect
of their
claims under this Agreement,
the other Contracting Party agrees that the first Contracting Party
or its
designated agency is entitled
by virtue of subrogation to exercise
the rights and assert the claims of
those investors. The subrogated rights or claims shall not exceed the original
rights or claim of such investors.
ARTICLE
9
Settlement
of Disputes between an Investor and a
Contracting
Party
(1)
Any dispute
between an
investor of
one Contracting Party
and the other Contracting
Party in relation
to an
investment of the former
under this Agreement
shall, as far as possible, be settled amicably through negotiations
between the parties to the dispute.
(2)
Any such dispute which has
not been amicably settled within a period of six months may, if both Parties
agree, be submitted:
(a)
for resolution, in accordance with the law of the Contracting Party which
has admitted the investment to that Contracting Party’s competent judicial,
arbitral or administrative bodies; or
(b) to
International conciliation under the Conciliation Rules of the United Nations
Commission on International Trade Law.
(3) Should the
Parties fail to agree on a dispute settlement procedure provided under paragraph
(2) of this Article or where a dispute is referred to conciliation but
conciliation proceedings are terminated other than by signing of a settlement
agreement, the dispute may be referred to Arbitration. The Arbitration procedure
shall be as follows:
(a) If the
Contracting Party of the Investor and the other Contracting Party are both
parties to the convention on the Settlement
of Investment Disputes between States and nationals of other States, 1965
and the investor consents in writing to submit the dispute to the International
Centre for the Settlement of Investment Disputes such a dispute shall be
referred to the Centre; or
(b)
If both parties to the dispute so agree, under the Additional Facility
for the Administration of Conciliation, Arbitration and Fact-Finding
proceedings; or
(c) to an ad hoc
arbitral tribunal by either party to the dispute in accordance with the
Arbitration Rules of the United Nations Commission on International Trade Law,
1976, subject to the following modifications:
(i) The appointing authority under Article 7 of the Rules shall be the
President, the Vice-President or the next senior Judge of the International
Court of Justice, who is not a national of either Contracting Party. The third
arbitrator shall not be a national of either Contracting party.
(ii) The parties shall appoint their respective arbitrators within two
months.
(iii)
The arbitral award shall be made in accordance with the provisions of this
Agreement and shall be binding for the parties in dispute.
(iv)
The arbitral tribunal shall state the basis of its decision and give
reasons upon the request of either party.
ARTICLE
10
Disputes
between the Contracting Parties
(1)
Disputes between
the Contracting
Parties concerning the
interpretation or application
of this Agreement
should, as far as possible, be settled through negotiation.
(2)
If a dispute between the Contracting Parties cannot thus
be settled within six months
from the time the dispute
arose, it shall upon the
request of either Contracting Party
be submitted to an arbitral tribunal.
(3)
Such
an arbitral
tribunal shall
be constituted for
each individual case in the
following way. Within two months of the receipt of the request for
arbitration, each
Contracting Party shall appoint
one member of the
tribunal. Those two members
shall then select a national
of a third State who on
approval
by the two Contracting Parties
shall be appointed Chairman of
the tribunal. The Chairman shall be
appointed within two months from the
date of appointment of the
other two members.
(4)
If
within the
periods specified
in paragraph (3) of this
Article the necessary appointments
have not been made, either
Contracting Party may, in the
absence of any other agreement,
invite the President of the
International Court of Justice to
make any necessary appointments.
If the President is a national of
either Contracting
Party or
if he is
otherwise prevented from
discharging the said function, the
Vice President shall be
invited to make the necessary appointments.
If the Vice President
is a national of either Contracting
Party or if he too is prevented from discharging the said function,
the Member
of the
International Court
of Justice next in seniority
who is not a national of either Contracting Party shall be invited to make the
necessary appointments.
(5)
The arbitral
tribunal shall
reach its decision by a
majority of votes. Such decisions
shall be binding on both
Contracting Parties. Each
Contracting Party shall bear
the cost
of its own member
of the tribunal
and of
its representation
in the
arbitral proceedings; the
cost of the Chairman and the remaining costs shall
be borne in equal parts by
the Contracting Parties.
The tribunal may,
however, in its
decision direct that a higher
proportion of costs shall be borne
by one of the
two Contracting Parties, and this
award shall be binding
on both
Contracting Parties.
The tribunal shall determine its own procedures.
ARTICLE
11
Entry
and Sojourn of Personnel
A
Contracting Party shall,
subject to its laws applicable
from time to time relating to
the entry and sojourn of
non-citizens, permit natural
persons of the other Contracting
Party and
personnel employed
by companies of
the other Contracting Party to enter
and remain in its
territory for the purpose of engaging
in activities connected with investments.
ARTICLE
12
Denial
of Benefits
(1)
A Contracting Party may deny the benefits of this Agreement to an
investor of the other Contracting Party and to investments of that investor if
persons of a non-Party own or control such investor and the denying Contracting
Party:
(a)
does not maintain diplomatic relations with such non-Party; or
(b)
adopts or maintains measures with respect to such non-Party that
prohibit transactions with the investor or that would be violated or
circumvented if the benefits of this Agreement were accorded to the investor or
to its investments.
(2)
A Contracting Party may deny the benefits of this Agreement to an
investor of the other Contracting Party that is an enterprise of such other
Party and to investments of that investor if the enterprise has no substantial
business activities in the territory of the other Contracting Party and persons
of a non-Party, or of the denying Contracting Party, own or control the
enterprise
ARTICLE 13
Applicable Laws
(1)
Except as
otherwise provided
in this Agreement, all
investment shall be governed by the laws in force in
the territory of the Contracting Party in which such investments are
made.
(2)
Notwithstanding paragraph (1) of this Article nothing in this Agreement
precludes the host Contracting Party from taking action for the protection of
its essential security interests or in circumstances of extreme emergency in
accordance with its laws normally and reasonably applied on a non discriminatory
basis.
ARTICLE
l4
Application
of other Rules
If
the provisions of law of
either Contracting Party or
obligations under international law existing at present or
established hereafter between the Contracting Parties in
addition to
the present Agreement contain
rules, whether general or specific,
entitling investments by investors of
the other
Contracting Party
to a treatment
more favourable than is
provided for by
the present Agreement, such
rules shall to the extent that
they are more
favourable prevail
over the
present Agreement.
ARTICLE
l5
Entry
into Force
This Agreement shall be
subject to ratification and shall
enter into force on the date
of exchange
of Instruments of
Ratification.
ARTICLE
l6
Duration
and Termination
(1)
This agreement shall remain
in force for a period of
ten years and thereafter it shall be deemed to have been
automatically extended
unless either
Contracting Party gives to the other
Contracting Party a written notice of
its intention
to terminate
the Agreement. The Agreement
shall stand terminated one year from the date on receipt of such written notice.
(2) Notwithstanding
termination of this Agreement pursuant to
paragraph (1) of this Article, the Agreement
shall continue to
be effective for a further period
of fifteen years from the
date of its termination in respect of
investments made
or acquired
before the
date of
termination of this Agreement.
In witness whereof
the undersigned, duly authorized thereto by their respective Governments, have
signed this Agreement.
Done
at………………..on this………….day of………….200…….
in two originals each in the
Hindi and English
languages, both the texts
being equally authoritative.
In case of any
divergence, the English text shall prevail.
For
the Government of the
For the Government of the
Republic
of
India
Republic of ……………..
