Investment Treaty Arbitration

Investment Treaty Arbitration: Czech Republic

Overview of investment treaty programme

1. What are the key features of the investment treaties to which this country is a party?

Czech Republic

 

BIT Contracting Party or MIT

Substantive Protections

Procedural Rights

Fair and equitable treatment (FET)

Expropriation

Protection
and security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

Albania (7 July 1995) (amended 28 May 2011)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Algeria (not yet in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Argentina (23 July 1998)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Australia (29 June 1994)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Austria (1 October 1991)

Yes

Yes

Yes

Yes

No

6 months

No

Yes (limited) 1

Bahrain (17 November 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Belarus (9 April 1998)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Belgium and Luxembourg 2 (13 February 1992)

Yes 3

Yes

Yes

Yes

No

6 months

No

Yes (limited) 4

Bosnia and Herzegovina (30 May 2004) (amended 3 June 2010)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Bulgaria (30 September 2000)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Cambodia (8 August 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Canada 5 (22 January 2012)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Chile (5 October 1996)

Yes

Yes

No

Yes

No

3 months

Yes

Yes

China (1 September 2006)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes 6

Costa Rica (5 March 2001)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Croatia (15 May 1997) (amended 31 August 2009)

Yes

Yes

No

Yes

No

6 months

No

Yes

Cyprus (25 September 2002)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Korea, Democratic People’s Republic (10 October 1999) (amended 10 January 2010)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Denmark (terminated 18 November 2009) 7

Yes

Yes

Yes

Yes

No

3 months

No

Yes

Egypt (4 June 1994)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

El Salvador (28 March 2001)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Estonia (terminated 20 February 2011) 8

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Finland (23 October 1991)

Yes

Yes

Yes

Yes

Yes

3 months

No

Yes

France (27 September 1991)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Georgia (13 March 2011)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Germany (2 August 1992)

Yes

Yes

Yes

Yes

Yes

6 months

No

Yes

Greece (30 December 1992)

No

Yes

Yes

Yes

No

6 months

Yes

Yes

Guatemala (29 April 2005) (amended 4 May 2011)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Hungary (25 May 1995)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

India (6 February 1998) (amended 24 March 2011)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Indonesia (21 June 1999)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Ireland (terminated 1 December 2011) 9

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Israel (16 March 1999)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Italy (terminated 30 April 2009) 10

Yes

Yes

No

Yes

No

6 months

Yes

Yes

Jordan 1997 (25 September 2001) (amended 28 January 2010)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Kazakhstan (2 April 1998) (amended 15 September 2013)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Korea, Republic of (16 March 1995)

Yes

Yes

Yes

Yes

No

3 months

No

Yes

Kosovo (29 January 2001) 11

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Kuwait (21 January 1997) (amended 5 August 2013)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes 12

Latvia (1 August 1995)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Lebanon (24 January 2000) 13

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Lithuania (12 July 1995)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Macedonia (20 September 2002) (amended 29 October 2010)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Malaysia (3 December 1998)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Malta (terminated 30 September 2010) 14

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Mauritius (27 April 2000)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Mexico (13 March 2004)

Yes

Yes

Yes

Yes

No

6 months 15

Yes

Yes

Moldova (21 June 2000) (amended 14 September 2011)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Mongolia (7 May 1999)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Montenegro 16 (29 January 2001)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Morocco (30 January 2003) (amended 18 December 2012)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Netherlands (1 October 1992)

Yes

Yes

Yes

Yes

Yes

6 months

No

Yes

Nicaragua (24 February 2004)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Norway (6 August 1992)

Yes

Yes

Yes

Yes

No

3 months

Yes

Yes

Pakistan 17 (not yet in force)

Text not available

             

Panama (20 October 2000)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Paraguay (24 March 2000)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Peru (6 March 1995)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Philippines (4 April 1996)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Poland (29 June 1994)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Portugal (3 August 1994)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Romania (28 July 1994) (amended 17 July 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Russian Federation (6 June 1996)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Serbia (29 January 2001) 18 (amended 16 March 2011)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Singapore (8 October 1995

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Slovakia (terminated 1 May 2004)

Text not available 19

             

Slovenia (terminated 13 August 2010) 20

Yes

Yes

Yes

Yes

No

6 months

No

Yes

South Africa (17 September 1999)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Spain (28 November 1991)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Sri Lanka 21 (not in force yet)

Text not available

             

Sweden (23 September 1991)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Switzerland (7 August 1991)

Yes

Yes

Yes

Yes

Yes

6 months

No

Yes

Syria (14 July 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Tajikistan (6 December 1995)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Thailand (4 May 1995)

Yes

Yes

Yes

Yes

Yes

No

No

Yes

Tunisia (8 July 1998)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Turkey (1 August 1997) 22 (terminated 18 March 2012) 23

No

Yes

No

Yes

No

12 months

No

Yes

Turkey (18 March 2012)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Ukraine (2 November 1995) (amended 17 May 2010)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

United Arab Emirates (25 December 1995)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

United Kingdom (26 October 1992)

Yes

Yes

Yes

Yes

Yes

4 months

No

Yes (limited)

United States (19 December 1992) (amended 10 August 2004)

Yes

Yes

Yes

Yes

Yes

6 months

No

Yes

Uruguay (29 December 2000) (amended 9 February 2012)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Uzbekistan (6 April 1998) (amended 16 February 2011)

Yes

Yes

Ye

Yes

No

6 months

No

Yes

Venezuela (23 July 1996)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Vietnam (9 July 1998) (amended 27 September 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Yemen (2 July 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Zimbabwe (not yet in force)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

MITs

Substantive Protections

Procedural Rights

Fair and equitable treatment (FET)

Expropriation

Protection
and Security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts 3

Arbitration

Energy Treaty (16 April 1998)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes 24

Qualifying criteria - any unique or distinguishing features?

2. What are the distinguishing features of the definition of “investor” in this country’s investment treaties?

Czech Republic

Issue

Distinguishing features in relation to the definition of ‘investor’

Definition of investor

‘Investor’ means any natural or legal person who invests in the territory of the other contracting party.

Natural persons

‘Natural person’ means having the nationality of either contracting party in accordance with its laws. 25 The Bosnia and Herzegovina BIT adds that Bosnia and Herzegovina’s citizens must have their permanent residence or main place of business in its territory.

Natural persons – dual nationals

The Israel BIT excludes dual nationals as Israeli investors in the Czech Republic; concerning Czech investors in Israel, they cannot be nationals or permanent residents of Israel.

The Uruguay BIT excludes dual nationals, unless such persons, at the time of the investment, have their legal domicile outside of the territory of the Contracting Party where the investment is made.

Natural persons – other limitations

The Argentina BIT states that it does not accord protection to the investments made by natural persons who are nationals of one contracting party in the territory of the other contracting party if such persons have, at the time of the investment, been domiciled in the latter contracting party for more than two years, unless it is proved that the investment was admitted into its territory from abroad.

Legal persons

‘Legal person’ means any entity incorporated in accordance with, and recognized as a legal person by, the laws of a contracting party, having its seat in the territory of that contracting party. 26 Other BITs use the similar terms ‘permanent seat’ 27 or ‘permanent residence.’ 28 Some BITs do not have the reference to the ‘seat’ at all. 29 The Kuwait BIT expressly includes as legal persons the Government of each contracting state as well as state authorities or agencies.

Legal persons – main office

The Mexico and Portugal BITs require the ‘main office’ of the company to be in the territory of the respective state. The Tunisia BIT uses the term ‘head office.’ The Mauritius BIT requires that a company has its principal place of business or head office in the territory of one of the contracting parties.

Legal persons – effective economic activities

The Chile, Romania and Switzerland BITs require that a company has its seat in the territory of the contracting party together with effective (or ‘real’ 30 ) economic activities. The Philippines BIT requires that companies are ‘actually doing business’ and have headquarters in the territory of the respective contracting party.

Legal persons – denial of benefits (lack of substantial business activities)

The Canada 31 and United States 32 (‘US’) BITs contain a denial of benefits clause.

Legal persons – third country company

The Australia BIT provides that ‘company’ also means any corporation duly incorporated under the law of a third country if it is owned or controlled 33 by a company incorporated in a contracting state or a natural person who is a national of a contracting state. 34 However, the Australia BIT adds that it will not apply in this scenario where the provisions of an investment protection agreement with the third country have already been invoked in respect of the same matter. 35

Legal persons – control by a non-national

The Australia BIT states that where a company of a contracting party is owned or controlled by a citizen or a company of any third country, the contracting parties may decide jointly in consultation not to extend the rights and benefits of the BIT to such company.

Legal persons – local companies

The Australia BIT specifies that a company duly organized under the law of a contracting party shall not be treated as an investor of the other contracting party, but any investments in that company by investors of that other contracting party shall be protected by the BIT.

3. What are the distinguishing features of the definition of "investment" in this country’s investment treaties?

Czech Republic

Issue

Distinguishing features in relation to the definition of ‘investor’

Definition

‘Investment’ is usually defined broadly as comprising ‘every kind of asset’ followed by a non-exhaustive list of what constitutes such assets usually including movable and immovable property, shares, stocks, claims to money 36 or to any performance having an economic value associated with an investment, intellectual property rights, including copyrights, trademarks, patents, industrial designs, technical processes, know-how, trade secrets, trade names and goodwill associated with an investment, any right conferred by contracts, licenses and permits. 37 The Turkey BIT adds that ‘investment’ means direct investment under the definition of the International Monetary Fund.

Indirect control

Six BITs expressly include in the definition of ‘investment’ any assets owned or controlled and invested indirectly through an investor of a third state by an investor of one of the contracting states. 38

Invested in connection with economic activities

Many BITs specify that assets must be invested in connection with economic activities. 39 The Kazakhstan, Russian Federation and Uzbekistan BITs add that economic activities must have a purpose of achieving profit.

Establishing lasting economic relations

The Denmark BIT requires investment to be acquired for the purpose of establishing lasting economic relations.

Invested in the territory of the other contracting party

The BITs usually specify that assets must be invested by investors of one contracting party in the territory of the other contracting party. 40

In accordance with local laws and regulations

Most of the BITs specify that the asset must be invested in accordance with local laws and regulations. 41

Admission/approval of an investment

Five BITs require the investment to be admitted by the other contracting party subject to its law and investment policies. 42

Exclusion of certain assets

The Canada BIT excludes cultural industries. The Mexico BIT specifies that investment does not mean claims to money that arise solely from: (i) commercial contracts for the sale of goods or services by an investor in the territory of a contracting party to a company or a business enterprise in the territory of another contracting party, or (ii) the extension of credit in connection with a commercial transaction, such as trade financing.

Commencement of treaty protection

Majority of the BITs protect all investments, including those made prior to the date of entry into force of the treaty, but do not cover disputes or claims that arose before the entry into force of the BIT. 43 Other BITs do not contain such limitation (understanding that investment had to exist when the BIT came into force). 44 Finally, few BITs apply to investments made after a specific date: January 1, 1950, 45 January 1, 1955, 46 December 2, 1971, 47 January 1, 1973, 48 January 1, 1983, 49 January 1, 1988, 50 and January 1, 1992. 51 The United Kingdom does not specify the commencement of treaty protection; it entered into force on 26 October 1992.

Sunset clause

As a general rule, in respect of investments made prior to the date of termination of a BIT, a BIT will continue to be effective for a further period of 10 years from that date. 52 Some BITs provide for a period of 15 years 53 or 20 years. 54 The Turkey BIT does not have sunset clause.

Substantive protections - any unique or distinguishing features?

4. What are the distinguishing features of the fair and equitable treatment standard in this country’s investment treaties?

Czech Republic

Issue

Distinguishing features of the fair and equitable treatment standard

Fair and equitable treatment standard

Most BITs do not further specify the applicable standard and state only that investments shall at all times be accorded ‘fair and equitable treatment.’ 55 The Russian Federation BIT refers to ‘fair and equitable regime.’

FET – customary international law

Few BITs specify that the concept of ‘fair and equitable treatment’ does not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens. 56 The France and Venezuela BITs only specify that fair and equitable treatment shall be accorded in conformity with international law. The United States BIT states that investment in no case shall be ‘accorded treatment less than that required by international law.’

FET – other limitations

The Mexico BIT specifies that a determination that there has been a breach of another provision of the BIT, or of a separate international agreement, does not establish that there has been a breach of fair and equitable treatment under the BIT provision.

5. What are the distinguishing features of the protection against expropriation standard in this country’s investment treaties?

Czech Republic

Issue

Distinguishing features of the ‘expropriation’ standard

Expropriation standard

Czech BITs prohibit investments to be nationalised, expropriated or subjected to measures having an effect equivalent to nationalisation or expropriation (indirect expropriation), unless the conditions discussed below are met. 57

Local companies owned by investors of the other state

Some BITs specify that expropriation also applies where a contracting party expropriates the assets of a company which is incorporated under the law in force in any part of its own territory, having permanent residence, seat or main office in its territory and in which investors of the other contracting party own shares. 58

Leasing agreements

The Sweden BIT specifies that expropriation shall also apply to goods that under a leasing agreement are placed at the disposal of a lessee in the territory of one contracting party by a lessor being a national of the other contracting party or a legal person having its seat in the territory of that contracting party.

Definition of indirect expropriation

The Canada 59 and Kuwait 60 BITs contain a detailed definition of indirect expropriation.

Right to regulate for a public purpose

The Canada BIT specifies that ‘non-discriminatory measures of a contracting party that are designed and applied to protect legitimate public welfare objectives, such as health, safety and the environment, do not constitute indirect expropriation except in rare circumstances, such as when a measure or series of measures are so severe in the light of their purpose that they cannot be reasonably viewed as having been adopted and applied in good faith.’

Sequestration

The Kuwait and United Arab Emirates BITs specify that investments by investors of either contracting state shall not be subjected to sequestration, confiscation or any similar measures, in case of the Kuwait BIT, except in case of violation of applicable laws of the host state and under due process of law.

The Uruguay BIT says that investors of one contracting party who suffer losses in the territory of the other contracting party due to requisitioning or destruction of their property by any authority of the latter contracting party shall be accorded for the losses sustained a just and adequate compensation.

Conditions for expropriation

 

In the public interest

Expropriation must be made for a public purpose.

Due process of law

Expropriation must be carried out under due process of law. The China BIT specifies that it is ‘domestic’ due process of law.

Non-discriminatory

Expropriation must be carried out on a non-discriminatory basis.

Against compensation

 

Justness

Expropriation must be accompanied by provisions for the payment of prompt, adequate and effective compensation. 61

Valuation

 

Market value

Pursuant to some BITs, the compensation shall amount to the market value of the investment expropriated immediately before expropriation or impending expropriation became public knowledge. 62

Market value cannot be determined

The Australia and United Arab Emirates BIT specify that where market value cannot be readily ascertained, the compensation shall be determined in accordance with generally recognized principles of valuation (not in the UAE BIT) and equitable principles taking into account the capital invested, depreciation, capital already repatriated, replacement value, currency exchange rate movements and other relevant factors. The Kuwait 63 and Indonesia 64 BITs have similar provisions.

Other valuations

Some BITs refer only to ‘the value of the investment’ immediately before expropriation. 65 Some BITs refer to the ‘actual value’ 66 or the ‘real value’ 67 of the investment immediately before expropriation.The Netherlands and United Kingdom BITs refer to the ‘genuine value of the investments.’ The Costa Rica BIT refers to ‘fair price.’ The Thailand BIT talks about ‘adequate compensation taking into account inter alia market value.’ The Singapore BIT mentions ‘compensation in accordance with the domestic law of the respective state.’ The Spain, Sweden and Switzerland BITs require adequate compensation but do not discuss the valuation method.

Interest

The compensation includes interests from the date of expropriation.

Transfer

The compensation is effectively realisable and freely transferable in freely convertible currency.

Review

The investor shall have a right to prompt review by a judicial or other independent authority of its case of expropriation and of the valuation of its investment. 68

6. What are the distinguishing features of the national treatment/most-favoured-nation treatment standard in this country’s investment treaties?

Czech Republic

Issue

Distinguishing features of the ‘national treatment’ and/or ‘most favoured nation’ standard

Treatment of investments

The majority of Czech BITs require each contracting party to accord in its territory investments and returns of investors of the other contracting party treatment which is fair and equitable and not less favourable than that which it accords to investments and returns of its own investors or to investments and returns of investors of any third state, whichever is more favourable. 69 Two BITs contain only a most favoured nation (‘MFN’) provision but not national treatment provision. 70

Definition of national treatment

The Kuwait BIT states that the ‘national treatment’ in the Czech Republic is based on Articles 21–24 of the Czech Commercial Code.

Treatment of investors

Some BITs additionally require each contracting party to accord investors of the other contracting party, as regards management, maintenance, use, enjoyment or disposal of their investment, treatment which is fair and equitable and not less favourable than that which it accords to its own investors or to investors of any third state, whichever is more favourable. 71

Armed conflict

Czech BITs often extend MFN treatment and national treatment to substantive protection as regards restitution, indemnification, compensation or other settlement in case of losses in respect of investments owing war, armed conflict, a state of national emergency, revolt, insurrection, riot or other similar events. 72 Two BITs provide for MFN treatment but not for national treatment in respect of compensation for losses in the cases mentioned above. 73

Free transfers

The Malaysia BIT states that the contracting parties undertake to accord to the transfers mentioned in the BIT a treatment as favourable as that accorded to the transfer originating from investments made by investors of any third state.

Economic unions and free trade area exceptions to MFN

Czech BITs do not extend the benefits of MFN treatment to advantages accorded to nationals of any third state by virtue of agreements establishing customs unions, economic unions, monetary unions and free trade areas. 74

Taxation exception to MFN

Czech BITs do not extend the benefits of MFN treatment by virtue of any international agreement relating mainly to taxation. 75

Limitations on national treatment

The Kuwait BIT provides that each contracting state shall not impose on the investor of the other contracting state mandatory measures, which require or restrict the purchase of materials, energy, fuel or of means of production, transport or operation of any kind or restrict the marketing of products, or any other measures having the effect of discrimination against investments by investors of the other contracting state in favour of investments by its own investors, unless such measures are deemed vital for reasons of public order or public health.

Sectors not covered by national treatment

Under the Bulgaria BIT, Bulgaria reserves the right to make or maintain limited exceptions to the national treatment in the following sectors or matters: ownership of real estate; air, rail, and maritime transportation; governmental subsidies; government insurance and loan programs and dealership in government securities. Similarly, the Ukraine BIT states that the principle of national treatment shall not be applied to the acquisition of property rights for land and participation in privatization. The Russian Federation BIT is broadly drafted and gives each state the right to exclude foreign investors from certain sectors (the provision is not applied to investments made prior to a new exception).

Sectors not covered by national treatment and MFN

National treatment and MFN obligations do not apply:

(a) under the Canada BIT, to subsidies or grants provided by a contracting party or a state enterprise, including government-supported loans, guarantees and insurance;

(b) under the ECT, to the protection of intellectual property; and

(c) under the US BIT states, to the sectors or matters listed in the annex to the BIT. 76 Any future exception by either party shall not apply to an investment existing in that sector or matter at the time the exception becomes effective. The treatment accorded pursuant to any exceptions shall, unless specified otherwise in the annex, be not less favorable than that accorded in like situations to investments and associated activities of nationals or companies of any third country.

Specific agreements not covered by national treatment and MFN

The US BIT states that national treatment and MFN obligations do not apply to a state’s binding obligations under any multilateral international agreement under the framework of the General Agreement on Tariffs and Trade that enters into force subsequent to the signature of the BIT. The Israel BIT states that national treatment and MFN provisions shall not be construed so as to oblige Israel to extend to investors of the Czech Republic the benefits of any treatment, preference or privilege resulting from the provisions of Article 6 contained in the Agreements for the Promotion and Reciprocal Protection of Investments entered into by the Government of the State of Israel with the Governments of Poland, Hungary and Romania in 1991.

Specific agreements not covered by MFN

The Russian Federation BIT excludes MFN treatment in regard to the agreements with former soviet republics. The Sweden BIT states the treatment granted to investments under the Commercial Agreements concluded with the Ivory Coast on 27 August 1965, with Madagascar on 2 April 1966, and with Senegal on 24 February 1967 shall not be invoked as the basis of MFN treatment by Czech investors. The Thailand BIT excludes MFN treatment in regard to (a) any arrangement with a third country or countries in the same geographical region designed to promote regional cooperation in the economic, social, labour, industrial or monetary fields within the framework of specific projects or (b) the grant to a particular investor in Thailand of the status of a ‘promoted person’ under the law of Thailand on the promotion of investment.

Specific sectors not covered by MFN

The Lebanon BIT excludes from MFN treatment the ownership, without prior approval of the Council of Ministers, of real estate property up to 5000m in Lebanon pursuant to the law No. 11614 of 4 January 1969. Lebanon can only grant such privileges to nationals of Arab countries.

Covered provisions

Under the Belgium and Luxembourg BIT, the MFN provision applies to protection and security, expropriation and free transfers provisions.

Non-conforming measures

Two BITs state that MFN provisions do not apply to any existing non-conforming measures maintained within the territory of a contracting party. 77 The Canada BIT also includes ‘any measure maintained or adopted after the date of entry into force of this Agreement that, at the time of sale or other disposition of a government’s equity interests in, or the assets of, an existing state enterprise or an existing governmental entity, prohibits or imposes limitations on the ownership of equity interests or assets or imposes nationality requirements relating to senior management or members of the board of directors.’

7. What are the distinguishing features of the obligation to provide protection and security to qualifying investments in this country’s investment treaties?

Czech Republic

Issue

Distinguishing features of the ‘protection and security’ standard

Extent of obligations

Almost all Czech BITs require that investments enjoy ‘full protection and security’ in the territory of the other contracting party. 78 As an alternative, some BITs refer to ‘adequate protection and security,’ 79 ‘protection and security,’ 80 ‘protection,’ 81 ‘full security’ 82 or ‘full protection.’ 83 Few BITs state only that each state ‘shall protect’ investments. 84 Other BITs refer to the ‘full and unconditional legal protection’ 85 or ‘full legal protection and security.’ 86

Customary international law

Two BITs specify that the concept of ‘full protection and security’ does not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens. 87 The Kuwait and United Arab Emirates refer to full protection and security in a manner consistent with international law and, in case of the Kuwait BIT, also consistent with the provisions of the BIT.

Domestic law

The Thailand BIT provides for the most constant protection and security under the law of the contracting party.

Public order measures limitation

The Belgium and Luxembourg BIT states that protection and security shall be accorded, except to measures necessary to maintain public order.

Relation to other provisions

The Mexico BIT states that a determination that there has been a breach of another provision of the BIT, or of a separate international agreement, does not establish that there has been a breach of the full protection and security provision.

8. What are the distinguishing features of the umbrella clauses contained within this country’s investment treaties?

Czech Republic

Issue

Distinguishing features of any ‘umbrella clause’

Definition

Only 10 BITs currently contain an umbrella clause, which most often reads that each contracting party shall observe any other obligation it may have entered into with regard to investments by investors of the other contracting party. 88 The Paraguay, 89 Singapore, 90 Switzerland, 91 Thailand 92 and United Kingdom 93 BITs have a different wording of the umbrella clause.

9. What are the other most important substantive rights provided to qualifying investors in this country?

Czech Republic

Issue

Other substantive protections

Armed conflict/civil unrest – compensation for losses

Most Czech BITs state that investors who in war, armed conflict, a state of national emergency, revolt, insurrection, riot or other similar events suffer losses in the territory of the other contracting party resulting from: (a) requisitioning of their property by its forces or authorities and/or (b) destruction of their property by its forces or authorities which was not caused in combat action or was not required by the necessity of the situation, are to be accorded just and adequate compensation for the losses sustained during the period of the requisitioning or as a result of the destruction of the property and that resulting payments are to be freely transferable in freely convertible currency without delay. 94

Free transfers

All Czech BITs guarantee the transfer of payments related to investments and returns, and such transfers are to be made in a freely convertible currency, without any restriction and undue delay. 95 In some BITs, it is specified that undue delay shall not exceed a specified time period (e.g., 30 days, 96 45 days, 97 two months 98 and three months 99 ).

Free transfers – Measures adopted by the European Union

Certain BITs state that a right to free transfers applies ‘without prejudice to measures adopted by the European Union’ 100 (‘EU’). Similarly, the Vietnam BIT refers to measures of general application, which are applied neither arbitrarily nor discriminatorily, based on the rights and obligations, which a contracting party has assumed as a member of or a party to a customs, economic or monetary union, a common market or a free trade area.

Free transfers – Serious balance of payments difficulties

Five BITs provide that each contracting state shall be entitled, under circumstances of exceptional or serious balance of payments difficulties, to limit transfers temporarily, on a fair and non-discriminatory basis and in accordance with criteria accepted by international organizations of which both contracting parties are members, and that limits on transfers adopted by a contracting party shall be communicated promptly to the other contracting party. 101

Free transfers – Serious difficulties for the operation of exchange rate policy or monetary policy

Four BITs provide that where, in exceptional circumstances, movements of capital between the two contracting parties cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy for one of the parties, the respective party may take safeguard measures with regard to movements of capital between the two parties for a period not exceeding six months if such measures are strictly necessary. 102

Free transfers – Rights of creditors, satisfaction of judgments, compliance with securities laws

Eight BITs state that a contracting party may protect the rights of creditors, or ensure the satisfaction of judgments in court proceedings, through the equitable, non-discriminatory and good faith application of its law. 103 Three BITs add to the list the measures (a) relating to or ensuring compliance with laws and regulations on the issuing, trading and dealing in securities and laws and regulations concerning reports or records of transfers; or (b) in connection with criminal offences. 104

Free transfers – Political reasons or urgency

The Uruguay BIT allows limiting transfers for serious political reasons or on grounds of urgency though non-arbitrary and non-discriminatory measures applied in good faith.

Free transfers – Other limitations

The Canada, 105 Malaysia, 106 Tunisia 107 and United Kingdom 108 BITs contain other specific limitations on free transfers.

Free transfers – Exclusions

The South Africa BIT provides that the right of free transfer does not apply to permanent residents of South Africa; i.e., foreign nationals who are natural persons and resided five years or more in South Africa.

Application of other rules and special commitments

Most Czech BITs contain an ‘Application of Other Rules’ provision, which typically reads as follows: Where a matter is governed simultaneously both by this BIT and by another international agreement to which both contracting parties are parties, nothing in this BIT shall prevent either contracting party from taking advantage of whichever rules are more favourable to his case. They also usually contain a ‘Special Commitments’ provision reading: If the treatment to be accorded by one contracting party to investors of the other contracting party in accordance with its laws and regulations or other specific provisions of contracts is more favourable than that accorded by the BIT, the more favourable shall be accorded. Most BITs contain both clauses. 109 Some BITs contain only Application of Other Rules. 110

Entry and sojourn of personnel

Some BITs state that a contracting party shall, subject to its laws, permit investors of the other contracting party who have made investments in the territory of the first contracting party to employ within its territory key technical and managerial personnel of their choice regardless of citizenship. 111

Non-impairment

Some BITs impose upon the contracting parties an obligation not to impair the management, maintenance, use, enjoyment or disposal of investments. 112

Access to local courts

Three BITs state that each contracting state shall ensure to investors of the other contracting state the right of asserting claims and enforcing rights with respect to investments through the right of access to its courts of justice, administrative tribunals and agencies, and all other bodies exercising adjudicatory authority. 113 The Australia BIT has a provision dealing with settlement of disputes between investors of the contracting parties. 114

Non-interference with other commitments

The Singapore BIT specifies that each contracting party shall not interfere with any commitments, additional to those specified in this BIT, entered into by its nationals or companies with the nationals or companies of the other contracting party as regards their investments.

Transparency

Three BITs state that each contracting state shall make public all laws, regulations, administrative directives and procedures that pertain or directly affect investments in its territory of investors of the other contracting state. 115

Performance requirements

The US BIT states that neither state shall impose performance requirements as condition of, establishment, expansion or maintenance of investments, which require or enforce commitments to export goods produced, or which specify that goods or services must be purchased locally, or which impose any other similar requirements. The BIT contains specific exceptions of the Czech Republic from this obligation.

Additional performance requirements

The Kuwait BIT states that once established, investments shall not be subject in either contracting state to additional performance requirements which hinder their expansion or maintenance, which require or enforce commitments to export goods produced or which specify that goods or services must be purchased locally, or which impose any other additional requirements or restrictions which may be considered as detrimental to the viability of the investment.

Essential security interests

The recently concluded or amended BITs contain an Essential Security Interests exception to the accorded investment protections. 116 The provision usually reads as follow: Nothing in the BIT shall be construed to prevent any contracting party from taking any actions that it considers necessary for the protection of its essential security interests, a) relating to criminal or penal offences; b) relating to traffic in arms, ammunition and implements of war and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment; c) taken in time of war or other emergency in international relations; d) relating to the implementation of national policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or e) in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security. A contracting party’s essential security interests may include interests deriving from its membership in a customs, economic, or monetary union, a common market or a free trade area. 117

General exceptions

Two BITs provide that the provisions of the BIT shall not in any way limit the right of either contracting party to apply prohibitions or restrictions of any kind or take any other action in accordance with its laws for the protection of its essential security interests, or to the protection of public health or the prevention of diseases and pests in animals or plants. 118 The Mauritius BIT specifies such measures must be applied in good faith, on a non-discriminatory basis and only to the extent and duration necessary. The Canada BIT also contains general exceptions. 119

Exclusion of measures applied under the WTO agreements

The Costa Rica BIT specifies that any matter relating to the access of goods produced in the territory of one contracting party to foreign markets, including quantitative export restriction or their allocation, applied in accordance with the provisions contained in the Agreements concluded under the WTO, particularly Article XIII of GATT 1994, shall not be covered by the BIT.

Procedural rights in this country’s investment treaties

10. Are there any relevant issues related to procedural rights in this country’s investment treaties?

Czech Republic

Issue

Procedural rights

Subrogation of insurance rights

Czech BITs provide that if a contracting party or its designated agency makes payment to its own investors under a guarantee it has accorded in respect of an investment in the territory of the other contracting party, the latter contracting party shall recognize that the former contracting party or its designated agency is entitled by virtue of subrogation to exercise the rights and enforce the claims of that investor. 120

Fork-in-the-road

Only three BITs contain a classic fork-in-the-road provision stating that where an investor has submitted a dispute to the competent court of the contracting party where the investment has been made or an international arbitration tribunal, this choice is final. 121 Five BITs state that choice of arbitration is definitive but gives to an investor who submitted a claim to local courts one opportunity to withdraw it and submit it to arbitration. 122 Four of these five BITs specify that a claim can be withdrawn from local courts until a final decision has been rendered. 123

Definition of investment disputes

Two BITs define an ‘investment dispute’ as a dispute involving (a) the interpretation or application of an investment agreement between a contracting party and an investor of the other contracting party; (b) an alleged breach of any obligation of the state under this BIT with respect to an investor of the other state or his investment; and (c) the interpretation or application of any investment authorization granted by a state’s foreign investment authority to such investor, provided that the denial of an investment authorization shall not in itself constitute an investment dispute unless such denial involves an alleged breach of any right conferred or created by the present BIT. 124

ICSID or ad hoc arbitration

Most BITs allow an investor to choose between ICSID and ad hoc arbitration under the UNCITRAL Arbitration Rules. 125 Four BITs require use of the ICSID arbitration if both contracting states are parties to the ICSID Convention. 126 The Thailand BIT provides only for the ICSID arbitration. The Israel and Switzerland BITs provide for the ICSID or ad hoc arbitration. 127 Some BITs provide only for ad hoc arbitration or UNCITRAL ad hoc arbitration. 128 The United Kingdom BIT provides for ad hoc UNCITRAL arbitration, arbitration under the auspices of the Arbitration Institute of the Chamber of Commerce in Stockholm or the Court of Arbitration of the Federal Chamber of Commerce and Industry in Vienna.

Ad hoc arbitration – constitution of the arbitral tribunal

Five BITs require that: Each state chooses within two months one arbitrator and then the co-arbitrators select the chair within three months (or two months 129 ), and if the time periods are not respected, the president of the Stockholm Chamber of Commerce (or President of the International Chamber of Commerce 130 ) appoints an arbitrator or a chair as appropriate. 131 The Israel, Netherlands and Switzerland BITs provide that the chair must be a national of a third country (but in case of Israel, both states need to have diplomatic relations with that country). The Belgium and Luxembourg BIT specifies that arbitrators cannot be a national of a state with whom the contracting parties do not have diplomatic relations and the chair cannot be a national of one of the contracting parties.

Formation of the arbitral tribunal

The Mexico BIT requires that the members of arbitral tribunals shall have experience in international law and investment matters. It also contains further procedural specifications. 132

Seat of arbitration

Two BITs state that any arbitration, at the request of any party to the dispute, be held in a state that is party of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). 133 The Mexico BIT adds that claims submitted to arbitration shall be considered to arise out of a commercial relationship or transaction for purpose of Article 1 of the New York Convention.

Renunciation of requirement of exhaustion of local remedies

The Bulgaria BIT states that the consent to submit any disputes to arbitration implies the renunciation of the requirement that the internal administrative or judicial remedies should be exhausted.

Procedural requirements prior to arbitration

Under the China BIT, with respect to the possibilities of submission of a dispute to the international arbitration, China will require the investor concerned to go through the domestic administrative review procedures specified by its laws and regulations before the submission of the dispute to the international arbitration. Such a procedure shall not exceed a period of three months.

Limitations on arbitral jurisdiction

 

Expropriation and amount of compensation

In a few cases, arbitral jurisdiction is limited (i) to the amount of compensation for expropriation 134 or (ii) to the amount of compensation for expropriation and right to free transfers. 135 The UK BIT limits the arbitral jurisdiction to determine compensation of losses in cases of armed conflict, expropriation and free transfers, and to the umbrella clause provision.

No use of other dispute mechanisms and local courts

The Tunisia and United States BITs state that the investor shall be entitled to submit the dispute to treaty arbitration only if: (a) the dispute has not been submitted by the investor for resolution in accordance with any applicable previously-agreed dispute settlement procedures, and (b) the investor concerned has not brought the dispute before the courts of justice, administrative tribunals or agencies of competent jurisdiction of the contracting party that is the party to the dispute.

Absence of other dispute procedures

The Kuwait BIT allows treaty arbitration in the absence of any previously-agreed dispute settlement procedures.

Exclusion of taxation

The Ireland BIT excludes taxation related disputes from arbitral jurisdiction. The US BIT applies to matters of taxation only with respect to: (a) expropriation; (b) transfers; or (c) the observance and enforcement of terms of an investment agreement or authorization, to the extent they are not subject to the dispute settlement provisions of a Convention for the avoidance of double taxation between the two parties, or have been raised under such settlement provisions and are not resolved within a reasonable period of time.

Exclusion of real estate

The Turkey BIT states that national courts have exclusive jurisdiction over disputes concerning real estate.

Approved and effectually established investments

The Turkey BIT allows treaty claims only for the disputes arising in connection with an investment made in conformity with the relevant legislation or approved, which has been effectively established.

Other exclusions

The US BIT excludes treaty arbitration for disputes arising under (a) the export credit, guarantee or insurance programs of the Export-Import Bank of the United States and (b) other official credit, guarantee or insurance arrangements pursuant to which the parties have agreed to other means of settling disputes. The Venezuela BIT states that the jurisdiction of the arbitral tribunal shall be limited to determining whether there has been a breach by the contracting party concerning its obligations under the BIT, whether such breach of its obligations has caused damage to the investor concerned, and, if this is the case, the amount of compensation.

Consent on nationality

Four BITs ensure that, for a company which is constituted under the law in force in the territory of one contracting party, and in which the dispute arises, the majority of shares that are owned by investors of the other contracting party shall, in accordance with Article 25(2)(b) of the ICSID Convention, be treated as a company of the other contracting party. 136 The Mexico BIT does not reference the ICSID Convention but admits expressly claims by investors controlling a local company. It also specifies that an investment cannot make a treaty claim.

Sources of applicable law

Some BITs state that the arbitral tribunal shall decide in accordance (i) with the provisions of the BIT, (ii) the laws of the contracting party involved in the dispute, including its rules on conflict of laws, (iii) the terms of any specific agreement concluded in relation to such an investment and (iv) the relevant principles of international law. 137 Some BITs specify that the arbitral tribunal shall take into account the sources of law previously listed (i-iv) in that specific order. 138 The US BIT has a specific provision. 139

Inconsistencies between international law and local law

The Costa Rica and Paraguay BITs specify that awards shall be based on the provisions of the BIT, the rules and accepted general principles of international law and the domestic law of the state to the extent that the domestic laws of the host state are not inconsistent with the provisions of the BIT or the principles of international law.

Local law only

The India and Singapore BITs state that all investments shall be governed by the laws in force in the territory of the contracting party in which such investment is made. The Singapore BIT specifies that if local law conflicts with the BIT, the BIT prevails.

Diplomatic intervention

Six BITs specifically prohibit contracting parties from pursuing the dispute through diplomatic channels unless (a) the Secretary-General of ICSID or an arbitral tribunal decides that it has no jurisdiction over the dispute; or (b) a contracting party has failed to comply with the award rendered in such a dispute. 140

Time limits

The Canada and Mexico BITs allow treaty claims only if not 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 thereby.

Waiver of sovereign immunity

The Bahrain, Lebanon and Paraguay BITs state that the contracting party which is a party to the dispute shall, at no time whatsoever during the procedures involving investments disputes, assert as a defence its sovereign immunity (the Lebanon and Paraguay BITs omit the word ‘sovereign’).

Waiver of local remedies

The Canada and Mexico BITs state that an investor waives its right to initiate or continue before any administrative tribunal or court under the law of any contracting party, or other dispute settlement procedures, any proceedings with respect to the measure of the disputing contracting party that is alleged to be a breach under this BIT, except for procedures for injunctive, declaratory or other extraordinary relief.

Enforcement of arbitral awards

The Mexico BIT allows enforcement of the award (a) in case of the ICSID arbitration after (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; (b) in the case of a final award under the ICSID Additional Facility Rules or the UNCITRAL Arbitration Rules after (i) three 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 an application to revise, set aside or annul the award and there is no further appeal, or (iii) a court has allowed an application to revise, set aside or annul the award and the proceeding has been completed and there is no further appeal.

11. What is the status of this country’s investment treaties?

Czech Republic

The Czech Republic entered into more than 85 BITs to attract foreign investors mainly in the 90s after the end of the communist regime. The BITs concluded by the Czechoslovak Socialist Republic (in existence until 1989) or the Czech and Slovak Federative Republic (in existence until 1992) with some European countries 141 continue to apply unless agreed otherwise between the contracting parties, because the Czech Republic is a legal successor of the Czechoslovak Socialist Republic and then of the Czech and Slovak Federative Republic.

After having lost several cases and being obliged to pay large amounts to investors, the Government of the Czech Republic adopted a resolution No. 853/2008 in 2008, which states that the government policy is to terminate the intra-EU BITs. The Czech Republic has already terminated eight intra-EU investment treaties. These BITs incorporated a ‘survival clause,’ which extends a treaty’s application in relation to existing investments for a further period (either 10 or 15 years) from the date of termination; however, the contracting parties in the most cases agreed to abrogate the survival clause. The Czech Republic has also recently negotiated amendments to 19 of its current BITs.

It is important to note that the Treaty of Lisbon provided the EU with a new exclusive competence to conclude investment treaties. The EU has now started to negotiate new investment agreements with certain third countries, which will progressively replace EU member states’ BITs with those of these third countries. Furthermore, in 2012, the EU Regulation No. 1219/2012 was adopted. It creates a transitional framework for the BITs between the EU member states and third countries. It restricts the capacity of the EU member states to amend the current BITs and adopt new BITs.

Practicalities of commencing an investment treaty claim against this country

12. To which governmental entity should notice of a dispute against this country under an investment treaty be sent? Is there a particular person or office to whom a dispute notice against this country should be addressed?

Czech Republic

Government entity to which claim notices are sent

Claim notices are to be sent to:

Ministry of Finance (‘Ministerstvo financí CˇR’)

Letenská 15

118 10 Prague 1

The Czech Republic

13. Which government department or departments manage investment treaty arbitrations on behalf of this country?

Czech Republic

Government department which manages investment treaty arbitrations

The Ministry of Finance manages investment treaty arbitrations. There is a specialized department at the Ministry of Finance for that purpose.

14. Are internal or external counsel used, or expected to be used, by the state in investment treaty arbitrations? If external counsel are used, does the state normally go through a formal public procurement process when hiring them?

Czech Republic

Internal/external Counsel

The Czech Republic often uses its internal counsels at the Ministry of Finance in combination with some external counsels. Public tenders are used, but, for example, in the recent solar claims the Government used an exemption from the public tender procedure and chose directly the external counsel.

Practicalities of enforcing an investment treaty claim against this country

15. Has the country signed and ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)? Please identify any legislation implementing the Washington Convention.

Czech Republic

Washington Convention implementing legislation

The 1965 Washington Convention came into force in the Czech Republic on April 22, 1994. When applicable, the Washington Convention directly applies (there is no implementing legislation).

16. Has the country signed and ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention)? Please identify any legislation implementing the New York Convention.

Czech Republic

New York Convention implementing legislation

The New York Convention came into force in the former Czechoslovakia on October 10, 1959, and in the Czech Republic (its successor state) on January 1, 1993. When applicable, the New York Convention directly applies (there is no implementing legislation).

17. Does the country have legislation governing non-ICSID investment arbitrations seated within its territory?

Czech Republic

Legislation governing non-ICSID arbitrations

The legislation governing non-ICSID arbitrations is the Act No. 216/1994 on Arbitral Proceedings and on Execution of Arbitral Awards as amended (the ‘Arbitration Act’). It applies to arbitrations based on arbitration agreements concluded after January 1, 1995 (for arbitration agreements concluded before this date, the old 1963 Arbitration Act applies). The Arbitration Act is not based on the UNCITRAL Model Law.

18. Does the state have a history of voluntary compliance with adverse investment treaty awards; or have additional proceedings been necessary to enforce these against the state?

Czech Republic

Compliance with adverse awards

The Czech Republic has consistently voluntarily complied with adverse investment treaty awards.

19. Describe the national government’s attitude towards investment treaty arbitration

Czech Republic

Attitude of government towards investment treaty arbitration

The Czech Republic entered into bilateral investment treaties with more than 85 countries. However, the Czech Republic has recently terminated some of them, which seems to be the current government policy.

20. To what extent have local courts been supportive and respectful of investment treaty arbitration, including the enforcement of awards?

Czech Republic

Attitude of local courts towards investment treaty arbitration

State courts generally enforce arbitral awards without complications.

National legislation protecting inward investments

21. Is there any national legislation that protects inward foreign investment enacted in this country? Describe the content.

Czech Republic

There is not any national legislation that protects inward foreign investment.

 

National legislation protecting outgoing foreign investment

22. Does the country have an investment guarantee scheme or offer political risk insurance that protects local investors when investing abroad? If so, what are the qualifying criteria, substantive protections provided and the means by which an investor can invoke the protections?

Czech Republic

Relevant guarantee scheme

Qualifying criteria, substantive protections provided and practical considerations

Czech Export Bank

www.ceb.cz/en

The Czech Export Bank founded in 1995 is a state-owned banking institution. It provides export financing products (credits, guarantees, etc.). Outside the financing export of goods and services, it can also provide financing for engineering projects.

EGAP

www.egap.cz/index-en.php

The EGAP established in 1992 is fully owned by the state. It is a credit insurance corporation insuring credit connected with exports of goods and services from the Czech Republic against political and commercial risks uninsurable by commercial insurance.

Multilateral Investment

Guarantee Agency

www.miga.org

The Convention establishing the Multilateral Investment Guarantee Agency (MIGA) (Seoul, 1985) came into force in the Czech Republic on 20 September 1990. The MIGA is a member of the World Bank Group and provides political risk insurance guarantees to private sector investors and lenders in relation to investments in some developing countries.

Awards

23. Please provide a list of any available arbitration awards or cases initiated involving this country’s investment treaties.

Czech Republic

Awards

Anglia Auto Accessories, Ivan Peter Busta and Jan Peter Busta v. The Czech Republic , SCC, dismissed by the SCC, Czech Republic-United Kingdom BIT

Arcelor Mittal v. The Czech Republic , UNCITRAL, settled, Czech Republic-Netherlands BIT

Binder v. The Czech Republic , UNCITRAL, Final Award, July 2011, Czech Republic-Germany BIT

CME Czech Republic B.V. v. The Czech Republic , UNCITRAL, Final Award, 14 March 2003, Czech Republic-Netherlands BIT

Eastern Sugar B.V. v. The Czech Republic , SCC Case No. 088/2004, Final Award, 12 April 2007, Czech Republic-Netherlands BIT

ECE Projektmanagement v. The Czech Republic , UNCITRAL, Final Award, 2013, Czech Republic-Germany BIT

European Media Ventures SA v. The Czech Republic , UNCITRAL, Final Award, 8 July 2009, Belgium-Luxembourg-Czech Republic BIT

Frontier Petroleum Services Ltd. v. The Czech Republic , UNCITRAL, Final Award, 12 November 2010, Canada-Czech Republic BIT

InterTrade Holding GmbH v. The Czech Republic , UNCITRAL, PCA, Final Award, 7 June 2012, Czech Republic-Germany BIT

I nvesmart v. The Czech Republic , UNCITRAL, Final Award, 3 July 2009, Czech Republic-Netherlands BIT

Konsortium Oeconomismus v. The Czech Republic , Final Award, 1 February 2012, Czech Republic-Switzerland BIT

Ronald S. Lauder v. The Czech Republic , UNCITRAL, Final Award, 3 September 2011, Czech Republic-United States BIT

William Nagel v. The Czech Republic , SCC Case No. 049/2002, Final Award, 9 September 2003, Czech Republic-United Kingdom BIT

Georg Nepolsky v. The Czech Republic , UNCITRAL, Final Award, 1 February 2010, Czech Republic-Germany BIT

Pren Nreka v. The Czech Republic , UNCITRAL, Final Award, 1 February 2007, Croatia-Czech Republic BIT

Phoenix Action, Ltd. v. The Czech Republic , ICSID Case No. ARB/06/5, Final Award, 15 April 2009, Czech Republic-Israel BIT

Saluka Investments B.V. v. The Czech Republic , UNCITRAL, Final Award, 2008, Czech Republic-Netherlands BIT

Peter Franz Vocklinghaus v. The Czech Republic , Final Award, Czech Republic-Germany BIT

Pending proceedings

A11Y Ltd v. Czech Republic , UNCITRAL, Czech Republic-United Kingdom BIT

Antaris Solar GmbH and Dr. Michael Göde v. Czech Republic , UNCITRAL, PCA, Notice of Arbitration dated 8 May 2013, Energy Charter Treaty, Czech Republic-Germany BIT

ICW Europe Investments Limited v. The Czech Republic , UNCITRAL

Natland Investment Group NV, Natland Group Limited, G.I.H.G. Limited and Radiance Energy Holding S.A.R.L. v. The Czech Republic , UNCITRAL

Photovoltaik Knopf Betriebs-GmbH v. The Czech Republic , UNCITRAL

Voltaic Network GmbH v. Czech Republic , UNCITRAL, Energy Charter Treaty, Czech Republic-Germany BIT

WA Investments-Europa Nova Limited v. The Czech Republic , UNCITRAL

Jürgen Wirtgen, Stefan Wirtgen and JSW Solar v. Czech Republic , UNCITRAL

Reading List

24. Please provide a list of any articles or books that discuss this country’s investment treaties.

Czech Republic

Pavel Šturma, International Treaties on Investment Protection and Settlement of Disputes (2001) (in Czech)

Pavel Šturma et al., Selected issues concerning the conclusion of international treaties and their internal consultation (2010) (project of the Ministry of Foreign Affairs, in Czech)

Notes

1 Arbitral jurisdiction is limited to the amount of compensation for expropriation and right to free transfers.

2 The bilateral investment treaty (‘BIT’) was signed between Belgium-Luxembourg Economic Union and Czechoslovak Socialist Republic.

3 The BIT only provides for a treatment excluding any illegitimate and discriminatory measures which could impair the management, maintenance, use, enjoyment or disposal of investments.

4 Arbitral jurisdiction is limited to the amount of compensation for expropriation.

5 This BIT replaced retroactively the earlier BIT between Canada and the Czech and Slovak Federal Republic, which came into force on 9 March 1992.

6 The China BIT requires investors first going through domestic administrative review procedures, which shall not exceed a period 3 months.

7 The BIT has a 10-year survival clause; i.e., the treaty protection continues to apply on investments made prior to the termination for an additional 10 years. However, when terminating the BIT, the contracting parties expressly agreed that the survival clause shall not further apply.

8 The BIT has a 10-year survival clause. However, when terminating the BIT, the contracting parties expressly agreed that the survival clause shall not further apply.

9 The BIT has a 10-year survival clause. However, when terminating the BIT, the contracting parties expressly agreed that the survival clause shall not further apply.

10 The BIT has a 10-year survival clause. However, when terminating the BIT, the contracting parties expressly agreed that the survival clause shall not further apply.

11 The BIT was initially concluded with the former Federal Republic of Yugoslavia. Kosovo is a successor state.

12 Treaty arbitration is available only in the absence of any previously-agreed dispute settlement procedures.

13 The Czech Republic ratified an amendment to the BIT, but the amendment still awaits ratification by Lebanon.

14 The BIT has a 10-year survival clause, which is in effect.

15 The 6-month cooling-off period applies only in case of treaty arbitration.

16 The BIT was initially concluded with the former Federal Republic of Yugoslavia. Montenegro is a successor state. The Czech Republic ratified an amendment to the BIT but the amendment still awaits ratification by Montenegro.

17 There was an Agreement between the Czech Republic and Pakistan for the Promotion and Protection of Investments signed on 7th May 1999, which has never entered into force. The Czech Republic is currently negotiating a new text of the BIT with Pakistan.

18 The BIT was initially concluded with the former Federal Republic of Yugoslavia. The Federal Republic of Yugoslavia was officially renamed Serbia and Montenegro in 2003. In June 2006, Montenegro became an independent. In 2011, the amendment of the initial BIT was concluded with the Republic of Serbia.

19 The BIT is not published in the official collection of laws and treaties of the Czech Republic.

20 The BIT has a 10-year survival clause. However, when terminating the BIT, the contracting parties expressly agreed that the survival clause shall not further apply.

21 The Czech Republic ratified an amendment to the BIT but the amendment still awaits ratification by Sri Lanka.

22 The BIT was concluded with the Czech and Slovak Federative Republic. The Czech Republic and Turkey agreed to terminate this treaty when they concluded a new BIT in 2012.

23 The BIT has a 10-year survival clause and continues to apply in cases which give rise to treaty claims that occurred before the entry into force of the new BIT.

24 The Czech Republic does not give an unconditional consent to international arbitration where the investor has previously submitted the dispute to national courts or any other previously-agreed dispute resolution procedure.

25 See, e.g., Albania, Argentina, Austria, Bahrain, Belarus, Belgium and Luxembourg, Bulgaria, Cambodia, Canada (includes permanent residents), China, Finland, Indonesia, Jordan, Mexico, Moldova, Netherlands, Sweden (specifying that the national of the contracting state has to have legally-required permission to invest in the other country), Switzerland, Uzbekistan (includes also a person without nationality that has a right to do business according to legal order of one of the contracting states).

26 Argentina, Austria, Belgium and Luxembourg, Bulgaria, Cambodia, China, Finland, Georgia, Morocco, Norway, South Africa, Spain, Syria, Tajikistan, Uzbekistan, Yemen.

27 Costa Rica, Cyprus, Korea (Democratic People’s Republic), El Salvador, Guatemala, India, Indonesia, Israel, Kazakhstan, Kosovo, Macedonia, Montenegro, Moldova, Mongolia, Panama (in relation to the companies in the Czech Rep. only), Paraguay, Peru, Poland, Russian Federation, Serbia, Uruguay, Venezuela, Vietnam. The Malta BIT uses the term ‘registered office.’

28 Albania, Belarus, Croatia, Egypt, Jordan, Nicaragua.

29 Bahrain, Canada, Estonia, Greece, Republic of Korea, Kuwait, Latvia, Lebanon, Lithuania, Malaysia, Netherlands, Panama (in relation to the companies in Panama; a company must be registered in Panama and not be legal person of the Czech Rep. or third state), Singapore, Thailand, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States.

30 In the case of Romania and Switzerland BITs.

31 Subject to prior notification and consultation in accordance with the BIT, a contracting party may deny the benefits of this BIT to an investor of the other contracting party that is an enterprise of such contracting party, and to investments of such investors if investors of a third state own or control the enterprise and the enterprise has no substantial business activities in the territory of the contracting party under whose law it is constituted.

32 Each party reserves the right to deny to any company the advantages of the BIT if nationals of any third country control such company and that company has no substantial business activities in the territory of the other party or is controlled by nationals of a third country with which the denying party does not maintain normal economic relations.

33 The Australia BIT defines ‘control’ as having ‘a substantial interest in the other company or the investment.’

34 Similarly, Finland and Sweden BITs consider as an investor a company having its seat in a third country with a predominant interest of an investor of either contracting party. The Switzerland BIT recognizes as investors legal entities established under the law of any country which are, directly or indirectly, controlled by nationals of a contracting party or legal entities having their seat, together with real economic activities, in the territory of a contracting party.

35 Sweden, Canada and Switzerland BITs also have such a limitation. The Switzerland BIT states that such investor cannot raise an expropriation claim if it has been paid under another BIT.

36 The Mexico BIT defines and restricts ‘claims to money or to any performance under contract having an economic value such as bonds, debentures, loans and other forms of debt of an enterprise, including rights derived therefrom, where the enterprise is an affiliate of the investor, or where the original maturity of the loans is at least of three (3) years.’

37 See, e.g., Albania, Argentina, Austria, Bahrain (adding Islamic investment funds to the list), Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, China, El Salvador, Mexico, Morocco, Netherlands, Singapore, Spain.

38 Belgium and Luxembourg, Canada, France, Kuwait, Netherlands, United States.

39 See, e.g., Albania, Argentina, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, El Salvador, Uzbekistan.

40 See, e.g., Albania, Argentina, Austria, Belarus, Cambodia, El Salvador, Singapore.

41 See, e.g., Albania, Argentina, Austria, Belarus, Bulgaria, Cambodia, El Salvador.

42 Australia, Indonesia, Singapore, Switzerland, Thailand.

43 Argentina, Bahrain, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, China, Costa Rica, Cyprus, Korea (Democratic People’s Republic), El Salvador, Georgia, Guatemala, India, Jordan, Kosovo, Kuwait, Lebanon, Malta, Mauritius, Mexico, Moldova, Mongolia, Montenegro, Morocco, Nicaragua, Panama, Paraguay, Portugal, Romania, Serbia, South Africa, Sweden, Syria, Turkey, Uruguay, Uzbekistan, Venezuela, Yemen.

44 Belarus, Belgium and Luxembourg, Croatia, Egypt, Estonia, Finland, Indonesia, Israel, Kazakhstan, Latvia, Lithuania, Macedonia, Malaysia, Peru, Philippines, Poland, Tajikistan, United States, Vietnam.

45 Austria, Denmark, France, Germany, Greece, Republic of Korea, Netherlands, Norway, Singapore, Spain, Switzerland, Thailand, Tunisia (the date is January 1, 1957, in respect of investments in Tunisia).

46 Canada.

47 United Arab Emirates.

48 Hungary.

49 Ukraine.

50 Russian Federation.

51 Albania.

52 Albania, Argentina, Austria, Bahrain, Belarus, Belgium and Luxembourg, Bosnia and Herzegovina, Bulgaria, China, Costa Rica, Croatia, Cyprus, Korea (Democratic People’s Republic), Denmark (contracting parties agreed not to apply this provision when they terminated the BIT), Egypt, El Salvador, Estonia (contracting parties agreed not to apply this provision when they terminated the BIT), Finland, Greece, Georgia, Guatemala, Hungary, Indonesia, Israel, Jordan, Kazakhstan, Kosovo, Kuwait, Latvia, Lebanon, Macedonia, Malaysia, Malta, Mauritius, Mexico, Moldova, Mongolia, Montenegro, Nicaragua, Norway, Paraguay, Poland, Portugal, Romania, Russian Federation, Serbia, Spain, Sweden, Switzerland, Syria, Tajikistan, Tunisia, Turkey, Ukraine, United Arab Emirates, United States, Uruguay, Uzbekistan, Venezuela, Vietnam, Yemen.

53 Australia, Chile, Canada, France, Germany, India, Thailand, Netherlands, Panama, Peru, Philippines, Singapore, South Africa, Thailand, United Kingdom.

54 Republic of Korea.

55 See, e.g., Albania, Argentina, Australia, Austria, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, China, Croatia, El Salvador, Germany, Hungary, India, Indonesia, Israel, Jordan, Kazakhstan, Republic of Korea, Kuwait, Latvia, Lithuania, Malaysia, Mauritius, Moldova, Mongolia, Morocco, Netherlands, Nicaragua, Panama, Paraguay, Singapore, Spain, Sweden, Switzerland, Tajikistan, Thailand, Ukraine.

56 Canada, Guatemala (after an amendment), Mexico.

57 See, e.g., Albania, Argentina, Australia, Austria, Bahrain, Belarus, Belgium and Luxembourg, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, China, Croatia, El Salvador, Germany, Guatemala, Hungary, India, Indonesia, Jordan, Kazakhstan, Republic of Korea, Lithuania, Malaysia (the BIT does mention measures equivalent to expropriation), Mauritius, Mongolia, Morocco, Netherlands, Panama, Russian Federation, Singapore, Spain, Sweden, Switzerland, Syria, Tajikistan, Ukraine, United Arab Emirates.

58 Albania, Austria, Croatia, Hungary, India, Indonesia, Republic of Korea, Kuwait, Latvia, Lithuania, Malaysia, Peru, Poland, Portugal, Romania, Singapore, Tajikistan, Ukraine, United Arab Emirates, United Kingdom.

59 The ‘determination of whether a measure or series of measures of a Contracting Party constitute an indirect expropriation requires a case-by-case, fact-based inquiry that considers, among other factors: (i) the economic impact of the measure or series of measures, although the sole fact that a measure or series of measures of a Contracting Party have an adverse effect on the economic value of an investment does not establish that an indirect expropriation has occurred, (ii) the extent to which the measure or series of measures interfere with distinct, reasonable, investment-backed expectations and (iii) the character of the measure or series of measures.’

60 The Kuwait BIT talks about ‘any direct or indirect measure of expropriation, nationalisation or other similar measures such as freezing, or blocking of assets, levying of arbitrary taxes, the compulsory sale of all or part of the investment, any state intervention, impairment, deprivation of management or control of any kind with respect to, or a measure resulting in loss to the economic value of, such an investment, if the effect of such measure or measures would be tantamount to expropriation.’

61 See, e.g, Albania, Argentina, Belarus, Bulgaria, El Salvador.

62 Albania, Argentina, Australia, Bosnia and Herzegovina, Bulgaria, Chile, Croatia, Denmark, Egypt, El Salvador, Greece, Hungary, Indonesia, Israel, Jordan, Republic of Korea, Latvia, Lithuania, Macedonia, Malaysia, Mexico, Morocco, Norway, Panama, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Turkey, Ukraine, United Arab Emirates, United States, Venezuela.

63 The Kuwait BIT states that compensation shall amount to the accrual value of the investment and shall be determined in accordance with internationally recognized principles of valuation on the basis of the fair market value. Where the fair market value cannot be readily ascertained, the compensation shall be determined on equitable principles.

64 The Indonesia BIT states market value shall be determined in accordance with internationally acknowledged practices and methods or, where such market value cannot be determined, it shall be a reasonable amount as may be mutually agreed between the contracting parties hereto.

65 Bahrain, Cambodia, Cyprus, Korea (Democratic People’s Republic), Georgia, Germany, Guatemala, India, Kazakhstan, Lebanon, Mauritius, Moldova, Mongolia, Nicaragua, South Africa, Syria, Uruguay, Uzbekistan, Vietnam, Yemen.

66 Belarus, Belgium and Luxembourg, Canada, Tajikistan.

67 China, France, Paraguay, Kosovo, Montenegro, Tunisia (using the term ‘effective value’), Serbia.

68 Albania, Argentina, Austria, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, Canada, China, Croatia, Cyprus, Korea (Democratic People’s Republic), Egypt, El Salvador, Georgia, Germany, Greece, Guatemala, Hungary, India, Israel, Jordan, Kazakhstan, Kosovo, Republic of Korea, Latvia, Lebanon, Lithuania, Macedonia, Malaysia, Mauritius, Mexico, Moldova, Mongolia, Montenegro, Nicaragua, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Serbia, Singapore, South Africa, Syria, Tajikistan, Thailand, Tunisia, Ukraine, United Kingdom, United States, Uzbekistan, Venezuela, Vietnam, Yemen.

69 See, e.g., Albania, Argentina, Austria, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, Canada, El Salvador, Greece, Guatemala, Kuwait, Malaysia. The United States BIT uses a different language (‘Each Party shall permit and treat investment, and activities associated therewith, on a basis no less favorable than that accorded in like situations to investment or associated activities of its own nationals or companies, or of nationals or companies of any third country, whichever is the most favorable (…).’).

70 Australia, Sweden.

71 See, e.g., Albania, Argentina, Bosnia and Herzegovina, Bulgaria, Canada, El Salvador, Greece, Guatemala, Kuwait, Malaysia.

72 See, e.g., Albania, Argentina, Australia, Bahrain, Belarus, Belgium and Luxembourg, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, Canada, El Salvador.

73 Malaysia, Sweden.

74 See, e.g., Albania, Argentina, Austria, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, Canada, El Salvador, Greece, Guatemala.

75 See, e.g., Albania, Argentina, Austria, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, Canada, El Salvador, Greece, Guatemala.

76 For details of the excluded sectors, see the annex as last amended on 10 August 2004.

77 Canada, China.

78 See, e.g., Albania, Argentina, Austria, Bahrain, Belarus, Bosnia and Herzegovina, Cambodia, China, El Salvador, Hungary, India, Jordan, Kazakhstan, Malaysia, Mauritius, Moldova, Morocco, Netherlands, Panama, Paraguay, Philippines, South Africa, Tunisia, Venezuela.

79 Indonesia.

80 Australia.

81 Algeria (not in force), Bulgaria, Norway.

82 Greece.

83 Nicaragua, Sweden.

84 Lebanon, Spain, Switzerland.

85 Russian Federation, Uzbekistan.

86 Kosovo, Montenegro, Serbia.

87 Guatemala (amendment), Mexico.

88 Finland, Germany, Kuwait (the amendment of the BIT deleted this provision), Lebanon, Netherlands, United States.

89 ‘Each Contracting Party will respect, at all times, the obligations assumed in connection with the investments of investors of the other Contracting Party.’

90 ‘Each Contracting Party shall observe commitments, additional to those specified in this Agreement it has entered into with respect to the investments of the investors of the other Contracting Party.’

91 ‘Either Contracting Party shall constantly guarantee the observance of the commitments it has entered into with respect to the investments of the investors of the other Contracting Party.’

92 ‘Each Contracting Party shall observe any obligation, additional to those specified in this Agreement, into which it may have entered with regard to investments of the investors of the other Contracting Party.’

93 ‘Investors of one Contracting Party may conclude with the other Contracting Party specific agreements, the provisions and effect of which, unless more beneficial to the investor, shall not be at variance with this Agreement. Each Contracting Party shall, with regard to investments of investors of the other Contracting Party, observe the provisions of these specific agreements, as well as the provisions of this Agreement.’

94 See, e.g., Albania, Algeria, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, China, El Salvador.

95 See, e.g., Albania, Algeria, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, China, Costa Rica, Cyprus, Korea (Democratic People’s Republic), El Salvador, India, Jordan, Kazakhstan, Malaysia, Mexico, Paraguay, South Africa, Tunisia.

96 Chile.

97 Australia.

98 See, e.g., Algeria (not in force), Argentina, Korea (Democratic People’s Republic), South Africa.

99 See, e.g., Albania, Algeria, Bahrain, Belarus, Bosnia and Herzegovina, Costa Rica, Cyprus, Paraguay.

100 Albania, Bahrain (include also measures of the Cooperation Council of the Arab States of the Gulf), Bosnia and Herzegovina, China, Croatia, Georgia, Guatemala, Jordan, Kazakhstan, Macedonia, Moldova, Morocco, Turkey, Serbia.

101 Costa Rica, India, Mexico, Morocco (including also circumstances when transfers could cause serious difficulties in implementation of macroeconomic policies), Philippines (no notification requirement).

102 Guatemala, Moldova, Nicaragua, Uruguay.

103 Australia, Canada, Mauritius, Mexico, Paraguay, Tunisia, United States, Uzbekistan.

104 Canada, Mauritius, Mexico, Uzbekistan (only (b)).

105 The Canada BIT specifies that a contracting party may prevent or limit transfers by a financial institution to an affiliate of or person related to such institution, through the equitable, non-discriminatory and good faith application of measures relating to maintenance of the safety of financial institutions.

106 The Malaysia BIT specifies that transfers are subject to the right of each contracting party to exercise equitably and in good faith powers conferred upon it by its laws and regulations at the time the investment is made as well as new laws and regulations thereafter, provided that no investor shall be put in a less favorable position than at the time of commencement of the investment.

107 The Tunisia BIT states that either state may maintain laws and regulations: (a) requiring reports of currency transfer and (b) imposing income taxes.

108 The UK BIT states that the right of free transfer ‘shall be applied, in respect of the [Czech Republic], so that unrestricted transfer of payments relating to returns and loan repayments, shall only be permitted in any one year up to a maximum of 20% of the value of the investment of the investor of the United Kingdom, that value being the value of the investment at the date of the admission of the investment to the [Czech Republic].’

109 See, e.g., Albania, Algeria, Argentina, Austria, Bahrain, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, Guatemala, Latvia, Macedonia.

110 See, e.g., Israel, Belgium and Luxembourg (the BIT also states that special agreements concluded between investors and contracting parties cannot be contrary to the BIT), Greece, India, Israel.

111 See, e.g., Australia, Sweden, India.

112 Australia, Bahrain, Chile, Denmark, France, Germany, Guatemala, Israel, Kuwait, Lebanon, Netherlands, Russian Federation, Spain, Switzerland, Turkey, United Arab Emirates, United Kingdom, United States.

113 Kuwait, United Arab Emirates, United States.

114 A Contracting Party shall in accordance with its law: (a) provide investors of the other Contracting Party who have made investments within its territory and personnel employed by them for activities associated with investments full access to its competent judicial or administrative bodies in order to afford means of asserting claims and enforcing rights in respect of disputes with its own nationals or companies; (b) permit its nationals and companies to select means of their choice to settle disputes relating to investments with investors of the other Contracting Party, including arbitration conducted in a third country; and (c) provide for the recognition and enforcement of any resulting judgments or awards.

115 Kuwait, United Arab Emirates, United States.

116 Albania (amendment), Bahrain, Cambodia, Canada, Croatia, Cyprus, Korea (Democratic People’s Republic) (amendment), Georgia, Guatemala (amendment), India (amendment), Jordan, Kazakhstan (amendment), Kuwait (amendment), Macedonia (amendment), Moldova (amendment), Morocco (amendment), Serbia (amendment), Syria, Turkey (adding measures necessary for the maintenance of public order), Ukraine (amendment), Uruguay (amendment), United States (adding measures necessary for the maintenance of public order), Uzbekistan (amendment), Vietnam (amendment), Yemen.

117 The Turkey BIT has a similar provision: If either contracting party takes any action or measures against the other contracting party based on interests deriving from its membership in a customs, economic or monetary union, a common market or a free trade area, the other contracting party against whom such actions or measures were taken may take similar actions or measures against the first contracting party based on the principle of reciprocity. In such a circumstance, the investors of the first contracting party affected by such measures cannot resort to international arbitration to get compensation for any losses suffered as a result of such measures.

118 Mauritius, Singapore.

119 ‘1. Subject to the requirement that such measures are not applied in a manner that would constitute arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or enforcing measures necessary: (a) to protect human, animal or plant life or health; (b) to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement; or (c) for the conservation of living or non-living exhaustible natural resources. 2. Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining reasonable measures for prudential reasons, such as: (a) the protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution; (b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and (c) ensuring the integrity and stability of a Contracting Party’s financial system.’

120 See, e.g., Albania, Algeria, Argentina, Bahrain, Bosnia and Herzegovina, Cambodia, Chile, Canada, Macedonia, Mauritius.

121 Argentina, Uruguay, Chile.

122 China, Costa Rica, El Salvador, Mauritius, Panama.

123 Costa Rica, El Salvador, Mauritius, Panama.

124 Bulgaria, United States.

125 Albania, Argentina, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, Chile, Canada (including Additional Facility Rules of ICSID), China, Costa Rica (including Additional Facility Rules of ICSID), Croatia, Cyprus (including Arbitration Institute of the Chamber of Commerce in Stockholm), Denmark, Egypt, Finland (specifying that an investor can choose conciliation procedure before the dispute is submitted to arbitration), Georgia, Greece (including ICSID conciliation), Guatemala (including Additional Facility Rules of ICSID), Hungary, India (including conciliation under UNCITRAL Conciliation Rules), Kazakhstan (for ad hoc arbitration, the BIT specifies that arbitral award shall be final and binding unless arbitration rules or international agreements between the parties do not provide otherwise), Kosovo, Republic of Korea, Kuwait, Latvia, Lebanon, Lithuania, Macedonia, Malaysia, Malta, Mexico (including Additional Facility Rules of ICSID), Moldova (including Additional Facility Rules of ICSID), Mongolia, Montenegro, Morocco, Nicaragua, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Serbia, Singapore (including ICSID conciliation and conciliation under the 1980 UNCITRAL Conciliation Rules), South Africa (including Additional Facility Rules of ICSID), Spain (including Arbitration Institute of the Chamber of Commerce in Stockholm and ICC arbitration), Syria, Tajikistan, Tunisia, Turkey, Ukraine, United Arab Emirates, United States (including Additional Facility Rules of ICSID or other institutional rules on which the parties to the dispute agreed), Uruguay, Uzbekistan, Vietnam, Yemen.

126 Australia, France, Sweden, Venezuela (the BIT also allows to use the Additional Facility Rules of ICSID if one party is not party to the ICSID and ad hoc UNCITRAL if ICSID and ICSID additional facility arbitrations are not available).

127 Germany.

128 Austria, Belgium and Luxembourg (1976 UNCITRAL Rules), Netherlands.

129 In case of Israel, Netherlands and Switzerland BITs.

130 In case of Israel, Netherlands and Switzerland BITs.

131 Belgium and Luxembourg, Germany, Israel, Netherlands, Switzerland.

132 ‘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 the disputing parties shall agree upon a third member as their chairman. (…) If an arbitral tribunal has not been constituted within ninety (90) days from the date the claim was submitted to arbitration, either because a party to the dispute failed to appoint a member or failed to agree upon a chairman, the Secretary General of ICSID, on the request of any of the parties to the dispute, shall be asked to appoint, in his discretion, the member or members not yet appointed. Nevertheless, the Secretary General of ICSID, on appointing a chairman, shall assure that the chairman is a national of neither of the Contracting Parties.’

133 Mexico, United States.

134 Belgium and Luxembourg.

135 Austria, Canada (in respect to investments in financial institutions).

136 Australia, Chile, United States, Uruguay.

137 Argentina, Belgium and Luxembourg, Bosnia and Herzegovina (except (iii)), China, Croatia (except (iii)), Lebanon (including only (i) and (iv)), Macedonia (including only (ii) and (iv); the national law is applied only to the extent the BIT refers to it in its particular provisions), Mexico (including only (i) and (iv); adding that a joint interpretation of the BIT by the contracting parties is binding on any tribunal), Morocco, Netherlands (stating that these sources are not exclusive), Spain (including only (i), (ii) and other agreements between contracting parties), United Kingdom (stating that arbitral tribunal ‘shall, in particular, base its decision on the provisions of’ the BIT), Uruguay.

138 Cambodia, Korea (Democratic People’s Republic), Georgia, Jordan, Romania, Syria, Turkey (includes only (i), other agreements between contracting parties, (ii), (iii)), Vietnam, Yemen.

139 ‘This Treaty shall not derogate from: (a) laws and regulations, administrative practices or procedures, or administrative or adjudicatory decisions of either Party; (b) international legal obligations; or (c) obligations assumed by either party, including those contained in an investment agreement or an investment authorization, that entitle investments or associated activities to treatment more favorable than that accorded by this Treaty in like situations.’

140 Australia, Chile, Costa Rica, Malaysia, Philippines, Switzerland.

141 Austria, Belgium-Luxembourg Economic Union, Denmark, Finland, France, Germany, Greece, Netherlands, Norway, Spain, Sweden, Switzerland.

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