Investment Treaty Arbitration

Last verified on Wednesday 24th November 2021

Investment Treaty Arbitration: Jordan

Overview of investment treaty programme

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

Jordan

 

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

Algeria (5 June 1997)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Armenia (not in force) (date of signature 29 October 2014) (unavailable)

-

-

-

-

-

-

-

-

Austria (25 November 2001)

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

Azerbaijan (25 December 2008) (unavailable)

-

-

-

-

-

-

-

-

Bahrain (5 June 2000)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Belarus (22 December 2005) (unavailable)

-

-

-

-

-

-

-

-

Bosnia & Herzegovina (25 November 2011) (unavailable)

-

-

-

-

-

-

-

-

Bulgaria (19 April 2003) (unavailable)

-

-

-

-

-

-

-

-

Canada (14 December 2009)

Yes

Yes

Yes

Yes

No

90 days

Limited except declaratory relief

Yes

China (not in force) (date of signature 15 November 2011)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Congo (not in force) (date of signature 23 June 2004) (Unavailable)

-

-

-

-

-

-

-

-

Croatia (27 April 2000)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Cyprus (19 July 2010) (unavailable)

-

-

-

-

-

-

-

-

Czech Republic (25 April 2001)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

England and Wales (24 April 1980)

Yes

Yes

Yes

Yes

Yes

No

No

Yes

Egypt (11 April 1998)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

Estonia (not in force) (date of signature 10 May 2010) (unavailable)

-

-

-

-

-

-

-

-

Finland (18 December 2007)

Yes

Yes

Yes

Yes

No

No

Yes

Yes

France (18 October 1979)

Yes

Yes

Yes

Yes

No

No

No

Yes

Germany (28 August 2010)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Greece (8 February 2007)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Hungary (9 March 2008) (unavailable)

-

-

-

-

-

-

-

-

India (22 January 2009)

Yes

Yes

No

Yes

No

9 months2

Yes

Yes

Indonesia (9 February 1999)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Italy (30 September 2001)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

Kuwait (19 March 2004)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Lebanon (30 August 2003)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Lithuania (5 May 2003)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Malaysia (3 March 1995)

Yes

Yes

Yes

Yes

No

3 months

No

Yes

Morocco (7 February 2000)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Netherlands (1 August 1998)

Yes

Yes

Yes

Yes

Yes

No

No

Yes

Oman (not in force) (date of signature 9 April 2007) (unavailable)

-

-

-

-

-

-

-

-

Occupied Palestinian Territory (not in force) (date of signature 4 October 2011) (unavailable)

-

-

-

-

-

-

-

-

Poland (14 August 1999)

Yes

Yes

No

Yes

No

6 months

No

Yes

Portugal (not in force) (date of signature 17 March 2009) (unavailable)

-

-

-

-

-

-

-

-

Qatar (not in force) (date of signature 28 January 2009) (unavailable)

-

-

-

-

-

-

-

-

Republic of Korea (25 December 2004)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Romania (24 November 1995)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Russia (17 June 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Singapore (22 August 2005)

Yes

Yes

Yes

No

Yes

9 months

No

Yes

Slovak Republic (9 June 2010)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Spain (13 December 2000)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Sudan (3 February 2001)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Switzerland (11 December 2001)

Yes

Yes

Yes

Yes

No

No

No

No

Syria (11 May 2002)

Yes

Yes

No

Yes

No

No

Yes

Yes

Tanzania (date of signature 18 October 2009) (unavailable)

-

-

-

-

-

-

-

-

Thailand (8 June 2012)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Tunisia (23 November 1995)

Yes

Yes

Yes

Yes

No

3 months

Yes

Yes

Turkey (23 January 2006)

No3

Yes

No

Yes

No

6 months

Yes

Yes

UAE (12 February 2010)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Ukraine (17 April 2007)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

United States (12 June 2003)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Yemen (28 January 1998)

Yes

Yes

Yes

Yes

No

3 months

Yes

Yes

The Unified Agreement For The Investment Of Arab Capital In The Arab States (7 September 1981)

No

Yes

Yes

Yes

No

No

Yes

Yes

The Agreement On The Promotion, Protection And Guarantee Of Investments Among Member States Of The Organization Of Islamic Cooperation (23 September 1986)

No

Yes

Yes

Yes

No

No

Yes

Yes

 

FTAs

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

Jordan-Turkey FTA (1 March 2011) (unavailable)

-

-

-

-

-

-

-

-

Jordan-Singapore FTA
(22 August 2005)

No

No

No

No

No

No

No

No

Jordan-United States FTA
(17 December 2001)

No

No

No

No

No

No

No

No

EFTA-Jordan FTA
(1 September 2002)

No

No

No

No

No

No

No

No

Qualifying criteria - any unique or distinguishing features?

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

Jordan

Issue

Distinguishing features in relation to the definition of ‘investor’

Natural persons

Most Jordanian BITs provide that for natural persons, an investor is any individual with the nationality/citizenship of a Contracting Party. The Unified Agreement provides that an investor is a national of an Arab state. The United States BIT provides that investors are ‘nationals’ of the United States.4

Dual-nationality

Most Jordanian BITs make no mention of the effect of dual citizenship on the ability to bring claims as an investor under the BIT. However, the Canada BIT specifies that a natural person who is a dual citizen of Canada and Jordan shall be deemed to be exclusively a national of his or her ‘dominant and effective nationality.’

Residency

Permanent residence is an alternative requirement to nationality/citizenship in the agreements with Algeria, Bahrain, Canada, Egypt, Lithuania, Malaysia, Morocco, Sudan, Tunisia, the United Kingdom, and Yemen. In the United Kingdom BIT, the protection extended to permanent residents requires that that individual ‘shall declare his status before making any investment.’ The Canada BIT specifies that if an individual is a citizen of one Party and a permanent resident of the other Party, they shall be deemed to be exclusively a national of the Party of his or her citizenship.

Legal persons

Many Jordanian BITs provide examples of the types of legal persons that constitute investors. Generally this includes some combination of companies, corporations, firms, partnerships, associations, institutions, or organisations among other entities. The treaties with Austria, Canada, Finland, Germany (with respect to German entities only), Singapore, and the United States expressly include non-for-profit organisations in their definition of investor. Six BITs require that an entity be ‘established or incorporated’ in the Contracting State.5 Similarly, the BITs with the Republic of Korea, and the United Kingdom require that an entity to be ‘incorporated or constituted’ in accordance with the legislation of the Contracting Party. Otherwise, the remaining Jordan BITs refer to varying criteria when determining which legal persons can constitute investors. These remaining BITs can be categorised by the number of requirements that they impose on legal entities:

1. One requirement

a. The Switzerland BIT (with respect to Swiss entities only) requires ‘incorporation’ of the entity under Swiss law.

b. The Kuwait and Lithuania BITs require that the entity be ‘established’ according to the regulations of the Contracting State.

c. The Germany BIT (with respect to Germany only) requires an entity to have its ‘seat’ in the territory of Germany.

d. The Italy BIT demands an entity have its ‘headquarters’ in the Contracting State.

e. The Netherlands BIT requires entities to be ‘constituted’ under the laws of the Contracting Party.

f. The United States BIT requires entities to be ‘constituted or organized’ in the Contracting State.

2. Two requirements

a. The France BIT requires legal persons to be ‘incorporated’ in the Contracting Party with their siege-social (registered place of business) in that Contracting Party as well.

b. The India (with respect to Jordanian entities only) and Slovak Republic BITs provide that entities must be ‘incorporated or constituted’ in accordance with the law of the Contracting State with their ‘registered office, central administration or principal place of business’ in the same Contracting State.

c. The Germany BIT (with respect to Jordan) and the Greece BIT require entities to be ‘constituted or otherwise duly organized’ under the legislation of the Contracting State and have their ‘effective economic activities’ in its territory.

d. The Lebanon BIT requires the entity be ‘duly established’ according to the regulations of the Contracting Party with its ‘headquarters’ in the same State.

e. The Czech Republic BIT requires entities to be ‘incorporated or constituted’ in the Contracting State with its ‘permanent residence’ there as well.

f. The Turkey BIT requires entities to be ‘incorporated or constituted’ in the Contracting State with their ‘headquarters’ there as well.

g. The Romania BIT requires an entity be ‘constituted’ under the law of the Contracting Party with it ‘head office’ in that State as well.

h. The Ukraine BIT requires that entities have their ‘seat’ and ‘business activity’ in the territory of the Contracting Party.

i. The Singapore BIT requires entities to be ‘incorporated, constituted, or duly organized’ having their ‘substantive business operations’ in the territory of the same State.

 

3. Three or more requirements

a. The China BIT requires an entity to be ‘incorporated and constituted’ under the laws of a Contracting Party with its ‘seat’ in that Contracting Party.

b. The Finland BIT provides that entities must be ‘incorporated, constituted, or otherwise duly organized’ in the territory of the Contracting Party, have their registered office in the territory of the Contracting Party, and perform a real business activity in the territory of the same Contracting Party in order to claim the nationality of a signatory State. The Croatia BIT requires the same elements but instead of ‘registered office,’ it provides that the ‘seat’ should be in the territory of the Contracting Party.

c. The Poland and Thailand BITs is require an entity to be ‘constituted or otherwise duly organized’ under the law of the Contracting Party, have its ‘seat’, together with ‘real economic activities’ in the territory of the same Contracting Party.

Status as a legal person

A couple of Jordan BITs expressly provide that ‘investor’ covers entities not possessing the status of legal persons (Switzerland, Germany (with respect to German entities only)).

Denial of benefits

In general, the majority of Jordan BITs do not contain a denial of benefits clause. However, a couple of BITs do contain such a clause. The BITs with Austria, Canada, and the United States allow a Contracting Party to deny the benefits of the treaty to investors of the other Contracting Party and their investments, if they are owned or controlled by investors of a non-Contracting Party and have no substantial business activity in the territory of the Party under whose law it is constituted. The United States BIT also permits denial of benefits to a company owned or controlled by nationals of a non-Party country and with which the denying Party does not have normal economic relations. The treaty cites Cuba and Libya as examples.

Governments

Government owned entities are expressly included as investors in the BITs with Canada and Kuwait whereas government owned or controlled entities are included in the BITs with Austria, the United States, and Singapore.

Establishment phase of investment

Article 1(t) of the Canada BIT provides that covered investors are also investors who seek to make an investment, ‘when the investor has taken concrete steps necessary to make said investment.’

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

Jordan

Issue

Distinguishing features in relation to the concept of ‘investment’

Assets qualifying for protection

The definition of investment contained in all Jordanian investment treaties is very broad, generally referring to ‘any kind of asset’ (eg Poland BIT) or ‘every kind of asset’ (eg China BIT), and providing a non-exclusive list of examples. The non-exhaustive lists of investments often refer to (a) movable and immovable property and any other property rights such as mortgages, liens, leases or pledges; (b) shares in, stocks and debentures of, and any other form of participation in a company or any business enterprise and rights or interest derived therefrom; (c) claims to money or to any performance under contract having a financial value; (d) intellectual property rights including though not limited to rights with respect to copyrights, patents, trademarks, trade names, industrial designs, technical processes, trade secrets, know-how and goodwill; and (e) business concessions conferred by law, by an administrative act or under a contract by a competent authority, including concessions to search for, develop, extract and exploit natural resources.’ (eg Korea BIT).

Indirect investments

A handful of Jordanian BITs expressly protect investments owned or controlled “directly or indirectly” by an investor of the other Contracting Party. 6

Exclusion of certain types of assets

The Canada BIT excludes certain claims to money and certain extensions of credit from the definition of ‘investment.’

The UAE BIT in its article 13 excludes investments in hydrocarbons and natural resources from its scope.

Accordance with local laws

Most of Jordan’s BITs explicitly set forth that they protect investments made in accordance with legislation of the host state. 7

Commencement of coverage

The Ukraine BIT expressly provides that it does not apply to claims and/or disputes that arose prior to its entry into force. Conversely, the Egypt, Italy, Switzerland, and UK BITs extend protection to investments made prior to the date of their entry into force.

Reinvested benefits

Reinvested benefits are among the types of assets covered by the term investment in the treaties with Algeria and Romania.

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?

Jordan

Issue

Distinguishing features of the fair and equitable treatment standard

Illustrations of the FET standard

Almost all of Jordan BITs provide that each Contracting Party shall accord ‘fair and equitable treatment’8 to investments.9 The wording of the FET standard in Jordan’s investment treaties varies. Thirteen BITs simply provide that each Contracting party shall ensure fair and equitable treatment to investments without any further criteria.10 In eleven BITs, the FET clause appears in the same clause as the duty to abstain from impairing the investment through unreasonable or discriminatory measures.11 Six BITs utilise an FET clause that sets national treatment or most favored nation treatment as the minimum standard for fair and equitable treatment.12 Five BITs make reference to the principles of international law in defining the FET standard.13 One BIT links the FET clause to the minimum customary international law standard.14

Scope of standard

Several BITs extend the FET standard not only to investments but also returns on investments (ie Austria, China and Greece BITs). In most of Jordan’s BITs, the FET standard itself applies to ‘investments by/of investors’ (eg Austria, China, Greece BITs).

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

Jordan

Issue

Distinguishing features of the ‘expropriation’ standard

Conditions of expropriation

The majority of Jordanian BITs provide that a Contracting Party shall not expropriate or nationalise an investment except for the public benefit/interest/purpose in a non-discriminatory manner, in accordance with the due process of law, and accompanied by prompt adequate and effective compensation (eg Canada, Croatia, Greece, Romania, Singapore, Thailand).

Definition of expropriation

Most Jordanian BITs do not define expropriation. However, the India BIT provides an annex which lists many of the non-exclusive factors to be taken into consideration when determining whether a measure constitutes expropriation.

Calculation of compensation

Compensation is calculated from the valuation date. The valuation date varies in Jordan’s BITs. Some BITs provide for compensation from the eve of expropriation (eg Canada, Austria, China, Singapore, US). Other BITs provide for compensation from the date of the expropriation (eg Romania, France, UK). Some other BITs provide for compensation immediately before the expropriation became public knowledge/was announced (eg Algeria, Czech Republic, Poland). Some BITs provide for compensation from the date of the announcement of the expropriation (eg Sudan, Morocco). Finally, some BITs offer an alternative: compensation is either calculated immediately before the expropriation or before the impending expropriation became public knowledge, whichever is earlier (eg Finland, Greece, India, Kuwait, Russia, Slovak Republic).

Interest on compensation

Many of Jordan’s BITs include interest on compensation and it varies in Jordan’s BITs. A couple of BITs refer to interest at a commercial rate established on a market basis (ie Austria, Finland). The normal/ordinary commercial rate is referred to in Jordan’s BITs with Greece, the Netherlands, and Bahrain. The rate of interest is not specified at all in the treaties with Romania or the Czech Republic. In a few BITs the rate of interest shall be not less than the LIBOR rate (ie Kuwait, Russia). Other formulations of the interest rate include ‘applicable commercial rate’ in the treaties with the Republic of Korea and the Slovak Republic, ‘fair and equitable rate’ in the treaty with India, and the ‘rate applicable in the territory of the Contracting Party’ in the treaty with Thailand.

Indirect expropriation

Twenty Jordanian treaties provide that a Contracting Party shall not expropriate “directly or indirectly” an investment of an investor.

Exceptions to expropriation

In the Canada BIT, a Contracting Party may derogate from the provision on expropriation through measures related to intellectual property rights that are consistent with the WTO agreement.

Judicial or administrative review

Eighteen BITs recognise a right to investors to a prompt review of the expropriation by a judicial authority or other competent/independent body of the Contracting Party, including the valuation of the investment and its payment. The UAE BIT requires that the expropriation must be taken in accordance with a decision of a competent court.

Timing of compensation

Twenty-one Jordanian BITs provide that payment shall be made without delay. In the Italy and Poland BITs, compensation is considered timely if it takes place at the most three months from the date on which the application for payment has been submitted.

Taxes

The Jordan-Kuwait BIT expressly provides that expropriation includes ‘imposition of arbitrary taxes.’

Right to repurchase investment

In the Jordan-Italy BIT, an owner whose investment was expropriated has the right to repurchase the good at market price if after dispossession the good concerned is not utilised wholly or partially for that purpose.15

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

Jordan

Issue

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

Scope of MFN

The majority of Jordan’s BITs extend MFN protection to investors as well as investments (eg Algeria, Austria, Croatia, Czech Republic, Germany, Greece, United Kingdom). Some BITs also extend MFN protection to returns of investors (eg China, Croatia, Italy, Finland). Certain BITs expressly proscribe the MFN standard to determining compensation or restitution of the investment in case of war or other armed conflict, revolution, a state of national emergency, revolt, insurrection, disturbances or other similar events (ie Egypt, Lebanon, Malaysia Morocco, Sudan, Tunisia, Yemen, and the United States). Some BITs also expressly extend MFN protection to ‘activities associated with investments’ (ie China, France, Italy, and Turkey).

Exceptions to MFN

The grand majority of Jordan’s BITs (ie all except for the Syria BIT) expressly provide that the provision of ‘most favoured nation’ and/or ‘national’ treatment to an investment does not extend to the benefits of membership of a customs union, monetary union or free trade area. The majority of Jordan’s BITs also provide that MFN/NT does not extend to taxation agreements and/or taxation legislation (ie all BITs except for Syria, Switzerland, Tunisia, and Yemen). The United States BIT expressly excludes from the scope of MFN treatment multilateral agreements concluded under the auspices of the World Intellectual Property Organization. The Canada BIT expressly excludes from the scope of MFN treatment procurements, grants, and subsidies as well as existing non-conforming measures.

National Treatment Only

The Jordan-Singapore BIT is the only Jordanian BIT to provide for National Treatment only.

MFN issues considered in arbitration case law

The attempt to impose arbitration through the application of an MFN clause was unsuccessful in Salini Construttori Sp v. Jordan (ICSID Case No ARB/02/13). The applicable BIT (Italy-Jordan BIT) allowed for ICSID arbitration of treaty claims, but not contract claims, and the claimants hoped to use the BIT’s MFN clause to import a broader dispute resolution provision from the Jordan-US BIT or the Jordan-UK BIT, allowing for arbitration of contract claims. The tribunal declined to allow the MFN clause to expand the scope of the arbitration provision, and held that its jurisdiction was limited by the Italy-Jordan BIT’s dispute resolution clause. In the case ATA Construction, Industrial and Trading Co v. Jordan (ICSID Case No ARB/08/2, Award, 18 May 2010), the tribunal allowed the claimant to rely on an MFN clause to import the fair and equitable treatment standard from another BIT.

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

Jordan

Issue

Distinguishing features of protection and security

Scope

The majority of Jordanian BITs include some obligation to provide protection and security to investments.16 However, the formulation of this obligation is hardly uniform. Fourteen BITs provide for ‘full protection and security.’17 Six BITs (all with Arab countries) refer to ‘complete and adequate protection and security.’18 Two BITs cite ‘full and complete protection and security’ (ie Algeria, France). Two BITs cite ‘adequate protection and security’ (ie Indonesia, Netherlands). Two BITs utilise ‘complete protection and safety’ (ie Kuwait, Lebanon). Other formulations include ‘full and constant protection and security’ in the BIT with Austria, ‘full protection as well as security’ in the BIT with Germany, and ‘full and adequate protection and security’ in the BIT with Malaysia. Two BITs require only that each Contracting Party protect in its territory the investments made according to its laws and regulations, by the investors of the other Contracting Party (ie Romania, Switzerland). The treaties are not explicit as to whether this clause covers only physical protection or also legal protection of investments.

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

Jordan

Issue

Distinguishing features of any ‘umbrella clause’

Scope

Many Jordanian BITs include umbrella clauses (eg Algeria, Austria, Italy, Lebanon, Spain, United Kingdom, United States).

Qualification of the obligation

Contracting Parties are required to ‘observe any obligation entered into with regard to specific investments’ (eg Austria) or ‘take into consideration any other commitment assumed concerning the investment’ (eg Lebanon). The Spain BIT limits the application of the umbrella clause to written undertakings. In Salini v. Jordan , claimants alleged that the Jordan-Italy BIT contained an ‘umbrella clause’ in its article 2(4). This clause provided: ‘each contracting Party shall maintain in its territory a legal framework apt to guarantee to investors the continuity of legal treatment, including the compliance, in good faith of all undertakings assumed with regards to each specific investor.’ The tribunal found that this clause did not have the effect of transforming contractual undertakings into treaty obligations as the only obligation it imposed on Jordan was to ‘create and maintain a legal framework apt to guarantee the compliance of undertakings.’ Thus, the tribunal decided that the dispute regarding the construction of the Karameh Dam Project in Jordan had to be settled before domestic courts pursuant to the contract concluded between claimants and the Ministry of Water and Irrigation.

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

Jordan

Issue

Other substantive protections

Free transfer of payments

Free transfer of investments and investment returns is provided for in most of Jordan’s BITs. Nevertheless, there are some restrictions. The Austria BIT provides that the host state can prevent/restrict the free transfer of investments and investment returns in case of administrative or court proceedings (eg, bankruptcy or criminal taxation offences) or based on the right to restrict or prohibit export under the GATT 1994. The Canada, Singapore, and United States BITs similarly allow a Contracting Party to restrict free transfer through equitable, non-discriminatory, and good faith application of its laws relating to among other things, bankruptcy, securities, criminal offences, and satisfaction of judgments. The Romania BIT subjects free transfer of currency to Contracting States’ laws and regulations. The Slovak Republic BIT permits a Contracting Party to temporarily disrupt free transfer through measures relating to cross-border capital and payment transactions adopted by the European Communities. Finally, in the United Kingdom BIT, free transfer is subject to the right of each Contracting Party in exceptional financial or economic circumstances to exercise equitably and in good faith powers conferred by its laws existing when the Agreement enters into force.

Armed conflict/civil unrest

Thirty Jordanian BITs provide for compensation, restitution, indemnification or other settlement to be paid by a Contracting Party in case of losses due to armed conflict/civil unrest/civil strife with many of them guaranteeing MFN treatment in regards to that compensation. The Canada BIT also provides this protection in case of natural disaster. A few of the BITs expressly state that the compensation to be offered shall be ‘prompt, adequate, and effective’ (eg Spain, UAE).

Non-impairment by arbitrary/unreasonable/discriminatory measures

About half of the reviewed Jordanian BITs impose upon the Contracting Parties an obligation not to impair by unreasonable or discriminatory or arbitrary measures the management, maintenance, use, enjoyment, extension, selling and where applicable liquidation of such investments.

Transparency

Several of the Jordanian BITs contain provisions on transparency. The Austria, Canada, Finland, Singapore, and United States BITs impose an obligation to publish laws, regulations, procedures and administrative rulings/judicial decisions as well as international agreements which may affect the investments of investors of the other Contracting Party in the territory of the former Contracting Party. The Austria BIT adds that a Contracting Party shall also promptly respond to specific questions and provide, upon request, information to the other Contracting Party on matters referred to in new laws. In addition to prompt publication, the Canada BIT provides interested persons and the other Party a reasonable opportunity to comment on such proposed measures. The Poland and Thailand BITs provide that upon request by either Contracting Party, information shall be exchanged on the impact that the laws, regulations, decisions, administrative practices, procedures or policies of the other Contracting Party may have on covered investments.

General exceptions

The Jordan-Singapore BIT provides that the Treaty shall not prevent the adoption or enforcement by a Party of measures necessary to, among other things, protect public order, human/animal/plant life, national treasures of artistic, historic or archaeological value. This BIT further allows Contracting Parties to take any action which it considers necessary for the protection of its essential security interests: (i) relating to fissionable and fusionable materials or the materials from which they are derived; (ii) taken in time of war or other emergency in international relations; and (iii) relating to the production or supply of arms and ammunition. The Singapore BIT also states that a Party shall not be prevented from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

10. Do this country’s investment treaties exclude liability through carve-outs, non-precluded measures clauses, or denial of benefits clauses?

Jordan

Procedural rights in this country’s investment treaties

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

Jordan

Issue

Procedural rights

Fork-in-the-road

Several of Jordan’s BITs contain fork-in-the-road provisions (eg Bahrain, Egypt, Ukraine, Lebanon, Morocco, Tunisia, Yemen). These provisions require investors to elect either to pursue their claim through the local courts or by international arbitration. But once they have initiated one method of dispute resolution they can no longer pursue another.

Investor-State arbitration

The grand majority of Jordan’s BITs provide for investor-State arbitration. However, the Switzerland BIT does not. Rather, it only provides for arbitration between the Contracting Parties.

Institutional/ad hoc arbitration

All but one of the BITs providing for investor-State arbitration make available ICSID arbitration.19 In addition to ICSID arbitration, half of Jordan’s BITs make available ad hoc arbitration under the UNCITRAL rules. A few BITs also provide for the choice of ICC arbitration (ie Austria, Croatia, Finland, Germany, Poland, and Turkey). Beyond the choice of ICSID, UNCITRAL, and ICC arbitration, the Poland BIT also allows for SCC arbitration. A few of the BITs with Arab countries also refer to the possibility of dispute settlement per the Unified Agreement (eg Kuwait, Lebanon).

Applicable law

A few of Jordan’s BITs (eg Austria, Canada, Croatia) refer to the applicable investment treaty and rules and principles of international law.

12. What is the approach taken in this country’s investment treaties to standing dispute resolution bodies, bilateral or multilateral?

Jordan

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

Jordan

Consistent with investment treaty practice, the grand majority of Jordan’s BITs can be unilaterally terminated by a Contracting Party at any time after the end of the initial term of the treaty by giving at least 6 months written notice (eg Jordan-Netherlands BIT) of the termination (although in most cases, one year notice is required). The grand majority of the reviewed BITs incorporate a survival/sunset clause, extending a treaty’s application in relation to existing investments for a further period (anywhere from 6 months (eg Singapore BIT) to 20 years (eg Kuwait BIT)) from the date of termination.

The Jordanian government has not made any statement to the effect that it would cease entering into bilateral investment treaties or that it would not renew existing treaties. Further, given the fact that many of its bilateral investment treaties were recently concluded, (see Answer 19) unless there is any express indication on behalf of the government to the contrary, one can expect Jordan to continue to promote investments through the conclusion/renewal of additional BITs and other investment agreements.

Practicalities of commencing an investment treaty claim against this country

14. 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?

Jordan

Government entity to which claim notices are sent

As a rule, Jordan’s investment treaties do not indicate a government entity to which claim notices should be addressed. In the pending case Fouad Alghanim & Sons Co. for General Trading & Contracting, et. al v. Jordan , the Council of Ministers, Prime Minister, and Minister of Finance were listed as respondents. In the concluded case Trans-Global Petroleum, Inc v. Jordan , the Foreign Ministry and Ministry of Justice appeared as respondents. As such, it would be advisable to send a notice of dispute to the Prime Minister, Council of Ministers, Ministry of Justice and Ministry of Finance as well as a courtesy copy to the Ambassador.

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

Jordan

Government department which manages investment treaty arbitrations

Jordan’s investment treaties have been signed by the Minister of Industry and Trade. Thus, this Ministry in conjunction with the above mentioned Ministry of Justice, Ministry of Finance, and Council of Ministers manage Jordan’s investment treaty arbitrations.

16. 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?

Jordan

Internal/external counsel

The Kingdom of Jordan has retained external counsel in all 5 of its concluded cases. The external counsel has consisted of local and foreign counsel.

Practicalities of enforcing an investment treaty claim against this country

17. 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.

Jordan

Washington Convention implementing legislation

Jordan signed the ICSID Convention on 14 July 1972 and the Convention entered into force on 29 November 1972.

18. 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.

Jordan

New York Convention implementing legislation

Jordan is signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958. The New York Convention was ratified by Jordan on 15 November 1979. Furthermore, Article 2 of the Jordanian Law on the Enforcement of Foreign Arbitration Awards No. 8 of 1952 provides that foreign judgments, including those issued by foreign courts of justice and arbitral awards rendered abroad, shall not be enforceable in Jordan unless they are final and enforceable in the country in which the judgments or awards were issued.

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

Jordan

Legislation governing non-ICSID arbitrations

The Jordanian Law No. 31 of 2001 (the Law of Arbitration) governs every arbitration seated in Jordan.

20. 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?

Jordan

Compliance with adverse awards

Of the eight cases against Jordan, three20 were settled, three21 are pending, and one22 was rendered in favour of Jordan. The only award rendered against Jordan ordered specific performance and restitution.23 Specifically, Jordan was ordered to terminate the Jordanian court proceedings related to Dike No. 19 and it was also ordered that ATA Construction be entitled to proceed to arbitration in relation to Dike No. 19 under the Arbitration Agreement set forth in the Contract of 2 May 1998.24 It is unknown whether or not this award was complied with.

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

Jordan

Attitude of government towards investment treaty arbitration

Jordan has concluded all but two (France, UK) of its bilateral investment treaties within the last 20 years. Conversely, many countries signed the majority of their investment treaties during the 1970s, 1980s and 1990s. This demonstrates a recent trend towards increasing and encouraging investment in Jordan. Further, 3 out of 5 of the concluded investment cases against Jordan have been settled pursuant to agreement between the Parties indicating an overall willingness of the government to negotiate these disputes.

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

Jordan

Attitude of local courts towards investment treaty arbitration

As for investment cases against Jordan, three25 were settled, three26 are pending, and one27 was rendered in favor of Jordan. The only case rendered against Jordan, ATA Construction v. Jordan , ordered restitution and specific performance. Thus, the attitude of the local courts with respect to issues like enforcement/annulment has not comprehensively been tested given the few cases to draw upon.

National legislation protecting inward investments

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

Jordan

National legislation

Substantive protections

Procedural rights

FET

Expropriation

Other

Local courts

Arbitration

Investment Promotion Law No. 16 of 1995

 

Article 25

 

Choice between litigation and ICSID arbitration under Article 33.

Choice between litigation and ICSID arbitration under Article 33.

National legislation protecting outgoing foreign investment

24. 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?

Jordan

Relevant guarantee scheme

Qualifying criteria, substantive protections provided and practical considerations

Pending

 

Awards

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

Jordan

Concluded (Not all led to an award!)

International Company for Railway Systems (ICRS) v Hashemite Kingdom of Jordan (ICSID Case No. ARB/09/13)

ATA Construction, Industrial and Trading Company v Hashemite Kingdom of Jordan (ICSID Case No. ARB/08/2)

Trans-Global Petroleum, In. v Hashemite Kingdom of Jordan (ICSID Case No. ARB/07/25)

Salini Costruttori SpA and Italstrade SpA v Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/13)

JacobsGibb Limited v Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/12)

Pending proceedings

Fouad Alghanim & Sons Co for General Trading & Contracting, WL.L. and Mr Fouad Mohammed Thunyan Alghanim v Hashemite Kingdom of Jordan (ICSID Case No. ARB/13/38)

Orange SA v Hashemite Kingdom of Jordan (ICSID Case No. ARB/15/10)

Ali Alyafei v Hashemite Kingdom of Jordan (ICSID Case No. ARB/15/24)

Reading List

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

Jordan

Abdul Hamid El Ahdab and Jalal El Ahdab, Arbitration in the Hashemite Kingdom of Jordan   in Arbitration with the Arab Countries , (Kluwer Law International 2011) pp. 259 – 304

Omar M.H. Aljazy, ‘Arbitration in Jordan: From Old to New’, Journal of International Arbitration , (Kluwer Law International 2008, Volume 25 Issue 2) pp. 219 – 229

Abdullah Suleiman Nawafleh, Law and Investment in Jordan: The Legal Environment of Business after WTO accession, the Bilateral Investment Treaty and Free Trade Agreement with the United States (Lap Lambert, 2011).

Omar N. Nabulsi, Hashemite Kingdom of Jordan in The Practitioner’s Guide to Arbitration in the Middle East and North Africa , (JurisNet LLC 2009), pp. 129-158.

Notes

1 The following Jordanian BITs were reviewed for the devleopment of this country report: Algeria, Austria, Bahrain, Canada, China, Croatia, Czech Republic, Egypt, Finland, France, Germany, Greece, India, Indonesia, Italy, Kuwait, Lebanon, Lithuania, Malaysia, Morocco, Netherlands, Poland, Republic of Korea, Romania, Russia, Singapore, Slovak Republic, Spain, Sudan, Switzerland, Syria, Thailand, Tunisia, Turkey, United Arab Emirates (UAE), United Kingdom, United States, and Yemen.

2 Unlike many ‘cooling off’ periods which stipulate a period of time before the parties may turn to arbitration, the Jordan-India BIT provides for two step process: an investor and a Contracting Party must first attempt a period of negotioations. If a dispute has not been amicably settled within 6 months then the dispute may be submitted to, if both Parties agree to a Contracting Party’s competent judicial, arbitral, or administrative bodies or to international conciliation proceedings under the under the Conciliation Rules of the United Nations Commission on International Trade Law. Should the parties fail to agree to one of the aforementioned dispute settlement procedures, or if a dispute is referred to conciliation but conciliation proceedings are terminated other than by signing of a settlement agreement, then the dispute may be referred to either ICSID or ad hoc/UNCITRAL arbitration. Thus, a period of 9 months must pass before the parties can turn to arbitration.

3 It appears in the preamble only.

4 Under United States law, the term ‘national’ is broader than the term ‘citizen.’ The US-Jordan BIT provides that for example, a native of American Samoa is a national of the United States but not a citizen.

5 See Jordan’s BITs with Sudan, Tunisia, India (as to Indian entities only), Morocco, Yemen, and Egypt.

6 See Jordan’s BITs with Spain, Austria, Finland, Germany, Kuwait, and the United States.

7 See Jordan’s BITs with Algeria, Austria, China, Croatia, Czech Republic, Finland, India, Indonesia, Korea, Italy, Lebanon, Morocco, Poland, Russia, Slovak Republic, Spain, Sudan, Syria, Tunisia, Turkey, UAE, United Kingdom, and Yemen.

8 The Jordan-Italy BIT provides for ‘just and fair treatment.’ The Jordan-Syria BIT provides for ‘fair and just treatment.’

9 The Jordan-Turkey BIT provides for fair and equitable treatment only in the preamble of the treaty.

10 See Jordan’s BITs with Austria, Bahrain, Czech Republic, Egypt, Finland, India, Lithuania, Russia, Singapore, Sudan, Syria, Tunisia, and Yemen.

11 See Jordan’s BITs with Algeria, Germany, Greece, Indonesia, Italy, Morocco, Netherlands, Romania, Slovak Republic, Thailand, and the United Kingdom.

12 See Jordan’s BITs with Kuwait, Lebanon, Malaysia, Poland, Switzerland, and United Arab Emirates.

13 See the BITs with China, Croatia, France, Spain, and the United States.

14 Jordan-Canada BIT.

15 Jordan-Italy BIT, art. 5(11).

16 Five BITs (India, Italy, Poland, Syria, and Turkey) out of the 38 treaties reviewed contained no such obligation at all.

17 See Jordan’s BITs with Canada, Croatia, Czech Republic, Finland, Greece, Korea, Lithuania, Singapore, Slovak Republic, Spain, Thailand, United Arab Emirates, United Kingdom, and United States.

18 See Jordan’s BITs with Bahrain, Egypt, Morocco, Sudan, Tunisia, and Yemen.

19 The Jordan-Syria BIT refers to ‘arbitration’ but does not specify anything further.

20 J acobsGibb Limited v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/12) (where the proceedings were discontinued pursuant to a settlement under ICSID arbitration Rule 43(1)); International Company for Railway Systems (ICRS) v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/09/13) (where the proceedings were discontinued pursuant to a settlement under ICSID arbitration Rule 43(1)); Trans-Global Petroleum, Inc. v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/07/25) (where an award by settlement was rendered pursuant to ICSID Arbitration Rule 43(2).

21 Fouad Alghanim & Sons Co. for General Trading & Contracting, W.L.L. and Mr. Fouad Mohammed Thunyan Alghanim v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/13/38); Orange SA v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/15/10); Ali Alyafei v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/15/24).

22 Salini Costruttori S.p.A. and Italstrade S.p.A. v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/13) (where the award dismissed the claim submitted by Salini in its memorial of 9 May 2005.

23 ATA Construction, Industrial and Trading Company v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/08/2), Award, 18 May 2010, p. 68.

24 Id.

25 JacobsGibb Limited v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/12) (where the proceedings were discontinued pursuant to a settlement under ICSID arbitration Rule 43(1)); International Company for Railway Systems (ICRS) v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/09/13) (where the proceedings were discontinued pursuant to a settlement under ICSID arbitration Rule 43(1)); Trans-Global Petroleum, Inc. v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/07/25) (where an award by settlement was rendered pursuant to ICSID Arbitration Rule 43(2).

26 Fouad Alghanim & Sons Co. for General Trading & Contracting, W.L.L. and Mr. Fouad Mohammed Thunyan Alghanim v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/13/38); Orange SA v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/15/10); Ali Alyafei v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/15/24).

27 Salini Costruttori S.p.A. and Italstrade S.p.A. v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/13) (where the award dismissed the claim submitted by Salini in its memorial of 9 May 2005).

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