A G R E E M E
N T
between
the Republic of Austria and the Republic of the Philippines for the Promotion
and Reciprocal Protection of Investments
THE REPUBLIC OF AUSTRIA AND THE REPUBLIC OF THE
PHILIPPINES hereinafter referred to as the Contracting Parties,
DESIRING to create favourable conditions for greater
economic co-operation between the Contracting Parties;
RECOGNIZING that the promotion and protection of
investments will strengthen the readiness for such investments and thereby make
an important contribution to the development of economic relations,
HAVE AGREED AS FOLLOWS:
ARTICLE
1
Definitions
For the purpose of this Agreement:
(1) the term „investment“
comprises all assets and in particular, though not exclusively:
a) movable
and immovable property as well as any other rights in rem such as
mortgages, liens, pledges, usufructs and similar rights;
b) shares and other types of participation in
undertakings;
c) claims to money that has been given in order to
create an economic value or claims to any performance having an economic value;
d) intellectual
and industrial property rights, as defined in the multilateral agreements
concluded under the auspices of the World Intellectual Property Organization,
including, but not limited to, copyright, trademarks, patents, industrial
designs and technical processes, know-how, trade secrets, trade names and
goodwill;
e) business
concessions granted in accordance with the laws and regulations of the
respective Contracting Party, including concessions to search for, extract or
exploit natural resources.
(2) the term
„investor“ means
a) with respect to the Republic of Austria:
natural persons who are citizens of the Republic of Austria and make an
investment in the other Contracting Party's territory;
b) with respect to the Republic of the
Philippines: individuals who are citizens of the Philippines within the meaning
of its Constitution and make an investment in the other Contracting Party's
territory;
c) with respect to the Republic of Austria: any
juridical person, or partnership, constituted in accordance with the
legislation of the Republic of Austria, having its seat in the territory of the
Republic of Austria and making an investment in the other Contracting Party's
territory and any juridical person, or partnership, constituted in accordance
with the legislation of a Contracting Party or of a Third Party in which the
investor referred to above exercises effective control;
d) with respect to the Republic of the
Philippines: legal entities, including companies, associations of companies,
trading corporate entities and other organizations that are incorporated or, in
any event properly organized and actually doing business under the laws of the
Republic of the Philippines and have their headquarters in the territory of the
Republic of the Philippines where effective management is carried out, as well
as corporations organized abroad, effectively controlled by Philippine
nationals and registered as doing business under Philippine laws.
(3) the term
„returns“ means the amounts yielded by an investment, and in particular, though
not exclusively, profits, interests, capital gains, dividends, royalties, license
and other fees.
(4) the term „territory“ means in
respect of each Contracting Party the territory under its sovereignty as well
as its exclusive economic zone and continental shelf over which each
Contracting Party exercises sovereign rights or jurisdiction in accordance with
its national law and international law.
ARTICLE
2
Promotion
and Protection of Investments
(1) Each
Contracting Party shall in its territory promote, as far as possible,
investments of investors of the other Contracting Party, admit such investments
in accordance with its legislation and in any case accord such investments fair
and equitable treatment.
(2) Investments
admitted according to Article 1 paragraph (1) and their returns shall enjoy the
full protection of the present Agreement. The same applies without prejudice to
the regulations of paragraph (1) also for their returns in case of reinvestment
of such returns. The legal extension, alteration or transformation of an
investment has to be made in accordance with the legislation of the respective
Contracting Party.
ARTICLE
3
Treatment
of Investments
(1) Each
Contracting Party shall accord to investors of the other Contracting Party and
their investments treatment no less favourable than that accorded to its own
investors and their investments or to investors of any third State and their
investments.
(2) The
provisions of paragraph (1) shall not be construed as to oblige one Contracting
Party to extend to the investors of the other Contracting Party and their
investments the present or future benefit of any treatment, preference or
privilege resulting from
a) any customs union, common market, free trade
area, membership in an economic community or multilateral investment agreement;
b) any international agreement, international
arrangement or domestic legislation regarding taxation.
ARTICLE
4
Expropriation
(1) Investments
of investors of either Contracting Party shall not be expropriated,
nationalized or subjected to any measure having equivalent effect (hereinafter
referred to as expropriation) in
the territory of the other Contracting Party except for a public purpose by due
process of law and accompanied by prompt, adequate and effective compensation.
(2) Such
compensation shall be equivalent to the fair market value of the expropriated
investment immediately before the date on which the expropriation has occurred.
The fair market value shall not reflect any change in value occurring because
the expropriation had become publicly known earlier. The compensation shall be
paid without delay. In the event that the payment of compensation is delayed,
the compensation shall include interest at the prevailing commercial rate from
the date of expropriation until the date of payment. The compensation shall be
effectively realizable and freely transferable in any freely convertible currency. Provision shall be made in an
appropriate manner at or prior to the time of expropriation for the
determination and payment of such compensation.
(3) For the
avoidance of doubt, where a Contracting Party expropriates the assets of a
company which is incorporated or constituted under the law in force in any part
of its territory and in which an investor of the other Contracting Party owns
shares, it shall apply the provisions of paragraph (1) of this Article so as to
ensure due compensation provided for in that paragraph to such investors to the
extent of their interest in the assets expropriated.
(4) The
investor shall be entitled to have the legality of the expropriation reviewed
by the competent authorities of the Contracting Party having initiated the
expropriation.
(5) The investor
shall be entitled to have the amount and the provisions for the payment of the
compensation reviewed either by the competent authorities of the Contracting
Party having initiated the expropriation or by an international arbitral
tribunal according to Article 9 of the present Agreement.
ARTICLE
5
Compensation
for Damage or Loss
(1) When
investments made by investors of either Contracting Party suffer damage or loss
owing to war or other armed conflict, a state of national emergency, revolt,
civil disturbances, insurrection, riot or other similar events in the territory
of the other Contracting Party, they shall be accorded by the latter
Contracting Party, treatment, as regards restitution, indemnification,
compensation or other settlement, not less favourable than that the latter
Contracting Party accords to its own investors or investors of any third state,
whichever is the most favourable.
(2) Without
prejudice to paragraph 1, investors of one Contracting Party who in any of
the events referred to in that paragraph suffer damage or loss in the territory
of the other Contracting Party resulting from:
a) requisition
of their property or part thereof by the forces or authorities of the latter
Contracting Party, or
b) destruction
of their property or part thereof by the forces or authorities of the latter
Contracting Party which was not caused in combat action or was not required by
the necessity of the situation,
shall
be accorded prompt restitution or prompt and adequate compensation where
restitution is not possible for the damage or loss sustained. Resulting
payments shall be made in a freely convertible currency and be freely
transferable without undue delay.
ARTICLE
6
Transfers
(1) Each
Contracting Party shall guarantee without undue delay to investors of the other
Contracting Party free transfer in freely convertible currency of payments in
connection with an investment, in particular but not exclusively, of the
a) capital and additional amounts for the
maintenance or extension of the investment;
b) amounts
assigned to cover expenses relating to the management of the investment;
c) returns;
d) repayment
of loans;
e) proceeds
from total or partial liquidation or sale of the investment;
f) compensation
payment for expropriation, damage or loss; or
g) payments
arising out of a settlement of a dispute.
(2) The
payments referred to in this Article shall be effected at the market rate of
exchange prevailing on the day of the transfer.
(3) The rates
of exchange shall be determined according to the quotations on the stock
exchanges or in the absence of such quotations according to the spot
transactions conducted through the respective banking system in the territory
of the respective Contracting Party.
(4) The term
„without undue delay“ means such period as is normally required for the
completion of necessary formalities for the transfer of payments. The said
period shall commence on the day on which the request for transfer has been
submitted and may on no account exceed two months.
ARTICLE
7
Subrogation
Where one Contracting Party or an institution
authorized by it makes payments to its investor by virtue of a guarantee for an
investment in the territory of the other Contracting Party, the other
Contracting Party shall without prejudice to the rights of the investor of the
first Contracting Party under Article 9 of the present Agreement and to the
rights of the first Contracting Party under Article 10 of the present Agreement
recognize the assignment to the first Contracting Party of all rights and
claims of this investor under a law or pursuant to a legal transaction. The
latter Contracting Party shall also recognize the subrogation of the former
Contracting Party to any such rights or claims which that Contracting Party
shall be entitled to assert to the same extent as its predecessor in title. As
regards the transfer of payments to the Contracting Party concerned by virtue
of such assignment, Articles 4, 5 and 6 of the present Agreement shall apply
mutatis mutandis.
ARTICLE
8
Other
Obligations
(1) If the
provisions of law of either Contracting Party or international obligations
existing at present or established thereafter between the Contracting Parties
in addition to the present Agreement, contain a rule, whether general or specific,
entitling investments by investors of the other Contracting Party to a
treatment more favourable than is provided for by the present Agreement, such
rule shall to the extent that it is more favourable prevail over the present
Agreement.
(2) Each Contracting
Party shall observe any contractual obligation it may have entered into towards
an investor of the other Contracting Party with regard to investments approved
by it in its territory.
ARTICLE
9
Settlement
of Disputes Between a Contracting Party
and an
Investor of the Other Contracting Party
(1) Any dispute
arising out of an investment, between a Contracting Party and an investor of
the other Contracting Party shall, as far as possible, be settled amicably
between the parties to the dispute.
(2) In the
event that the dispute cannot be settled amicably, the party concerned may
choose to submit the dispute for resolution:
a) to the courts or administrative tribunals of
the Party that is a party to the dispute; or
b) in accordance with any applicable, previously
agreed dispute-settlement procedures.
(3) If such a
dispute between an investor of one Contracting Party and the other Contracting
Party continues to exist after a period of six months, the investor shall be
entitled to submit the case either to:
a) international
arbitration of the International Centre for Settlement of Investment Disputes
established pursuant to the Convention on the Settlement of Investment Disputes
Between States and Nationals of other States opened for signature at Washington
D.C. on 18 March 1965 (ICSID
Convention), or
b) an arbitrator or international ad hoc arbitral
tribunal established under the Arbitration Rules of the United Nations
Commission on International Trade Law (UNCITRAL).
(4) Each
Contracting Party, by this Agreement irrevocably and unconditionally consents
in advance to submit any such disputes to international arbitration, if the
investor so chooses.
(5) The award
shall be final and binding; it shall be executed according to national law;
each Contracting Party shall ensure the recognition and enforcement of the
arbitral award in accordance with its relevant laws and regulations.
(6) A
Contracting Party which is a party to a dispute shall not, at any stage of
conciliation or arbitration proceedings or enforcement of an award, raise the
objection that the investor who is the other party to the dispute has received
indemnity by virtue of a guarantee in respect of all or some of its losses.
ARTICLE
10
Settlement
of Disputes Between the Contracting Parties
(1) Disputes
between the Contracting Parties concerning the interpretation or application of
this Agreement shall, as far as possible, be settled amicably through negotiations.
(2) If a
dispute according to paragraph (1) cannot be settled within six months it shall
upon the request of either Contracting Party be submitted to an arbitral
tribunal.
(3) Such an
arbitral tribunal shall be constituted ad hoc as follows: each Contracting
Party shall appoint one member and these two members shall agree upon a
national of a third State as their Chairman. Such members shall be appointed
within two months from the date one Contracting Party has informed the other
Contracting Party, that it intends to submit the dispute to an arbitral
tribunal, the Chairman of which shall be appointed within two further months.
(4) If the
periods specified in paragraph (3) are not observed, either Contracting Party
may, in the absence of any other relevant arrangement, invite the President of
the International Court of Justice to make the necessary appointments. If the
President of the International Court of Justice is a national of either of the
Contracting Parties or if he is otherwise prevented from discharging the said
function, the Vice-President or in case of his inability the member of the
International Court of Justice next in seniority should be invited under the
same conditions to make the necessary appointments.
(5) The
tribunal shall establish its own rules of procedure.
(6) The
arbitral tribunal shall reach its decision by virtue of the present Agreement
and pursuant to the generally recognized rules of international law. It shall
reach its decision by a majority of votes; the decision shall be final and
binding.
(7) Each
Contracting Party shall bear the costs of its own member and of its legal
representation in the arbitration proceedings. The costs of the chairman and
the remaining costs shall be borne in equal parts by both Contracting Parties. The
tribunal may, however, in its award determine another distribution of costs.
ARTICLE
11
Application
of the Agreement
This Agreement shall apply to investments made in the
territory of one of the Contracting Parties in accordance with its legislation
by investors of the other Contracting Party prior to as well as after the entry
into force of this Agreement.
ARTICLE
12
Entry
into Force and Duration
(1) This
Agreement is subject to ratification and shall enter into force on the first
day of the third month that follows the month during which the instruments of
ratification have been exchanged.
(2) This
Agreement shall remain in force for a period of ten years; it shall be extended
thereafter for an indefinite period and may be denounced in writing through diplomatic
channels by either Contracting Party giving twelve months' notice.
(3) In respect
of investments made prior to the date of termination of the present Agreement
the provisions of Articles 1 to 11 of the present Agreement shall continue to
be effective for a further period of five years from the date of termination of
the present Agreement.
DONE in Manila, on the 11th day of April 2002, in
duplicate, in the German and English languages, both texts being equally
authentic.
For the Republic of Austria: |
For the Republic of the Philippines: |
Johann DEMEL |
Thomas G. AQUINO |