Indian Model Text of BIPA
The Government of the
Desiring to create conditions favourable for fostering greater investment
by investors of one State in the territory of the other State;
Recognising that the encouragement and reciprocal protection under
International agreement of such investment will be conducive to the stimulation
of individual business initiative and will increase prosperity in both
States;
Have agreed as follows:
ARTICLE 1
For the purposes of this Agreement:
(a) “Companies”
means:
(i) in respect
of
(ii) in respect
of
(b)
“investment” means every kind of asset established or acquired including changes in the form of such
investment, in accordance with the national laws of the Contracting Party in
whose territory the investment is made and in particular, though not
exclusively, includes:
(i)
movable and immovable property as well as other rights such as mortgages,
liens or pledges;
(ii) shares
in and stock and debentures of a company and any other
similar forms of participation in a company;
(iii) rights to money or to
any performance under contract having a financial value;
(iv)
intellectual property rights,
in accordance with the relevant laws of the respective Contracting
Party;
(v)
business concessions conferred by law or under contract, including concessions to
search for and extract oil and other minerals;
(c)
“investors” means any national or company of a Contracting
Party;
(d)
“ nationals” means:
(i) In respect of
(ii) In respect
of
(e)
“returns” means the monetary amounts yielded by an investment such as
profit, interest, capital gains, dividends, royalties and
fees;
(f)
"territory" means:
(a)
in respect of India : the territory of the Republic of India including its territorial waters and the airspace above it and other maritime zones
including the Exclusive
Economic Zone and
continental shelf over which
the Republic of India has
sovereignty, sovereign rights
or exclusive jurisdiction in
accordance with its laws in
force, the l982 United Nations
Convention on the Law of the Sea and International Law.
(b) in
respect of
ARTICLE
2
Scope of
the Agreement
This Agreement shall apply to all investments made by investors of
either Contracting Party in
the territory of the other Contracting Party, accepted as such in accordance with
its laws and regulations, whether made before or
after the coming into force of this Agreement.
ARTICLE
3
Promotion
and Protection of Investment
(1)
Each Contracting Party shall
encourage and create
favourable conditions for investors
of the other Contracting Party to make investments in its territory, and admit such investments in accordance with its laws and
policy.
(2)
Investments and returns of investors of each Contracting Party shall at
all times be accorded fair and equitable
treatment in the territory of
the other Contracting
Party.
ARTICLE
4
National
Treatment and Most-Favoured-Nation
Treatment
(l) Each Contracting Party shall accord to
investments of investors of the other Contracting Party, treatment which shall not be less favourable than that accorded either to
investments of its own or investments of investors of any
third State.
(2)
In addition, each
Contracting Party shall accord to investors of
the other Contracting Party, including in
respect of returns on
their investments,
treatment which shall not be less favourable than that accorded to investors of any third
State.
(3) The
provisions of paragraphs (l) and (2) above shall not be
construed so as to oblige one Contracting Party to extend to
the
investors of the other the
benefit of any treatment,
preference or privilege resulting from:
(a) any existing or future customs unions or similar international agreement to which it is or
may become a party, or
(b) any matter pertaining wholly or mainly to taxation.
ARTICLE
5
Expropriation
(1) Investments of investors of either Contracting Party shall not be
nationalised, expropriated or subjected
to measures having effect equivalent to
nationalisation or expropriation (hereinafter referred to as " expropriation") in
the territory of the other Contracting Party except for a public purpose in
accordance with law on a non-discriminatory basis and against fair and equitable compensation. Such compensation shall amount to the genuine value of
the investment expropriated immediately before the expropriation or
before the impending expropriation became public knowledge, whichever is the
earlier, shall include
interest at a fair and equitable rate until the date
of payment, shall be made without unreasonable delay, be effectively realizable and be freely
transferable.
(2) The
investor affected shall have right, under the law of the Contracting Party making the expropriation, to review, by
a judicial or other independent authority of that Party, of his or
its case and of the valuation of
his or its investment in accordance with the principles
set out in this paragraph. The
Contracting Party making the expropriation shall make every endeavour to ensure
that such review is carried out promptly.
(3) Where
a Contracting Party expropriates the assets of a company which is incorporated or
constituted under the law in force
in any part of
its own territory, and in which
investors of the other
Contracting Party own shares, it shall ensure that the provisions of
paragraph (1) of this Article are
applied to the extent necessary to
ensure fair and equitable
compensation in respect of their
investment to such investors of the other Contracting Party who are
owners of those shares.
ARTICLE
6
Compensation for
Losses
Investors of one Contracting Party whose investments in
the territory of the
other Contracting Party
suffer losses owing to war or
other armed conflict, a
state of national emergency or civil disturbances in the territory of
the latter Contracting Party shall
be accorded by the latter Contracting Party treatment,
as regards restitution,
indemnification,
compensation or other
settlement, no less favourable than
that which the latter Contracting
Party accords to its own investors or to investors of
any third State. Resulting payments shall be freely
transferable.
ARTICLE 7
Repatriation of Investment
and Returns
(l) Each
Contracting Party shall permit all funds of an investor of the other Contracting
Party related to an investment in its territory to be freely transferred, without unreasonable delay and on a non-discriminatory basis. Such
funds may
include:
(a)
Capital and additional capital amounts used to maintain and increase
investments;
(b) Net
operating profits including dividends and interest in proportion to their
share-holdings;
(c)
Repayments of any loan including interest thereon, relating to the
investment;
(d)
Payment of royalties and services fees relating to the
investment;
(e)
Proceeds from sales of their shares;
(f)
Proceeds received by investors in case of sale or partial sale or
liquidation;
(g) The
earnings of citizens/nationals of one Contracting Party who work in connection
with investment in the territory of the other Contracting
Party.
(2)
Nothing in paragraph (l) of this Article shall affect the transfer of
any compensation under Article 6 of this
Agreement.
(3)
Unless otherwise agreed to between the parties, currency transfer
under paragraph (1) of this Article shall be permitted in the currency of the original Investment or any
other convertible currency.
Such transfer shall be made at the prevailing market rate of exchange on
the date of transfer.
ARTICLE 8
Subrogation
Where one Contracting Party or its designated agency has guaranteed any indemnity against non-commercial risks in respect of an investment
by any of its investors in the territory of the other Contracting Party and has made payment to such
investors in respect of their claims under this Agreement, the other Contracting Party agrees that
the first Contracting Party or its designated agency is entitled by virtue of subrogation to exercise the rights
and assert the claims of those
investors. The subrogated rights or claims shall not exceed the original rights
or claim of such investors.
ARTICLE
9
Settlement of Disputes Between an Investor and
a
Contracting
Party
(1)
Any dispute between an
investor of one Contracting Party and the other Contracting Party in relation to
an investment of the former under this Agreement shall, as far as possible, be settled
amicably through negotiations between the parties to the
dispute.
(2) Any
such dispute which has not been
amicably settled within a period of six months may, if both Parties agree, be
submitted:
(a) for resolution, in accordance with the law of the Contracting Party
which has admitted the investment to that Contracting Party’s competent
judicial, arbitral or administrative bodies; or
(b) to
International conciliation under the Conciliation Rules of the United Nations
Commission on International Trade Law.
(3) Should the Parties fail to agree on a dispute settlement procedure
provided under paragraph (2) of this Article or where a dispute is referred to
conciliation but conciliation proceedings are terminated other than by signing
of a settlement agreement, the dispute may be referred to Arbitration. The
Arbitration procedure shall be as follows:
(a) If the Contracting Party
of the Investor and the other Contracting Party are both parties to the
convention on the Settlement of
Investment Disputes between States and nationals of other States, 1965 and the
investor consents in writing to submit the dispute to the International Centre
for the Settlement of Investment Disputes such a dispute shall be referred to
the Centre; or
(b) If
both parties to the dispute so agree, under the Additional Facility for the
Administration of Conciliation, Arbitration and Fact-Finding proceedings; or
(c) to an ad hoc arbitral
tribunal by either party to the dispute in accordance with the Arbitration Rules
of the United Nations Commission on International Trade Law, 1976, subject to
the following modifications:
(i) The appointing authority under Article 7 of the Rules shall be the
President, the Vice-President or the next senior Judge of the International
Court of Justice, who is not a national of either Contracting Party. The third
arbitrator shall not be a national of either Contracting party.
(ii) The parties shall appoint their respective arbitrators within two
months.
(iii) The arbitral award shall be made in accordance with the provisions
of this Agreement and shall be binding for the parties in
dispute.
(iv) The arbitral
tribunal shall state the basis of its decision and give reasons upon the request
of either party.
ARTICLE 10
Disputes
Between the Contracting Parties
(1)
Disputes between the Contracting Parties concerning the interpretation or application of
this Agreement should, as
far as possible, be settled through negotiation.
(2) If a
dispute between the Contracting Parties cannot thus be
settled within six months from the
time the dispute arose, it shall upon the request of either Contracting Party be submitted to
an arbitral tribunal.
(3) Such an arbitral tribunal shall be constituted for each individual case in the following way. Within two months of the
receipt of the request for arbitration,
each Contracting Party
shall appoint one member of the tribunal. Those two members shall then select a national of a third State
who on approval by the two Contracting
Parties shall be appointed
Chairman of the tribunal. The Chairman shall be appointed within
two months from the date of appointment of the other two members.
(4) If within the periods specified in paragraph (3) of this Article the necessary appointments have not been made, either Contracting Party may,
in the absence of any other agreement, invite the
President of the International Court of Justice to make any
necessary appointments. If the President is a national of either Contracting Party or
if he is otherwise prevented from discharging the said function, the Vice President shall be invited to make the necessary
appointments. If the Vice President is a national of either Contracting Party or if he too is
prevented from discharging the said function, the Member of
the International Court of
Justice next in seniority who is not a national of either Contracting
Party shall be invited to make the necessary appointments.
(5)
The arbitral tribunal shall reach its decision by a majority of
votes. Such decisions shall be
binding on both Contracting Parties. Each Contracting Party shall bear the cost of its own member of
the tribunal and of
its representation in
the arbitral
proceedings; the cost of the
Chairman and the remaining costs shall
be borne in equal parts by
the Contracting Parties. The tribunal may, however, in its decision direct that a higher proportion of costs shall
be borne by one of the two Contracting Parties, and this award shall be binding on
both Contracting Parties. The tribunal shall determine its
own procedures.
ARTICLE
11
Entry and
Sojourn of Personnel
A Contracting Party shall, subject to its laws applicable from time to time relating to the entry and sojourn of non-citizens, permit natural persons of the other Contracting Party and personnel employed by companies of
the other Contracting Party to
enter and remain in its territory for the purpose of
engaging in activities connected
with investments.
ARTICLE 12
Applicable Laws
(1)
Except as otherwise provided in this Agreement, all investment
shall be governed by the laws in force in
the territory of the Contracting Party in which such investments are
made.
(2)
Notwithstanding paragraph (1) of this Article nothing in this Agreement
precludes the host Contracting Party from taking action for the protection of
its essential security interests or in circumstances of extreme emergency in
accordance with its laws normally and reasonably applied on a non discriminatory
basis.
ARTICLE
l3
Application of other
Rules
If the provisions of law of either Contracting Party or obligations under international law
existing at present or established
hereafter between the Contracting Parties in addition to
the present Agreement
contain rules, whether general or
specific, entitling investments by investors of the other Contracting Party to
a treatment more favourable than is provided for by
the present Agreement,
such rules shall to the
extent that they are more favourable prevail over the present
Agreement.
ARTICLE l4
Entry
into Force
This Agreement shall be
subject to ratification and
shall enter into force on the date of exchange of
Instruments of Ratification.
ARTICLE l5
Duration
and Termination
(1)
This agreement shall remain
in force for a period of ten years and thereafter it shall be
deemed to have been
automatically
extended
unless either
Contracting Party gives to the
other Contracting Party a written notice of its intention to terminate the Agreement. The Agreement shall stand terminated one
year from the date on receipt of such written notice.
(2)
Notwithstanding termination of this Agreement pursuant to paragraph (1) of this Article, the
Agreement shall continue to
be effective for a further
period of fifteen years from the date of its
termination in respect of
investments made or
acquired before the date of termination of this
Agreement.
In witness whereof the undersigned, duly authorised
thereto by their respective Governments, have signed this
Agreement.
Done at on this 2003 in two originals each in the Hindi and English languages, both the texts being equally authoritative.
In case of any divergence, the English text shall prevail.
For the Government of
the
For the Government of
the