On the ratification of the Agreement between the Government of the Republic of Kazakhstan and the Government of Mongolia on the Promotion and Mutual Protection of Investments
Decree of the President of the Republic of Kazakhstan dated April 29, 1995 N 2249
In accordance with Article 2 of the Law of the Republic of Kazakhstan dated December 10, 1993 Z933600_ "On the temporary delegation of additional powers to the President of the Republic of Kazakhstan and heads of local administrations", I decree:
1. To ratify the Agreement between the Government of the Republic of Kazakhstan and the Government of Mongolia on the Promotion and Mutual Protection of Investments, signed in Almaty on December 2, 1994.
2. This Decree shall enter into force from the date of publication.
President
Republic of Kazakhstan
application
Agreement
between the Government of the Republic of Kazakhstan and
By the Government of Mongolia on Promotion and Mutual Protection
investments*
(Bulletin of International Treaties, Agreements and Individual Legislative Acts of the Republic of Kazakhstan, 1997, No. 5, Article 79 )
The Government of the Republic of Kazakhstan and the Government of Mongolia, hereinafter referred to as the "Contracting Parties", wishing to strengthen and expand economic cooperation between the two States, striving to create favorable conditions for the implementation of investments by investors of one State in the territory of the other State, recognizing that the promotion and mutual protection of investments in accordance with the Agreement will contribute to the economic development of the two States, agreed on as follows:
Article 1 Definitions For the purposes of this Agreement:
1. The term "Investments" means all types of property values and covers, in particular, but not exclusively:
- movable and immovable property and any other related property rights, including mortgages, the right to hold mortgages or other collateral, and funds in accounts with banks and other financial institutions;
- shares, deposits (units), bonds and any other forms of participation in enterprises, joint-stock companies, business partnerships, associations and other legally recognized legal entities registered in accordance with the legislation of each of the Contracting Parties;
- loans, credits, targeted bank and financial deposits and other monetary requirements related to the implementation of investments;
- intellectual and industrial property rights, including copyrighted objects, patents, trademarks, service marks, trade names, industrial designs, trade secrets and know-how;
- Reinvestment of income and payments of principal and interest on loan agreements;
2. The term "investor" means:
a) an individual who is a national of a State of one of the Contracting Parties in accordance with the current legislation;
b) any legal entity established in accordance with the current legislation of one of the Contracting Parties;
c) a legal entity that is not established in accordance with the legislation of one of the Contracting Parties, but is directly or indirectly controlled by individuals or legal entities of the same Contracting Party.
3. The term "income" means:
Funds received as a result of investments or related to them, in cash or in kind, including profits, dividends, remuneration for enterprise management, maintenance and any other legitimate income.
4. Changing the form of an investment permitted in accordance with the legislation and other regulatory acts of the State of the Contracting Party in whose territory the investment was made does not change its nature as an investment.
Article 2 Investment promotion and protection
1. Each of the Contracting Parties will promote investments of individuals and legal entities of the other Contracting Party and will allow such investments in accordance with its legislation.
2. Each of the Contracting Parties will ensure fair and equitable treatment for investors of the other Contracting Party and will not infringe upon the management, use or disposal of these investments by arbitrary or discriminatory measures.
Article 3 Legal regime of investments
1. Each of the Contracting Parties shall ensure in its territory in respect of investments a regime no less favorable than that granted to investments of its own investors or investments of investors from third countries. 2. This regime does not apply to: a) the advantages that one of the Contracting Parties provides to investors of individual countries in connection with their joint participation in a customs or economic free trade union;
b) advantages that one of the Contracting Parties provides to investors of individual countries on the basis of an agreement on the avoidance of double taxation or other agreements on tax issues.
Article 4 Expropriation
Investments of investors of one of the Contracting Parties may not be requisitioned, nationalized, expropriated or subjected to other measures having such consequences as requisition, nationalization, expropriation (hereinafter referred to as expropriation), except in cases where expropriation is carried out in the public interest and is carried out by:
- in accordance with the procedure established by law;
- without discrimination;
- with the payment of adequate compensation without delay. Compensation should be equal to the market value of the expropriated investment immediately before the time of expropriation or before the impending expropriation became known, whichever occurs first. Compensation must include interest corresponding to the effective interest rate and calculated for the period between the date specified in part two of this Article of this Agreement and the date of payment of compensation. Compensation will be paid in the currency in which the investment was made, or, with the investor's consent, in any other currency. Compensation is subject to transfer abroad without restrictions and unnecessary delay.
Article 5 Compensation for damages
Investors of one of the Contracting Parties, whose investments in the territory of the other Contracting Party have been damaged as a result of war or other armed conflict, state of emergency or similar circumstances, shall be provided with a regime no less favorable than that applied to their investors or investors of third countries, upon compensation for the damage they suffered as a result of the above circumstances.
These amounts are subject to free transfer abroad.
Article 6 Transfer of investment-related payments
1. The Contracting Parties guarantee that all transfers of funds related to investments are carried out freely and without unnecessary delay in accordance with the procedure established by the legislation of the Contracting Party, which may be provided for:
- rules for making such transfers, taking into account that the very right of free translation is not violated;
- taxes, fees, and deductions from the amounts transferred;
- protection of the legitimate rights of creditors or enforcement of judgments rendered during court proceedings.
The procedure specified in this article must be fair and non-discriminatory.
2. In this Agreement, transfers include:
- the capital initially invested, as well as any additional foreign capital used to maintain or expand investments;
- profit;
- compensation in accordance with Article 4 of this Agreement;
- payments resulting from the resolution of an investment dispute;
- payments in accordance with the loan agreement, as well as remuneration in connection with intellectual and industrial property rights, payment under the agreement on management, technical and service maintenance;
- payments in compensation for damages, in accordance with Article 5 of this Agreement;
- a part of the payment for work on a regular basis for individuals of the other Contracting Party engaged in investment-related activities; - proceeds from the sale or liquidation of part or all of the investment.
3. Transfers will be made without unnecessary delay in freely convertible currency at the exchange rate applicable on the day of transfer. A transfer "without unnecessary delay" will be considered a transfer made within the time normally required to perform formal actions related to the transfer.
Article 7 Applying other rules
In the event that the provisions of the legislation of one of the Contracting Parties or obligations under international law currently in force or established between the Contracting Parties in addition to this Agreement contain either general or special rules that provide investors of the other Contracting Party with a more favorable treatment than provided for in this Agreement, such rules will prevail over by this Agreement.
Article 8 Subrogation
1. If a Contracting Party or any institution authorized by it makes payments to any of the investors of its State within the framework of a guarantee or insurance concluded in connection with the investment, the other Contracting Party will recognize the assignment to the first Contracting Party or its institution of any rights or claims inherent in the investor. A Contracting Party or any of its institutions that have taken over the investor's rights are entitled to the same rights that the investor has and to claim such rights to the same extent, subject to the investor's obligations related to the investment insured in this way.
2. In the case of subrogation defined in paragraph 1 of this Article, the investor will not make claims unless he is authorized by the Contracting Party or any of its institutions.
Article 9 Disputes between the Contracting Parties
1. Disputes between the Contracting Parties concerning the interpretation and application of the provisions of this Agreement will be resolved through diplomatic channels.
2. If no agreement is reached by the Contracting Parties within six months from the date of the dispute, the dispute, at the request of either Contracting Party, will be referred to a three-member arbitral tribunal. Each of the Contracting Parties appoints one arbitrator, and the appointed arbitrators select a chairman who will be a citizen of a third State maintaining diplomatic relations with both Contracting Parties.
3. If one of the Contracting Parties does not appoint an arbitrator and does not agree with the invitation of the other Contracting Party to make such an appointment within two months, the arbitrator shall be appointed at the request of that Contracting Party by the President of the International Court of Justice in The Hague.
4. If the two arbitrators cannot agree on the choice of a chairman within two months from the date of their appointment, he shall be appointed at the request of either Contracting Party by the President of the International Court of Justice.
5. If, in the cases specified in paragraphs 3 and 4 of this Article, the President of the International Court of Justice is unable to perform the specified function or if he is a national of one of the Contracting Parties, such appointment will be made by the Vice-President, and if he is unable to perform the relevant functions or is a national of one of the Contracting Parties, then The appointment will be made by the most senior judge of the International Court of Justice, who is not a citizen of either Contracting Party.
6. Without violating other agreements between the Contracting Parties, the arbitration court will establish its own rules of procedure. The arbitration court makes a decision by a majority vote.
7. Each of the Contracting Parties shall bear the costs of maintaining its member of the court, as well as in accordance with its share in the arbitration procedure; the costs of maintaining the chairman and other expenses shall be covered by the Contracting Parties in equal parts. However, the court may determine in its decision the greater participation of one of the Contracting Parties and such a decision will oblige both Contracting Parties. 8. The court's decisions are final and binding on each of the Contracting Parties.
Article 10 Disputes between a Contracting Party and an investor of the State of the second Contracting Party
1. In order to resolve a dispute between a Contracting Party and an investor of the State of the second Contracting Party with respect to an investment, without prejudice to the provisions of Article 9 of this Agreement, negotiations will be conducted between the Parties concerned.
2. If negotiations are not concluded by a decision within six months from the date of the written proposal to start negotiations, the Parties to the dispute may proceed as follows::
a) if the dispute concerns obligations under Articles 4, 5, and 6 of this Agreement, it shall, at the request of the investor, be referred to the arbitral tribunal; b) a dispute not specified in subparagraph (a) of paragraph 2 of this Article will be referred to the arbitral tribunal by agreement of both Parties to the dispute.
3. An arbitration court will be established for each individual case. Unless the Parties to the dispute agree otherwise, each of them will appoint one arbitrator. The appointed arbitrators select the chairman, who will be a citizen of a third country. The arbitrators must be appointed within two months from the date of receipt of the request to submit the dispute for consideration by the arbitral tribunal, and the chairman within the next two months.
4. If the deadlines specified in paragraph 3 of this Article have not been met, either Party to the dispute may, without having other agreements, apply to the Chairman of the Arbitration Court at the International Chamber of Commerce in Paris with a request to make the necessary appointments. If the Chairman is unable to perform this function or is a national of a Contracting State, the same provisions of paragraph 5 of Article 9 of this Agreement shall apply.
5. Unless otherwise agreed by the Parties, the arbitral tribunal shall establish its own rules of procedure. The decisions are final and binding. Each of the Contracting Parties will ensure the recognition and enforcement of arbitral awards.
6. Each of the Parties to the dispute shall bear the costs of maintaining its member of the court and in accordance with its own share in the arbitration procedure; they will bear the costs of maintaining the chairman and other expenses in equal parts as the Parties to the dispute. However, in its decision, the court may establish a different proportion of the division of costs incurred by one of the Parties, and this decision will be binding on both Parties.
7. A Contracting Party that is a Party to the dispute may not, at any stage of the arbitration procedure or the execution of a court decision, refer to the fact that the investor has received compensation as a result of the insurance contract covering all or part of the damage caused.
8. In the event that both Contracting Parties become Parties to the Washington Convention of March 18, 1965. On the settlement of disputes concerning investments between States and citizens of other States, disputes will be sent to the International Investment Dispute Resolution Center as follows: disputes referred to in paragraph 2, subparagraph (a) of this Article - at the request of the investor, and disputes referred to in paragraph 2, subparagraph (b) of this Article - by mutual agreement. Of the Contracting Parties.
Article 11 Final provisions
1. The Contracting Parties shall exchange notes on the implementation of the legal procedures provided for by the national legislation of each of the Contracting Parties with regard to the entry into force of international agreements.
The effective date of this Agreement is the date of receipt of the last note.
2. This Agreement is concluded for a period of 10 (ten) years and may be automatically extended for subsequent five-year periods if none of the Contracting Parties declares its intention to terminate it in accordance with paragraph 6 of this Article.
3. The provisions of this Agreement shall also apply to investments made since December 16, 1991.
4. With respect to those investments that were made prior to the termination of this Agreement, the provisions of all previous articles of this Agreement will remain in force for a period of 10 (ten) years from the date of termination.
5. This Agreement may be amended by written agreement between the Parties. Any amendment must enter into force if each Party has notified the other Party that it has adjusted all its own formalities preventing the entry into force of such an amendment.
6. Each of the Contracting Parties may terminate this Agreement upon the expiration of the first nine years or at any time thereafter by notifying the other Contracting Party in writing one year before the expiration date.
In witness whereof, we, duly authorized representatives, have signed this Agreement.
Done in Almaty on December 2, 1994, in two original copies in the Kazakh, Mongolian, and Russian languages, all texts being equally authentic.
In case of discrepancies in the interpretation of the provisions of this Agreement, the Contracting Parties will be guided by the text of the Agreement in Russian.
President
Republic of Kazakhstan
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