On the ratification of the Agreement between the Republic of Kazakhstan and the State of Kuwait on the Promotion and Mutual Protection of Investments

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Law of the Republic of Kazakhstan dated February 22, 2000 No. 36

To ratify the Agreement between the Republic of Kazakhstan and the State of Kuwait on the Promotion and Mutual Protection of Investments, concluded in Kuwait on August 31, 1997.

President of the Republic of Kazakhstan

 Agreement between the Republic of Kazakhstan and the State of Kuwait on the Promotion and Mutual Protection of Investments

(Bulletin of International Treaties of the Republic of Kazakhstan, 2001, No. 4, Article 30) (Entered into force on May 1, 2000 - J. "Diplomatic Courier", special issue No. 2, September 2000, p. 182)

The Republic of Kazakhstan and the State of Kuwait (hereinafter referred to as the "Contracting States") - Desiring to create favorable conditions for the development of economic cooperation among themselves and, in particular, for investments by investors of one Contracting State in the territory of the other Contracting State; - recognizing that the promotion and mutual protection of investments will promote business initiatives and enhance the well-being of both States; agreed as follows:

 Article 1 Definitions For the purposes of this Agreement: 1. The term "investment" means all types of assets or rights in the territory of one Contracting State owned or controlled directly or indirectly by an investor of the other Contracting State and includes assets or rights consisting of or taking the form of: a) movable or immovable property, as well as other related property rights, such as such as leases, mortgages, retention rights, mortgages, and other rights under the laws of the Contracting States; b) companies, assets, deposits, other forms of equity participation, as well as bonds, shares and other types of interest on debts in the company, and other debts and loans, as well as securities provided by any investor of a Contracting State; c) monetary claims and claims on any assets or performance requirements in accordance with contracts that have an economic value; d) intellectual property rights, including but not limited to copyrights, trademarks, patents, industrial designs and designs, technical processes, know-how, trade secrets, trade names and goodwill; e) any rights granted in accordance with the law, contract, or on the basis of any licenses or permits granted in accordance with the law, including rights to explore, explore, extract or use natural resources, as well as rights to carry out other economic or commercial activities or provide services. The term "investment" also refers to "income" held for reinvestment purposes, as well as proceeds from "liquidation" as these terms are defined below. Any changes in the form in which assets are invested or reinvested should not affect their nature as investments. 2. The term "investor" in relation to a Contracting State means: (a) an individual who holds the nationality or nationality of that Contracting State in accordance with its applicable laws; (b) the Government of the State of Kuwait; c) any legal entity established or established in accordance with the laws and regulations of that Contracting State, such as institutions, development funds, agencies, foundations and others established in accordance with the law, institutions and bodies, as well as companies. 3. The term "company" means any legal entity established in accordance with the laws of a Contracting State, regardless of whether it was created for financial gain and whether the company is private or public, or owned or controlled by investors of a Contracting State, and includes a corporation, trust, partnership, sole proprietorship, branch, joint venture an enterprise, association, or other similar organization. The term "income" means funds received as a result of investments, regardless of the form of payment, in particular, but does not necessarily include profits, interest, capital gains, dividends, royalties, as well as management, technical assistance or other types of payments or commissions, as well as payment in kind, regardless of its type. 5. The term "liquidation" means a transfer carried out for the purpose of full or partial withdrawal of investments. 6. The term "territory" means the territory of a Contracting State, including any zone outside the territorial waters, which is established in accordance with international law or may subsequently be determined by the laws of a Contracting State as a territory over which a Contracting State may exercise its sovereign rights or jurisdiction. 7. The term "freely convertible currency" means any currency that is periodically designated by the International Monetary Fund as a freely usable currency in accordance with the articles of Agreement of the International Monetary Fund and any amendments thereto. 8. The term "without delay" means the period that is normally required to complete the necessary formalities for the transfer of payments. The above period begins on the day when the transfer request is submitted and may not exceed one month.

Article 2 Admission and encouragement of investments 1. Each Contracting State shall allow and encourage investments by investors of the other Contracting State in its territory in accordance with applicable laws and regulations. 2. Each Contracting State, with respect to investments admitted to its territory, grants such investments all necessary permits, consent, approval, licenses and powers to the extent, within the time limits and under the conditions that may be determined by its laws and regulations. 3. The Contracting States may consult with each other in any way they deem necessary to stimulate and encourage investment opportunities within their respective territories. 4. Each Contracting State, in accordance with its laws and regulations relating to the entry, stay and work of individuals, shall duly examine and consider, regardless of nationality or nationality, requests from key personnel, including senior management and technical personnel, hired for the purpose of investing in its territory for entry, temporary stay and work in its territories. The immediate family members of these core personnel should be provided with the same treatment regarding entry and temporary stay in the receiving Contracting State. 5. If it is necessary to transport goods or persons related to investments, each Contracting State, within acceptable limits in accordance with its relevant laws and regulations, grants permission for such transportation by enterprises of the other Contracting State.  

Article 3 Investment protection 1. Investments of investors of one Contracting State should always be provided with fair and equal treatment, as well as full protection and security in the territory of the other Contracting State in full compliance with generally recognized principles of international law and the provisions of this Agreement. None of the Contracting States will in any way violate, through the application of arbitration or discriminatory measures, the use, management, maintenance, operation, expansion, sale or other placement of investments. 2. Each Contracting State shall bring to its attention all laws, regulations, judicial decisions and administrative rules, directives, procedures and guidelines that contain or directly affect investments in its territory made by investors of the other Contracting State. 3. Each Contracting State provides for effective measures to assert claims and exercise rights in respect of investments. Each Contracting State guarantees investors of the other Contracting State the right to apply to its judicial authorities, administrative courts, agencies and other bodies with arbitration powers, as well as the right to authorize persons of their choice who are qualified in accordance with applicable laws and regulations, in order to file claims and exercise rights in respect of their investments. 4. None of the Contracting States may use as a condition for the creation, acquisition, expansion, use, management, management or operation of investments by investors of the other Contracting State compulsory measures that may require or restrict the purchase of materials, energy, fuel or other means of production, transport or actions aimed at any restriction of the sale of products on the its territory or beyond its borders or any other measures, aimed at the benefit of investments of their own investors or investors of third countries, and discriminating against investments of investors of another Contracting State. Moreover, investments in the territory of the receiving Contracting State should not be subject to requirements that could damage their viability or adversely affect their use, management, maintenance, operation, expansion, sale or any other placement. 5. Sequestration, confiscation or other similar measures shall not be applied to investments of investors of another Contracting State in the territory of the receiving Contracting State, except for measures taken in accordance with appropriate legal procedures and principles of international law, as well as the relevant provisions of this Agreement. 6. Each Contracting State will comply with all obligations and guarantees that it may accept in respect of investments in its territory by investors of the other Contracting State.

 Article 4 Investment mode 1. With respect to the use, management, maintenance, operation, expansion and sale, as well as any other placement of investments made in its territory by investors of another Contracting State, each Contracting State shall grant treatment no less favorable than that which it grants in such situations to investments of its own investors or investors of any third State, which is Article 4 Investment mode 1. With respect to the use, management, maintenance, operation, expansion and sale, as well as any other placement of investments made in its territory by investors of another Contracting State, each Contracting State shall graneatment no less favorable than that which it grants in such situations to investments of its own investors or investors of any third State, which is the most favorable. 2. However, the provisions of this Article should not be interpreted in such a way as to oblige one of the Contracting States to grant investors of the other Contracting State the advantage of any regime, preferences and privileges arising from: a) any customs union, economic union, free trade zone, monetary union, or any other form of regional economic agreement, or a similar international agreement to which one of the Contracting States is or may become a Party; b) any international regional and bilateral agreement or other similar agreement, as well as domestic legislation related in whole or in part to taxation.  

Article 5 Compensation for damage or loss 1. If investments made by investors of one of the Contracting States are damaged or lost as a result of a war or other armed conflict, a state of emergency, an uprising, a violation of public order, an insurrection, mass riots or other similar events in the territory of the other Contracting State, the second Contracting State shall grant a regime of non- less favorable than thestments made by investors of one of the Contracting States are damaged or lost as a result of a war or other armed cct, a state of emergency, an uprising, a violation of public order, an insurrection, mass riots or other similar events in the territory of the other Contracting State, the second Contracting State shagrant a regime of non- less favorable than the one provided to its investors or to investors of any third state, which is the most favorable. 2. Without prejudice to the provisions of paragraph 1, to investors of one Contracting State who, in any of the events referred to in this paragraph, suffer damage or loss in the territory of the other Contracting State as a result of: (a) the requisition of their property or part thereof by its forces or authorities; b) the destruction of their property or part of it by his forces or authorities, which was not caused by hostilities or was not a requirement of necessity in the given situation, must immediately provide fair, adequate and effective compensation for damage or loss caused during the requisition or as a result of the destruction of their property.  

Article 6 Expropriation 1. (a) Investments made by investors of one Contracting State in the territory of the other Contracting State may not be expropriated, nationalized, alienated or subjected to direct or indirect measures equivalent to expropriation, nationalization or alienation (hereinafter referred to as "expropriation") by the other Contracting State, except in the public interest related to the domestic needs of that Contracting State, with immediate, adequate and effective compensation and on condition of, that such measures will be implemented on a non-discriminatory basis and in accordance with applicable legal procedures. b) Such compensation should amount to the actual value of the expropriated investments and be determined and calculated in accordance with internationally recognized valuation principles based on the fair market value of the expropriated investments for the period immediately preceding the announcement of expropriation (hereinafter referred to as the "valuation date"). Such compensation must be calculated in a freely convertible currency chosen by the investor, based on the market-wide foreign exchange rate at the valuation date, and include interest at a commercial rate established on a market basis, but ultimately not less than the current Libor interest rate or its equivalent, starting from the date of expropriation until the payment date. c) In the event that the above-mentioned market fair value cannot be easily determined, compensation should be determined on the basis of equality, taking into account all relevant factors and circumstances, such as invested capital, the nature and duration of the investment, cost recovery, value appreciation, current income, discounted cash value, nominal value and goodwill. The final amount of compensation must be paid to the investor immediately. 2. In the light of the principles referred to in paragraph 1 and without prejudice to the investor's rights provided for in Article 9 of this Agreement, an investor who has suffered damage should have the right to have his case promptly reviewed, including the value of his investments and compensation, by judicial or other competent and independent authorities of the expropriating Contracting State. 3. For greater certainty, expropriation includes situations where a Contracting State expropriates the assets of a company or enterprise established or established in accordance with the laws in force in its own territory, in which an investor of the other Contracting State invests, including ownership of shares, deposits, units and other rights or interests. 4. For the purposes of this Agreement, the term "expropriation" also includes interference or regulatory measures on the part of a Contracting State that have a de facto confiscatory or expropriation effect, in which their actions effectively deprive the investor of his property, control and significant benefits in relation to his investments, or that may damage or lose the economic value of the investment, such as freezing and blocking investments, levying judicial or excessive taxes on investments, mandatory sale of all or part of investments or other similar actions or measures.

 Article 7 Transfer of payments related to investments 1. Each Contracting State guarantees investors of the other Contracting State the free transfer of investment-related payments within or outside its territory, including transfers of: a) initial capital, as well as any additional capital to support the management and development of investments; b) income; (c) Payments under the contract, including depreciation of fixed and accumulated interest payments made in accordance with the loan agreement; (d) royalties and commissions in respect of the rights provided for in article 1, paragraph 1 (d); (e) Proceeds from the sale or liquidation of all or part of investments; (f) salaries and other type of remuneration for personnel attracted from abroad in connection with investments; g) compensation payments in accordance with articles 5 and 6; h) payments provided for in article 8; and i) payments arising from dispute resolution. 2. The transfer of payments in accordance with paragraph 1 must be made without delay and restriction in freely convertible currency, with the exception of payments in kind. In the event of such a delay in making the required transfers, the investor who suffered the damage should be entitled to receive interest for the period of this delay. 3. The transfer must be carried out at the spot currency market rate applicable in the territory of the receiving Contracting State on the date of transfer of the currency to be transferred. In the absence of a market for foreign currency exchange, the rate used will be the most recent rate applicable to domestic investments, either the exchange rate determined in accordance with the regulations of the International Monetary Fund, or the exchange rate for currency conversion into special drawing rights or US dollars, depending on the investor's preference.  

Article 8 Subrogation 1. If a Contracting State, its authorized agency, or any other party designated by it and established or incorporated in that Contracting State (the "Reimbursing Party") makes payments in accordance with the compensation or guarantee it has assumed in respect of investments in the territory of the other Contracting State (the "Receiving State"), the Receiving State Recognizes: a) the transfer to the Reimbursing Party, in accordance with the law or a legal transaction, of all rights and claims arising from these investments; b) the right of the Reimbursing Party to exercise all rights and make demands, as well as to assume all obligations related to investments by virtue of subrogation. 2. The reimbursing Party should be entitled in all circumstances to: (a) the same treatment with respect to the rights and claims received, as well as the obligations it has under the assignments provided for in paragraph 1 above; (b) any payments received in accordance with these rights and claims; because the original investor had these rights based on this Agreement with respect to these investments.  

Article 9 Settlement of disputes between a Contracting State and an investor 1. Disputes arising between a Contracting State and an investor of the other Contracting State in respect of the latter's investments in the territory of the former should, as far as possible, be settled amicably. 2. If such disputes are not resolved within a six-month period from the date on which one of the parties to the dispute requested a friendly resolution by sending a written notification to the other party, the dispute must be submitted for resolution at the investor's option, through one of the following methods: a) in accordance with any applicable pre-agreed dispute resolution procedures; b) to international arbitration in accordance with the following paragraphs of this Article. 3. If the investor decides to apply to international arbitration to resolve the dispute, he/she shall submit in writing his/her consent to resolve the dispute to one of the following bodies: a) (1) The International Center for Settlement of Investment Disputes "The Center", established in accordance with the Convention on Settlement of Investment Disputes Arising between States and Citizens of other States, opened for signature in Washington on March 18, 1965 (the "Washington Convention"), if both Contracting States are parties to the Washington Convention and the Washington Convention is applicable to the dispute; (2) The Center, in accordance with the rules governing Additional Powers for judicial Proceedings by the Secretariat of the Center ("Rules on Additional Powers"), if the Contracting State of the investor or the Contracting State - the party to the dispute, but not both, are parties to the Washington Convention: b) an arbitration court established in accordance with the arbitration rules (the "Rules") The United Nations Commission on International Trade Law (UNCITRAL), since these Rules may be amended by the parties to the dispute (the designated Body provided for in article 7 of the Rules will be the Secretary General of the Center); (c) an arbitration court established in accordance with the arbitration rules of any arbitration institution, mutually agreed between the parties to the dispute. 4. Although an investor may submit a dispute to arbitration in accordance with paragraph 3, he may, prior to or during the commencement of arbitration proceedings, apply to a court or administrative court of a Contracting State Party to the dispute to impose a temporary injunction in order to preserve his rights and interests, without including claims for compensation any damage. 5. Each Contracting State hereby gives its unconditional consent to submit the investment dispute to binding arbitration in accordance with the investor's choice in accordance with paragraphs 3 (a) and (b) or by mutual agreement of both parties to the dispute in accordance with paragraph 3 (c). 6. a) The consent given in accordance with paragraph 5, as well as the consent given in accordance with paragraph 3, must meet the requirements of a written agreement between the parties to the dispute and comply with the provisions of Part II of the Washington Convention, the Rules of Additional Powers, article 2 of the UN Convention on the Recognition and Acceptance of International Arbitral Awards, adopted in New York on June 10 1958 (the "New York Convention") and article 1 of the UNCITRAL Arbitration Rules. b) Any arbitration provided for in this Article and mutually agreed upon by the parties to the dispute must be conducted in a State Party to the New York Convention. Claims submitted to arbitration must be considered as arising from commercial relationships and transactions in accordance with article 1 of the New York Convention. c) None of the Contracting States will grant diplomatic protection or bring an international claim in respect of any arbitration dispute, as long as the other Contracting State does not begin to evade payment of the awarded payment in such dispute. However, the diplomatic protection of this subparagraph does not include informal diplomatic exchanges, the sole purpose of which is to contribute to the resolution of the dispute. 7. The arbitration court established in accordance with this Article shall consider the issues of the dispute in accordance with the rules of law agreed upon by the parties to the dispute. In the absence of such an agreement, the norms of private law and those recognized norms of international law that can be applied taking into account the relevant provisions of this Agreement are used. 8. For the purposes of article 25 (2) (b) of the Washington Convention, an investor other than an individual who is a national of a Contracting State of the Party to the dispute on the date of the written consent provided for in paragraph 6 and who, prior to the dispute between him and that Contracting State, is controlled by investors of the other Contracting State, must be considered as "having the nationality of another Contracting State" and, in accordance with Article 1 (6) of the Rules of Additional Powers, is considered as "having the nationality of another State". 9. The decisions of the arbitral tribunal, which may include the award of interest, are final and binding on the parties to the dispute. Each Contracting State shall immediately implement such a decision and ensure effective enforcement of that decision on its territory. 10. In the course of any proceedings, judicial, arbitral or otherwise, or in the enforcement of any award or determination concerning an investment dispute between a Contracting State and an investor of another Contracting State, a Contracting State shall not use its sovereign inviolability as a defense. Any counterclaim or right of legal set-off need not be based on the fact that the interested investor has received or will receive, in accordance with the insurance contract, compensation or other compensation for all or part of the claimed damage from any third party, regardless of whether it is public or private, including another Contracting State and its divisions, agencies, or intermediary institutions.

 Article 10 Settlement of disputes between the Contracting States 1. The Contracting States should, whenever possible, resolve any disputes concerning the interpretation and application of this Agreement through consultations or other diplomatic means. 2. If the dispute has not been resolved within six months following the date on which one of the Contracting States requested such consultations or the settlement of such dispute through other diplomatic means and, unless the Contracting States have agreed otherwise in writing, a Contracting State may, by written notification to the other Contracting State, submit the dispute to ad hoc arbitration in in accordance with the following provisions of this Article. 3. The Arbitral Tribunal shall be established as follows: each Contracting State shall appoint one representative and these two representatives shall decide on the issue of a citizen of a third State, who shall be appointed by the two Contracting States as Chairman of the Arbitral Tribunal. These representatives shall be appointed within two months, and the Chairman within four months from the date on which one of the Contracting States informed the other Contracting State of its intention to submit the dispute to the arbitral tribunal. 4. If, during the periods specified in paragraph 3, it has not been possible to achieve the above, one of the Contracting States may, in the absence of any other agreement, 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 one of the Contracting States or for any other reason cannot be allowed to exercise this function, then the Vice-President of the International Court of Justice will be invited to make the necessary appointments. If the Vice-President is a national of one of the Contracting States or, if he also cannot be allowed to perform this function, then the next ex officio member of the International Court of Justice who is not a national of any of the Contracting States shall be invited to make the necessary appointments. 5. The arbitration court shall render its decision by a majority vote. Such a decision must be made in accordance with this Agreement and such recognized norms of international law as may be applicable, and is final and binding on both Contracting States. Each Contracting State shall bear the costs of maintaining a member of the arbitral tribunal appointed by that Contracting State, as well as the costs associated with its participation in the arbitration proceedings. Both Contracting States shall equally bear the costs of maintaining the Chairman of the arbitral tribunal, as well as other costs related to the arbitration proceedings. However, the arbitral tribunal may, at its discretion, impose most or all of the costs on one of the Contracting States. In all other respects, the arbitral tribunal determines its own rules of procedure.

Article 11 Relations between the Contracting States The provisions of this Agreement shall apply regardless of the establishment of diplomatic or consular relations between the Contracting States.

 Article 12 Application of other rules If the legislation of any of the Contracting States or obligations arising from international law currently in force or subsequently established by the Contracting States in addition to this Agreement contain rules of a general or private nature that provide investors of the other Contracting State with a more favorable treatment than provided for in this Agreement., Such rules should be applied to the extent that they are more favorable to investors in comparison with this Agreement.  

Article 13 Scope of application of this Agreement This Agreement applies to all existing or implemented investments of investors of one Contracting State in the territory of the other Contracting State after its entry into force.  

Article 14 Entry into force Each Contracting State shall notify the other of the completion of the internal procedures necessary for the entry into force of this Agreement, and this Agreement shall enter into force on the 30th day after the date of receipt of the last notification.

Article 15 Duration and Termination 1. This Agreement shall be in force for a period of 30 years and shall remain in force for the same period or periods, unless either Contracting State notifies the other Contracting State in writing of its intention to terminate this Agreement after the expiration of the initial or subsequent period. 2. With respect to investments made prior to the effective date of the notice of termination of this Agreement, the provisions of this Agreement shall remain in force for a period of 20 years from the date of termination of this Agreement.

In witness whereof, duly authorized representatives of both Contracting States have signed this Agreement.

Done in Kuwait City on August 31, 1997, in two original copies in the Kazakh, Arabic and English languages, all texts being equally authentic. In case of any divergence of interpretation, the English text will prevail.

President

Republic of Kazakhstan

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