Investment Disputes between a Party and an Investor

This Article shall apply to investment disputes between a Party and an investor of another Party concerning an alleged breach of an obligation of the former Party under  Article 4 (National Treatment), Article 5 (Most-Favoured-Nation Treatment), Article  7 (Treatment of Investment),Article 8 (Expropriation), Article 9 (Compensation for  Losses) and Article 10 (Transfers and Repatriation of Profits), which causes loss or damage to the investor in relation to its investment with respect to the management, conduct, operation, or sale or other disposition of an investment.

This Article shall not apply:
        (a) to investment disputes arising out of events which occurred, or to investment  disputes which had been settled, or which were already under judicial or arbitral  process, prior to the entry into force of this Agreement;
         (b) in cases where the disputing investor holds the nationality or citizenship of the disputing Party. The parties to the dispute shall, as far as possible,resolve the dispute through consultations.
Where the dispute cannot be resolved as provided for under Paragraph 3 within six (6) months from the date of written request for consultations and negotiations, unless  the parties to the dispute agree otherwise, it may be submitted at the choice of the investor to the courts or administrative tribunals of the disputing Party, provided such  courts or administrative tribunals have jurisdiction; or under the International Centre for Settlement of Investment Disputes (ICSID) Convention and the ICSID Rules of Procedure for Arbitration Proceedings provided that both the disputing Party and the non-disputing Party are parties to the ICSID Convention;
        (c) under the ICSID Additional Facility Rules,provided that either of the disputing Party or non-disputing Party is a party to the ICSID Convention; or
        (d) to arbitration under the rules of the United Nations Commission on International Trade Law; or
        (e) if the disputing parties agree, to any other arbitration institution or under any  other arbitration rules.

In case a dispute has been submitted to a competent domestic court, it may be  submitted to international dispute settlement, provided that the investor concerned  has withdrawn its case from the domestic court before a final judgement has been reached in the case. In the case of Indonesia, Philippines, Thailand, and Viet Nam,  once the investor has submitted the dispute to their respective competent courts or administrative tribunals or to one of the arbitration procedures stipulated in Sub-paragraphs 4(b), 4(c), 4(d) or 4(e), the choice of the procedure is final.

The submission of a dispute to conciliation or arbitration under Sub-paragraphs 4(b), 4(c), 4(d) or 4(e) in accordance with the provisions of this Article, shall be conditional upon:
        (a) the submission of the dispute to such conciliation or arbitration taking place  within three (3) years of the time at which the disputing investor became aware, or  should reasonably have become aware, of a breach of an obligation under this Agreement causing loss or damage to the investor or its investment; and
        (b) the disputing investor providing written notice, which shall be submitted at least ninety (90) days before the claim is submitted, to the disputing Party of his or her intent to submit the dispute to such conciliation or arbitration. Upon the receipt of the notice, the disputing Party may require the disputing investor to go through any  applicable domestic administrative review procedure specified by its domestic laws  and  regulations before the submission of the dispute under Sub-paragraphs 4(b),  4(c), 4(d) or 4(e). The notice shall:
        (i) nominate either Sub-paragraphs 4(b), 4(c), 4(d) or 4(e) as the forum for dispute settlement and, in the case of Sub-paragraph 4(b), nominate whether conciliation or arbitration is being sought;  
        (ii) waive the right to initiate or continue any proceedings, excluding proceedings for interim measures of protection referred to in Paragraph 7, before any of the other dispute settlement fora referred to in Paragraph 4 in relation to the matter under dispute; and
        (iii) briefly summarise the alleged breach of the disputing Party under this Agreement,
including the Articles alleged to have been breached, and the loss or damage allegedly caused to the investor or its investment.

No Party shall prevent the disputing investor from seeking interim measures of protection, not involving the payment of damages or resolution of the substance of the matter in dispute before the courts or administrative tribunals of the disputing Party, prior to the institution of proceedings before any of the dispute settlement fora referred to in Paragraph 4, for the preservation of its rights and interests.

No Party shall give diplomatic protection, or bring an international claim, in respect of a dispute which one of its investors and any one of the other Parties shall have consented to submit or have submitted to conciliation or arbitration under this Article, unless such other Party has failed to abide by and comply with the award rendered in such dispute. Diplomatic protection, for the purposes of this Paragraph, shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute.

Where an investor claims that the disputing Party has breached Article 8 (Expropriation) by the adoption or enforcement of a taxation measure, the disputing Party and the non-disputing Party shall, upon request from the disputing Party, hold consultations with a view to determining whether the taxation measure in question has an effect equivalent to expropriation or nationalisation. Any tribunal that may be established under this Article shall accord serious consideration to the decision of both Parties under this Paragraph.

If both Parties fail either to initiate such consultations, or to determine whether such taxation measure has an effect equivalent to expropriation or nationalisation within the period of one hundred eighty (180) days from the date of receipt of the request for consultation referred to in Paragraph 4, the disputing investor shall not be prevented from submitting its claim to arbitration in accordance with this Article.