AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINAAND THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF PAKISTAN ON THE RECIPROCALENCOURAGEMENT AND PROTECTION OF INVESTMENTS
AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINAAND THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF PAKISTAN ON THE RECIPROCALENCOURAGEMENT AND PROTECTION OF INVESTMENTS
Whole Doc.
The Government of the People's Republic of China and the Government
of the Islamic Republic of Pakistan (hereinafter referred to as a
Contracting Party),
Desiring to encourage, protect and create favourable conditions for
investments by investors of one Contracting Party in the territory of the
other Contracting Party based on the principles of mutual respect for
sovereignty, equality and mutual benefit and for the purpose of the
development of economic co-operation between both States,
Have agreed as follows:
Article 1
For the purposes of this Agreement,
(1) The term "investments" means every kind of asset made as
investment in accordance with the laws and regulations of the Contracting
Party accepting the investment in its territory, including mainly:
((1)) Movable and immovable property and other rights in rem;
((2)) Shares in companies or other forms of interest in such
companies;
((3)) A claim to money or to any performance having an economic
value;
((4)) Copyrights, industrial property rights, know-how and technical
process;
((5)) concessions conferred by law, including concessions to search
for or exp loit natural resources.
(2) The term "investors" means:
In respect of the People's Republic of China:
((1)) Natural persons who have nationality of the People's Republic
of China;
((2)) Economic entities established in accordance with the laws of
the People' s Republic of China and domiciled in the territory of the
People's Republic of China;
In respect of the Islamic Republic of Pakistan:
((1)) Physical persons who are deemed to be nationals of the Islamic
Republic of Pakistan in accordance with its law;
((2)) Corporations, firms or associations incorporated or constituted
under the law in force of the Islamic Republic of Pakistan in its
territory.
(3) The term "returns" means the amounts yielded by an investment,
including profits, dividends, interests, royalties and other legitimate
income.
Article 2
Each Contracting Party shall encourage investors of the other
Contracting Party to commit investments in its territory, and admit such
investments in accordance with its laws and regulations.
Article 3
(1) Investments and activities associated with investments of
investors of either Contracting Party shall be accorded equitable
treatment and shall enjoy protection in the territory of the other
Contracting Party.
(2) The treatment and protection referred to in Paragraph 1 of this
Article shall not be less favourable than that accorded to investments and
activities associated with investments of investors of any third State.
(3) The treatment and protection as mentioned in Paragraph 1 and 2 of
this Article shall not include any favourable treatment accorded by the
other Contracting Party to investments of investors of a third State based
on customs union, free trade zone, economic union, agreement relating to
avoidance of double taxation and for facilitation of frontier trade.
Article 4
(1) Either Contracting Party may, for the security and public
interest, expropriate, nationalize or take similar measures (hereinafter
referred to as expropriatory measures) against investment assets of
investors of the other Contracting Party in its territory, but the
following conditions shall be complied with:
((1)) Under domestic legal procedure of the Contracting Party taking
expropriatory measures;
((2)) Being non-discriminatory;
((3)) Being against compensation.
(2) The compensation mentioned in Paragraph 1. Item 3 of this Article
shall be
in accordance with the laws and regulations of the Contracting Party
taking expropriatory measures in convertible currencies. The compensation
shall be paid without unreasonable delay.
(3) If an investor considers the expropriation mentioned in Paragraph
1 of this Article incompatible with the laws of the Contracting Party
taking the expropriatory measures, the competent court of the Contracting
Party taking the expropriatory measures may, upon the request of the
investor, review the said expropriation.
(4) Investors of one Contracting Party who suffer losses in respect
of their investments in the territory of the other Contracting Party owing
to war, a state of national emergency, insurrection, riot or other similar
events, shall be accorded by the latter Contracting Party, if it takes
relevant measures, treatment no less favourable than that accorded to
investors of any third State.
Article 5
Each Contracting Party, within the framework permitted by its laws
and regulations, guarantees that investors of the other Contracting Party
transfer investment assets and their returns held in the territory of the
one Contracting Party, including:
(1) Profits, dividends, interests and other legitimate income;
(2) Amounts from liquidation of investments;
(3) Repayments made pursuant to a loan agreement in connection with
investment s;
(4) Licence fees in item 4 of Paragraph 1 in Article 1;
(5) Payments of technical assistance or technical service fee,
management fee;
(6) Payments in connection with contracting projects;
(7) Normal earnings of nationals of the other Contracting Party who
work in co nnection with an investment in the territory of the one
Contracting Party.
Article 6
The transfer mentioned in Article 4 and 5 of this Agreement shall be
made at the official exchange rate of the Contracting Party accepting
investment on the date of transfer.
Article 7
If a Contracting Party or its Agency makes a payment to an investor
under a guarantee it has granted to an investment by its investor in the
territory of the other Contracting Party, such other Contracting Party
shall recognize the transfer of any right on claim of such investor to the
former Contracting Party or its Agency and recognize the subrogation of
the former Contracting Party to such right or claim. The subrogated right
or claim shall not be greater than the original right or claim of the said
investor.
Article 8
This Agreement shall apply to investments which are made after
September 1, 1954 by investors of either Contracting Party in accordance
with the laws and regulations of the other Contracting Party in the
territory of the latter one.
Article 9
(1) Disputes between the Contracting Parties concerning the
interpretation or application of this Agreement shall, as far as possible,
be settled by consultation through the diplomatic channel.
(2) If a dispute cannot thus be settled within 6 months, it shall,
upon the request of either Contracting Party, be submitted to an ad hoc
arbitral tribunal.
(3) Such ad hoc tribunal comprises of 3 arbitrators. Within 2 months
from the date on which either Contracting Party receives the written
notice requesting for arbitration from the other Contracting Party, each
Contracting Party shall appoint 1 arbitrator. Those 2 arbitrators shall,
within 2 months after their appointments, together select a third
arbitrator who is a national of a third State which has diplomatic
relations with both Contracting Parties. The third arbitrator shall be
appointed by the both Contracting Parties as Chairman of the arbitral
tribunal.
(4) If the ad hoc arbitral tribunal has not been constituted within 4
months from the date of the receipt of the written notice for arbitration,
either Contracting Party may, in the absence of any other agreement,
invite the President of the International Court of Justice to appoint the
arbitrator(s) who has or have not yet been appointed.
If the President is a national of either Contracting Party or is
otherwise prevented from discharging the said function, the next most
senior member of the International Court of Justice who is not a national
of either Contracting Party shall be invited to make the necessary
appointment(s).
(5) The ad hoc arbitral tribunal shall determine its own procedure.
The tribunal shall reach its award in accordance with the laws of the
Contracting Party accepting investment, the provisions of this Agreement
and the principles of international law recognized by both Contracting
Parties.
The tribunal shall reach its award by a majority of votes. Such award
shall be final and binding on both Contracting Parties. The ad hoc
arbitral tribunal shall, upon the request of either Contracting Party,
explain the basis of its award.
(6) Each Contracting Party shall bear the cost of its appointed
arbitrator. The relevant costs of the Chairman and the ad hoc tribunal
shall be borne in equal parts by the Contracting Parties.
Article 10
If an investor challenges the amount of compensation for the
expropriated investment assets, he may file complaint with the competent
authority of the Contracting Party taking the expropriatory measures. If
it is not solved within 1 year after the complaint is filed, the competent
court of the Contracting Party taking the expropriatory measures or an
international arbitral tribunal may, upon the request of the investor,
review the amount of compensation.
Article 11
If a company which is owned or controlled by an investor of one
Contracting Party in a third State has made investment in accordance with
the laws and regulations of the other Contracting Party in the territory
of the latter, the provisions of Article 4 of this Agreement shall apply
to such investment only on the assumption that such third State is not
entitled to exercise the right or abandons the right to request for
compensation.
Article 12
If the treatment to be accorded by one Contracting Party in
accordance with its laws and regulations to investments or activities
associated with investments of investors of the other Contracting Party is
more favourable than the treatment provided for in this Agreement, the
more favourable treatment shall be applicable.
Article 13
(1) This Agreement shall enter into force 30 days after the date on
which both Contracting Parties have notified each other that they have
fulfilled their respective internal legal procedures, and shall remain in
force for a period of 10 years.
(2) This Agreement shall continue in force if either Contracting
Party fails to give a written notice to the other Contracting Party to
terminate it 1 year before the expiration specified in Paragraph 1 of this
Article.
(3) After the expiration of the 10 years period, either Contracting
Party may at any time terminate this Agreement by giving at least 1 year's
written notice to the other Contracting Party.
(4) With respect to investments made prior to the date of termination
of this Agreement, the provisions of Article 1 to 12 shall continue to be
effective for a further period of 10 years from such date of termination.
In witness whereof, the duly authorized representatives of their
respective Governments have signed this Agreement.
Done in duplicate at Beijing on December 12, 1989 in the Chinese and
English languages, both texts being equally authentic.
For the Government of For the Government of
the People's Republic the Islamic Republic of
of China Pakistan
Zheng Tuobin V. A. Jaffery
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