Agreement between the Government of the People's Republic of Chinaand the Government of Portuguese Republic Concerning the Encouragement andReciprocal Protection of Investments

Agreement between the Government of the People's Republic of Chinaand the Government of Portuguese Republic Concerning the Encouragement andReciprocal Protection of Investments Whole Doc.

The Government of the People's Republic of China and the Government of Portuguese Republic (hereinafter referred to as "the Contracting Parties"), Desiring to encourage, protect and create favorable conditions for investment 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 cooperation between both States, have agreed as follows: Article 1 For the purpose of this Agreement, (1) The term "investments" means every kind of asset invested by investors of one Contracting Party in accordance with the laws and regulations of the other Contracting Party in the territory of the latter, including mainly: ((1)) movable and immovable property and other property rights, such as mortgages, liens or pledges; ((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, such as patents, technical processes, industrial designs and know-how, name of company or permanent establishment and goodwill; ((5)) concessions conferred by law, including concessions to prospect, research and exploit 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 Portuguese Republic: ((1)) natural persons of Portuguese nationality, in accordance with the Portug uese Constitution and Portuguese legislation governing nationality; ((2)) corporations, including commercial companies or other companies or associations, with or without legal personality, which have a registered head office in Portugal and are constituted and operate in accordance with Portuguese law.

(3) The term "return" means the amounts yielded by investments, such as profits, dividends, interests, royalties or other legitimate income.

Article 2 Each Contracting Party shall encourage investors of the other Contracting Party to make 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 fair and 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 favorable than that accorded to investments and activities associated with such investments of investors of a third State.

(3) The treatment and protection as mentioned in Paragraphs 1 and 2 of this Article shall not include any preferential treatment accorded by the other Contracting Party to investments of investors of a third State based on customs union, free trade zone, economic union or other types of cooperation or economic integration, agreement relating to avoidance of double taxation or for facilitating frontier trade.

Article 4 (1) Neither Contracting Party shall expropriate, nationalize or take similar measures (hereinafter referred to as "expropriation") against investments of investors of the other Contracting Party in its territory, unless the following conditions are met: ((1)) in the public interest; ((2)) under domestic legal procedure; ((3)) without discrimination; ((4)) against compensation.

(2) The compensation mentioned in Paragraph 1, ((4)) of this Article shall be equivalent to the value of the expropriated investments at the time when expropriation is proclaimed, be convertible and freely transferable. The compensation shall be paid without unreasonable delay.

(3) 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 favorable than that accorded to investors of a third State. These resulting payments shall be freely transferable.

Article 5 (1) Each Contracting Party shall, subject to its laws and regulations, guarantee investors of the other Contracting Party the transfer of their investments and returns held in the territory of the one Contracting Party, including: ((1)) profits, dividends, interests and other legitimate income; ((2)) amounts from total or partial liquidation of investments; ((3)) payments made pursuant to a loan agreement in connection with investment; ((4)) royalties in Paragraph 1, ((4)) of Article 1; ((5)) payments of technical assistance or technical service fee, management fee; ((6)) payments in connection with projects on contract; ((7)) earnings of nationals of the other Contracting Party who work in connection with an investment in the territory of the one Contracting Party.

(2) The transfer mentioned above shall be made at the prevailing exchange rate of the Contracting Party accepting investment on the date of transfer and without unreasonable delay.

Article 6 If a Contracting Party or its Agency makes payment to an investor under a guarantee it has granted to an investment of such investor in the territory of the other Contracting Party, such other Contracting Party shall recognize the transfer of any right or claim of such investor to the former Contracting Party or its Agency and recognize the subrogation of the former Contracting Party or its Agency 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 7 (1) Any dispute between the Contracting Parties concerning the interpretation or application of this Agreement shall, as far as possible, be settled by consultation through 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 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 further 2 months, 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 two Contracting Parties as Chairman of the arbitral tribunal.

(4) If the 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 arbitral tribunal shall determine its own procedure. The tribunal shall reach its award in accordance with the provisions of this Agreement and the principles of international law recognized by both Contracting Parties.

(6) 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 reasons of its award.

(7) Each Contracting Party shall bear the cost of its appointed arbitrator and of its representation in arbitral proceedings. The relevant costs of the Chairman and the tribunal shall be borne in equal parts by the Contracting Parties.

Article 8 (1) Any dispute between an investor of one Contracting Party and the other Contracting Party in connection with an investment in the territory of the other Contracting Party shall, as far as possible, be settled amicably through negotiations between the parties to the dispute.

(2) If the dispute cannot be settled through negotiations within 6 months, either party to the dispute shall be entitled to submit the dispute to the competent court of the Contracting Party accepting the investment.

(3) If a dispute involving the amount of compensation for expropriation cannot be settled within 6 months after resort to negotiations as specified in Paragraph 1 of this Article, it may be submitted at the request of either party to an ad hoc arbitral tribunal.

The provisions of this Paragraph shall not apply if the investor concerned has resorted to the procedure specified in Paragraph 2 of this Article.

(4) Such an arbitral tribunal shall be constituted for each individual case under the Arbitration Rules of the United Nations Commission on International Trade Law.

(5) The ad hoc tribunal shall follow the procedure under the Arbitration Rules of the United Nations Commission on International Trade Law.

(6) The tribunal shall reach its decision by a majority of votes.

Such decision shall be final and binding on both parties to the dispute.

Both Contracting Parties shall commit themselves to the enforcement of the decision in accordance with their respective domestic laws.

(7) The tribunal shall adjudicate in accordance with the law of the Contracting Party to the dispute accepting the investment including its rules on the conflict of laws, the provisions of this Agreement as well as the generally recognized principle of international law accepted by both Contracting Parties.

(8) Each party to the dispute shall bear the cost of its appointed member of the tribunal and of its representation in the proceedings. The cost of the appointed Chairman and the remaining costs shall be borne in equal parts by the parties to the dispute.

Article 9 If the treatment to be accorded by one Contracting Party in accordance with its laws and regulations or international agreements concluded by that Contracting Party, to investments or activities associated with such investments of investors of the other Contracting Party is more favorable than the treatment provided for in this Agreement, the more favorable treatment shall be applicable.

Article 10 This Agreement shall apply to investments which are made prior to or after its entry into force by investors of either Contracting Party in accordance with the laws and regulations of the other Contracting Party in the territory of the Latter.

Article 11 (1) The representatives of the two Contracting Parties shall hold meetings from time to time for the purpose of: ((1)) reviewing the implementation of this Agreement; ((2)) exchanging legal information and investment opportunities; ((3)) resolving dispute arising out of investments; ((4)) forwarding proposals on promotion of investment; ((5)) studying other issues in connection with investments.

(2) Where either Contracting Party requests consultation on any matters of Paragraph 1 of this Article, the other Contracting Party shall give prompt response and the consultation shall be held alternately in Beijing and Lisbon.

Article 12 (1) This Agreement shall enter into force on the first day of the following month after the date on which both Contracting Parties have notified each other in writing that their respective internal legal procedures have been fulfilled, 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 this Agreement 1 year before the expiration specified in Paragraph 1 of this Article.

(3) After the expiration of the initial 10 years period, either Contracting Party may at any time thereafter terminate this Agreement by giving at least one 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 Articles 1 to 11 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 Lisbon on February 3, 1992 in the Chinese and Portuguese languages, both texts being equally authentic.

For the Government of For the Government of the People's Republic of Portuguese Republic China LI LAN QING OLIVEIRA