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Convention on the Settlement of Investment Disputes


Convention on the Settlement of Investment Disputes in the Arab countries

- The Council of Arab Economic Unity approved this agreement by virtue of decision No. 1138/d72 of 6/12/2000.

- To date of publishing this book, four Arab countries adopted this Agreement, namely Jordan, Iraq , Libya and Egypt. The agreement is effective.

Governments of the member countries in the Council of Arab Economic Unity:

  1. Hashemite Kingdom of Jordan
     
  2. The Republic of the Sudan
     
  3. The Arab Republic of Syria
     
  4. The Democratic Republic of Somalia
     
  5. The Republic of Iraq
     
  6. The State of Palestine
     
  7. The Great Socialist People's Libyan Arab Jamahiriya
     
  8. The Arab Republic of Egypt
     
  9. The Islamic Republic of Mauritania
     
  10. The Republic of Yemen

Based on the goals of the Arab Economic Unity Agreement among the members of the League of Arab States (LAS) and the decision of the Council of Arab Economic Unity (CAEU) to establish an Arab common market; 
In Pursuit of further economic cooperation and integration among Arab countries

For the purpose of achieving the objectives of the Agreement of the Encouragement and Protection of Investments and Transfer of Capitals among Arab Countries adopted by the CAEU's decision No. 1125 of 7/6/2000 in its 71st regular session; and 

Out of their appreciation of the role of the private Arab investments in the economic development projects in hosting countries 

Have agreed to the following:

Materials

 

Chapter I Definitions Article (1)

For the purposes of this agreement, the following expressions shall have the set-forth meaning:

Agreement: The Agreement of the Settlement of Investment Disputes in Arab Countries.

Countries parties to the agreement: Countries members to this Agreement

The Council: The Council of Arab Economic Unity

General Secretariat: The General Secretariat of the Council of Arab Economic Unity.

Secretary General: The Secretary General of the Council of Arab Economic Unity

The Committee: Conciliation Committee

The Tribunal: Arbitration Tribunal

Chapter II Objectives of the Agreement and Implementation Authorities Article (2)

This agreement aims at settling any dispute that may arise directly from any investment between an Arab country party to the agreement and hosting the investments or one of its authorities, public institutions, companies or nationals and between any other Arab country party to the agreement or one of its authorities, public institutions, companies or nationals towards ensuring an appropriate environment that may encourage establishing on-growing Arab investments in the Arab countries. 

The term "nationals" shall, in this article, include physical persons and legal persons holding the nationality of a country party to the agreement. 

Article (3)

Without prejudice to the plaintiff's right to resort directly to the judiciary system in the investment-hosting country, settling disputes shall be via conciliation among parties to the dispute or arbitration in accordance to the rules and proceedings stipulated in the agreement. The Council and the Secretary General shall be in charge of setting and implementing the conciliation and arbitration rules.

Neither conciliation nor arbitration may be resorted to if the dispute is brought before court and if judiciary system of the investment-hosting country has rendered its final and decisive award.

Chapter III Administration Article (4)

Within the framework of this agreement, the Council shall, in addition to the power of authorities assigned thereto by virtue of this agreement, be responsible for considering any dispute arising among the countries parties to this agreement in respect of interpreting or implementing the agreement. 

Article (5)

An administrative unit shall be established in the General Secretariat to follow up procedures of implementing the Agreement provisions. The unit shall be appointed by virtue of a decision of the Secretary General and shall include a sufficient number of experienced staff

(First Branch: Conciliation)

Article (6)

  1. The conciliation committee shall be formed by virtue of a decision by the Secretary General upon a request addressed, in writing, to him by the parties to the dispute presenting the issue of dispute and demanding the settlement thereof via conciliation.

The conciliation committee shall be formed within 45 days as of the date of registering the request. The number of conciliators shall be equal to that of the parties to the dispute so that each party may choose a conciliator as its representative. Another conciliator, selected by the parties to the dispute, shall head the committee. A General Secretariat staff member, selected by the Secretary General, shall take on the secretarial services. 

  1. Unless the committee is formed within the specified period in paragraph (A), the Secretary General shall designate the conciliators including the president after consulting the parties to the dispute.

Article (7)

  1. The Committee shall decide upon any objections to or challenges of its jurisdiction voiced by one of the parties before discussing the issue of dispute.
  2. Conciliation procedures shall be implemented in accordance with the provisions of this chapter and in accordance with the effective regulations thereof once agreed upon by the parties.

Article (8)

  1. The committee shall raise the issues of dispute among the parties to the dispute and do its best to reach an agreement with appealing conditions to all parties. For this purpose, it may propose at any stage of the procedures conditions for settlement. The parties to the dispute shall cooperate with the committee so that the latter can properly perform its mission.
  2. If the committee discovers at any stage of procedures that it is not likely to reach an accord among parties, it shall halt the procedures and report to the Secretary General explaining the issue of dispute and the failure of the parties to reach an accord through conciliation.
  3. If a party is absent, despite being notified by a registered letter with return receipt requested mail, or if a party does not participate in the procedures without an acceptable excuse, the committee shall halt the procedures and file a report proving the absence from or nonparticipation in the procedures.
  4. When the committee reaches a unanimous agreement, it shall make a report outlining the issues of dispute and recording the conclusion it reached.

Article (9)

Any party to the dispute may not object or count on any viewpoint, report, confession or offers of settlement presented by the other party during conciliation procedures – either before the court, the judiciary system of the investment-hosting country or any other authority unless parties otherwise agreed in advance

(First – The Procedures)

Article (10)

  1. The tribunal shall be formed by virtue of a decision by the Secretary General upon a request addressed, in writing, to him by the parties to the dispute presenting the issue of dispute and demanding the settlement thereof via arbitration.
  2. The arbitration tribunal shall be formed within 45 days as of the date of registering the request. The number of arbitrators shall be equal to that of the parties to the dispute so that each party may select an arbitrator as his representative. The Secretary General shall select another arbitrator head the tribunal from among those who occupied senior judicial posts in a country non-party to the dispute.
    b. Unless the tribunal is formed within the specified period in the previous paragraph, the Secretary General shall designate the arbitrator/arbitrators who are not assigned yet after consulting the parties. The appointees may not, hereby, belong to the one of the parties to the dispute.

Article (11)

  1. The tribunal shall decide upon any objection to or challenge of its jurisdiction voiced by one of the parties before discussing the issue of dispute or initiating any stage of the case.
  2. The tribunal shall decide upon any accidental or additional requests or challenges that directly arise from the issue of dispute upon the request of a party provided that these requests are included within the parties’ agreement on the arbitration. Besides, they should fall within the tribunal’s area of jurisdiction without any previous agreement between parties on ruling them out.
  3. The tribunal shall decide upon any issue related to the procedures that are not covered by the provisions of this chapter, the regulations of the arbitration or the regulations agreed upon by the parties to the dispute.
  4. The tribunal may, at any stage of the procedures, ask demand the parties to the dispute to submit other documents or evidence. It may also visit the site of the dispute and make the necessary investigations unless the parties otherwise agree.

Article (12)

  1. The tribunal may settle the dispute pursuant to the regulations stipulated in this agreement and the systems adopted by the Council. In addition, it may enforce the law of the investment-hosting country party to the dispute including its own dispute laws, whatever enforceable from the international law regulations, as well as any other regulations appropriate to settle the dispute—if the parties to the dispute agree thereupon.
  2. The tribunal may not refrain from considering the dispute or settling it by virtue of a final award on the pretext of the silence or vagueness of the law.

Article (13)

  1. In the event of the absence of one of the parties to the dispute at any stage of procedures without an acceptable excuse, despite being notified by a registered letter with return receipt requested mail, the pleading may be filed in absentia upon the request of the other party. In such a case, he shall be re-notified and given no more than 10 days as of the date of notification to attend the tribunal.
  2. If a party does not attend despite notification, the tribunal may proceed with the pleading in absentia and render an award concerning the raised issues. 

Article (14)

The tribunal may decide to take any temporary procedures to maintain the rights of any of the parties to the dispute upon the request thereof and render a preliminary award to that effect. 

(Second – The Award)

Article (15)

  1. The convening of the tribunal shall be deemed valid by two thirds of the members thereof present.
  2. Awards are rendered by majority. In the event of having equal votes, the President’s decision shall be deemed valid.
  3. Awards shall be written and signed by the proponents from among the members of the tribunal. The opponents shall write down their opinion on the margins of the award.
  4. Awards shall cover all the issues raised before the tribunal and shall be for cause.
  5. The General Secretariat may not publish the award except after the approval of the parties to the dispute.

Article (16)

  1. The General Secretariat shall transmit an official copy of the award to each of the parties to the dispute within 10 days of the rendering thereof by a registered letter with return receipt requested mail.
  2. Despite the provisions of paragraph (D) of the preceding article, the tribunal may, upon the request of one of the parties to the dispute and within 30 days as of the date of rendering the award, decide, after notifying other parties, of any disregarded questions pertaining to the award and correct any tangible mistake in the award (written, arithmetic or similar mistakes). The parties shall be notified in the same way as they were notified of the award itself.

(Third – The Interpretation of the Award)

Article (17)

  1. In case of any disagreement among the parties to the dispute as regards the meaning of the award, any of them may request an interpretation thereof by submitting a request to the Secretary General.
  2. The Secretary General shall, if possible, refer such request to the tribunal that rendered the award. If not, a new tribunal shall be formed pursuant to the provisions of this chapter and may, if deemed necessary, stay the enforcement of the award pending its decision on the interpretation.

(Fourth: Revision and Annulment of the Award)

Article (18)

  1. The parties to the dispute may address an application to reconsider the award under the following conditions:

·         The application shall be submitted, in writing, to the Secretary General.

·         The application shall be based on discovering a new fact the nature thereof may decisively affect the award and provided that the applicant's ignorance thereof was not due to negligence.

·         The application shall be made within ninety days as of the date of discovering such fact.

·         The application shall be made within three years after the date on which the award was rendered.

  1. The application shall be referred to the tribunal that rendered the award, or otherwise a new tribunal shall, in accordance with the provisions of his chapter, be formed and it may temporarily stay enforcement of the award pending its decision, upon the appellant's application, until the tribunal decides upon the application.

Article (19)

  1. Either party may request annulment of the award by an application in writing addressed to the Secretary-General on one or more of the following grounds:

·         that the tribunal was not properly constituted

·          that the tribunal has manifestly exceeded its powers

·         that there was corruption on the part of a member of the tribunal

·         that there has been a serious departure from a fundamental rule of procedure

·         that the award has failed to state the reasons on which it is based.

  1. The application shall be made within ninety days as of the award date, but if the annulment application is made on the basis corruption, it shall be made within ninety days as of discovering the corruption within three years as of the date of rendering the award.
  2. The Secretary General shall, separately and upon receiving the application, appoint an ad hoc committee known as the "Award Revision Committee" of three or more persons (provided that the number is odd) from the Arbitrators list provided that the Head of the Committee is at least a Counselor among the current of former members of the judiciary. The Committee may not include members of the tribunal that rendered the award, members of the same nationality as any such members, nationals of the country party to the dispute, the designated in the Arbitrators' list, and persons previously made conciliation in the same dispute. Such Committee shall be authorized to annul the award or any part thereof on the basis of any of the reasons mentioned in paragraph (a).
  3. The provisions of articles (11), (12), (13), and (14) shall apply to the procedures before the Committee.
  4. The Committee may, temporarily upon the request of the appellant, stay the enforcement of the award pending its decision.
  5. If the award is annulled, the dispute shall, upon the request of the parties to dispute, be resubmitted to a new tribunal. Such tribunal shall be constituted according to the procedures of the request for arbitration stipulated in this agreement, and the tribunal award shall, in this case, be final and decisive.

(Fifth: Enforcement of the Award)

Article (20)

Except for Articles (18) and (19), the awards of final arbitration tribunals may not be appealed against. Such awards shall be binding for the parties to dispute, who shall comply with and apply the award. The term "award" shall, in respect of this chapter, include any decision to interpret, amend or annul the award in accordance with the provisions of this agreement.

Article (21)

  1. The arbitration award shall be enforced in the country party to the dispute or which one of whose nationals is a party to this dispute as if it were a final award rendered by a court of this country. The award shall enjoy all the locally approved guarantees by virtue of the effectiveness of local awards. Countries of federal system shall enforce the arbitration award through the federal courts thereof if they had such powers.
  2. Each member country shall notify the Secretary General of the designation of a competent court or official authority for the purpose of enforcing the awards of arbitration tribunals. The party with an interest in enforcing the award shall submit a copy of the award signed by the Secretary General to such authority.
  3. The procedures of enforcing the award shall be subject to the enforcement laws applicable in the country where it shall be enforced.

(Third Branch: Common Provisions)

Article (22)

The request for conciliation or arbitration shall be subject to the following:

  1. The party to the dispute, wishing to institute conciliation, shall address a request in writing to the Secretary General who shall send a copy thereof to all the other parties.
  2. The request shall include all adequate information about the issues in dispute and the parties thereto.
  3. The Secretary General shall register the request unless he finds, founded on the information included therein, that the dispute does not fall within the jurisdiction of the Council in accordance to this agreement.
  4. The Secretary General shall notify other parties of the request for conciliation or arbitration for the purpose of getting the approval thereof regarding the procedures of conciliation and arbitration as a means of settling the dispute.

The applicant of the request for conciliation or arbitration shall meet the following:

  1. He shall be a national of a contracting country on the date of registering the approval of the parties to the dispute to refer the dispute to the Secretary General for conciliation or arbitration.
  2. He may not be a national of the country party to the dispute on the date of registering the approval thereof, with the exception of the applicant who a legal person if he has a main branch abroad and he is a national of another member country.

Article (23)

The conciliation committees and arbitration tribunals may not be amended after the constitution thereof except in case a member thereof dies, becomes unable to work or resigns where another member substitutes him in accordance with the provisions of this chapter.

Article (24)

The request for disqualifying a member of the conciliation committee or an arbitrator shall, mutatis mutandis, be subject to the decision of the other members of the committee or the tribunal. In case of even votes, the President's vote shall be deemed valid. In case, the request was for the disqualification of the majority of members or the President, it shall be subject to the Secretary General's decision.

Article (25)

The charges due to be paid by the parties to the dispute for the services provided, according to this agreement, by the General secretary shall be determined by the Secretary General in accordance with the regulations adopted by the Council.

Article (26)

Each conciliation committee and tribunal shall, after consultation with the President, determine the fees and expenses of the members thereof according to the regulations set by the Council from time to time unless the parties otherwise agree in advance with the Council.

Article (27)

  1. In case of conciliation, fees and expenses of the committee's members shall be borne by the parties to the dispute and the General Secretariat. Each party shall bear any other expenses related to the proceedings.
  2. In case of conciliation, the tribunal shall, unless the parties to the dispute otherwise agree, determine the expenses paid by the parties in relation to the proceedings and the fees of the services of the General Secretary, and shall decide how and by whom such fees and expenses shall be paid. Other expenses and the fees of the tribunal members shall be paid, from time to time, according to regulations set by the Council.

Article (28)

The proceedings of conciliation and arbitration shall be held at the General Secretariat headquarters, unless the parties agree, after consultation with the Secretary General, to another place approved by the Committee or the Tribunal.

Chapter V Conciliators and Arbitrators

Article (29)

The Secretary General shall prepare three guiding lists; one with the names of the names of the conciliators, another with the names of the arbitrators (ordinary members) and a third with the names of the arbitrators (members of the judiciary systems who head the arbitration tribunals). The persons mentioned in the lists shall be of qualified persons of high moral character and recognized competence in the fields of law, commerce, industry finance, agriculture, services or any other field of competence required by the issues of dispute that may arise within the scope of Arab investments, who may be relied upon to exercise independent judgment. Competence in the field of law as current or former members of the judiciary shall be of particular importance in the case of the arbitrators who shall head the arbitration tribunals.

Chapter VI General Rules

Article (30)

  1. The country party to the dispute may not institute an international request in respect of the dispute already before the tribunal unless the other country refuses the tribunal award regarding the dispute or does not enforce it.
  2. Exchanging points of view by diplomatic means for the sole purpose of facilitating the settlement of the dispute shall not be rendered an international request in terms of the aforementioned paragraph.

Article (31)

The members of the conciliation committee and arbitration tribunal shall enjoy the immunities stipulated in the agreement on the CAEU's Privileges and Immunities within the limits that allow them properly perform their mission. The archives and documents of the committee or the tribunal shall be deemed as the archives and documents of the Council.

Article (32)

  1. Any contracting country may suggest the amendment of this agreement by addressing a request to the Secretary General at least ninety days before the regular meeting of the Council.
  2. The Secretary General shall notify the countries of the text of the proposed amendment and the opinion of the General Secretariat in respect thereof within two weeks as of submitting the request.
  3. The Council shall, in its first meeting, consider the amendment and shall decide thereupon by a majority of two thirds. The decision shall be binding for all contracting countries
  4. The amendment shall not affect any rights or obligations arising from this agreement with regard to any member country, or any of the authorities, institutions, or citizens thereof before the date of enforcing this agreement.

Article (33)

  1. The ratification, acceptance or approval of this agreement by member countries shall be in accordance with their respective constitutional procedures.
  2. The agreement shall come into force thirty days after three member countries deposit the instruments of ratification, acceptance and approval. The provisions of the agreement shall apply to other countries as of the date of depositing their instruments of ratification, acceptance or approval.

Article (34)

Any other Arab country member of the League of Arab States (LAS) may, after this agreement comes into force, accede to the agereement by sending a notice to the Secretary General of the Council of Arab Economic Unity (CAEU), who shall notify other contracting countries of the accession thereof. Such country shall abide by the agreement as of the date of depositing the notice with the General Secretariat.

Article (35)

The instruments of the ratification, acceptance and approval of this agreement shall be deposited with the CAEU's General Secretariat, which shall notify other countries of the depository.

Article (36)

Any member country may withdraw from the agreement after five years of coming into force by sending a notification in writing to the CAEU, and the withdrawal shall be after a year of receiving such notification.

Article (37)

The notification sent by a member country by virtue of the preceding paragraph shall not affect the rights and obligations stipulated under this agreement with regard to such country or the public authorities, institutions or citizens thereof arising before the date of receiving such notification.

Done at Cairo on 10th Ramadan, 1421 A.H./6th December, 2000 A.D., in the Arabic language, in a single copy which shall remain deposited with the CAEU's General Secretariat, and a duplicate shall be transmitted to each of the countries agreeing to this agreement.

  1. Hashemite Kingdom of Jordan.
  2. The Republic of the Sudan.
  3. The Arab Republic of Syria.
  4. The Democratic Republic of Somalia.
  5. The Republic of Iraq.
  6. The State of Palestine.
  7. The Great Socialist People's Libyan Arab Jamahiriya.
  8. The Arab Republic of Egypt.
  9. The Republic of Yemen.
  10. The Islamic Republic of Mauritania.