Agreement between the Czech Republic and the Republic of Cyprus for the Promotion and Reciprocal Protection of Investments

The Czech Republic and the Republic of Cyprus (hereinafter referred to as the "Contracting Parties"),

Desiring to develop economic co-operation to the mutual benefit of both Contracting Parties,

Intending to create and maintain favourable conditions for investments of investors of one Contracting Party in the territory of the other Contracting Party, and

Conscious that the promotion and reciprocal protection of investments in terms of the present Agreement stimulates the business initiatives in this field,

Have agreed as follows:

Article 1 Definitions

For the purposes of this Agreement:

1.

The term "investment" shall comprise every kind of asset invested in connection with economic activities by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the laws and regulations of the latter and shall include, in particular, though not exclusively:

a.

movable and immovable property as well as any other property rights, such as mortgages, liens or pledges;

b.

shares, stocks and debentures of companies or any other form of participation in a company;

c.

claims to money or to any performance under contract having a financial value associated with an investment;

d.

intellectual property rights, such as trade marks, patents, industrial designs, technical processes, know-how, trade secrets, trade names and goodwill associated with an investment;

e.

any right conferred by laws or under contract and any licenses and permits pursuant to laws, including the concessions to search for, extract, cultivate or exploit natural resources.

Any alteration of the form in which assets are invested shall not affect their character as investment.

2.

The term "investor" shall mean any natural or legal person of one Contracting Party who invests in the territory of the other Contracting Party, and for the purpose of this definition;

a.

The term "natural person" shall mean any natural person having the nationality of either Contracting Party in accordance with its laws.

b.

The term "legal person" shall mean, with respect to either Contracting Party, any entity incorporated or constituted in accordance with, and recognized as legal person by its laws, having the permanent seat in the territory of that Contracting Party.

3.

The term "returns" shall mean amounts yielded by an investment and in particular, thought not exclusively, includes profits, interest related to loans, capital gains, shares, dividends, royalties or fees.

4.

The term "territory" shall mean:

a.

in respect of the Czech Republic, the territory of the Czech Republic over which it exercises sovereignty, sovereign rights and jurisdiction in accordance with international law.

b.

in respect of the Republic of Cyprus, the territory of the Republic of Cyprus including the territorial sea and any maritime or submarine area over which the Republic of Cyprus exercises, in accordance with international law, sovereignty, sovereign rights and jurisdiction for the purpose of exploration, exploitation and preservation of the sea-bed, subsoil and natural resources.

Article 2 Promotion and Protection of Investments

1.

Each Contracting Party shall encourage and create favourable conditions for investors of the other Contracting Party to make investments in its territory and shall admit such investments in accordance with its laws and regulations.

2.

Investments of investors of either Contracting Party shall at all times be accorded fair and equitable treatment and shall enjoy full protection and security in the territory of the other Contracting Party.

Article 3 National and Most-Favoured-Nation Treatment

1.

Once a Contracting Party has admitted an investment in its territory in accordance with its laws and regulations, it shall accord to investments and returns of investors of the other Contracting Party treatment which is fair and equitable and not less favourable than that which it accords to investments and returns of its own investors or to investments and returns of investors of any third State, whichever is more favourable.

2.

Each Contracting Party shall in its territory accord to investors of the other Contracting Party, as regards management, maintenance, use, enjoyment or disposal of their investment, treatment which is fair and equitable and not less favourable than that which it accords to its own investors or investors of any third State, whichever is more favourable.

3.

The provisions of paragraphs 1 and 2 of this Article shall not be construed so as to oblige one Contracting Party to extend to the investors of the other Contracting Party and their investments the benefit of any treatment, preference or privilege which may be extended by the former Contracting Party by virtue of:

a.

any customs union or free trade area or a monetary union or similar international agreements leading to such unions or institutions or other forms or regional cooperation to which either of the Contracting Parties is or may become a party;

b.

any international agreement or arrangement relating wholly or mainly to taxation.

4.

The treatment referred to in paragraphs 1 and 2 of this Article will be granted on the basis of reciprocity.

Article 4 Compensation for Losses

1.

Where investments of investors of either Contracting Party suffer losses owing to war, armed conflict, a state of national emergency, revolt, insurrection, riot or other similar events in the territory of the other Contracting Party, such investors shall be accorded by the latter Contracting Party treatment, as regards restitution, indemnification, compensation or other settlement, not less favourable than that which the latter Contracting Party accords to its own investors or to investors of any third State.

2.

Without prejudice to paragraph 1 of this Article investors of one Contracting Party who in any of the events referred to in that paragraph suffer losses in the territory of the other Contracting Party resulting from:

a.

requisitioning of their property by the forces or authorities of the latter Contracting Party, or

b.

destruction of their property by the forces or authorities of the latter Contracting Party which was not caused in combat action or was not required by the necessity of the situation,

shall be accorded restitution or just and adequate compensation for the losses sustained during the period of the requisitioning or as a result of the destruction of the property. Resulting payment shall be freely transferable in a freely convertible currency without delay.

Article 5 Expropriation

1.

Investments of investors of either Contracting Party shall not be nationalized, expropriated of subjected to measures having effect equivalent to nationalization or expropriation (hereinafter referred to as "expropriation") in the territory of the other Contracting Party except for a public purpose. The expropriation shall be carried out under due process of law, on a non-discriminatory basis and shall be accompanied by provisons for the payment of prompt, adequate and effective compensation. Such compensation shall amount to the value of the investment expropriated immediately before expropriation or impending expropriation became public knowledge, whichever is the earlier. The compensation shall carry interest (based on the 6-month LIBOR rate applicable on the date of expropriation) from the date of expropriation until the date of payment, be made without undue delay, be effectively realizable and be freely transferable in a freely convertible currency.

2.

The investor affected shall have a right to prompt review by a judicial or other independent authority of that Contracting Party, of his or its case and of the valuation of his or its investment in accordance with the principles set out in this Article.

Article 6 Transfers

1.

The Contracting Party shall guarantee the transfer of payments related to investments and returns. The transfers shall be made in a freely convertible currency, without any restriction and undue delay. Such transfers shall include in particular, though not exclusively:

a.

capital and additional amounts to maintain or increase the investment;

b.

profits, interest, dividends and other current income;

c.

funds in repayment of loans connected with an investment;

d.

royalties and other fees resulting from licence rights and from commercial, administrative or technical assistance;

e.

proceeds from the partial or total sale or liquidation of the investments;

f.

compensation as provided in Articles 4 and 5 of this Agreement;

g.

wages and other kind of remuneration accruing to nationals of the other Contracting Party who were permitted to work in connection with an investment in the territory of the other Contracting Party.

2.

For the purpose of this Agreement, exchange rate shall be the prevailing exchange rate for current transaction applicable at the date of transfer, unless otherwise agreed by the parties to the transaction.

3.

Transfers shall be considered to have been made "without any undue delay" in the sense of paragraph (1) of this Article when they have been made within the period normally necessary for the completion of the transfer. Such period shall under no circumstances exceed three months.

Article 7 Subrogation

1.

If a Contracting Party or its authorised agency makes a payment to its own investors under a guarantee it has accorded in respect of an investment in the territory of the other Contracting Party, the latter Contracting Party shall recognize:

the assignment, whether under the law or pursuant to a legal transaction in that country, of any right or claim by the investor to the former Contracting Party or its authorised agency, as well as, that the former Contracting Party or its authorised agency is entitled by virtue of subrogation to exercise the rights and enforce the claims of that investor and shall assume the obligations related to the investment.

2.

The subrogated rights or claims shall not exceed the original rights or claims of the investor.

Article 8 Settlement of Investment Disputes between a Contracting Party and an Investor of the other Contracting Party

1.

Any dispute which may arise between an investor of one Contracting Party and the other Contracting Party in connection with an investment in the territory of that other Contracting Party shall be settled, if possible, by negotiations between the parties to the dispute.

2.

If any dispute between an investor of one Contracting Party and the other Contracting Party cannot be thus settled within a period of six months from the written notification of a claim, the investor shall be entitled to submit the case, at his choice, for settlement to:

a.

a court of competent jurisdiction or an administrative tribunal of the Contracting Party which is the party to the dispute, or

b.

the International Centre for Settlement of Investment Disputes (ICSID) having regard to the applicable provisions of the Convention on the Settlement of Investment Disputes between States and Nationals of other States opened for signature at Washington D.C. on 18 March 1965, or

c.

an arbitrator or international ad hoc arbitral tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). The parties to the dispute may agree in writing to modify these Rules, or

d.

The Arbitration Institute of the Chamber of Commerce in Stockholm.

3.

The arbitral awards shall be final and binding on both parties to the dispute and shall be enforceable in accordance with the domestic legislation.

Article 9 Settlement of Disputes between the Contracting Parties

1.

Disputes between the Contracting Parties concerning the interpretation or application of this Agreement shall, if possible, be settled through consultations or negotiations.

2.

If the dispute cannot be thus settled within six months, it shall upon the request of either Contracting Party be submitted to an Arbitral Tribunal in accordance with the provisions of this Article.

3.

The Arbitral Tribunal shall be constituted for each individual case in the following way. Within two months of the receipt of the request for arbitration, each Contracting Party shall appoint one member of the Tribunal. These two members shall then select a national of a third State who on approval of the two Contracting Parties shall be appointed Chairman of the tribunal (hereinafter referred to as the "Chairman"). The Chairman shall be appointed within three months from the date of appointment of the other two members.

4.

If within the periods specified in paragraph 3 of this Article the necessary appointments have not been made, a request may be made to the President of the International Court of Justice to make the appointments. If the President of the Court is a national of any Party to the dispute or of a State with which one of the Contracting Parties does not maintain diplomatic relations or if he is otherwise prevented from discharging the said function, the Vice-President shall be invited to make the appointments. If the Vice-President also happens to be a national of either Contracting Party or of a State with which one of the Contracting Parties does not maintain diplomatic relations or is prevented from discharging the said function, the member of the International Court of Justice next in seniority who is not a national of either Contracting Party or of a State with which one of the Contracting Parties docs not maintain diplomatic relations shall be invited to make the appointments.

5.

The Arbitral Tribunal shall reach its decision by a majority of votes. Such decision shall be binding. Each Contracting Party shall bear the cost of its own arbitrator and its representation in the arbitral proceedings; the cost of the Chairman and the remaining costs shall be borne in equal parts by both Contracting Parties. The Arbitral Tribunal shall determine its own procedure.

Article 10 Application of Other Rules and Special Commitments

1.

Where a matter is governed simultaneously both by this Agreement and by another international agreement to which both Contracting Parties are parties, nothing in this Agreement shall prevent either Contracting Party or any of its investors who own investments in the territory of the other Contracting Party from taking advantage of whichever rules are more favourable to his case.

2.

If the treatment to be accorded by one Contracting Party to investors of the other Contracting Party in accordance with its laws and regulations or other specific provisions of a contract is more favourable than that accorded by the Agreement, the latter shall be accorded.

Article 11 Essential Security Interests

Nothing in this Agreement shall be construed to prevent either Contracting Party from taking measures to fulfil its obligations with respect to the maintenance of international peace or security.

Article 12 Applicability of this Agreement

The provisions of this Agreement shall apply to future investments made by investors of one Contracting Party in the territory of the other Contracting Party, and also to the investments existing in accordance with the laws of the Contracting Parties on the date this Agreement came into force. However, the provisions of this Agreement shall not apply to claims arising out of events which occurred, or to claims which had been settled, prior to its entry into force.

Article 13 Entry into Force, Duration and Termination

1.

This Agreement shall enter into force on the date of the last written notification through diplomatic channels of the fulfillment by the Contracting Parties of all the necessary internal procedures for bringing this Agreement into force.

2.

This Agreement shall remain in force for a period of ten years. Thereafter, it shall remain in force until the expiration of a twelve month period from the date either Contracting Party notifies the other in writing of its intention to terminate the Agreement.

3.

In respect of investments made prior to the termination of this Agreement, the provisions of this Agreement shall continue to be effective for a period of ten years from the date of its termination.

IN WITNESS WHEREOF, the undersigned duly authorised have signed this Agreement.

DONE in duplicate at Prague this day of 15th June, 2001, in the Czech, Greek and the English languages, all texts being equally authentic. In case of any divergence of interpretation the English text shall prevail.

Whole document
Click on the text to select an element Click elsewhere to unselect an element
Select a key word :
1 /

Instantly access the most relevant case law, treaties and doctrine.

Start your Free Trial

Already registered ?