* Unofficial

Treaty between the Federal Republic of Germany and the Czech and Slovak Federal Republic Concerning the Promotion and Reciprocal Protection of Investments

The Federal Republic of Germany and the Czech and Slovak Federal Republic,

Desiring to intensify mutual economic cooperation,

Striving to create favourable conditions for reciprocal investments,

Recognizing that the promotion and reciprocal protection of investments serve to strengthen all forms of economic initiative, particularly in respect of private enterprise,

Have agreed as follows:

For the purposes of this Treaty

b.

Shares and other kinds of participation in companies;

c.

Claims to money that has been used to create economic value or claims to services that have economic value and are related to an investment;

d.

Intellectual property rights, including, in particular, copyright, patents, registered designs, industrial designs and models, trademarks, trade names, technical processes, know-how and goodwill;

e.

Concessions under public law, including concessions for prospecting and exploitation.

1.

Each Contracting Party shall accord in its territory, to investments by investors of the other Contracting Party or investments in which investors of the other Contracting Party have a holding, treatment no less favourable than that accorded to investments by its own investors or to investments by investors of third States.

3.

Such treatment shall not extend to privileges which either Contracting Party accords to investors of a third State by virtue of their membership in, or association with, a customs or economic union, a common market or a free trade area.

4.

The treatment granted under this article shall not extend to privileges which either Contracting Party accords to investors of third States by virtue of a double taxation agreement or other agreements concerning matters of taxation.

2.

Investments by investors of either Contracting Party may be expropriated, nationalized or subjected to other measures with effects equivalent to expropriation or nationalization only in the public interest and against compensation. Such compensation shall correspond to the value of the investment expropriated immediately before the date on which the actual or pending expropriation, nationalization or similar measure was made public. Compensation shall be paid without delay and shall bear interest at the normal rate of bank interest; it shall be effectively convertible and freely transferable. Provision for the determination and payment of such compensation shall be made in an appropriate manner no later than the date of the expropriation, nationalization or similar measure. The legality of the expropriation, nationalization or similar measure and the amount of the compensation may be subject to review in a properly constituted legal proceeding.

3.

Investors of either Contracting Party whose investments suffer losses in the territory of the other Contracting Party as a result of armed conflict, a national emergency or state of unrest shall be accorded treatment by that other Contracting Party no less favourable than that accorded by such Party to its own investors in respect of restitution, indemnification, compensation or other consideration. Such payments shall be freely transferable.

Article 5

1.

Each Contracting Party shall guarantee to investors of the other Contracting Party the free transfer of payments in connection with an investment and, in particular, of:

a.

Capital and additional amounts for the maintenance or extension of the investment;

b.

Returns;

c.

Payments for the repayment of loans within the meaning of article 1, paragraph 1 (c);

d.

Proceeds from the total or partial liquidation or sale of the investment;

e.

Compensation as provided for under article 4.

2.

Transfers shall be effected without delay at the exchange rates prevailing on the day of the transfer.

Article 6

If either Contracting Party makes payment to any of its investors on the basis of a guarantee for an investment in the territory of the other Contracting Party, that other Contracting Party shall, without prejudice to the rights of the first-mentioned Contracting Party as set forth in article 9, recognize the assignment of all rights and claims of the investor to that first-mentioned Contracting Party by operation of law or on the basis of a legal transaction. The other Contracting Party shall also recognize the subrogation of the first-mentioned Contracting Party (on the merits or in terms of amount) to any such rights and claims of the legal predecessor. Article 5 shall apply mutatis mutandis to the transfer of payments to be made on the basis of the assigned claims.

Article 7

1.

If the legislation of either Contracting Party or obligations under international law existing at present or established in the future between the Contracting Parties in addition to this Treaty contain a general or specific arrangement according the investments of investors of the other Contracting Party treatment more favourable than that accorded under this Treaty, such arrangement shall to the extent that it is more favourable prevail over this Treaty.

2.

Each Contracting Party shall comply with any other obligation it has assumed in respect of investments in its territory by investors of the other Contracting Party.

This Treaty shall also apply to investments made by investors of either Contracting Party in accordance with the laws of the other Contracting Party in its territory with effect from 1 January 1950.

1.

Disputes between the Contracting Parties concerning the interpretation or application of this Treaty shall as far as possible be settled by means of negotiation between the two Contracting Parties.

2.

If such a dispute cannot be settled in this manner, it shall, at the request of either Contracting Party, be submitted to an arbitral tribunal.

3.

The arbitral tribunal shall be constituted in each case as follows: each Contracting Party shall appoint one member and the two members shall agree on a national of a third State as chairman. Such members shall be appointed within two months, and the chairman within three months, after the date on which one Contracting Party notifies the other in writing that it intends to submit the dispute to an arbitral tribunal.

4.

If the time-limits stipulated in paragraph 3 have not been observed, and in the absence of any other arrangement, either Contracting Party may request the President of the International Court of Justice to make the necessary appointments.

1.

Disputes between either Contracting Party and an investor of the other Contracting Party regarding investments shall, as far as possible, be settled amicably between the parties to the dispute.

3.

The Contracting Party which is a party to the dispute shall not in course of arbitration proceedings or the execution of the arbitral award raise an objection on the grounds that the investor who is the other party to the dispute has already received compensation for all or part of his losses under an insurance policy.

Article 11

This Treaty shall apply irrespective of whether diplomatic or consular relations exist between the Contracting Parties.

Article 12

In keeping with the Quadripartite Agreement of 3 September 1971, this Treaty shall be extended to Berlin (West) in accordance with established procedures.

1.

This Treaty is subject to ratification; the instruments of ratification shall be exchanged as soon as possible at Bonn.

2.

This Treaty shall enter into force 30 days after the exchange of the instruments of ratification. It shall remain in force for 10 years, and shall be extended thereafter for an unlimited period, unless either Contracting Party denounces it in writing 12 months prior to its expiration. After the expiry of 10 years, the Treaty may be denounced at any time, subject to 12 months' prior notice.

3.

With respect to investments made prior to the termination of this Treaty, articles 1 to 12 shall continue to apply for a further period of 15 years from the date of termination of this Treaty.

Done at Prague on 2 October 1990, in two original copies in the German and Czech languages, both texts being equally authentic.

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