AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF LATVIA AND
THE GOVERNMENT OF THE REPUBLIC OF INDIA
FOR THE PROMOTION AND PROTECTION OF INVESTMENTS
The Government of the Republic of Latvia and the Government of
the Republic of India (hereinafter referred to as the
"Contracting Parties");
Desiring to create conditions favourable for fostering greater
investment by investors of one Contracting Party in the territory
of the other Contracting Party;
Recognising that the encouragement and reciprocal protection
of investments of investors of one Contracting Party in the
territory of the other Contracting Party on a non discriminatory
basis under international agreement will be conducive to the
stimulation of individual business initiative and will increase
prosperity in the territory of both Contracting Parties;
Have agreed as follows:
ARTICLE 1
Definitions
For the purposes of this Agreement:
(a) "investment" means every kind of asset established or
acquired including changes in the form of such investment, in
accordance with the national laws and regulations of the
Contracting Party in whose territory the investment is made and
in particular, though not exclusively, includes:
(i) movable and immovable property as well as other rights
such as mortgages, liens or pledges;
(ii) shares in and stock and debentures of a company and any
other similar forms of participation in a company;
(iii) rights to money or to any performance under contract
having a financial value;
(iv) intellectual property rights, in accordance with the
relevant laws and regulations of the respective Contracting
Parties;
(v) business concessions conferred by law or under contract,
including concessions to search for and extract oil and other
minerals;
(b) "investor" means any natural or juridical person who has
made investment in the territory of the other Contracting
Party:
(i) "natural person" means:
in respect of the Republic of Latvia: a citizen or non-citizen
in accordance with the laws and regulations of the Republic of
Latvia;
in respect of the Republic of India: persons deriving their
status as Indian nationals from the law in force in India;
(ii) "juridical person" means:
in respect of the Republic of Latvia: commercial company
(partnership or capital company), association and foundation
incorporated or constituted in accordance with the laws and
regulations of the Republic of Latvia, whether or not for
profit;
in respect of the Republic of India: any entity that is
incorporated, constituted, set up or otherwise duly organized
under the law in force in any part of India; whether or not for
profit, whether privately or otherwise owned, with limited or
unlimited liability, including any corporation, company,
association, partnership, trust, joint venture, co-operatives or
sole proprietorship;
(c) "returns" means the monetary amounts yielded by an
investment such as profit, interest, capital gains, dividends,
royalties and fees;
(d) "territory" means:
(i) in respect of Latvia: the land territory, internal waters
and territorial sea of the Republic of Latvia and the airspace
above it, as well as the maritime zones beyond the territorial
sea, including the seabed and subsoil, over which the Republic of
Latvia exercises sovereign rights or jurisdiction in accordance
with its national laws in force and international law, for the
purpose of exploration and exploitation of the natural resources
of such areas;
(ii) in respect of India: the territory of the Republic of
India including its territorial waters and the airspace above it
and other maritime zones including the Exclusive Economic Zone
and continental shelf over which the Republic of India has
sovereignty, sovereign rights or exclusive jurisdiction in
accordance with its laws in force, the l982 United Nations
Convention on the Law of the Sea and International Law.
ARTICLE 2
Scope of the Agreement
This Agreement shall apply to all investments made by
investors of either Contracting Party in the territory of the
other Contracting Party, accepted as such in accordance with its
laws and regulations, whether made before or after the coming
into force of this Agreement, but shall not apply to any dispute
concerning an investment which arose, or any claim which was
settled before its entry into force.
ARTICLE 3
Promotion and Protection of Investment
(1) Each Contracting Party shall encourage and create
favourable conditions for investors of the other Contracting
Party to make investments in its territory, and admit such
investments in accordance with its laws and regulations.
(2) Investments and returns of investors of each Contracting
Party shall at all times be accorded fair and equitable treatment
in the territory of the other Contracting Party.
(3) A Contracting Party shall, subject to its laws, accord
within its territory protection and security to investments and
shall not impair the management, maintenance, use, enjoyment or
disposal of investments.
ARTICLE 4
National Treatment and Most-Favoured-Nation Treatment
(l) Each Contracting Party shall accord to investments of
investors of the other Contracting Party, treatment which shall
not be less favourable than that accorded either to investments
of its own or investments of investors of any third State,
whichever is more favourable.
(2) In addition, each Contracting Party shall accord to
investors of the other Contracting Party, including in respect of
returns on their investments, treatment which shall not be less
favourable than that accorded to investors of any third
State.
(3) The provisions of paragraph (1) and (2) above shall not be
construed so as to oblige one Contracting Party to extend to the
investors of the other Contracting Party and to their investments
and returns on investments the present or future benefit of any
treatment, preference or privilege resulting from:
(a) any membership in a free trade area, customs union,
monetary union, common market and any international agreement
resulting in similar arrangements, or
(b) any international agreement or arrangement or, domestic
legislation relating wholly or mainly to taxation.
ARTICLE 5
Expropriation
(1) Investments of investors of either Contracting Party shall
not be nationalised, expropriated or subjected to measures having
effect equivalent to nationalisation or expropriation
(hereinafter referred to as "expropriation") in the
territory of the other Contracting Party except for a public
purpose in accordance with law on a non-discriminatory basis and
against fair and equitable compensation. Such compensation shall
amount to the fair market value of the investment expropriated
immediately before the expropriation or before the impending
expropriation became public knowledge, whichever is the earlier,
shall include interest at the normal market rate until the date
of payment, shall be made without unreasonable delay, be
effectively realizable and be freely transferable.
(2) The investor affected shall have
right, under the law of the Contracting Party making the
expropriation, to 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. The Contracting Party making
the expropriation shall make every endeavour to ensure that such
review is carried out promptly.
(3) Where a Contracting Party
expropriates the assets of a company which is incorporated or
constituted under the law in force in any part of its own
territory, and in which investors of the other Contracting Party
own shares, it shall ensure that the provisions of paragraph (1)
of this Article are applied to the extent necessary to ensure
fair and equitable compensation in respect of their investment to
such investors of the other Contracting Party who are owners of
those shares.
ARTICLE 6
Compensation for Losses
Investors of one Contracting Party whose investments in the
territory of the other Contracting Party suffer losses owing to
war or other armed conflict, a state of national emergency or
civil disturbances in the territory of the latter Contracting
Party shall be accorded by the latter Contracting Party
treatment, as regards restitution, indemnification, compensation
or other settlement, no less favourable than that which the
latter Contracting Party accords to its own investors or to
investors of any third State, whichever is more favourable.
Resulting payments shall be freely transferable.
ARTICLE 7
Transfers
(l) Each Contracting Party shall permit all funds of an
investor of the other Contracting Party related to an investment
in its territory to be freely transferred, without unreasonable
delay and on a non-discriminatory basis. Such funds may
include:
(a) Initial capital and additional
capital amounts used to maintain and increase investments;
(b) Net operating profits including
dividends and interest in proportion to their share-holdings;
(c) Repayments of any loan including interest thereon,
relating to the investment;
(d) Payment of royalties and services fees relating to the
investment;
(e) Proceeds from sales of their shares;
(f) Proceeds received by investors in case of sale or partial
sale or liquidation;
(g) The earnings of natural persons of one Contracting Party
who work in connection with investment in the territory of the
other Contracting Party.
(2) Nothing in paragraph (l) of this Article shall affect the
transfer of any compensation under Article 6 of this
Agreement.
(3) Unless otherwise agreed to between the parties, currency
transfer under paragraph (1) of this Article shall be permitted
in the currency of the original investment or any other freely
convertible currency. Such transfer shall be made at the
prevailing market rate of exchange on the date of transfer.
ARTICLE 8
Subrogation
Where one Contracting Party or its designated agency has
guaranteed any indemnity against non-commercial risks in respect
of an investment by any of its investors in the territory of the
other Contracting Party and has made payment to such investors in
respect of their claims under this Agreement, the other
Contracting Party agrees that the first Contracting Party or its
designated agency is entitled by virtue of subrogation to
exercise the rights and assert the claims of those investors. The
subrogated rights or claims shall not exceed the original rights
or claim of such investors.
ARTICLE 9
Settlement of Disputes Between an Investor and a Contracting
Party
(1) Any dispute between an investor of one Contracting Party
and the other Contracting Party in relation to an investment of
the former under this Agreement shall, as far as possible, be
settled amicably through negotiations between the parties to the
dispute.
(2) If the dispute has not been settled within six months from
the date on which it was raised in writing, the dispute may, at
the choice of investor, be submitted:
(a) to the competent courts of the Contracting Party in whose
territory the investment is made; or
(b) to arbitration under the International Centre for
Settlement of Investment Disputes between States and Nationals of
other States, opened for signature at Washington on
18th March, 1965 (hereinafter referred to as the
"Centre') provided that both the disputing Contracting Party and
the Contracting Party of the investor are parties to the ICSID
Convention; or
(c) to arbitration under the Additional Facility of the
Centre, provided that either the disputing Contracting Party or
the Contracting Party of the investor is a party to the ICSID
Convention; or
(d) to any ad-hoc arbitration tribunal which unless otherwise
agreed on by the parties to the dispute, is to be established
under the Arbitration Rules of the United Nations Commission on
International Trade Law (UNCITRAL) with the following
modifications:
(i) The appointing authority under Article 7 of the Rules
shall be the President, the Vice-President or the next senior
Judge of the International Court of Justice, who is not a
national of either Contracting Party. The third arbitrator shall
not be a national of either Contracting party.
(ii) The parties shall appoint their respective arbitrators
within two months.
(iii) The arbitral award shall be made in accordance with the
provisions of this Agreement.
(3) The arbitral tribunal shall state
the basis of its decision and give reasons upon the request of
either party.
(4) The arbitration award shall be
final and binding upon both parties to the dispute. Both
Contracting Parties shall commit themselves to the enforcement of
the award.
(5) If either Party submits a dispute for resolution under
paragraph 2(a), it shall be precluded from invoking the procedure
under paragraph 2(b), 2(c) or 2(d) and vice-versa.
(6) Neither of the Contracting Parties, which is a Party to a
dispute, can raise an objection, at any phase of the arbitration
procedure or of the execution of an arbitral award, on account of
the fact that the investor, which is the other Party to the
dispute, has received an indemnification covering a part or the
whole of its losses by virtue of an insurance.
ARTICLE l0
Settlement of Disputes between the Contracting Parties
(1) Disputes between the Contracting Parties concerning the
interpretation or application of this Agreement should, as far as
possible, be settled through negotiation.
(2) If a dispute between the Contracting Parties cannot thus
be settled within six months from the time the dispute arose, it
shall upon the request of either Contracting Party be submitted
to an arbitral tribunal.
(3) Such an 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. Those two members shall
then select a national of a third State who on approval by the
two Contracting Parties shall be appointed Chairman of the
tribunal. The Chairman shall be appointed within two 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, either Contracting Party may, in the absence of
any other agreement, invite the President of the International
Court of Justice to make any necessary appointments. If the
President is a national of either Contracting Party or if he is
otherwise prevented from discharging the said function, the Vice
President shall be invited to make the necessary appointments. If
the Vice President is a national of either Contracting Party or
if he too 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 shall be
invited to make the necessary appointments.
(5) The arbitral tribunal shall reach its decision by a
majority of votes. Such decisions shall be binding on both
Contracting Parties. Each Contracting Party shall bear the cost
of its own member of the tribunal and of its representation in
the arbitral proceedings; the cost of the Chairman and the
remaining costs shall be borne in equal parts by the Contracting
Parties. The tribunal may, however, in its decision direct that a
higher proportion of costs shall be borne by one of the two
Contracting Parties, and this award shall be binding on both
Contracting Parties. The tribunal shall determine its own
procedures.
ARTICLE 11
Entry and Sojourn of Personnel
A Contracting Party shall, subject to its laws and regulations
relating to the entry and sojourn of foreign nationals, permit
natural persons of the other Contracting Party and personnel
employed by companies of the other Contracting Party to enter and
remain in its territory for the purpose of engaging in activities
connected with investments.
ARTICLE 12
Applicable Laws
(1) Except as otherwise provided in this Agreement, all
investment shall be governed by the laws and regulations in force
in the territory of the Contracting Party in which such
investments are made.
(2) Notwithstanding paragraph (1) of
this Article nothing in this Agreement precludes the host
Contracting Party from taking action for the protection of its
essential security interests or in circumstances of extreme
emergency in accordance with its laws normally and reasonably
applied on a non discriminatory basis.
ARTICLE l3
Application of other Rules
If the provisions of law of either Contracting Party or
obligations under international law existing at present or
established hereafter between the Contracting Parties in addition
to the present Agreement contain rules, whether general or
specific, entitling investments by investors of the other
Contracting Party to a treatment more favourable than is provided
for by the present Agreement, such rules shall to the extent that
they are more favourable prevail over the present Agreement.
ARTICLE l4
Entry into Force
Each Contracting Party shall notify
the other in writing of the completion of the procedures required
by its law for bringing this Agreement into force. The Agreement
shall enter into force on the thirtieth day following the date of
receipt of the last notification.
ARTICLE l5
Duration and Termination
(1) This Agreement shall remain in force for a period of ten
years and thereafter it shall be deemed to have been
automatically extended unless either Contracting Party gives to
the other Contracting Party a written notice of its intention to
terminate the Agreement. The termination of this Agreement shall
become effective twelve months after the date of receipt of such
written notice by the other Contracting Party.
(2) Notwithstanding termination of this Agreement pursuant to
paragraph (1) of this Article, the Agreement shall continue to be
effective for a further period of fifteen years from the date of
its termination in respect of investments made or acquired before
the date of termination of this Agreement.
(3) The Protocol shall form an integral part of the
Agreement.
In witness whereof the undersigned, duly authorised thereto by
their respective Governments, have signed this Agreement.
Done at New Delhi on this 18th February 2010 in two
originals each in the Latvian, Hindi and English languages, all
texts being equally authentic.
In case of any divergence, the English text shall prevail.
For the Government
of the Republic of Latvia
Artis Kampars
|
For the Government
of the Republic of India
Shri Anand Sharma
|
PROTOCOL
TO THE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF LATVIA
AND THE GOVERNMENT OF THE REPUBLIC OF INDIA FOR THE PROMOTION AND
PROTECTION OF INVESTMENTS
On the signing of the Agreement between the Government of the
Republic of Latvia and the Government of the Republic of India
for the Promotion and Protection of Investments, the undersigned
representatives have agreed on the following provisions which
constitute an integral part of the Agreement:
Ad Article 1
The Republic of India takes note of the statement of the
Republic of Latvia that the term "non-citizens" referred to in
Article 1, paragraph (b)(i), means a person who, in accordance
with the Law on Status of Those Former U.S.S.R. Citizens Who Do
Not Have Citizenship Of Latvia Or That of any Other State, has a
right to a non-citizen passport issued by the Republic of
Latvia.
Ad Article 5
1. Article 5 (Expropriation) is intended to reflect customary
international law concerning the obligation of States with
respect to expropriation.
2. An action or a series of actions by a Contracting Party
cannot constitute an expropriation unless it interferes with a
tangible or intangible property right or property interest in an
investment.
3. Article 5 addresses two situations. The first is direct
expropriation, where an investment is nationalized or otherwise
directly expropriated through formal transfer of title or
outright seizure.
4. The second situation addressed by Article 5 is indirect
expropriation, where an action or series of actions by a
Contracting Party has an effect equivalent to direct
expropriation without formal transfer of title or outright
seizure.
(a) The determination of whether an action or series of
action, in a specific fact situation, constitutes an indirect
expropriation requires a case-by-case, fact based inquiry that
considers, among other factors:
(i) the economic impact of the governmental action, although
the fact that an action or series of actions by a Contracting
Party has an adverse effect on the economic value of an
investment, standing alone, does not establish that an indirect
expropriation has occurred;
(ii) the extent to which the government action interferes with
distinct, reasonable investment-backed expectations; and
(iii) the character of the government action.
(b) Actions by a Government or Government controlled bodies,
taken as a part of normal business activities, will not
constitute indirect expropriation unless it is prima facie
apparent that it was taken with an intent to create an adverse
impact on the economic value of an investment.
(c) Except in rare circumstances, non-discriminatory
regulatory actions by a Contracting Party that are designed and
applied to protect legitimate public welfare objectives, such as
public health, safety, and the environment, do not constitute
indirect expropriation.
For the Government
of the Republic of Latvia
Artis Kampars
|
For the Government
of the Republic of India
Shri Anand Sharma
|