The original official languages of this BIT were: Chinese, Spanish, and English. The Tsinghua Rule of Law Project has produced this unofficial English language version from the original Chinese text. While the English language version is for the benefit of the website readers, users should rely on official language versions when advising clients or undertaking some legal process.
The Government of the People's Republic of China and the Government of the Republic of Ecuador (hereinafter referred to as “the Contracting Parties”),
Intending to create favourable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party;
Recognizing that the reciprocal encouragement, promotion, and protection of such investments will be conducive to stimulating business initiative of the investors and will increase prosperity in both States,
Desiring to intensify the cooperation of both States on the basis of equality and mutual benefits;
Have agreed as follows:
Article 1
For the purpose of this Agreement,
1. The term "investment" 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, and in particularly, though not exclusively, includes:
(a) movable, immovable property as well as any property rights-such as mortgages and pledges,
(b) shares, stocks and any other kind of participation in companies;
(c) claims to money or to any performance having an economic value;
(d) copyrights, industrial property, know-how and technical process;
(e) concessions conferred by law, including concessions to search for, or exploit natural resources.
2. The term "investor" means:
In respect of the People’s Republic of China means
(a) natural persons who have nationality of the People’s Republic of China ;
(b) 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 Republic of Ecuador:
(a) natural persons who are nationals of the Republic of Ecuador ;
(b) corporate bodies, commercial partnerships and other associations or partnerships based on the territory of the Republic of Ecuador and having legal capacity independently of the type of liability of their partners of the activity executed by them.
3. The term "return" means the amounts yielded by investments such as profits, dividends, interests, royalties or other legitimate income;.
Article 2
1. Each Contracting Party shall encourage investors of the other Contracting Party to make investment within its territory, and admit such investments in accordance with its laws and regulations. .
2. Each Contracting Party shall grant assistance in and facilities for obtaining visas and working permit to nationals of the other Contracting Party to or in the territory of the Former in connection with activities associated with such in accordance with its domestic legislation.
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. Treatment and protection mentioned in this Para.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 and economic union, agreement relating to avoidance of double taxation or for facilitating frontier trade.
Article 4
Neither Contracting Party shall expropriate, nationalize or take similar measures (hereinafter referred to as "expropriation") against the investments of investors of the other Contracting Party in its territory, unless the following conditions are met:
(a) for the public interests;
(b) under domestic legal procedure;
(c) without discrimination;
(d) against fair compensation.
The compensation mentioned in Paragraph (d) 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. Payment of compensation shall be paid without unreasonable delay.
Article 5
Investors of one Contracting Party whose investments 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, treatment no less favorable than that accorded to investors of a third State.
Article 6
1. Each Contracting Party shall, subject to its laws and regulations, guarantee to the investors of the other Contracting Party the transfer of their investments and returns held in the territory of the one Contracting Party, including:
(a)profits, dividends, interests and other legitimate income;
(b)amounts from total or partial sale or liquidation of investments;
(c) payments made pursuant to a loan agreement in connection with investments;
(d) royalties in Paragraph 1 (d)， of Article 1;
(e) payments of technical assistance or technical service fees, management fee;
(f) payments in connection with projects on contract;
2. The transfer above-mentioned shall be made at the prevailing exchange rate of the Contracting Party accepting the investment the date of transfer.
Article 7
If a Contracting Party or its Agency makes payments 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.
1. Any dispute between the Contracting Parties concerning the interpretation or application of this Agreement shall, as far as possible, be settled with consultation through diplomatic channels.
2. If a dispute cannot thus be settled within six months from the time of submission of the formal claim, it shall, upon the request of either Contracting Party, be submitted to an ad- hoc arbitral tribunal.
3. Such tribunal comprises of three arbitrators. Within two 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 one arbitrator. Those two arbitrators shall, within further two months together select a third arbitrator who is a national of a third State which has diplomatic relations with both Contracting Parties as Chairman of the arbitral tribunal. 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 four months from the receipt of the written notice requesting 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 next in seniority 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 arbitral tribunal shall reach its award in accordance with the provisions of this Agreement and the principles of international law generally recognized.
6. The arbitral 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, clarify or amplify its award.
7. Each Contracting Party shall bear the costs 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 9
1. Any legal dispute between an investor of the other 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 the settled through negotiations within six 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 six 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 as follows: each Party to the dispute shall appoint an arbitrator, and these two shall select a national of a third State which has diplomatic relations with the two Contracting Parties as the Chairman. The first two arbitrators shall be appointed within two months of the written notice for arbitration by either Contracting Party to the dispute to the specified above the tribunal has not been constituted, either party to the dispute may invite the Secretary General of the International Center for Settlement of Investment Disputes to make the necessary appointments.
5. The ad-hoc arbitral tribunal shall determine its own procedure. However, the tribunal may, in the course of determination of procedure, take as guidance the Arbitration Rules of the United Nations Commission on the 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 with their respective domestic law.
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 principles of international law.
8. Each Party to the dispute shall bear the costs of its appointed member of the arbitral and of its representation in the proceedings. The costs of the appointed Chairman and the remaining costs shall be borne in equal parts by the parties to the dispute.
Article 10
If the treatment to be accorded by one Contracting Party in accordance with its laws and regulations 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 11
This Agreement shall apply to all 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 latter.
Article 12
1. The representatives of the Contracting Parties shall hold meetings from time to time for the purpose of:
(a) reviewing the implementation of this Agreement;
(b) exchanging legal information and investment opportunities;
(c) resolving disputes arising out of investments;
(d) forwarding proposals on promotion of investment;
(e) 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 be held alternatively in Beijing and Quito
Article 13
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 five 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 one year before the expiration specified in Paragraph 1 of this Article.
3. After the expiration of initial five 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 Article 1 to 12 shall continue to be effective for a further period of ten 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 Beijing on March 21st ,1994 in Chinese, Spanish and English, all texts being equally authentic. In case of divergent of interpretation, the English text shall prevail.
For the Government of The People's Republic of China
Shi Guangsheng
Vice-Minister of Moftec
For the Government of The Republic of Ecuador
Diego Paredes Pena
Minister of Foreign Affairs
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