Agreement Between the Government of the People's Republic of China And the Government of the Republic of Madagascar for the Reciprocal Promotion and Protection of Investments


The original official languages of this BIT were: Chinese, and French.  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 and the Government of the Republic of Madagascar (hereinafter referred to as “Contracting Parties”)
Desiring to intensify the economic relation, especially the investment made by the People's Republic of China in the Republic of Madagascar , and the investment made by the Republic of Madagascar in the People's Republic of China;
Recognizing that signing this kind of agreement for promotion and protection of such investments will promote operation enthusiasm and capital and technology transfers of investors from both States,


Have agreed as follows:

Article 1
DEFINITIONS
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:
    1. movable and immovable property as well as any property rights relevant to all kinds of properties;
    2. shares, stock, capital and any other kind of participation in companies, and small participation or indirect participation in companies established in the territory of one Contracting Party ;
    3. claims to credit, rights relevant to other assets, or to any other performance having an economic value ;
    4. intellectual property, commercial property and industrial property; and
    5. concessions conferred by law or contract, including concessions to search for, explore, exploit or develop natural resources.

    Any alteration of the form in which assets are invested shall not affect their classification as investment, unless that such a change conflicts with the laws and regulations of the Contracting Party in the territory of which the investment were made.

  2. The term "investor" means:
    1. natural persons who have nationality of the People's Republic of China or the Republic of Madagascar in accordance with respective laws of the People's Republic of China or the Republic of Madagascar;
    2. legal entities, such as companies, partnerships or other organizations constituted under the laws of the People's Republic of China or the Republic of Madagascar and having their seats in that Contracting Party;

    Natural persons or legal entities mentioned in this Paragraph (a) and (b) of either Contracting Party shall invest in one Contracting Party subject in accordance with its laws and regulations.

  3. The term “returns” means the net profit after taxation yielded by an investment, such as profits, concession fees or interests, etc. Returns rising from investment and re-investment shall be equally protected with respect to investment.
  4. The term “territory” means territory of either Contracting Party (including territorial sea ), as well as any area beyond its territorial sea within which either Contracting Party has sovereign rights of explorations and exploitations of resources of the seabed and its subsoil and superjacent water resources in accordance with laws of either Contracting Party and international law

Article 2
PROMOTION AND ADMISSION OF INVESTMENT

  1. Each Contracting Party shall encourage investors of the other Contracting Party to make investments in its territory so as to promote cooperation.
  2.   Each Contracting Party shall admit such investments in accordance with its laws and regulations.

Article 3
FAIR AND EQUITABLE TREATMENT

  1. In accordance with principles of international law, one Contracting Party shall accord to investors of the other Contracting Party treatment with fair and equitable treatment, and the treatment shall not be legally or de facto impeded.
  2. Legal or de facto obstacles to the fair and equitable treatment mainly mean, but without limitation to: non-equitable treatment of all kinds of restrictions on the means of production and management, non-equitable treatment of all kinds of restrictions on sale of products at home and abroad, as well as other measures with similar effect. But measures adopted for reasons of security, public order, health, ethical and environmental protection and other reasons , these measures shall not be regarded as obstacles
  3. One Contracting Party shall conduct review applications as for entry, residence, working and communication application and other applications by natural persons investors of the other Contracting Party for the purpose of making investment in its territory.

Article 4
NATIONAL TREATMENT AND MOST FAVORED NATION TREATMENT

  1. The treatment accorded by one Contracting Party in accordance with its laws and regulations to investments, and activities associated with such investments by investors of the other Contracting Party shall not be less favorable than that accorded to domestic investors or not less favorable than that accorded to investors of any third State, where the treatment is more favorable.
  2. However, the most favored nation treatment mentioned in the Paragraph 1 of this Article shall not include the preferential treatment granted by one Contracting Party to investors of a third State by virtue of its participation or association in a free trade zone, customs union, common market or any other form regional economic organization.
  3. The treatment accorded by one Contracting Party shall not include the privileges granted by one Contracting Party to investors of the any third State in accordance with agreement on avoiding double taxation or other taxation arrangement.

Article 5
EXPROPRIATION AND COMPENSATION

  1. Investments made by investors of one Contracting Party in the territory of the other Contracting Party shall enjoy the full and comprehensive protection and security. 
  2. Neither Contracting Party shall expropriate, nationalize or take similar measures to directly or indirectly expropriate investments owned by investors of the other Contracting Party in its territory, unless the following conditions are met:
    1. adopting measures for the public interests under a sound legal framework;
    2. without discrimination and not conflicting with commitments of the Contracting Parties;
    3. against fair compensation when adopting measures;
  3. The compensation mentioned in Paragraph 2 of this Article shall be equivalent to value of the expropriated investments when the expropriation measure is taken or known to the public. The interests shall be calculated from expropriation date to the payment date. The compensation shall be made without delay and be freely transferable.

Article 6
Compensation for Losses from War and Conflicts
Investors of one Contracting Party whose investments in the territory of the other Contracting Party suffer losses owing to war or other armed conflict, revolution, a state of national emergency, revolt, insurrection, riot or terroristic activities 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 the investors of its own or any third State.

Article 7
Free Transfer

  1. For investments made by investors of one Contracting Party in the territory of the other Contracting Party, the latter Contracting Party shall guarantee to an investor of the former Contracting Party that all payments related to an investment in its territory may be freely transferred. The transfer shall be subject to laws and regulations of the Contracting Parties, and fulfill the procedure and obligation requirements by the laws and regulations provided in these laws and regulations. The transfers shall mainly include, but without limitation to:
    1. profits, dividends, interests and other incomes;
    2. royalties of non-material rights provided in Paragraph 1(d) and (e) of Article 1 of this Agreement;
    3. repayments made pursuant to legitimate loan agreement;
    4. sale of investment, proceeds of total or partial sale or liquidation of investments, including the value-added part of the investment;
    5. compensation paid under Article 5 and 6 of this agreement;
    6. earnings.
  2. The transfers mentioned above shall be made in a freely convertible currency and at the prevailing market rate of exchange applicable of the Contracting Party accepting the investment on the date of transfer.
  3. Where there is no foreign exchange market rate, the applicable exchange rate shall be the rate between the most recent rate between the relating currency and the special drawing right.
  4. If there are special difficulties for international payment balances, the Contracting Parties may conduct temporary restrictions on free transfers in accordance with the standards and requirements provided in the International Monetary Fund Protocol, and shall fulfill fair, non-discriminatory, good faith standards.

Article 8
Subrogation
If a Contracting Party or its designated 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 designated Agency and recognize the subrogation of the former Contracting Party or its designated Agency to such right or claim in the same scope, and shall assume obligations related to the investment.

Article 9
Specific Provision
If the provisions of domestic law of either Contracting Party or international obligations existing at present or established thereafter between the Contracting Parties in addition to the present Agreement, contain a rule, whether general or specific, entitling investments by investors of the other Contracting Party to a treatment more favorable than is provided for by the present Agreement, such rule shall to the extent that it is more favorable prevail over the present Agreement.

Article 10
Settlement of disputes between a Contracting Party and an investor of the other Contracting Party

  1. Any investment dispute between an investor of one Contracting Party and 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 be thus settled within six months, the dispute may be submitted at the request of investor of the other Contracting Party: arbitral tribunal within the territory of the Contracting Party; or judicial procedure of within the territory of the Contracting Party; or to the International Center for Settlement of Investment Disputes (ICSID), under the Convention on the Settlement of Investment Disputes between States and Nationals of other States, opened for signature in Washington on March 18th, 1965; provided that the Contracting Party involved in the dispute may require the investor concerned to complete the domestic administrative review procedures specified in the laws and regulations of that Contracting Party before the submission to international arbitration.
  3. The award shall have binding force, and shall not be submitted to another suit or referred to any other settlement method not provided under the Convention on the Settlement of Investment Disputes between States and Nationals of other States. The award shall be enforced in accordance with domestic laws of respect Contracting Party.
  4.  During the arbitration process or enforcement of arbitral awards, the Contracting Party related to the dispute shall not hold that the investor has received partial or total insurance compensation as defense.

Article 11
Application
This Agreement shall apply to investments made by one Contracting Party in the other Contracting Party subject to the laws and regulations of the latter Contracting Party prior to the entry into force of this Agreement.

  1. However, this Agreement shall not apply to any investment dispute that may have arisen before its entry into force.

Article 12
Settlement of disputes between the Contracting Parties

  1. Any dispute between the Contracting parties concerning the interpretation or application of this Agreement shall be settled through diplomatic channel.
  2. If a dispute cannot be settled within six (6) months in accordance with Para. 1 of this Article, upon the request of either Contracting Party it shall be submitted to an arbitral tribunal.
  3. Such an arbitral tribunal shall be constituted for each specific case as follows:     
    1. each Party to the dispute shall appoint one arbitrator;
    2. these two arbitrators shall jointly select a national of a third State as the Chairman upon jointly appointed by both Contracting Parties;
    3. all arbitrators shall be appointed within two months after one Contracting Party noticing the other Contracting Party to submit the dispute for arbitration.
  4. If within the period specified in this Para.3 (c), the tribunal has not been constituted, either Contracting Party may, in the absence of any other relevant arrangement, invite the President of the International Court of Justice to make the necessary appointments. If the President is a national of either Contracting Party or is otherwise prevented from discharging the said function, the Vice-president 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 tribunal shall determine its own procedure. The arbitral tribunal shall reach its decision by virtue of this Agreement and generally recognized principles of international law.
  6. The tribunal shall reach its decision by a majority of votes; the decision shall be final and binding on both Contracting Parties. The tribunal shall, upon the request of either Contracting Party, explain reasons of its award. Unless the arbitral tribunal makes different decisions under special circumstances, the arbitration fees including the fees of the arbitrators shall be borne in equal parts by the Contracting Parties.

Article 13
Entry into Force and Duration
This Agreement shall enter into force on the 30th day after the date on which both Contracting Parties have notified each other in writing that their respective internal legal procedures thereof have been fulfilled.

  1. This Agreement shall remain in force for a period of ten (10) years. This Agreement shall continue in force if either Contracting Party fails to give a written notice through diplomatic channels to the other Contracting Party to terminate this Agreement one year before the expiration.

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 Tananarive on 2005/11/ in the Chinese and French languages, both texts being equally authentic.

For the Government of the People’s Republic of China

Representative

For the Government of the Republic of Madagascar

Representative