Investment Treaty with RwandaSenate Consideration of Treaty Document 110-23
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[Senate Treaty Document 110-23] [From the U.S. Government Printing Office] 110th Congress 2d Session SENATE Treaty Doc. 110-23 _______________________________________________________________________ INVESTMENT TREATY WITH RWANDA __________ MESSAGE from THE PRESIDENT OF THE UNITED STATES transmitting TREATY BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF RWANDA CONCERNING THE ENCOURAGEMENT AND RECIPROCAL PROTECTION OF INVESTMENT, SIGNED AT KIGALI ON FEBRUARY 19, 2008 November 20, 2008.--Treaty was read the first time, and together with the accompanying papers, referred to the Committee on Foreign Relations and ordered to be printed for the Senate LETTER OF TRANSMITTAL ---------- The White House, November 20, 2008. To the Senate of the United States: I transmit herewith, with a view to receiving the advice and consent of the Senate to ratification, the Treaty between the Government of the United States of America and the Government of the Republic of Rwanda Concerning the Encouragement and Reciprocal Protection of Investment, signed at Kigali on February 19, 2008. I transmit also, for the information of the Senate, the report prepared by the Department of State with respect to the Treaty. This is the first bilateral investment treaty (BIT) concluded between the United States and a sub-Saharan African country since 1998. The Treaty will help to promote cross- border investment by providing legal protections for investors of each country for their investments in the other country. The Treaty underscores the shared commitment of both countries to open investment and trade policies. Rwanda has opened its economy, improved its business climate, and embraced trade and investment as a means to boost economic development and help alleviate poverty. The U.S.- Rwanda BIT will reinforce these efforts. The Treaty is fully consistent with U.S. policy to secure protections for U.S. investment abroad and to welcome foreign investment in the United States. Under this Treaty, the Parties agree to accord national treatment and most-favored-nation treatment to investments. They also agree to customary international law standards for expropriation and for the minimum standard of treatment. The Treaty includes detailed provisions regarding the payment of prompt, adequate, and effective compensation in the event of expropriation; free transfer of funds related to investment; freedom of investment from specified performance requirements; prohibitions on nationality based restrictions for the hiring of senior managers; and the opportunity for investors to resolve disputes with a host government through international arbitration. The Treaty also includes extensive transparency obligations with respect to national laws and regulations and commitments to transparency in dispute settlement. The Parties also recognize that it is inappropriate to encourage investment by weakening or reducing the protections afforded in domestic environmental and labor laws. I recommend that the Senate give early and favorable consideration to the Treaty and give its advice and consent to ratification. George W. Bush. LETTER OF SUBMITTAL ---------- Department of State, Washington, October 31, 2008. The President, The White House. The President: I have the honor to submit to you the Treaty between the Government of the United States of America and the Government of the Republic of Rwanda Concerning the Encouragement and Reciprocal Protection of Investment, signed at Kigali on February 19, 2008. I recommend that this Treaty, with Annexes, be transmitted to the Senate for its advice and consent to ratification. This is the first bilateral investment treaty (BIT) concluded between the United States and a sub-Saharan African country since 1998 (when a BIT was signed with Mozambique). The Treaty will provide legal protections for investors that underscore the shared commitment of both countries to open investment and trade policies. Rwanda has opened its economy, improved its business climate, and embraced trade and investment as a means to boost economic development and help alleviate poverty. The U.S.- Rwanda BIT will reinforce these efforts. The protections afforded by the Treaty include nondiscriminatory treatment; the free transfer of investment- related funds; prompt, adequate, and effective compensation in the event of an expropriation; a minimum standard of treatment grounded in customary international law; freedom of investment from specified performance requirements; prohibitions on nationality-based restrictions for the hiring of senior managers; and transparency in governance. The BIT also provides investors the opportunity to resolve investment disputes with a host government through international arbitration. Although there are 40 BITs in force to which the United States is a party, this Treaty with Rwanda is only the second concluded on the basis of the 2004 U.S. model BIT. An overview of key provisions of the U.S.-Rwanda BIT is enclosed. The Department of State and the Office of the U.S. Trade Representative jointly led the negotiation of this BIT, with the participation of the Departments of Commerce and the Treasury. These agencies join me in recommending that it be transmitted to the Senate at an early date. Respectfully submitted. Condoleezza Rice. Enclosure: As stated. Overview of the United States-Rwanda Treaty The Bilateral Investment Treaty (BIT) with Rwanda was signed by the United States and Rwanda on February 19, 2008. The following overview summarizes key provisions of the Treaty, and identifies provisions that vary materially from the 2004 U.S. Model BIT (Model). SECTION A--GENERAL PROVISIONS Definitions, Scope and Coverage (Articles 1, 2) The Treaty defines an ``investment'' in broad terms as an asset that is directly or indirectly controlled by an investor and has characteristics such as the expectation of profit, the assumption of risk by the investor, or the commitment of capital. The definition of investment provides an illustrative list of different types of investments. In addition, in a footnote to the definition of ``investment'' not present in the Model, the United States and Rwanda agreed to clarify that, where an enterprise does not have the characteristics of an investment, that enterprise is not an investment regardless of the form it may take. The Treaty applies generally to measures of either the United States or Rwanda, hereinafter referred to as the ``Parties'' or, individually, as a ``Party,'' relating to investors of one Party and to their investments in the territory of the other Party (defined as ``covered investments''). A ``covered investment'' includes investments that exist on the date the Treaty enters into force and those that are established, acquired, or expanded thereafter. National and Most-Favored-Nation Treatment (Articles 3, 4) The Treaty protects investors of a Party and their covered investments from discriminatory measures by the other Party during the full life-cycle of an investment, including the establishment phase, when investors are attempting to make an investment. Each Party commits to provide to investors of the other Party and to their covered investments treatment no less favorable than that which it provides, in like circumstances, to its own investors or to investors from any third country and their investments. Minimum Standard of Treatment (Article 5, Annex A) Article 5 of the Treaty establishes a minimum standard of treatment that each Party owes to covered investments. The minimum standard of treatment is defined as ``treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.'' ``Fair and equitable treatment'' includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world. The obligation to provide ``full protection and security'' requires a host country to provide the level of police protection required under customary international law. Article 5 also states that a determination that there has been a breach of another provision of the Treaty or of a separate international agreement does not establish that there has been a breach of the Treaty's minimum standard of treatment obligation. The Article further requires that each Party must accord to covered investments and to investors of the other Party non- discriminatory treatment with respect to measures adopted in relation to losses suffered by investments due to armed conflict or civil strife. Finally, in the event that an investor suffers losses as a result of a Party's requisition or unnecessary destruction of its covered investment, restitution and/or compensation must be paid. Annex A sets forth the shared understanding of the Parties regarding the meaning of ``customary international law'' in Article 5 (and in Annex B on Expropriation) and clarifies that the customary international law minimum standard of treatment of aliens owed under Article 5 refers to all customary international law principles that protect the economic rights and interests of aliens. Expropriation and Compensation (Article 6, Annexes A and B) Article 6 incorporates into the Treaty the customary international law standard for lawful expropriation, providing that neither Party may expropriate property unless it does so for a public purpose, in a non-discriminatory manner, in accordance with due process of law, and accompanied by prompt, adequate, and effective compensation. Article 6 addresses both direct expropriation, when a government actually transfers title or seizes an investment, and indirect expropriation, when a governmental action or series of actions has an effect equivalent to direct expropriation. Annex B clarifies the shared understanding of the Parties with respect to Article 6 as to how to determine whether an expropriation has occurred. The Annex states that a Party's actions can only be considered an expropriation if they interfere with a tangible or intangible property interest or right in an investment. With respect to indirect expropriation, the Annex endorses a case-by-case, fact-based approach, and lists three factors, among others, that tribunals must consider in determining whether an indirect expropriation has occurred: (1) the adverse economic impact of the government action, (2) the extent of government interference with reasonable investment-backed expectations, and (3) the character of the government action. The analytical approach adopted in Annex B is adapted from the seminal U.S. Supreme Court case relating to regulatory taking, Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), and is consistent with customary international law. Finally, Annex B observes that, except in rare circumstances, non-discriminatory regulatory actions designed and applied to protect legitimate public welfare objectives do not constitute indirect expropriations. Transfers (Article 7) The Treaty's free transfers obligation requires that a Party permit capital and other transfers related to a covered investment to be made freely and without delay both into and out of its territory. Additionally, a Party must permit transfers to be made in a ``freely usable currency,'' as designated by the International Monetary Fund, at the market rate prevailing at the time of the transfer. Parties may prevent transfers through the equitable and non-discriminatory application of certain laws, including those relating to criminal offenses, the regulation of financial markets, and compliance with orders or judgments in judicial or administrative proceedings. Performance Requirements (Article 8) Article 8 prohibits the imposition by Parties of several requirements relating to the performance of investments, including a requirement to achieve a given level of exports or domestic content or a requirement linking the value of imports or domestic sales by an investment to the level of its export or foreign exchange earnings. The Article also prohibits Parties from offering advantages, such as a tax holiday, in exchange for a more limited set of performance requirements. In addition, so as not to place U.S. and Rwandan investors at a competitive disadvantage, the disciplines that Article 8 imposes upon performance requirements also apply to all investments in the territory of a Party, including those owned or controlled by host-country investors or by investors of a non-Party. The Article also clarifies that the prohibitions in paragraphs 1 and 2 only apply to the requirements specifically enumerated in those paragraphs. In addition, the Parties agreed to two footnotes not present in the Model. First, the Parties agreed to clarify that the enforcement of a commitment or undertaking to use a particular technology, a production process, or other proprietary knowledge is not, by itself, inconsistent with the performance requirement relating to transfers of technology, a production process, or other proprietary knowledge. Second, the Parties agreed to clarify that nothing in the paragraph disciplining performance requirements shall be construed to prevent a Party from imposing or enforcing a requirement or enforcing a commitment or undertaking to train workers in its territory, provided that such training does not require the transfer of a particular technology, a production process, or other proprietary knowledge to a person in its territory. Senior Management and Boards of Directors (Article 9) The Treaty prohibits measures requiring that persons of any particular nationality be appointed to senior management positions in a covered investment. A country may require that a majority of the board of directors of a covered investment be of a particular nationality, however, or that a director be a resident of the host country, so long as such requirements do not materially impair an investor's control over its investment. Publication of Laws and Decisions Respecting Investment (Article 10) Article 10 seeks to promote transparency in the legal framework governing investment. It requires the Parties to ensure that laws, regulations, procedures, administrative rulings of general application, and adjudicatory decisions that relate to any matter covered by the Treaty are promptly published or otherwise made publicly available. Transparency in Lawmaking and Administrative Proceedings (Article 11) Under Article 11, each Party is obligated, to the extent possible, to publish in advance any laws, regulations, procedures, or administrative rulings of general application with respect to matters covered by the Treaty that the Party proposes to adopt, and to provide interested persons and the other Party a reasonable opportunity to comment on the proposed measures. Article 11 includes detailed provisions concerning the notification of information about government actions and the character of administrative proceedings, including review and appeal processes. Environment and Labor (Articles 12, 13) In Articles 12 and 13, the Parties acknowledge that it would be inappropriate to encourage investment by weakening or reducing the protections afforded in domestic environmental and labor laws, respectively. Both Articles also provide that a Party may request consultations with the other Party if it considers that the other Party has offered such an encouragement. Article 12 provides that nothing in the Treaty shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure otherwise consistent with the Treaty that it considers appropriate to ensure that investment activity in its territory is conducted in a manner sensitive to environmental concerns. Non-Conforming Measures (Article 14, Annexes I, II and III) Article 14 establishes the framework for the Treaty's Annexes of non-conforming measures (NCMs). In these Annexes, each Party lists existing measures to which any or all of four key obligations of the Treaty do not apply, and sectors or activities in which each Party reserves the right to adopt future measures to which any or all of those obligations will not apply. The Article specifies that a Party may list measures that do not conform to the following four obligations: National Treatment (Article 3), Most-Favored-Nation Treatment (Article 4), Performance Requirements (Article 8), and Senior Management and Boards of Directors (Article 9). The Parties list existing NCMs maintained at either the central or regional level of government in Annexes I and III. Annex III is reserved for existing financial services NCMs. The Parties list the sectors or activities in which they reserve the right to adopt future NCMs in Annex II. The Parties negotiated the content of the Annexes in conjunction with the negotiation of the Treaty text, and the Annexes are an integral part of the Treaty. Article 14 includes several other provisions. It makes clear that the four obligations noted above do not apply to existing NCMs maintained at local levels of government. The Article also prohibits a Party from adopting, in a sector or activity covered by Annex II, any future measure that requires an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment. It exempts application of the national treatment and most-favored nation treatment obligations to measures covered by an exception to, or derogation from, the obligations of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights. It also specifies that Articles 3 (National Treatment), 4 (Most-Favored-Nation Treatment), and 9 (Senior Management and Boards of Directors) do not apply to government procurement or to grants or subsidies provided by a Party. Because the Parties' NCMs are set out in detail in Annexes I, II and III, the following list merely identifies the sectors, subsectors or activities listed in each Party's Annex entries. The Annexes should be consulted for a complete description of each NCM. Annex I Rwanda: Differential minimum capital requirements for investment registration; and registration requirements for non- profit enterprises. United States: Atomic Energy; Mining; Air Transportation; Customs Brokers; Radiocommunications Licenses; and restrictions on securities registration and OPIC insurance eligibility. Annex II Rwanda: Preferences for socially or economically disadvantaged communities and differential treatment pursuant to existing international treaties. United States: Radio/Satellite Communications, Cable Television, Social Services, Minority Affairs, measures relating to U.S.-flagged maritime vessels, and differential treatment pursuant to existing international treaties. Annex III Rwanda: Insurance. United States: Financial Services/Banking, Insurance, and general Financial Services. Special Formalities and Information Requirements (Article 15) Article 15 allows a Party to adopt or maintain measures that prescribe special formalities in connection with covered investments, such as investor residency or incorporation requirements, so long as such formalities do not materially impair the Treaty's protections. The Article also provides that, notwithstanding the Treaty's non-discrimination obligations (Articles 3 and 4), a Party may require an investor of the other Party, or its covered investment, to provide information relating to the investment solely for informational or statistical purposes, so long as the Party imposing the requirement protects confidential business information from disclosure. Non-Derogation (Article 16) Article 16 stipulates that the Treaty does not derogate from other obligations or laws of a Party that entitle an investor to more favorable treatment than that accorded by the Treaty. Denial of Benefits (Article 17) Article 17 establishes that a Party may deny the benefits of the Treaty to an investor of the other Party that is an enterprise of the other Party, and to its investments, if persons of a third country own or control the enterprise and the denying Party either (1) has no diplomatic relations with the third country; or (2) adopts or maintains measures, such as foreign policy sanctions, with respect to the third country or to a person of the third country that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of the Treaty were accorded to the enterprise or to its investments. Article 17 also establishes that a Party may deny the benefits of the Treaty to an investor of the other Party that is an enterprise of the other Party, and to its investments, if the enterprise has no substantial business activities in the territory of the other Party and persons of a third country, or of the denying Party, own or control the enterprise. Essential Security (Article 18) Article 18 states that nothing in the Treaty may be construed to preclude a Party from applying measures that it considers necessary either to protect its own essential security interests or to fulfill its obligations with respect to the maintenance or restoration of international peace and security. The Treaty makes explicit the implicit understanding that measures to protect a Party's essential security interests are self-judging in nature, although each Party would expect the provisions to be applied by the other in good faith. Article 18 also states that the Treaty does not require a Party to provide access to information if it determines that such disclosure would be contrary to its essential security interests. Disclosure of Information (Article 19) Article 19 establishes that nothing in the Treaty may be construed to require a Party to provide access to confidential information, the disclosure of which would impede law enforcement, would otherwise be contrary to the public interest, or would prejudice the legitimate commercial interests of particular enterprises. Financial Services (Article 20) Article 20 includes two provisions that relate to the regulation of financial markets. Paragraph 1, the prudential exception, specifies that the Treaty does not prohibit a Party from adopting or maintaining measures relating to financial services for prudential reasons, including for the protection of depositors, investors, policy holders, or persons to whom a fiduciary duty is owed by a financial services supplier, or to ensure the integrity and stability of the financial system. Paragraph 2, the monetary and exchange rate policy exception, establishes that no provision of the Treaty applies to non- discriminatory measures of general application that may be taken by a Party's central bank or monetary authority pursuant to monetary and related credit policies or exchange rate policies. Article 20 modifies the standard investor-State dispute- settlement provisions of the Treaty for disputes in which a Party invokes one of the exceptions in paragraphs 1 or 2 as a defense against an investor claim. In the event that a Party invokes one of the exceptions, it must within 120 days of the date the investor's claim is submitted to arbitration submit to the competent financial authorities of both Parties a written request for a joint determination on the issue of whether and to what extent one of the exceptions is a valid defense to the investor's claim. If the competent financial authorities agree that the defense is valid, the investor's claim will be barred from arbitration. If the competent financial authorities fail to reach a determination by the end of the 120-day period, the tribunal will decide the issue. Article 20 also includes special procedures for the selection of arbitrators with expertise on financial matters. The Article also provides that the Party that is not a party to the dispute may make oral or written submissions to the tribunal regarding the issue of whether and to what extent paragraph 1 or 2 is a valid defense to the claim. If it fails to make such a submission, the non- disputing Party shall be presumed, for purposes of the arbitration, to take a position not inconsistent with that of the respondent. Paragraph 4 of Article 20 modifies the State-State dispute- settlement provisions of Section C of the Treaty for disputes in which the competent financial authorities of one Party provide written notice to their counterparts in the other Party that the dispute involves financial services. In the event that such notice is provided, the competent financial authorities of both Parties must conduct consultations regarding the dispute, and report the result of their consultations to the Parties, which either Party may transmit to the tribunal. Article 20 also contains changes that reflect an evolution in U.S. practice regarding the Financial Services Article since the U.S. model was last updated in 2004. In paragraph 3, provisions on the financial services expertise of arbitrators have been modified to clarify that they refer to the particular sector of financial services in which the dispute arises. New subparagraph 3(c)(iii) clarifies that the tribunal shall draw no inference regarding the application of paragraph 1 or 2 from the fact that the competent financial authorities have not made a determination as described in subparagraph (a). New subparagraph 3(e) enables the respondent, within a specified period of time, to request that the tribunal ``address and decide the issue or issues left unresolved by the competent financial authorities as referred to in subparagraph (c) prior to deciding the merits of the claim for which paragraph 1 or 2 has been invoked by the respondent as a defense.'' Further, it provides that failure to make such a request ``is without prejudice to the right of the respondent to invoke paragraph 1 or 2 as a defense at any appropriate phase of the arbitration.'' New paragraph 8 clarifies that the Treaty does not prevent a Party from taking measures relating to financial institutions that are necessary to secure compliance with laws or regulations that are not inconsistent with the Treaty, such as measures relating to the prevention of deceptive and fraudulent practices. The Rwanda BIT provides significant added protection to the financial services industry when compared to the U.S.-Uruguay BIT by ensuring that financial services films, like all other films, can bring discrimination-based claims in investor-state arbitration. Taxation (Article 21) Article 21 provides that nothing in the Treaty, other than what is provided in the Article, applies to taxation measures. In a departure from the Model, the Parties agreed that Articles 3 (National Treatment) and 4 (Most-Favored-Nation Treatment) shall apply to all taxation measures, other than those relating to direct taxes (such as taxes on income, capital gains, and inheritances). This provision, which employs language used in U.S. Free Trade Agreements and the U.S.-Uruguay BIT, further restricts the coverage of Articles 3 and 4 with respect to several other taxation-related measures, including any non- conforming aspects of existing taxation measures. Article 21 also provides that a claimant that asserts that a tax matter involves expropriation may submit that claim to arbitration under Section B only if (1) the claimant has first referred to the competent tax authorities of both Parties the issue of whether the tax matter involves an expropriation, and (2) the tax authorities have not both determined, within 180 days from the time of referral, that the matter does not involve an expropriation. Furthermore, Article 21 specifies that the obligation in Article 8, not to condition the receipt of an advantage on certain performance requirements, will apply to the use of a taxation measure as an advantage. Finally, Article 21 establishes that nothing in the Treaty will affect the rights and obligations of either Party under a tax convention, and that in the event of any inconsistency between the Treaty and a tax convention, the convention shall prevail to the extent of the inconsistency. Entry into Force, Duration, and Termination (Article 22) Article 22 specifies that the Treaty will remain in force for ten years after its entry into force and will continue in force unless terminated by a Party. A Party can terminate the Treaty anytime after ten years, so long as it provides one year's advance notice to the other Party. If the Treaty is terminated, all obligations will continue to apply for a period of ten years to covered investments established or acquired prior to the date of termination. Paragraph 4, a departure from the Model, provides that, on the request of either Party, the Parties shall consult promptly to discuss any matters relating to the interpretation or application of this Treaty or to the realization of the objectives of this Treaty. Paragraph 4 further clarifies that the Parties may agree, in writing, to amend this Treaty, and that any such amendment shall enter into force 30 days after the date the Parties exchange instruments of ratification, and shall remain in force so long as this Treaty remains in force. SECTION B--INVESTOR-STATE DISPUTE SETTLEMENT Submitting Investor Claims to Arbitration (Articles 23-27) Article 24 provides a mechanism for investors to submit to arbitration a claim that a Party has breached an obligation under Articles 3 through 10 of the Treaty, an investment agreement, or an investment authorization. An ``investment agreement'' is defined in the Treaty as a written agreement between a national authority of a Party and a covered investment or an investor of the other Party, on which the investment or the investor relies in establishing or acquiring a covered investment other than the written agreement itself that grants rights to the investment or the investor with respect to natural resources, the supply of public services, or infrastructure projects. The Treaty defines an ``investment authorization'' as an authorization that the foreign investment authority of a Party grants to a covered investment or to an investor of the other Party. Article 24 specifies that an investor of a Party may submit two types of claims: a claim on behalf of itself and a claim on behalf of an enterprise of the other Party that the investor owns or controls directly or indirectly. In both cases, the claimant must prove a breach of an obligation under Articles 3 through 10 of Section A, of an investment agreement, or of an investment authorization and that the claimant or the enterprise, as the case may be, has incurred loss or damage as a result of the breach. Under paragraph 3 of Article 24, an investor may seek arbitration of a claim under several potential mechanisms, including the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (known as the ``ICSID Convention,'' after the International Centre for Settlement of Investment Disputes), the Additional Facility of ICSID, the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL), or any other mutually agreed arbitral institution or rules. The rules of the chosen arbitral mechanism will govern the arbitration except to the extent modified by the Treaty. Article 24 also establishes that a claim may not be submitted to arbitration until six months have elapsed since the events giving rise to the claim. In addition, a claimant must deliver to the respondent Party a written notice of its intent to submit the claim at least 90 days before submitting a claim to arbitration. The notice of intent must identify the provision or provisions of the Treaty or investment agreement or investment authorization alleged to have been breached and the approximate amount of damages claimed. To ensure that a Party cannot block arbitration by withholding its consent, Article 25 expressly states that the Parties consent to the submission of a claim to arbitration and that this consent will satisfy the consent requirements of the principal conventions relating to the arbitration of investment disputes. Article 26 establishes a statute of limitations on arbitral claims by requiring that they be submitted no more than three years after the date that a claimant first acquired, or should have acquired, knowledge of an alleged breach and knowledge that the claimant has incurred loss or damage. Article 26 also specifies that no claim may be submitted to arbitration under Section B unless the claimant or, in the event a claimant makes a claim on behalf of an enterprise that it owns or controls, the enterprise waives in writing the right to initiate or continue any proceedings relating to the disputed measure in a court or administrative tribunal of either Party or in other dispute-settlement mechanisms. This Article thus generally permits investors to pursue other legal remedies during the three-year limitations period. After arbitration is initiated under Section B of the Treaty, however, all other legal action must be discontinued (except for actions for interim injunctive relief that do not involve monetary damages and that are brought for the sole purpose of preserving a claimant's rights during arbitration). Article 27 provides for the establishment of three-member arbitral tribunals, with one member appointed by each disputing party and a presiding arbitrator appointed by agreement between them. If, within 75 days of the submission of a claim to arbitration, one of the disputing parties has failed to appoint an arbitrator, or the two disputing parties have failed to agree on a presiding arbitrator, arbitrators may be named by the ICSID Secretary-General. Conduct of Investor-State Arbitration (Articles 28-33) Article 28 includes a number of important provisions relating to the conduct of arbitral proceedings. To ensure the enforceability of arbitral awards, Article 28 provides that, unless otherwise agreed, arbitrations must take place in a country that is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the ``New York Convention.'' The Article authorizes a Party that is not involved in a dispute to make oral or written submissions to the tribunal on questions of interpretation of the Treaty, and authorizes tribunals to accept amicus curiae submissions from persons or entities that are not involved in the dispute. Article 28 also includes provisions that permit a tribunal to decide as a preliminary question whether an investor has made a claim that, as a matter of law, falls within the scope of the Treaty and whether the tribunal has jurisdiction. Upon written request of the respondent Party, the Tribunal shall answer these questions on an expedited basis within 150 days or, if a hearing is requested, within 180 days of receipt of the request. Tribunals are also authorized to award costs and attorneys' fees in connection with the submission of a frivolous claim or objection. In addition, Article 28 authorizes tribunals to order interim measures of protection to preserve the rights of a disputing party or to ensure that the tribunal's jurisdiction is made fully effective. Such measures may include an order to preserve evidence in the control of a disputing party. A tribunal cannot, however, order attachment of assets or enjoin a Party from applying any measure that is the subject of a dispute. Finally, Article 28 requires a tribunal, at the request of a disputing party, to issue an interim decision or award to the disputing parties and to the non-disputing Party, after which the disputing parties will have 60 days within which they may submit to the tribunal written comments on the interim decision or award. The tribunal must issue a final decision or award no later than 45 days after the expiration of the 60-day comment period. The Parties also agreed in Article 28 that, if a separate multilateral agreement enters into force between the Parties that establishes an appellate body for purposes of reviewing awards by investor-State arbitral tribunals, the Parties will seek to reach an agreement under which that appellate body would review awards rendered under Section B of the Treaty. In Annex D, the Parties have agreed to consider within three years after the Treaty's entry into force the possibility of establishing a bilateral appellate body or similar mechanism to review arbitral awards rendered under the Treaty. Article 29 specifies that all substantive documents submitted to or issued by a tribunal, with the exception of certain proprietary or other confidential information, shall be made available to the public. This Article also requires that arbitral proceedings be open to the public, subject to logistical arrangements agreed to by a tribunal in consultation with the disputing parties, and sets out detailed procedures for the protection from disclosure of any protected information that is submitted to a tribunal. Article 29 also provides that nothing in Section B of the Treaty requires a respondent Party to withhold from the public information required to be disclosed by its laws. Article 30 provides that, in the case of a claim of a breach of an obligation of Section A of the Treaty, an arbitral tribunal must decide the dispute in accordance with the Treaty and applicable rules of international law. In the case of an alleged breach of an investment agreement or investment authorization, the tribunal must apply the rules of law specified in the agreement or authorization or other rules to which the disputing parties have otherwise agreed. If no rules of law have been specified or agreed to in the investment agreement or investment authorization, the tribunal is instructed to apply the domestic law of the respondent Party and applicable rules of international law. Article 30 further provides that a joint declaration by the Parties concerning the interpretation of a provision of the Treaty will be binding on a tribunal, and any decision or award issued by a tribunal must be consistent with the joint declaration. Under Article 31, a respondent Party's defense that an alleged breach falls within the scope of a reservation set forth in one of its Annexes of non-conforming measures must, at the Party's request, be referred to the Parties for their consideration. Any decision the Parties make on the issue will be binding on a tribunal. If the Parties fail to issue such a decision within 60 days, the question is referred back to the tribunal. Article 32 permits tribunals, on their own initiative or at the request of a disputing party, to seek advice from experts on environmental, health, safety, or other scientific matters at issue in a dispute. Article 33 sets out detailed procedures for the consolidation of investor claims that have a question of law or fact in common and arise out of the same events or circumstances. The Article provides for the establishment of a special three-member tribunal to consider whether it may assume jurisdiction over, or refer to a previously constituted tribunal, all or part of one or more such claims. Awards (Article 34) Article 34 authorizes a tribunal, when it makes a final award against a respondent Party, to award money damages, restitution of property, or a combination of the two. Awards of restitution must offer a respondent the alternative of paying damages. No punitive damages may be awarded. In the event of an award in response to a claim submitted by an investor on behalf of an enterprise that it owns or controls, restitution of property or monetary damages must be provided to the enterprise and the award must specify that it is made without prejudice to any right that a person may have in the award under applicable domestic law. Article 34 also stipulates that a tribunal award will have no binding force except between the disputing parties and in respect of the particular case. Article 34 also addresses the enforcement of arbitral awards. It requires disputing parties to comply with awards without delay. Enforcement proceedings may be delayed in the event that a disputing party initiates revision or annulment proceedings under the ICSID Convention or revision, set aside, or annulment proceedings under ICSID Additional Facility Rules or UNCITRAL Arbitration Rules. If a respondent fails to comply with a final award, the non-disputing Party may ask a State- State arbitral panel to determine whether the respondent's failure to comply with the award is inconsistent with the Treaty and to recommend that the respondent comply. Such a State-State proceeding would be without prejudice to other available remedies. SECTION C--STATE-STATE DISPUTE SETTLEMENT Article 37 provides that any dispute between the Parties concerning the interpretation or application of the Treaty not resolved through consultations or other diplomatic channels shall be submitted on the request of either Party to binding arbitration. Unless the Parties otherwise agree, the arbitration shall be governed by UNCITRAL Arbitration Rules. State-State arbitration cannot be established for matters arising under Articles 12 (Environment) and 13 (Labor).