Agreement on encouragement and reciprocal protection of investments between the Lao People's Democratic Republic and the Kingdom of the Netherlands
老挝人民民主共和国和荷兰王国关于鼓励和相互保护投资协定
ສັນຍາ ກ່ຽວກັບ ການ ສົ່ງເສີມ ແລະ ການ ປົກປ້ອງ ການ ລົງທຶນ ເຊິ່ງ ກັນ ແລະ ກັນ ລະຫວ່າງ ສາທາລະນະລັດ ປະຊາທິປະໄຕ ປະຊາຊົນ ລາວ ແລະ ລາຊະອານາຈັກ ໂຮນລັງ
Summary
This is the bilateral investment treaty (BIT) between the Lao PDR and the Kingdom of the Netherlands, signed on 16 May 2003 and in force from 1 May 2005 — the instrument invoked in the well-known Lao Holdings N.V. v. Laos and Sanum Investments ICSID arbitrations. It protects investments by nationals of one Contracting Party in the territory of the other: fair and equitable treatment and full physical security and protection, with no impairment by unreasonable or discriminatory measures (Article 3), and treatment no less favourable than that accorded to the Party's own nationals or to nationals of any third State (national/MFN treatment, Article 3); it guarantees the free transfer of investment-related payments in a freely convertible currency without restriction or delay (Article 5); prohibits direct or indirect expropriation except in the public interest, under due process of law, without discrimination and against just compensation reflecting genuine value plus interest at a normal commercial rate (Article 6); guarantees treatment for war/armed-conflict losses no less favourable than to own or third-State nationals (Article 7); and recognises subrogation (Article 8). The core dispute-settlement clause is Article 9: each Party consents to submit any legal dispute concerning an investment between it and a national of the other Party to the International Centre for Settlement of Investment Disputes (ICSID) under the 1965 Washington Convention (or the Additional Facility Rules if a Party is not a Contracting State), and under Article 25(2)(b) of the Convention treats a locally-incorporated legal person controlled by nationals of the other Party as a national of that other Party. State-to-State disputes go to a three-member ad hoc arbitral tribunal (Article 12). The Agreement runs fifteen years, renews tacitly for ten-year periods, and survives a further fifteen years for existing investments after termination (Article 14). It is the central legal basis for Dutch investors (including investments held through Dutch holding structures) to claim protection and bring investment arbitration concerning Laos.
Articles
Article 0
The Lao People's Democratic Republic and the Kingdom of the Netherlands (hereinafter referred to as the Contracting Parties),
Desiring to strengthen their traditional ties of friendship and to extend and intensify the economic relations between them, particularly with respect to investments by the nationals of one Contracting Party in the territory of the other Contracting Party,
Recognising that agreement upon the treatment to be accorded to such investments will stimulate the flow of capital and technology and the economic development of the Contracting Parties and that fair and equitable treatment of investment is desirable,
Have agreed as follows:
Article 1
Article 1 Definitions
For the purposes of this Agreement:
(a) the term “investments” means every kind of asset and more particularly, though not exclusively:
(i) movable and immovable property as well as any other rights in rem in respect of every kind of asset;
(ii) rights derived from shares, bonds and other kinds of interests in companies and joint ventures;
(iii) claims to money, to other assets or to any performance having an economic value;
(iv) rights in the field of intellectual property, technical processes, goodwill and know-how;
(v) rights granted under public law or under contract, including rights to prospect, explore, extract and win natural resources.
(b) the term “nationals” shall comprise with regard to either Contracting Party:
(i) natural persons having the nationality of that Contracting Party;
(ii) legal persons constituted under the law of that Contracting Party;
(iii) legal persons not constituted under the law of that Contracting Party but controlled, directly or indirectly, by natural persons as defined in (i) or by legal persons as defined in (ii).
(c) The term "territory" means:
the territory of the Contracting Party concerned and any area adjacent to the territorial sea which, under the laws applicable in the Contracting Party concerned, and in accordance with international law, is the exclusive economic zone or continental shelf of the Contracting Party concerned, in which that Contracting Party exercises jurisdiction or sovereign rights.
Article 2
Article 2 Promotion and Admission
Either Contracting Party shall, within the framework of its laws and regulations, promote economic cooperation through the protection in its territory of investments of nationals of the other Contracting Party. Subject to its right to exercise powers conferred by its laws or regulations, each Contracting Party shall admit such investments.
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