Common use of Arbitration and Conciliation Clause in Contracts

Arbitration and Conciliation. (1) Each Contracting Party consents to submit any dispute that may arise out of or in relation to an investment made in its territory by a national or a company of the other Contracting Party for settlement in accordance with the provisions of this Article. (2) Each Contracting Party consents to submit to the International Centre for the Settlement of Investment Disputes (hereinafter referred to as "the Centre") for settlement by conciliation or arbitration under the Convention on the 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 Convention") any dispute arising between that Contracting Party and a national or company of the other Party which involves: (a) An obligation entered into by that Party with the national or company of the other Party regarding an investment by such national or company; or (b) An alleged breach of any right conferred or created by this Agreement with respect to an investment by such national or company. (3) A company which is incorporated or constituted under the law in force in the territory of one Contracting Party, in which before such a dispute arises the majority of shares are owned by nationals or companies of the other Contracting Party shall, in accordance with Article 25 (2) (b) of the Convention, be treated for the purposes of the Convention as a company of the other Contracting Party. (a) If any dispute of the type referred in paragraph 2 should arise, the Party and the national or company concerned shall seek to resolve the dispute through coilsultation and negotiation. If the dispute cannot be thus resolved within three (3) months, then, if the national or company concerned also consents in writing to submit the dispute to the Centre for settlement by conciliation or arbitration under the Convention, either party to the dispute may institute proceedings by addressing a request to that effect to the Secretary-General of the Centre as set forth in Articles 28 and 36 of the Convention; provided that a dispute shall not be submitted to the Centre as long as such a dispute which has been submitted by the national or company concerned is still pending before the courts of justice or administrative tribunals or agencies of competent jurisdiction of the Contracting Party that is party to the dispute. (b) In the event of disagreement as to whether conciliation or arbitration is the more appropriate procedure the opinion of the national or company concerned shall prevail. The Contracting Party which is a party to the dispute shall not raise as an objection, defence, or right or set-off at any stage of the proceedings or enforcement of an award the fact that the national or company which is the other party to the dispute has received or will receive pursuant to an insurance or guarantee contract an indemnity or other compensation for all or part of his or its losses or damages. (5) Neither Contracting Party shall pursue through diplomatic channels any dispute referred to the Centre unless: (a) The Secretary-General of the Centre, or a conciliation commission or an arbitral tribunal constituted by it, decides that the dispute is not within the jurisdiction of the Centre, or (b) The other Contracting Party should fail to abide by or to comply with any award rendered by an arbitral tribunal.