Common use of Property Protection Clause in Contracts

Property Protection. (1) Each Contracting Party shall, in its territory, provide full protection and full security for investments made by investors of the other Contracting Parties in accordance with its laws. (2) Investments by investors of a Contracting Party may be expropriated, nationalized or subject to other measures which are equivalent to expropriation or nationalization in the territory of the other Contracting Parties only for the general good and for compensation. The compensation must be equal to the market value of the expropriated investment immediately before the date on which the actual or imminent expropriation, nationalization or comparable measure became publicly known. The compensation must be paid forthwith and payable until the date of payment at the usual bank interest rate which may not be lower than the LIBOR rate. It must in fact be usable and freely transferable. At the latest at the time of expropriation, nationalization or comparable measure, it must be appropriate for the fixing and performance of the compensation provision. The legality of the expropriation, nationalization or comparable measure and the amount of the compensation must be able to be verified by ordinary proceedings. (3) A right to compensation exists even if, by means of governmental measures, the company is the subject of the investment, and its economic substance is thereby considerably impaired. (4) Investors in a Contracting Party who suffer losses from investments in the territory of the other Contracting Party through war or other armed conflicts shall be treated no less favorably by the Contracting Party with regard to reimbursements, indemnities, compensation or other consideration than their own investors. Such payments must be freely transferable. (5) In respect of the matters governed by this Article, the investors of a Contracting Party shall enjoy most-favored-nation treatment in the territory of the other Contracting Party.