(Draft New Model)
The government of the People’s Republic of China and the government of _____________ (hereinafter referred to as the Contracting Parties),
Desiring to intensify the cooperation of both States on the basis of equality and mutual benefits;
Intending to create favorable conditions for investment by investors of one Contracting Party in the territory of the other Contracting Party;
Recognizing that the reciprocal encouragement, promotion and protection of such investment will be conducive to stimulating business initiative of the investors and will increase prosperity in both States;
Desiring to establish a framework of rules conducive to increasing investment flows between the Parties and to ensure the protection and security of investments of the other Party within each Party’s territory;
Desiring to achieve these objectives in a manner consistent with the protection of health, safety, and the environment, and the promotion of internationally recognized labour rights;
Emphasising the importance of corporate social responsibility;
Have agreed as follows:
Section II: Standards Of Treatment
Article 3 General Standard of Treatment
Article 4 Most Favoured Nation Treatment
(p. 442) Article 5 National Treatment
Article 6 Admission of Investments
Article 8 Compensation for Losses
Investors of one Contracting Party whose investments in the territory of the other Contracting Party suffer losses owing to war, a state of national emergency, insurrection, riot or other similar events in the territory of the latter Contracting Party, shall be accorded by the latter Contracting Party treatment, as regards restitution, indemnification, compensation and other settlements no less favorable than that accorded to the investors of its own or any third State, whichever is more favorable to the investor concerned.
(p. 443) Article 9 Transfer
Article 10 Subrogation
If one Contracting Party or its designed agency makes a payment to its investors under a guarantee or a contract of insurance against non-commercial risks it has accorded in respect of an investment made in the territory of the other Contracting Party, the latter Contracting Party shall recognize:
(p. 444) Article 11 Non-Derogation
Article 13 Corporate Social Responsibility
The Parties agree to encourage investors to conduct their investment activities in a socially responsible manner, by complying with the OECD Guidelines for Multinational Enterprises and participating in the United Nations Global Compact.
Section III: Settlement of Investor-State Disputes
Article 14 Application
This Section shall apply to disputes between a Contracting Party and an investor of the other Contracting Party arising from an alleged breach of an obligation set forth in Section II entailing loss or damage.
Article 15 Consultation and Notice of Intent
(p. 446) Article 16 Submission to Arbitration
Article 17 Consent by Contracting Parties
Article 18 Constitution of the Arbitral Tribunal
Article 19 Consolidation
Where two or more investors notify an intention to submit claims to arbitration which have a question of law or fact in common and arise out of the same events or circumstances, the disputing parties shall consult with a view to harmonising the procedures to apply, where all disputing parties agree to the consolidation of the claims, including with respect to the forum chosen to hear the dispute.4
Article 20 Conduction of the Arbitration
Article 21 Applicable Law
(p. 448) Article 22 Awards and Enforcement
Section V: Final Provisions
Article 30 Consultations
A Contracting Party may propose to the other Contracting Party to carry out consultations on any matter relating to this Agreement. These consultations shall be held at a place and at a time agreed by the Contracting Parties.
Article 31 Denial of Benefits
The Contracting Parties may decide jointly in consultation to deny the benefits of this Agreement to an enterprise of the other Contracting Party and to its investments, if a natural person or enterprise of a non-Contracting Party owns or controls such enterprise.
Article 32 Entry into Force, Duration and Termination
(p. 451) IN WITNESS WHEREOF the undersigned, duly authorized thereto by respective governments, have signed this Agreement.
Done in duplicate at ____________ on _______________, in the Chinese, _____________ and English languages, all texts being equally authentic. In case of divergent interpretation, the English text shall prevail.
For the Government of the For the Government of
People’s Republic of China _____________________(p. 452)