AGREEMENT BETWEEN ETHIOPIA AND REPUBLICOF ALGERIA

AGREEMENT BETWEEN
THE GOVERNMENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF
ETHIOPIA
AND
THE GOVERNMENT OF THE PEOPLE’S DEMOCRATIC REPUBLIC
OF ALGERIA
ON
THE RECIPROCAL PROMOTION AND PROTECTION OF
INVESTMENTS
The Government of the People’s Democratic Republic of Algeria and the
Government of the Federal Democratic Republic of Ethiopia hereinafter
referred to as the “Contracting Party”;
Desiring to strengthen economic cooperation between the two States and to
create favorable conditions to the investments of investors of a Contracting
Party in the territory of the other Contracting Party;
Recognizing that the reciprocal promotion and protection of investments
shall stimulate their investors’ business initiatives and increase particularly
capital flows and technology transfer between the Contracting Parties in the
mutual interests of their economic development:
Have agreed as follows:
Article 1
Definition
For the purpose of this Agreement:
1) The “Investment” means every kind of asset invested by investors of one
Contracting Party in the territory of the other Contracting Party, in
accordance with the laws and regulations of the latter, and in particular
though, not exclusively includes:

a) Movable and immovable property as well as other relating rights
such as mortgages, pledges, usufruct and any other similar rights;
b) Shares, debentures or any other form of participation in a
company;

c) Claims and rights to any performance having economic value
associated with Foreign Direct Investment;
d) Royalties, industrial property rights, such as patent, registered
trade-marks, industrial models or patterns, technical processes,
registered trade-names and know how associated with Foreign
Direct Investment;
e) Concessions accorded by law or under contract, including
concessions related to prospecting, extraction or exploitation of
natural resources.
Change in the form of investment does not affect its character as
investment, provided that the change is made in conformity with the
legislation of that Contracting Party in the territory of which the
investment is carried out.
2) The term “Investor” means:
a) Natural persons having the nationality of that Contracting Party in
conformity with the legislation of that Contracting Party;
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b) Legal entities or companies constituted in the territory of that
Contracting Party in accordance with its legislation having its head
office and its economic activities in the territory of that Contracting
Party.
3) The term “Returns” means all amounts yielded by an investment such as
benefits, dividends, interests, royalties or any other fees.
4) The term “Territory” means:
a) In respect of the People’s Democratic Republic of Algeria, when
used in a geographical sense, it means the territory of the People’s
Democratic Republic of Algeria, including the territorial sea and
beyond it, the other maritime zone, on which in application of the
national legislation, and/or in accordance with international law, the
People’s Democratic Republic of Algeria exercise its jurisdiction
and/or its sovereign rights for the purpose of exploration and
exploitation of biological or not biological natural resources of the
seabed superjacent water mass of the seabed and its subsoil.
b) In respect of the Federal Democratic Republic of Ethiopia, the
territory which constitutes the Federal Democratic Republic of
Ethiopia in which Ethiopia exercise sovereign rights and jurisdiction
pursuant to international law.
Article 2
Application of the Agreement
This Agreement shall apply to investments made in the territory of either
Contracting Party in accordance with its laws and regulation by investors of
the other Contracting Party prior to or after the entry into force of this
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Agreement. It shall, however, not be applicable to claims arising out of
disputes which occurred prior to its entry in to force.
Article 3
Promotion of Investments
1) Each Contracting Party shall with in the framework of its laws and
legislations admit and encourage investments by investors of the other
Contracting Party in its territory in accordance with its legislation and shall
create favorable conditions to such investments and accord them a fair
and equitable treatment.
2) Neither Contracting Party shall in any way impair by arbitrary nor any
unfounded discriminatory measures the management, maintenance, use,
enjoyment or the cessation of investment in its territory, by investors of
the other Contracting Party.
Article 4
National Treatment and Most Favored Nation Provisions
1) Once an investment is admitted in accordance with the legislation of a
Contracting Party in the territory of which the investment is made each
Contracting Party shall accord to the investors of the other Contracting
Party, with respect to their investments, a treatment not less favorable
than that granted to its own investors, or investments of investors of third
State.
2) Each Contracting Party shall accord to the investors of the other
Contracting Party as regards to management, maintenance, use,
enjoyment or cessation of their investment on the territory, a treatment
not less favorable than that it grants to its own investors or to the
investors of any third State.
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3) The treatment referred to in paragraphs (1) and (2) shall not extend to
the privileges and advantages that one of the Contracting Parties accords
to investors of a third State:
a) By virtue of its participation or association in a customs union, a
common market, a free trade area or any other form of regional
economic integration .
b) Relating to any agreement or arrangement wholly or mainly to
taxation.
Article 5
Protection of Investments
1) Investment of investors of one Contracting Party shall enjoy full
protection in the territory of the other Contracting Party.
2) Neither Contracting Party shall take any measures of expropriation or
nationalization or any other similar measures having the same nature and
the same effects against investments of investors of the other Contracting
Party.
If requirements of public purpose or national interest justify derogation
from this paragraph, the following conditions must be fulfilled:
a) The measures shall be carried out under due process of law;
b) The measures shall not be discriminatory; and
c) The measures shall be accompanied by prompt, adequate and
effective compensation.
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3) The amount of such compensation shall correspond to the market value of
the expropriated investment, on the day before such expropriation,
nationalization or similar measure became effective or public knowledge.
4) The compensation shall be paid in freely convertible currency at the
official exchange rate applied pursuant to the exchange regulation of the
Contracting Party on which it is incumbent pay the said compensation.
Such compensate shall be freely transferable.
5) Transfer should be made at least, within three months following the date
of deposit of an exhaustive and complete documentation on the
compensation, required by the exchange regulation of the Contracting
party making the expropriation. In case of unreasonable delay in
payment, the compensation shall include interests at the prevailing LIBOR
rate from the date of deposit until the date of payment.
6) If an agreement is not reached on the valuation of the amount of
compensation, the investor concerned shall have the right, under the laws
of Contracting Party making the expropriation, to promptly review, by a
competent authority or a court of justice of the said party, on the
valuation of his or its investment in accordance with the principles
referred to in this Article.
7) Investors of either Contracting Party whose investments suffer losses
owing to war or any other armed conflict, revolution, a state of national
emergency or revolt in the territory of the other Contracting Party shall be
granted by the latter Contracting Party treatment as regards restitution,
compensation, indemnification or any other settlement, not less favorable
than that granted to investors of any third State.
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Article 6
Transfer of Investment Returns
1) Each Contracting Party shall guarantee the transfer of payments related
to investments and returns after payment of all tax dues. Such transfer
includes :
a) Interest, dividend, profit and royalties or other fees;
b) Funds in repayment of loans regularly contracted;
c) Proceeds accruing from the whole or partial liquidation of the
investment;
d) Indemnity for dispossession or losses provided for in Article 5
paragraphs (3) and (7) mentioned above as well as any payment
due by virtue of subrogation in pursuance of Article 7 of this
Agreement.
2) Nationals of each Contracting Party, who have been authorized to work in
the territory of the other Contracting Party by way of an approved
investment, shall be allowed to transfer their earnings and other
remuneration.
3) The transfer referred to in the foregoing paragraphs shall be effected
without delay, in freely convertible currencies, at the official exchange
rate prevailing on the date of transfer for the currency to be transferred.
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Article 7
Subrogation
1) If a Contracting Party or its designated Agency (“the first Contracting
Party”) makes a payment as a guarantee it has given in respect of an
investment in the territory of the other Contracting Party (“the second
Contracting Party”) the latter (“the second Contracting Party”) shall
recognize without prejudice to the rights of the first Contracting Party:
a) The assignment, whether by law or by legal deed, to the first
Contracting Party of all the rights and claims of the indemnified
party;
b) The first Contracting Party is entitled to exercises such rights and
enforces such claims by virtue of subrogation to the same extent as
the indemnified party.
2) The first Contracting Party shall, under all circumstances enjoy:
a) The same treatment as concerns the rights and claims obtained by
virtue of assignment; and
b) All payments received under such rights and claims which the
indemnified party was entitled to receive by virtue of this
Agreement with regard to the investment concerned and the
returns pertaining thereto.
Article 8
Investments Covered by a Particular Commitment
Without prejudice to this Agreement, investments covered by a particular
commitment between one of the Contracting Party and an investor of the
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other Contracting Party shall be governed by the terms of that particular
commitment if it contains provisions more favorable than that provided in
this Agreement.
Article 9
Settlements of Disputes between an Investor and a Contracting
Party
1) Dispute between one of the Contracting Parties and an investor of the
other Contracting Party relating to investments shall, as far as possible be
amicably settled between the parties to the dispute.
2) If such dispute has not been amicably settled within six months from the
date on which either party to the dispute requested amicable settlement,
the dispute shall upon the request of the investor concerned be submitted
either to the competent jurisdiction of the Contracting Party involved in
the dispute or to an international arbitration. The choice of venues for the
settlement of dispute shall be binding and final.
3) Where a dispute is referred to international arbitration, the investor and
the Contracting Party concerned in the dispute agree to refer it either to:
a) The International Center for the Settlement of Investment
Disputes, established by the Convention on the Settlement of
Investment Dispute between States and Nationals of other States
opened for signature in Washington D.C. on 18 March 1965, where
both Contracting Parties are members to the Convention; or
b) An international ad hoc Arbitral Tribunal which, unless and
otherwise agreed upon by the parties to the dispute, shall be
established under the Arbitration Rules of the United Nations
Commission on International Trade Law (UNCITRAL).
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4) The Arbitral Tribunal shall settle the dispute to conformity with the
substantive domestic laws of the Contracting Party in the territory or
when the investment is made and such others generally recognized
principles and rules of international law and this Agreement as the case
may be.
5) The arbitral award shall be final and binding on both parties to the dispute
and shall be executed according to the national laws of the Contracting
Party in which the investment is made.
Article 10
Disputes between the Contracting Parties
1) Any dispute between the Contracting Parties concerning the interpretation
or application of this Agreement should, if possible, be settled through
diplomatic channel.
2) If the dispute can’t be settled within a period of six months following the
date on which it was raised by either Contracting Party, it shall at the
request of either Contracting Party be submitted to an Arbitral Tribunal.
3) The aforesaid Arbitral Tribunal shall be constituted for each individual case
in the following way:
Each Contracting Party shall appoint one member. Those two members
shall then by mutual consent select a national of a third state who shall be
appointed Chairman by the two Contracting Parties. The two members
should be appointed within two months and the Chairman within three
months from the date of notification of one of the Contracting Parties’
decision to refer the dispute to arbitration.
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4) If the necessary appointments have not been made within the terms
specified in paragraph (3) either Contracting Party shall, in the absence of
any applicable Agreement, invite the President of the International Court
of Justice to make the necessary appointments.
5) If the President of the International Court of Justice is a national of either
Contracting Party or if he is otherwise prevented from discharging the
said obligation, the Deputy President shall be invited to make the
necessary appointments. If the Deputy President is a national of either
Contracting Party or if he is otherwise prevented from discharging the
said obligation, a member of the Court next in seniority who is not a
national of either Contracting Party shall make the necessary
appointments.
6) The Tribunal shall determine its own ruler of procedure. It shall reach its
decision by a majority of votes its decisions shall be definitive and legally
binding on both Contracting Parties. At the request of either Contracting
Party, the Tribunal shall interpret the award. Unless otherwise decided by
the Tribunal, on account of special circumstances, the cost of the arbitral
procedure including the arbitrator’s fees shall be borne in equal parts by
the Contracting Parties.
Article 11
Entry into force, Amendment and Termination
The Contracting Parties shall notify to each other that their respective
constitutional requirements for entry into force of this agreement have
been fulfilled. This Agreement shall enter into force on the day following
the date of receipt of the last notification.
This agreement shall remain in force for a period of ten years and shall
extend for another same period. Unless written notice for termination is
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given by either Contracting Party twelve (12) months prior to the
expiration of the Agreement.
In respect of investments made prior to the date of termination of this
Agreement becomes effective, the provisions of Article 1 to 10 remain in
force for a further period of ten years from the date of termination of this
Agreement.
The Contracting Parties may be mutual consent, make any modification
and/or amendments to the provisions of this Agreement. Any modification
and/or amendment shall enter into force under the terms and conditions
provided for, in this Agreement.
Done at …………………………on ……………………….in duplicate in Arabic and
English languages, both texts being equally authentic. In case of
divergence between the two languages, the English text shall prevail.
For the Government of the
Federal Democratic Republic
of Ethiopia
Mr.Abi Woldemeskel
General Manager, Ethiopian
Investment Authority
For the Government of the
People’s Democratic
Republic of Algeria
Mr. Mourad Medele
Minster of Finance
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