A G R E E M E N T

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ARMENIA AND THE GOVERNMENT OF THE ORIENTAL REPUBLIC OF URUGUAY ON THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS

The Government of the Republic of Armenia, on the one hand, and the Government of the Oriental Republic of Uruguay, on the other hand, (hereinafter referred to as the "Contracting Parties"),

desiring to strengthen their economic cooperation by creating favourable conditions for investments by nationals of one Contracting Party in the territory of the other Contracting Party,

have agreed as follows:

Article 1

Definitions

For the purposes of this Agreement,

1. The term "Investment" shall mean any kind of assets invested or reinvested in the territory of either Contracting Party with the purpose of carrying out economic activity in a manner prescribed by the national legislation of the Contracting Parties and shall include in particular but not exclusively:

(a) movable and immovable property and any property rights such as leases, mortgages, liens, or pledges;

(b) shares, stocks or debentures of a corporate or other entity and any other form of participation in such entity;

(c) claims to money, and any performance under contract;

(d) intellectual property rights and know-how;

(e) concessions granted under public law or under contract, including concessions to explore, develop, extract or exploit natural resources.

Changes in the legal form in which the capital has been invested or reinvested shall not affect its designation as "investment" for the purpose of this Agreement.

2. The term "Investor" shall mean:

(a) any natural person who is national of either Contacting Party in accordance with its laws.

(b) any legal or other entity which is incorporated or constituted in accordance with the law of one of the Contracting Parties, having its residence in the territory of that Contracting Party and recognized by its laws.

(c) however this Agreement shall not apply to investments made by natural persons who are nationals of both Parties, unless such persons, at the time of the investment, have their legal domicile outside of the territory of the Party where the investment is made.

3. The term "Incomes" shall mean the proceeds of an investment and shall include in particular, though not exclusively, profits, interests, capital gains, dividends, royalties and payments.

4. The term "Territory" shall mean:

(a) in relation to the Republic of Armenia the territory of the Republic of Armenia;

(b) with respect to the Oriental Republic of Uruguay, its territory, internal waters and territorial sea as well as the maritime zones beyond the territorial sea over which Uruguay exercises sovereign rights or jurisdiction in accordance with its national laws in force and international law.

Article 2

Promotion and Protection of Investments

Each Contracting Party shall encourage and promote investments in its territory by investors of the other Contracting Party and shall accept such investments in accordance with its laws and regulations.

Article 3

National and Most-Favored-Nation Treatment

1. Each Contracting Party shall ensure fair and equitable treatment of the investments of investors of the other Contracting Party and shall not impair, by unreasonable or discriminatory measures, the establishment, acquisition, expansion, operation, management, use, sale or other disposition thereof by those investors.

2. Each Contracting Party shall accord to investors of the other Contracting Party and to their investments, treatment no less favourable than the treatment accorded either to its own investors and their investments or to investors and investments of any third State, whichever is more favourable.

3. However, such treatment shall not apply to privileges granted by one Contracting Party to investors of a third State by virtue of agreements establishing a customs union, free trade area, economic union or similar institutions of regional cooperation, as well as by virtue of agreements relating to taxation.

Article 4

Alienation and Compensation for Investments

1. Investments of investors of either Contracting Party shall not be alienated, nationalized, expropriated or subject to measures having effect equivalent to nationalization or expropriation (hereinafter referred to as "alienation'') in the territory of the other Contracting Party except for public purpose. The alienation and compensation carried out under due process of law, on a non-discriminatory basis and according to host country's legislation. Such compensation shall be equivalent to the fair market value of the alienated investment immediately before making a decision on alienation. Compensation referred to above shall be freely transferable and payable in freely convertible currency.

2. Investors of one Contracting Party who suffer losses with respect to their investments in the territory of the other Contracting Party owing to war, armed conflict, revolt, a state of national emergency, insurrection or riot shall be accorded by the latter Contracting Party treatment, as regards restitution, indemnification, compensation or other settlement, no less favourable than the treatment which that Contracting Party accords to its own investors or to investors of any third State.

Article 5

Transfers

1. Each Contracting Party shall ensure the free transfer of all payments relating to investment in its territory of investors of the other Contracting Party, including:

(a) amounts necessary for establishing, maintaining or expanding the investment,

(b) incomes from investment,

(c) amounts necessary for payments under a contract, including amounts for the repayment of loans, royalties, and other payments resulting from licenses, franchises, concessions, and other similar rights, as well as salaries of expatriate personnel,

(d) proceeds from the total or partial liquidation of investments, including capital gains in the capital invested,

(e) compensation paid pursuant to Article 4 of this Agreement,

(f) payments arising out of the settlement of a dispute.

2. Transfers shall be made without undue delay in a freely convertible currency at the rate applicable on the day of transfer.

Article 6

Subrogation

1. If one Contracting Party or its designated agency pays a compensation to its own investor pursuant to a guarantee for non-commercial risks of an investment in the territory of the other Contracting Party, the latter Contracting Party shall recognize the assignment of any right or claim of such investor to the former Contracting Party or its designated agency.

2. As far as the transferred rights are concerned, the other Contracting Party shall be entitled to invoke against the insurer who is subrogated into the rights of the indemnified investor the obligations of the latter under law or contract.

 3. The subrogated rights and claims shall not exceed the original rights or claims of the investor.

Article 7

Settlement of Investment Disputes Between a Contracting Party and Investor of the Other Contracting Party

1. Any investment dispute between an investor of one Contracting Party and the other Contracting Party shall be notified in writing by the first party to take action. The notification shall be accompanied by a sufficiently detailed memorandum.

2. In the absence of an amicable settlement by negotiations between the parties to the dispute within 6 months from the date of notification, the dispute shall be submitted, at the option of the investor, either to the competent jurisdiction of the State where the investment was made, or to international arbitration. Once the investor has submitted a dispute to the aforementioned national jurisdiction or to international arbitration, the choice of one or the other of these procedures shall be final, unless the parties to the dispute agree otherwise.

To this end, each Contracting Party agrees in advance and irrevocably to the submission of disputes as referred in paragraph 1 of this Article to international arbitration in accordance with the provisions of this Article. Such consent implies that both parties waive right to demand that all domestic administrative or judicial remedies be exhausted prior to such submission.

3. In case of international arbitration, the investment dispute shall be submitted for settlement by arbitration to one of the hereinafter mentioned organizations, at the option of the investor:

- The International Centre for the Settlement of Investment Disputes (I.C.S.I.D) under the Convention on the Settlement of Investment Disputes between States and Nationals of other States or under the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the Centre;

- An ad hoc arbitral tribunal established according to the Arbitration Rules of the United Nations Commission on International Trade Law.

4. At any stage of the arbitration proceedings or the execution of the arbitral award, none of the Contracting Parties involved in a dispute shall be entitled to raise as an objection the fact that the investor who is the opposing party in the dispute has received compensation totally or partly covering his losses pursuant to an insurance policy or to the guarantee provided for in Article 6 of this Agreement.

5. The arbitral tribunal shall decide on the basis of the national law, including the rules relating to conflicts of law, of Contracting Party involved in the dispute in whose territory the investment has been made, as well as on the basis of the provisions of this Agreement, of the terms of the specific agreement which may have been entered into regarding the investment, and of the principles of international law.

6. The arbitral award shall be final and binding on the parties to the dispute. Each Contracting Party shall execute the awards in accordance with its national legislation.

7. Neither Party shall bring an international claim in respect of a dispute which has been submitted to the procedures of this Article unless the other Party has failed to abide by or comply with the award of the arbitration tribunal, or the judicial authorities of the last mentioned Party have infringed a rule of international law, including denial of justice or the provisions of this Agreement.

Article 8

Disputes Between the Contracting Parties Relating to the Interpretation or Application of this Agreement

1. Disputes between the Contracting Parties concerning the interpretation or application of this Agreement shall be settled as far as possible through negotiations or consultations.

2. In the absence of a settlement through negotiations or consultations within three months, the dispute shall be submitted to a Tribunal established in accordance with this Article.

3. The Tribunal shall be constituted for each individual case in the following way. Within three months after receipt of a request for arbitration each Contracting Party shall appoint one member of the Tribunal. These two arbitrators shall select by mutual agreement a citizen of a third State who, on approval of the two Contracting Parties, shall be appointed as a Chairman of the Tribunal (hereinafter referred to as the "Chairman"). The Chairman shall be appointed within 40 days from the date of appointment of the latter of other two members of the Tribunal.

4. If the necessary appointments have not been made within the periods specified in paragraph 3 of this Article, either Contracting Party may request the President of the International Court of Justice to make necessary appointment(s). If the President of the International Court of Justice is a citizen of either Contracting Party or of a State with which on of the Contracting Parties has no diplomatic relations or if, for any other reason, he can not exercise the said function, the Vice-President of the International Court of Justice shall be requested to make appointment(s). If the Vice-President of the International Court of Justice is also prevented from exercising the said function the member of the International Court of Justice next in seniority who is not a citizen of either Contracting Party shall be requested to make appointment(s).

5. The Tribunal shall determine its own rules of procedure. Its decisions shall be taken by the majority of votes. The Tribunal shall decide disputes in accordance with this Agreement interpreted and applied in accordance with the applicable rules of international law. Decisions of the Tribunal shall be final and binding on the Contracting Parties.

6. Each Contracting Party shall bear the cost of its representation in the arbitral proceedings. The costs of the Tribunal shall be paid equally by the Contracting Parties. The Tribunal, however, may decide that a higher proportion of these costs shall be borne by one of the Contracting Parties.

Article 9

Application of Other Rules and Specific Agreements

1. If provisions of national legislation or international agreements existing or to be signed by both Contracting Parties in the future contain general or specific rule entitling the investors of either Contracting Party to treatment more favourable than which is provided for by this Agreement, such rule shall to the extent it is more favourable prevail over this Agreement.

2. Investments made pursuant to a specific agreement between one Contracting Party and investor(s) of the other Contracting Party shall be governed by the provisions of this Agreement and by that specific agreement.

Article 10

Applicability of This Agreement

1. This Agreement shall apply to investments made in the territory of either Contracting Party in accordance with their legislation prior to entry into force of this Agreement, as well as to investments made thereafter.

2. This Agreement shall not apply to any dispute that arose or to claim that has been settled, prior to its entry into force.

Article 11

Amendments and Changes

Amendments and changes to this Agreement can be made by mutual agreement of the Contracting Parties, following their constitutional and legal requirements for that purpose. Amendments and changes shall be made in the form of additional protocols and shall constitute an inseparable part of this Agreement. Amendments and changes shall enter into force in the manner prescribed by Article 12 of this Agreement.

Article 12

Entry into Force, Duration, and Termination of this Agreement

1. This Agreement shall enter into force one month after the date of exchange by the Contracting Parties of ratification instruments. The Agreement shall remain in force for a period of ten years.

2. Unless a notice of termination is given by either Contracting Party at least six months before the date of expiry of its validity, this Agreement shall be extended tacitly each time for a further period of ten years, whereby each Contracting Party reserves the right to terminate the Agreement by notification through diplomatic channels given at least six months before the date of expiry of the current period of validity.

3. In respect of investments made prior to termination of this Agreement, the provisions of Articles 1 through 12 shall continue to be effective for a period of ten years from the date of termination.

IN WITNESS WHEREOF, the undersigned representatives, duly authorized thereto by their respective Governments have signed this Agreement.

DONE at Montevideo, on May 6 2002, in two original copies, each in the Armenian, Spanish and English languages, all texts being equally authentic. In case of divergence of interpretation the text in English shall prevail.

The Agreement has entered into force on 15 December 2013.