Common use of Compensation and Suspension of Concessions and Obligations Clause in Contracts

Compensation and Suspension of Concessions and Obligations. 1. If the Party concerned fails to bring the measure found to be inconsistent with this Agreement into compliance with the findings of the arbitral tribunal within the reasonable period of time or if the Party complained against expresses in writing that it will not implement the findings, that Party shall, if so requested, enter into negotiations with the complaining Party with a view to reaching a mutually satisfactory agreement on any necessary compensation. 2. If the Parties do not reach agreement on compensation as set forth by paragraph 1 within 30 days, the complaining Party may suspend the application of concessions and obligations of equivalent effect to the responding Party, with 30 days' notice in writing after the end of the reasonable period of time established in accordance with Article 196. Concessions and obligations may not be suspended while the complaining Party is pursuing negotiations under paragraph 1. 3. Any suspension of concessions and obligations shall be restricted to benefits accruing to the other Party under this Agreement. 4. In considering what concessions and obligations to suspend pursuant to paragraph 2: (a) the complaining Party should first seek to suspend concessions and obligations in the same sector(s) as that affected by the measure that the arbitral tribunal has found to be inconsistent with the obligations of this Agreement; and (b) if the complaining Party considers that it is not practicable or effective to suspend concessions and obligations in the same sector(s), it may suspend concessions and obligations in other sectors. The communication in which it announces such a decision shall indicate the reasons on which it is based. 5. The suspension of benefits shall be temporary and shall only be applied until such time as the measure found to be inconsistent with this Agreement has been removed, or the Party that must implement the arbitral tribunal's findings has done so, or a mutually satisfactory solution is reached. 6. Upon written request of the Party concerned, the original arbitral tribunal shall determine whether the level of concessions and obligations to be suspended by the complaining Party pursuant to paragraph 2 is excessive. If the arbitral tribunal cannot be established with its original members, the proceeding set out in Article 189 shall be applied. 7. The arbitral tribunal shall present its determination within 60 days from the request made pursuant to paragraph 6, or if an arbitral tribunal cannot be established with its original members, from the date on which the last arbitrator is selected. The decision of the arbitral tribunal shall be final and binding. It shall be delivered to the Parties and be made publicly available.