Common use of Dispute Settlement between the Parties Clause in Contracts

Dispute Settlement between the Parties. 1. If the dispute is not resolved by the procedure described in Article 19, it shall be submitted to arbitration mechanisms between States at the request of either Party. A Party may refuse to arbitrate on an investment issue by a national of that Party or a national of a country with whom it does not maintain diplomatic relations. 2. The purpose of arbitration is to re-establish compliance with the Arrangement with the measure alleged to be in violation of the Arrangement by the arbitral award. However, the Parties may agree to allow arbitrators to consider the existence of dances caused by the disputed measure and to provide compensation for such damages in the award. If the award provides for the payment of monetary compensation, the receiving State shall transfer it to the holders of rights in respect of the investment in question, after reimbursement of the expenses of the dispute, in accordance with the respective internal procedures of each Party. 3. This Article shall not apply to any dispute regarding the fact that it has occurred, nor to any action taken before the entry into force of this Agreement. 4. The Parties may choose by mutual agreement to use another investment dispute settlement mechanism or to set up a specific arbitration panel for the dispute. 5. In the event that a specific arbitration panel is constituted for each dispute, within two (2) months after receiving the request for arbitration through diplomatic channels, each Party shall appoint a member of the Arbitral Tribunal. The two members shall designate a third-country national who, after approval by both Parties, shall be appointed President of the Arbitral Tribunal. The president shall be appointed within two (2) months of the appointment of the two other members of the Arbitral Tribunal. 6. If, within the time limits specified in paragraph 5 of this Article, the necessary appointments have not been made, either Party may request the President of the International Court of Justice to make the necessary appointments. If the President of the International Court of Justice is a national of one of the Parties or is prevented from exercising that function, the Deputy President will be invited to make the necessary appointments. If the Vice-President of the International Court of Justice is a national of one of the Parties or is prevented from exercising that function, the most senior member of the International Court of Justice who is not a national of either Party shall be invited to perform the designations required.