Common use of Expropriation or Nationalization Clause in Contracts

Expropriation or Nationalization. 1. Investments of investors of either Contracting Party shall not be expropriated or subjected to measures having effect equivalent to nationalization or expropriation (hereinafter referred as "expropriation") in the territory of the other Contracting Party except for a public purpose or national interest. The expropriation shall be carried out under due process of law, on a non-discriminatory basis and in exchange of the payment of prompt, adequate and effective compensation. Such compensation shall be equivalent to the market value of the investment expropriated immediately prior to the moment in which the decision of expropriation has been announced. The exchange rate applicable to any such compensation shall be that prevailing on the date immediately prior to the moment in which the decision of expropriation has been announced. The compensation shall include interest calculated on the LIBOR basis from the date of expropriation to the date of payment, shall be made without undue delay and in any case within three months, shall be effectively realizable and shall be freely transferable in freely convertible currency. 2. In the absence of an understanding between the host Contracting Party and the investor concerning the amount of the compensation, the latter shall be based on the same reference parameters taken into account in the documents for the constitution of the investment. 3. The provisions of this Article shall also apply when a Contracting Party expropriates the assets of a company which is incorporated or constituted under the law in force in its territory and of which investors of the other Contracting Party own shares or have other forms of participation. 4. An investor of either Contracting Party that asserts that all or part of its investment has been affected by expropriation shall have the right to a prompt review by the competent judicial or administrative authorities of the other Contracting Party in order to determine whether such measure has occurred and, if it has, whether such measure and any compensation thereof conform to the provisions of this Agreement and to the principles of international law, and in order to decide all other relevant matters. 5. Compensation will be considered as actual if it has been paid in the any freely convertible currency or in any other currency accepted by the investor. Compensation will be freely transferable. 6. The provisions of this Article shall also apply to profits of an investment and, in the event of winding-up, to the proceeds of liquidation. They will not apply to any future profit. 7. If, after the dispossession, as a consequence of expropriation, the assets concerned have not been utilized, wholly or partially, for that purpose, the owner or his assignees are entitled to the repurchasing of the assets at market price.