Common use of Losses and Compensation Clause in Contracts

Losses and Compensation. 1. Notwithstanding Article 8.13.5(b), each Party shall accord to investors of the other Party, and to covered investments, non- discriminatory treatment with respect to measures it adopts or maintains related to losses suffered by investments in its territory owing to armed conflict or civil strife. 2. Notwithstanding paragraph 1, if an investor of a Party, in the situations referred to in paragraph 1, suffers a loss in the territory of the other Party resulting from: (a) requisitioning of its covered investment or part thereof by the latter's forces or authorities; or (b) destruction of its covered investment or part thereof by the latter's forces or authorities, which was not caused in combat action or was not required by the necessity of the situation, the latter Party shall provide the investor restitution, compensation, or both, as appropriate, for such loss. Any compensation shall be prompt, adequate, and effective in accordance with Articles 8.7.2 through 8.7.4, mutatis mutandis. 3. Paragraph 1 shall not apply to existing measures related to subsidies or grants that would be inconsistent with Article 8.3 but for Article 8.13.5(b).