Common use of Nationalization and Expropriation Clause in Contracts

Nationalization and Expropriation. (1) Investments of either Contracting Party shall not be subject, directly or indirectly, to nationalization, expropriation, seizure, requisition or any other similar measure such as the forced sale of all or part of the investment by the state, unless it is for a public purpose or national interest, against immediate and fair compensation, where such measures shall be taken on a non-discriminatory basis and in accordance with legal procedures and laws. (2) Such compensation shall amount to the actual value of the expropriated investment, and shall be determined and computed in accordance with the internationally recognized principles of valuation on the basis of the fair market value of the expropriated investment immediately before the expropriation took place or the impending expropriation became publicly known, whichever is earlier. The compensation shall be computed in a freely convertible currency chosen by the investor, on the basis of the prevailing market value of the exchange rate of that currency on the valuation date. If the equivalent market value mentioned earlier cannot be easily determined then the compensation shall be based on fair principles, taking into account all the factors and circumstances related to it such as the invested capital, nature and duration of the investment, replacement value, increase in the value of the investment, current returns, computed cashflow value, book value and goodwill. The final compensation determined value shall be paid immediately to the investor in a freely convertible currency and shall be freely transferrable without delay. (3) In light of the principles set forth in Paragraph (2), and without prejudice to the rights of the investor mentioned in Article (8) of this agreement, the affected investor shall have the right of immediate review of his case, in addition to the valuation of his investment and compensation payments on this investment, by the legal authority or other independent specialized authority of that Contracting Party. (4) For further certainty, expropriation shall include situations where a Contracting Party expropriates the assets of an investment company or established project in accordance with the laws applicable in its territory, in which an investor of the other Contracting Party has made an investment either through shares, bonds, debt securities or other rights or interests.