AGREEMENTBETWEEN
THEGOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA
AND
THEGOVERNMENT OF THE REPUBLIC OF TURKEY
CONCERNING
THERECIPROCAL PROMOTION AND PROTECTION OF
INVESTMENTS
The Government of the People’s Republic ofChina and the Government of the Republic of Turkey, hereinafter referred to as“the Contracting Parties”.
Desiring to promote greater economiccooperation between them, particularly with respect to investment by investorsof one Contracting Party in the territory of the other Contracting Party;
Recognizing that agreement upon thetreatment to be accorded to such investment will stimulate the flow of capitaland technology and the economic development of the Contracting Parties;
Having resolved to conclude an agreementconcerning the encouragement and reciprocal protection of investments,
Have agreed as follows:
ARTICLE1
Definitions
For the purpose of this Agreement;
1. The term "investment" meansevery kind of asset, connected with business activities, invested by aninvestor of one Contracting Party in the territory of the other ContractingParty in conformity with its laws and regulations, and shall include inparticular, but not exclusively:
(a) movable and immovable property, as wellas any other rights as mortgages, liens, pledges and any other similar rights,
(b) reinvested returns, claims to money orany other rights having financial value related to an investment,
(c) shares, stocks or any other form ofparticipation in companies,
(d) industrial and intellectual propertyrights such as patents, industrial designs, technical processes, as well astrademarks, goodwill, know-how and other similar rights,
(e) business concessions conferred by lawor by contract, including concessions related to natural resources,
(f) rights under contracts, includingturnkey, construction, management, production, or revenue sharing contracts;
provided that such investments are not inthe nature of acquisition of shares or voting power less than 10 percent of acompany through stock exchanges without establishing lasting economic relations,which shall not be covered by this Agreement.
2. The term "investor" means:
(a) natural persons deriving their status as nationals of a ContractingParty according to its laws,
(b) corporations, firms, businesspartnerships incorporated or constituted under the law of a Contracting Partyand having their registered offices together with substantial businessactivities in the territory of that Contracting Party,
(c) corporations, firms, businesspartnerships incorporated or constituted under the laws of a non-ContractingParty but directly owned or controlled by nationals in Paragraph (a) orenterprises in Paragraph (b), who have made an investment in the territory ofthe other Contracting Party.
3.Theterm "returns" means the amounts yielded by an investment andincludes in particular, though not exclusively, profit, interest, capitalgains, royalties, fees, dividends and other legitimate income.
4. The term “territory” means:
(a) in respect of the People’s Republic ofChina, the territory, including the land area, internal waters and theterritorial sea and the air space above them, as well as any area beyond itsterritorial sea within which the People’s Republic of China has sovereignrights of explorations and exploitations of resources of the seabed and itssubsoil and superjacent water resources in accordance with Chinese law andinternational law.
(b) in respect of the Republic of Turkey, theland territory, internal waters, the territorial sea, and the airspace abovethem , as well as the maritime areas over which Turkey has sovereign rights orjurisdiction for the purposes of exploration, exploitation and preservation ofnatural resources, whether living or non-living, pursuant to international law.
ARTICLE2
Promotionand Protection of Investments
1. Subjectto its laws and regulations, each Contracting Party shall in its territorypromote as far as possible investments by investors of the other ContractingParty.
2. Investments of investors of eachContracting Party shall at all times be accorded fair and equitable treatment inaccordance with the principles of international law and shall enjoy fullprotection and security in the territory of the other Contracting Party.Neither Contracting Party shall in any way impair by unreasonable ordiscriminatory measures the management, maintenance, use, enjoyment, ordisposal of such investments.
3.“Fair and equitable treatment” requiresthat investors of one Contracting Party shall not be rejected to fairlyjudicial proceedings by the other Contracting Party or be treated with obviousdiscriminatory or arbitrary measures.
4. “Full protection and security” requiresthat Contracting Parties shall take reasonable and necessary police measureswhen performing the duty of guaranteeing investment protection and security.
5. A determination that there has been a breachof other Articles of this Agreement, or articles of other agreements, does not establishthat there has been a breach of this Article.
ARTICLE3
Treatmentof Investments
l. Within the framework of the hostingContracting Party’s laws and regulations, each Contracting Party shall admit inits territory investments on a basis no less favourable than that accorded in likecircumstances to investments of investors of any third State.
2. Each Contracting Party shall accord toinvestments, once established, and activities associated with such investmentsby the investors of the other Contracting Party treatment not less favourablethan that accorded to the investments and associated activities by its owninvestors in like circumstances.
3. With regard to either Contracting Party,Paragraph 2 of this Article does not apply to:
(a) any existing non-conforming measuresmaintained within its territory;
(b) the continuation of any suchnon-conforming measure;
(c) any amendment to any suchnon-conforming measure to the extent that the amendment does not increase thenon-conformity of these measures.
The Contracting Parties will takeappropriate steps in order to progressively remove the non-confirming measures.
4. Neither Contracting Party shall subjectinvestments and activities associated with such investments by the investors ofthe other Contracting Party to treatment less favorable than that accorded tothe investments and associated activities by the investors of any third Stateunder like circumstances.
5. (a) The Provisions of this Article shallnot be construed so as to oblige one Contracting Party to extend to theinvestors of the other Contracting Party the benefit of any treatment,preference or privilege which may be extended by the former Contracting Partyby virtue of any international agreement or arrangement relating wholly ormainly to taxation.
(b) The National Treatment andMost-Favoured-Nation Treatment provisions of this Article shall not apply toadvantages accorded by a Contracting Party pursuant to its obligations as amember of a customs, economic, or monetary union, a common market or a freetrade area.
(c) The Paragraphs 4 of this Article shallnot be construed so as to oblige one Contracting Party to extend to theinvestors of the other Contracting Party the benefit of any treatment,preference or privilege by virtue of any arrangements for facilitating smallscale frontier trade in border areas.
(d) Paragraphs 1 and 4 of this Article donot apply in respect of dispute settlement provisions laid down by thisAgreement and by another similar international agreement to which one of theContracting Parties is signatory.
6. The Contracting Parties shall within theframework of their national legislation give sympathetic consideration toapplications for the entry and sojourn of persons of either Contracting Partywho wish to enter the territory of the other Contracting Party in connectionwith the making and carrying through of an investment; the same shall apply tonationals of either Contracting Party who in connection with an investment wishto enter the territory of the other Contracting Party and sojourn there to takeup employment.
ARTICLE4
GeneralExceptions
1. Nothing in this Agreement shall beconstrued to prevent a Contracting Party from adopting, maintaining, orenforcing any non-discriminatory and necessary measures:
a) designed and applied for the protectionof human, animal or plant life or health, or the environment;
b) related to the conservation of living ornon-living exhaustible natural resources.
2. This Agreement shall not be construed soas to:
requireany Contracting Party to furnish or allow access to
any information the disclosure of which willit determines to be contrary to its essential security interests.
preventa Contracting Party from adopting measures that it
considers necessary for the purpose ofprotecting its essential security interests pursuant to its domestic law on anon-discriminatory basis.
c) prevent host country from adopting anyactions to perform the duty of maintaining international peace and securityunder Charter of the United Nations.
ARTICLE5
Expropriationand Compensation
1. Investments shall not be expropriated,nationalized or subject, directly or indirectly, to measures of similar effects(hereinafter referred as expropriation) except for a public purpose, in anon-discriminatory manner, upon payment of prompt and effective compensation,and in accordance with domestic law and due process of law and in accordancewith the general principles of treatment provided for in Article 3 of thisAgreement.
2. The determination of whether a measureor a series of measures of one Contracting Party constitutes indirectexpropriation in Paragraph 1 requires a case-by-case, fact-based inquiry thatconsiders, among other factors:
a) the economic influence of a measure or aseries of measures, although the fact that a measure or a series of measures ofthe Contracting Party has an adverse effect on the economic value ofinvestments, standing alone, does not establish that an indirect expropriationhas occurred;
b) the extent to which the measure or theseries of measures grant discrimination in scope or application over investorsand associated investments of the other Contracting Party;
c) the extent to which the measure or theseries of measures interfere the obviously reasonable investment expectation ofinvestors of the other Contracting Party;
d) the character and purpose of a measure anda series of measures, whether it is adopted for the purpose of public interestin good faith and whether it is proportional to that purpose.
3. Except in rare circumstances, such asthe measures adopted severely surpassing the necessity of maintainingcorresponding reasonable public welfare, non-discriminatory legal measuresadopted by one Contracting Party for the purpose of legitimate public welfare, suchas public health, safety and environment, do not constitute indirectexpropriation.
4. Compensation shall be equivalent to the market value of the expropriatedinvestment before the expropriation was taken or became public knowledge.Compensation shall be paid without delay and be freely transferable asdescribed in paragraph 2 of Article 7.
5. In the event that payment ofcompensation is delayed, it shall carry an interest at a rate to be agreed uponby both parties unless such rate is prescribed by law from the date ofexpropriation until the date of payment.
ARTICLE6
Compensationfor Losses
1. Investors of one Contracting Party,whose investments in the territory of the other Contracting Party suffer lossesowing to war, armed clash, a state of emergency, insurrection or other similarevents in the territory of the latter Contracting Party, shall be accorded bythe other Contracting Party, as regards restitution, indemnification,compensation and other settlements, no less favorable treatment than thataccorded to the investors of its own or any third State, whichever is morefavorable to the investor concerned.
2. Investments by investors of oneContracting Party that, in any of the situations referred to in Paragraph 1 ofthis Article, suffer losses in the territory of the other Contracting Partyresulting from requisitioning or destruction of an investment or a part thereofby the latter's armed forces or authorities, which was not caused in combataction or was not required by the necessity of situation, shall be accordedrestitution or appropriate compensation.
ARTICLE7
Repatriationand Transfer
l. Upon fulfillment of all tax obligations,each Contracting Party shall permit in good faith all transfers related to aninvestment to be made freely and without delay into and out of its territory.Such transfers include:
(a) returns,
(b) proceeds from the sale or liquidationof all or any part of an investment,
(c) compensation pursuant to Article 5 andArticle 6,
(d) reimbursements and interest paymentsderiving from loans in connection with investments,
(e) salaries, wages and other remunerationsreceived by the nationals of one Contracting Party who have obtained in theterritory of the other Contracting Party the corresponding work permits relatedto an investment,
(f) payments arising from an investmentdispute.
2. Transfers shall be made in theconvertible currency in which the investment has been made or in anyconvertible currency at the rate of exchange in force at the date of transfer,unless otherwise agreed by the investor and the hosting Contracting Party.
3. Notwithstanding above articles of thisAgreement, a Contracting Party may prevent a transfer through the equitable,non-discriminatory and good faith application of its national laws relating to:
(a)bankruptcy,insolvency or the protection of the rights of creditors;
(b) issuing,trading or dealing in securities, futures, options and other derivatives;
(c) suspectedcriminal or administrative offenses;
(d) reportsof transfers of cash or other monetary instruments; or
(e) ensuringcompliance with judicial or administrative proceedings.
4. Notwithstanding other provisions of thisAgreement, each Contracting Party may, in accordance with its laws andregulations, adopt or maintain measures inconsistent with its obligations underthis Article: (a) in the event of serious balance-of-payments and externalfinancial difficulties or threat thereof; or (b) where, in exceptionalcircumstances, movements of capital cause, or threaten to cause, seriousdifficulties for macroeconomic managements, in particular monetary and exchangerate policies.
5. Measures referred to in paragraph 4above: (a) shall be consistent with the Articles of the Agreement of theInternational Monetary Fund other than those the Contracting Parties madereservations; (b) shall not exceed those necessary to deal with thecircumstances described in paragraph 4 above; (c) shall be temporary and shallbe eliminated as soon as conditions permit; (d) shall be promptly notified tothe other Contracting Party.
6. With regard to the Contracting Parties,the transfers referred to in this Article shall comply with relevantformalities stipulated by the Contracting Party’s laws and regulations relatingto exchange control.
These formalities;
a) shall not be used as a way of avoidingthe Contracting Party’s commitments or obligations under this Agreement,
b) shall in no case be more restrictivethan these required at the time of entry into force of this Agreement.
The period required for the completion oftransfer formalities shall commence on the day on which a written request withnecessary supportive documentation is submitted to the foreign exchangeauthorities. The necessary authorizations should be granted in a period of onemonth but shall in no case exceed two months.
ARTICLE8
Subrogation
l. If the investment of an investor of oneContracting Party is insured against non-commercial risks under a systemestablished by law, any subrogation of the insurer, which stems from the termsof the insurance agreement between the investor and the insurer, shall berecognized by the other Contracting Party.
2. The insurer is entitled by virtue ofsubrogation to exercise the rights and enforce the claims of that investor andshall assume the obligations related to the investment. The subrogated rightsor claims shall not exceed the original rights or claims of the investor.
ARTICLE9
Settlementof Disputes Between One Contracting Party and Investors of the OtherContracting Party
1. Disputes between one of the ContractingParties and an investor of the other Contracting Party, in connection with hisinvestment, shall be notified in writing, including detailed information, bythe investor to the recipient Contracting Party of the investment, for domesticadministrative review procedures. As far as possible, the investor and theconcerned Contracting Party shall endeavor to settle these disputes byconsultations and negotiations in good faith.
2. If the dispute that an investor of oneContracting Party claiming that the other Contracting Party has breached anobligation under Article 2 through 8, can not be settled through negotiationsor administrative review procedures stipulated in paragraph (1) of this Articlewithin six (6) months following the date of the written notification mentionedin paragraph l, the dispute can be submitted, as the investor may choose, to:
(a) the competent court of the ContractingParty in whose territory the investment has been made,
(b) the International Center for Settlementof Investment Disputes (ICSID) set up by the "Convention on Settlement ofInvestment Disputes Between States and Nationals of other States",
(c) an ad hoc court of arbitration laiddown under the Arbitration Rules of Procedure of the United Nations Commissionfor International Trade Law (UNCITRAL).
3. Once the investor has submitted thedispute to the one of the dispute settlement procedures mentioned in paragraph2 of this Article, the choice of one of these procedures is final.
4. Notwithstanding the provisions ofparagraph 2 of this Article;
(a) only the disputes arising directly outof investment activities which have obtained necessary permission, if there isany permission requirement, in conformity with the relevant legislation of the hostingContracting Party on foreign capital, and that effectively started shall besubject to the jurisdiction of the International Center for Settlement ofInvestment Disputes (ICSID) or any other international dispute settlementmechanism as agreed upon by the Contracting Parties;
(b) the disputes, related to the propertyand real rights upon the real estates are totally under the jurisdiction of thecourts of the hosting Contracting Party and therefore shall not be submitted tojurisdiction of the International Center for Settlement of Investment Disputes(ICSID) or any other internationaldispute settlement mechanism.
5. The arbitration tribunal shall take itsdecisions in accordance with the provisions of this Agreement, the laws andregulations of the Contracting Party involved in the dispute on which territorythe investment is made (including its rules on the conflict of law) and therelevant principles of international law as accepted by both ContractingParties.
6. A dispute shall not be submitted to arbitrationwhen more than five (5) years elapsed from the date that the investor firstacquired knowledge or should reasonably have acquired knowledge of the eventswhich gave rise to the dispute.
7. Unless the disputing parties agreeotherwise, where an award affirms that a Contracting Party has breached itsobligations under this Agreement, the tribunal may only award, separately or incombination:
monetary damages and any applicableinterest; or
restitution of property, in which case theaward may specify monetary damages and corresponding interest in lieu ofrestitution.
8. In principle, each disputing party shallbear the costs of its appointed arbitrator and of any legal representation inproceedings. The costs of the presiding arbitrator and of other expensesassociated with the conduct of the arbitration shall be borne equally by the disputingparties. The Tribunal may award one disputing party to bear a higher proportionof the costs and give the explanation. If the Tribunal deems that the claim ofthe claimant or the objection of the respondent is frivolous, it may award thelosing party to bear reasonable costs and attorney’s fees of the prevailing partyincurred in objecting or opposing the objection with a reasonable cause.
9. The arbitration awards shall be finaland binding for all parties in dispute. Each Contracting Party commits itselfto execute the award according to its national law.
ARTICLE10
Settlementof Disputes Between The Contracting Parties
1. The Contracting Parties shall seek ingood faith and a spirit of cooperation a rapid and equitable solution to anydispute between them concerning the interpretation or application of thisAgreement. In this regard, the Contracting Parties agree to engage in directand meaningful negotiations to arrive at such solutions. If the ContractingParties cannot reach an agreement within six (6) months after the beginning ofdisputes between themselves through the foregoing procedure, the disputes maybe submitted, upon the request of either Contracting Party, to an arbitraltribunal of three members.
2. Within two (2) months of receipt of arequest, each Contracting Party shall appoint an arbitrator. The twoarbitrators shall select a third arbitrator as Chairman, who is a national of athird State. In the event either Contracting Party fails to appoint anarbitrator within the specified time, the other Contracting Party may requestthe President of the International Court of Justice to make the appointment.
3. If both arbitrators cannot reach anagreement about the choice of the Chairman within two (2) months after theirappointment, the Chairman shall be appointed upon the request of eitherContracting Party by the President of the International Court of Justice.
4. If, in the cases specified underparagraphs (2) and (3) of this Article, the President of the InternationalCourt of Justice is prevented from carrying out the said function or if he is anational of either Contracting Party, the appointment shall be made by theVice-President, and if the Vice-President is prevented from carrying out thesaid function or if he is a national of either Contracting Party, theappointment shall be made by the most senior member of the Court who is not anational of either Contracting Party.
5. The tribunal shall have three (3) monthsfrom the date of the selection of the Chairman to agree upon rules of procedureconsistent with the other provisions of this Agreement. In the absence of suchagreement, the tribunal shall request the President of the International Courtof Justice to designate rules of procedure, taking into account generallyrecognized rules of international arbitral procedure.
6. Unless otherwise agreed, all submissionsshall be made and all hearings shall be completed within eight (8) months ofthe date of selection of the Chairman, and the tribunal shall render itsdecision within two (2) months after the date of the final submissions or thedate of the closing of the hearings, whichever is later. The arbitral tribunalshall reach its decisions, which shall be final and binding, by a majority ofvotes.
7. Each Contracting Party shall bear thecosts of its appointed arbitrator and of its representation in arbitralproceedings. The relevant costs of the Chairman and tribunal shall be borne inequal parts by the Contracting Parties.
8. A dispute shall not be submitted to aninternational arbitration tribunal under the provisions of this Article, if adispute on the same matter has been brought before another internationalarbitration tribunal under the provisions of Article 9 and is still before thecourt.
ARTICLE11
Scopeof Application
1. This Agreement shall apply toinvestments in the territory of one Contracting Party, made in accordance withits national laws and regulations, by investors of the other Contracting Party,whether prior to, or after the entry into force of the present Agreement.However, this Agreement shall not apply to any disputes that have arisen beforeits entry into force.
2. This Agreement shall not apply to acorporation, firm or business associations incorporated or constituted underthe law of a third country within the meaning of paragraph 2 (c) of Article 1of this Agreement, if there is an investment promotion and protection agreementbetween the hosting Contracting Party and that third country.
ARTICLE12
Entryinto Force
1. The Contracting Parties shall notifyeach other in writing through diplomatic channel the fulfillment of theirdomestic legal procedures in relation to the approval and entry into force ofthis Agreement. This Agreement shall enter into force on the thirtieth day uponthe receipt of the latter notification. It shall remain in force for a periodof ten (10) years and shall continue in force unless terminated in accordancewith paragraph 2 of this Article.
2. Either Contracting Party may, by givingone year's written notice to the other Contracting Party, terminate thisAgreement at the end of the initial ten-year period or at any time thereafter.
3. This Agreement may be amended by mutualwritten consent of the Contracting Parties at any time. The amendments shallenter into force in accordance with the same legal procedure prescribed underthe first paragraph of the present Article.
4. With respect to investments made oracquired prior to the date of termination of this Agreement and to which thisAgreement otherwise applies, the provisions of all of the other Articles ofthis Agreement shall thereafter continue to be effective for a further periodof ten (10) years from such date of termination.
5. On the date of entry into force of thisAgreement, the Agreement between the People’s Republic of China and Republic ofTurkey the on the Reciprocal Promotion and Protection of Investments, signed on13th of November, 1990 inBeijing, (hereinafter referred to as “Previous Agreement”), shall be terminated. For any dispute which arose before thedate of the entry into force of this Agreement, provisions of the PreviousAgreement shall apply. Any dispute which arises after the date of the entryinto force of this Agreement shall be settled in accordance with the provisionsof this Agreement.
IN WITNESS WHEREOF, the respectiveplenipotentiaries have signed this Agreement.
DONE in duplicate at Beijing on July 29, 2015in the Chinese, Turkish and English languages, all texts being equallyauthentic.
In case of any divergence of interpretation,the English text shall prevail.
For the Government of the People’s Republic of China
GAOHUCHENG Minister of Commerce
For the Government of the Republic of Turkey
NİHATZEYBEKCİ Ministerof Economy
PROTOCOL
On signing the Agreement between theGovernment of the Government of the People’s Republic of China and Republic ofTurkey the Concerning the Reciprocal Promotion and Protection of Investments,the undersigned representatives, being duly authorized, have agreed on thefollowing provision which shall constitute an integral part of the saidAgreement.
AdArticle 9
In the implementation of Article 64 of the“Convention on the Settlement of Investment Disputes between States andNationals of other States”, the following provision shall apply:
The Republic of Turkey shall not accept thereferral of any disputes arising between the Republic of Turkey and any otherContracting State concerning the interpretation or application of “Conventionon the Settlement of Investment Disputes between States and Nationals of otherStates”, which is not settled by negotiation, to the International Court ofJustice.
Done in Beijing on July 29, 2015, in the ChineseTurkish, and English languages, all texts being equally authentic.
In case of divergence of interpretation, the English text shall prevail.
Forthe Government of the People’s Republic of China
GAOHUCHENG Minister of Commerce
Forthe Government of the Republic of Turkey
NİHATZEYBEKCİ Minister of Economy
