EU-CHILE ADVANCED FRAMEWORK AGREEMENT

CHAPTER 10

INVESTMENT

SECTION A: GENERAL PROVISIONS

Article 10.1
Definitions

1. For purposes of this Chapter:

“juridical person of a Party” means1:

(i) for the European Union:
A a juridical person constituted or organised under the law of the European Union
or of at least one of its Member States and engaged in substantive business
operations2 in the territory of the European Union; and

B shipping companies established outside the European Union, and controlled by

natural persons of a Member State of the European Union, whose vessels are
registered in, and fly the flag of, a Member State of the European Union.

(ii) for Chile:

A a juridical person constituted or organised under the law of Chile and engaged
in substantive business operations in the territory of Chile; and

1
For greater certainty, the shipping companies mentioned in this definition are only considered as
juridical persons of a Party with respect to their activities relating to the supply of maritime transport services.
2
In line with its notification of the Treaty establishing the European Community to the WTO
(WT/REG39/1), the European Union understands that the concept of “effective and continuous link" with the
economy of a Member State of the European Union enshrined in Article 54 of the TFEU is equivalent to the
concept of "substantive business operations”.
 B shipping companies established outside Chile, and controlled by natural
persons of Chile, whose vessels are registered in, and fly the flag of, Chile.

“enterprise” means a juridical person, branch or representative office set up through

establishment, as defined under this Article;

“establishment” means the setting up, including the acquisition3 of, an enterprise by an
investor of one Party in the territory of the other Party;

“economic activities” means activities of an industrial, commercial or professional character

and activities of craftsmen and including the supply of services, except activities performed in
the exercise of governmental authority;

“operation” means the conduct, management, maintenance, use, enjoyment, sale or other
disposal of an investment by an investor of one Party, in the territory of the other Party ;

“service” includes any service in any sector but not services supplied in the exercise of
governmental authority;

“activities performed in the exercise of governmental authority” means activities performed,

including services supplied neither on a commercial basis nor in competition with one or
more economic operators

“cross-border supply of services” means the supply of a service:

(i) from the territory of a Party into the territory of the other Party

(ii) in the territory of a Party to the service consumer of the other Party;

“investor of a Party” means a natural person or a juridical person of such Party, that seeks to
establish, is making or has made an investment in the territory of another Party;

3
The term “acquisition” shall be understood as including capital participation in a juridical person with a
view to establishing or maintaining lasting economic links.
 “covered investment” means an investment which is owned, directly or indirectly, or
controlled, directly or indirectly, by investors of one Party in the territory of the other Party,
made in accordance with applicable laws, in existence as of the date of entry into force of this
Agreement or established thereafter;

“investment” means every asset that an investor owns or controls, directly or indirectly, which
has the characteristics of an investment, including a certain duration the commitment of
capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms
that an investment may take include:
(a) an enterprise;

(b) shares, stocks and other forms of equity participation in an enterprise;

(c) bonds, debentures, or other debt instruments of an enterprise;

(d) futures, options and other derivatives;

(e) concessions, licenses, authorisations, permits, and similar rights conferred pursuant to
domestic law4;

(f) turnkey, construction, management, production, concession, revenue-sharing

contracts, or other similar contracts including those that involve the presence of the
property of an investor in the territory of the Parties;

(g) intellectual property rights;

(h) any other moveable or immovable, tangible or intangible property, and related
property rights, such as leases, mortgages, liens and pledges.

For greater certainty:

(i) returns that are invested shall be treated as investment. Any alteration of the form
in which assets are invested or reinvested shall not affect their qualification as
investments, provided that the form taken by any investment or reinvestment
maintains its compliance with the definition of investment;

(ii) investment does not include an order or judgment entered in a judicial or

administrative action.

4
For greater certainty, whether a concession, licence, authorisation, permit or similar instrument has the
characteristics of an investment depends inter alia on factors such as the nature and extent of the rights that the
holder has under that Party’s law.
“freely convertible currency” means a currency, which can be freely exchanged against
currencies, which are widely traded in international foreign exchange markets and widely
used in international transactions;

“returns” means all amounts yielded by or derived from an investment or reinvestment,

including profits, dividends, capital gains, royalties, interest, payments in connection with
intellectual property rights, payments in kind and all other lawful income;

“aircraft repair and maintenance services during which an aircraft is withdrawn from service”
mean such activities when undertaken on an aircraft or a part thereof while it is withdrawn
from service and do not include so-called line maintenance.

“selling and marketing of air transport services” mean opportunities for the air carrier
concerned to sell and market freely its air transport services including all aspects of marketing
such as market research, advertising and distribution. These activities do not include the
pricing of air transport services nor the applicable conditions.

“computer reservation system (CRS) services” mean services provided by computerised

systems that contain information about air carriers’ schedules, availability, fares and fare
rules, through which reservations can be made or tickets may be issued.

“ground handling services” mean the supply at an airport of the following services: airline
representation, administration and supervision; passenger handling; baggage handling; ramp
services; catering; air cargo and mail handling; fuelling of an aircraft, aircraft servicing and
cleaning; surface transport; flight operation, crew administration and flight planning.

Ground handling services do not include security, aircraft repair and maintenance, or
management or operation of essential centralised airport infrastructure such as de-icing
facilities, fuel distribution systems, baggage handling systems, and fixed intra-airport
transport systems

Article 10.2
Right to Regulate

The Parties reaffirm the right to regulate within their territories to achieve legitimate policy
objectives, such as the protection of public health, social services, education, safety,
environment, including climate change, or public morals, social or consumer protection,
privacy and data protection or the promotion and protection of cultural diversity.

Article 10.3
Scope exclusions

This Chapter shall not apply to measures adopted or maintained by a Party relating to
[financial institutions] of another Party, investors of the other Party and to the investments of
such investors, in [financial institutions] in the territory of the Party, as defined in Article X.1
(Financial Services Chapter - Definitions);

Article 10.4
Relation to Other Chapters

1. In the event of inconsistency between this Chapter and the Financial Services Chapter,
the latter shall prevail to the extent of the inconsistency.

2. A requirement of a Party that a service supplier of another Party post a bond or other
form of financial security as a condition for the cross-border supply of a service in its
territory, does not of itself make this Chapter applicable to such cross-border supply of that
service. This Chapter applies to measures adopted or maintained by the Party relating to the
bond or financial security, when such bond or financial security constitutes a covered
investment.

SECTION B: LIBERALISATION OF INVESTMENTS AND NON-DISCRIMINATION

Article 10.5
Scope

1. This Section applies to measures adopted or maintained by a Party affecting the

establishment of an enterprise or the operation of a covered investment in all economic
activities by an investor of the other Party in its territory.

2. The provisions of this Section shall not apply to:

(a) audio-visual services;
 (b) national maritime cabotage5; and
(c) domestic and international air services6, whether scheduled or non-scheduled, and
services directly related to the exercise of traffic rights, other than:
(i) aircraft repair and maintenance services during which an aircraft is
withdrawn from service;
(ii) the selling and marketing of air transport services;
(iii) computer reservation system (CRS) services;
(iv) groundhandling services.

3. The provisions of Articles 10.5 (Market Access), 10.6 (National Treatment), 10.8
(Most-Favoured-Nation Treatment), 10.9 (Performance Requirements) and 10.10 (Senior
Management and Boards of Directors) shall not apply with respect to government
procurement.

4. The provisions of Articles 10.5 (Market Access), 10.6 (National Treatment), 10.8
(Most-Favoured-Nation Treatment) and 10.10 (Senior Management and Boards of Directors)
shall not apply with respect to subsidies granted by the Parties, including government-
supported loans, guarantees and insurances.

Article 10.6
Market Access

1. In the sectors or subsectors where market access commitments are undertaken, neither
Party shall adopt or maintain, with respect to market access through establishment or
operation by investors of the other Party or by enterprises constituting covered investments,
either on the basis of its entire territory or on the basis of a territorial sub-division, a measure
that:

5
Without prejudice to the scope of activities which may be considered as cabotage under the relevant
national legislation, national maritime cabotage under this Chapter covers transportation of passengers or goods
between a port or point located in Chile or a Member State of the European Union and another port or point
located in Chile or that same Member State of the European Union, including on its continental shelf, as
provided in the UN Convention on the Law of the Sea, and traffic originating and terminating in the same port or
point located in Chile or a Member State of the European Union.
6
For greater certainty, Air services or related services in support of air services include, but are not
limited to, the following services: air transportation; services provided by using an aircraft whose primary
purpose is not the transportation of goods or passengers, such as aerial fire-fighting flight training, sightseeing,
spraying, surveying mapping, photography, parachute jumping, glider towing, helicopter-lift for logging and
construction, and other airborne agricultural, industrial and inspection services; the rental of aircraft with crew;
and airport operation services.
 (a) limits the number of enterprises that may carry out a specific economic activity,
whether in the form of numerical quotas, monopolies, exclusive rights or the
requirements of an economic needs test;

(b) limits the total value of transactions or assets in the form of numerical quotas or
the requirement of an economic needs test;

(c) limits the total number of operations or on the total quantity of output expressed in
terms of designated numerical units in the form of quotas or the requirement of an
economic needs test;7

(d) restricts or requires specific types of legal entity or joint venture through which an
investor of the other Party may carry out an economic activity;

(e) limits the total number of natural persons that may be employed in a particular
sector or that an enterprise may employ and who are necessary for, and directly
related to, the performance of economic activity in the form of numerical quotas
or the requirement of an economic needs test.

Article 10.7
National Treatment

1. Each Party shall accord to investors of the other Party and to enterprises constituting
covered investments treatment no less favourable than the treatment it accords, in like
situations8, to its own investors and to their enterprises with respect to the establishment in its
territory.

2. Each Party shall accord to investors of the other Party and to covered investments,
with respect to operation in its territory, treatment no less favourable than the treatment it
accords, in like situations9, to its own investors and to their investments.

3. The treatment accorded by a Party under paragraphs 1 and 2 means:

7
Subparagraphs 1 (a), (b), and (c) do not cover measures taken in order to limit the production of an
agricultural or fishery product.
8
For greater certainty, whether treatment is accorded in “like situations” requires a case-by-case, fact-
based analysis and depends on the totality of the situations.
9
For greater certainty, whether treatment is accorded in “like situations” requires a case-by-case, fact-
based analysis and depends on the totality of the situations
 (a) with respect to a regional or local government of Chile, treatment no less
favourable than the most favourable treatment accorded in like situations by that level
of government to investors of Chile and to their investments in its territory;

(b) with respect to a government of or in a Member State of the EU, treatment no

less favourable than the most favourable treatment accorded in like situations by that
government to investors of that Member State and to investments of such investors in
its territory10.

Article 10.8
Public Procurement

1. Each Party shall ensure that enterprises of the other Party established in its territory
are accorded treatment no less favourable than that accorded, in like situations, to its own
enterprises with respect to any measure regarding the purchase of goods or services by a
procuring entity for governmental purposes.

2. The application of the national treatment obligation provided for in this Article
remains subject to security and general exceptions as defined in Article X of the GP Chapter
of this Agreement.

Article 10.9
Most Favoured Nation Treatment

1. Each Party shall accord to investors of the other Party and to enterprises constituting
covered investments, treatment no less favourable than the treatment it accords, in like
situations11, to investors and their enterprises of any non-Party with respect to the
establishment of enterprises in its territory.

10
For greater certainty, the treatment accorded by a government of or in a Member State of the EU
includes the regional and local level of government, when applicable.
11
For greater certainty, whether treatment is accorded in “like situations” requires a case-by-case, fact-
based analysis and depends on the totality of the situations
2. Each Party shall accord to investors of the other Party and to covered investments,
treatment no less favourable than the treatment it accords, in like situations12, to investors and
investments of any non-Party with respect to the operation of investments in its territory.

3. Paragraphs 1 and 2 shall not be construed to oblige a Party to extend to the investors
of the other Party or to covered investments the benefit of any treatment resulting from:
(a) [reference to double taxation agreements in case not covered by horizontal
provisions in the Agreement]

(b) measures providing for recognition, including of the standards or criteria for the
authorisation, licencing, or certification of a natural person or enterprise to carry
out an economic activity, or of prudential measures.

4. For greater certainty the “treatment” referred to in paragraphs 1 and 2 does not include
investment dispute resolution procedures or mechanisms provided for in other international
investment treaties and other trade agreements. The substantive provisions in other
international investment or trade agreements do not in themselves constitute “treatment” as
referred to in paragraphs 1 and 2, and thus cannot give rise to a breach of this Article, absent
measures adopted or maintained by a Party. Measures applied pursuant to such substantive
provisions may constitute “treatment” under this Article.

Article 10.10
Performance Requirements

1. Neither Party may, in connection with the establishment of any enterprise or the
operation of any investment of a Party or of a non-Party in its territory, impose or enforce any
requirement, or enforce any commitment or undertaking to:

(a) export a given level or percentage of goods or services;

(b) achieve a given level or percentage of domestic content;

12
For greater certainty, whether treatment is accorded in “like situations” requires a case-by-case, fact-
based analysis and depends on the totality of the situations
(c) purchase, use or accord a preference to goods produced or services provided in its
territory, or to purchase goods or services from natural persons or enterprises in its
territory;

(d) relate in any way the volume or value of imports to the volume or value of exports
or to the amount of foreign exchange inflows associated with such investment;

(e) restrict sales of goods or services in its territory that such investment produces or
provides by relating such sales in any way to the volume or value of its exports or
foreign exchange earnings;

(f) transfer technology, a production process or other proprietary knowledge to a

natural person or an enterprise in its territory;

(g) supply exclusively from the territory of the Party the goods it produces or the
services it supplies to a specific regional or world market;

(h) locate the headquarters of that investor for a specific region of the world, which is
broader than the territory of the Party or the world market in its territory;

(i) hire a given number or percentage of its nationals;

(j) restrict the exportation or sale for export;

(k) adopt:

(i) a given rate or amount of royalty below a certain level under a licence
contract;
or
(ii) a given duration of the term of a licence contract,

in regard to any licence contract in existence at the time the requirement is imposed or
enforced, or any commitment or undertaking is enforced, or any future licence
 contract13 freely entered into between the investor and a natural or juridical person or
any other entity in its territory, provided that the requirement is imposed or the
commitment or undertaking is enforced in a manner that constitutes a direct
interference with that licence contract by an exercise of non-judicial governmental
authority of a Party. For greater certainty, paragraph (k) does not apply when the
licence contract is concluded between the investor and a Party.

2. Neither Party may condition the receipt or continued receipt of an advantage, in

connection with the establishment of an enterprise or the operation of an investment in its
territory, of a Party or of a non-Party, on compliance with any of the following requirements:

(a) to achieve a given level or percentage of domestic content;

(b) to purchase, use or accord a preference to goods produced or services provided in

its territory, or to purchase goods or services from natural persons or enterprises in
its territory;

(c) to relate in any way the volume or value of imports to the volume or value of
exports or to the amount of foreign exchange inflows associated with such
investment;

(d) to restrict sales of goods or services in its territory that such investment produces
or provides by relating such sales in any way to the volume or value of its exports
or foreign exchange earnings or

(e) to restrict the exportation or sale for export.

3. Paragraph 2 shall not be construed as preventing a Party from conditioning the receipt
or continued receipt of an advantage, in connection with investments in its territory by an
investor of a Party or a non-Party, on compliance with a requirement to locate production,
provide a service, train or employ workers, construct or expand particular facilities, or carry
out research and development in its territory.

4. Paragraph 1 (f) and (k) does not apply:

13
A licence contract referred to in this paragraph means a contract concerning the licencing of technology,
production process, or other proprietary knowledge.
 (a) if a Party authorises use of an intellectual property right in accordance with
Article 31 or article 31 bis of the TRIPS Agreement or adopts or maintains measures
requiring the disclosure of data or propriety information that fall within the scope of,
and are consistent with, paragraph 3 of Article 39 of the TRIPS Agreement; or

(b) if the requirement is imposed or the commitment or undertaking is enforced by

a court, administrative tribunal, or competition authority to remedy a practice
determined after judicial or administrative process to be a violation of the Party’s
competition laws.

5. Paragraphs 1 (a), 1 (b), 1 (c), 2 (a) and 2 (b) do not apply to qualification requirements
for goods or services with respect to participation in export promotion and foreign aid
programmes;

6. Paragraphs 2 (a) and 2 (b) do not apply to requirements imposed by an importing Party
relating to the content of goods necessary to qualify for preferential tariffs or preferential
quotas.

7. For greater certainty, this Article shall not be construed as requiring a Party to permit a
particular service to be supplied on a cross-border basis where that Party adopts or maintains
restrictions or prohibitions on such provision of services which are consistent with the
reservations, conditions or qualifications specified with respect to a sector, subsector or
activity listed in Annex XX (annexes with non-conforming measures or MA restrictions).

8. This Article is without prejudice to commitments of a Party made under the WTO
Agreement.

Article 10.11
Senior Management and Boards of Directors

A Party shall not require that an enterprise of that Party that is a covered investment appoints
natural persons of a particular nationality as members of boards of directors, or to a senior
management position, such as executives or managers.

Article 10.12
 Non-Conforming Measures

1. Articles 10.7 (National Treatment), 10.9 (Most Favoured Nation Treatment), 10.10
(Performance Requirements) and 10.11 (Senior Management and Boards of Directors), do not
apply to:

(a) any existing non-conforming measure that is maintained by:

For the European Union:

(i) the European Union, as set out in Annex I;

(ii) a central government of a Member State of the EU, as set out in Annex I;

(iii) a regional level of government of a Member State of the EU, as set out in
Annex I; or

(iv) a local level of government; and

For Chile:

(i) the central government or a regional level of government, as set out in

Annex I;

(ii) a local level of government;

(b) the continuation or prompt renewal of any non-conforming measure referred to in

subparagraph (a); or

(c) a modification to any non-conforming measure referred to in subparagraph (a), to

the extent that the amendment does not decrease the conformity of the measure, as
it existed immediately before the modification, with Articles 10.7 (National
Treatment), 10.9 (Most Favoured Nation Treatment) or 10.10 (Performance
Requirements) and 10.11 (Senior Management and Boards of Directors).
2. Articles 10.7 (National Treatment), 10.9 (Most Favoured Nation Treatment), 10.10
(Performance Requirements) and 10.11 (Senior Management and Board of Directors), do not
apply to measures of a Party which are consistent with a reservation listed in Annex II.

3. Neither Party may, under any measure adopted after the date of entry into force of this
Agreement and covered by its Schedule to Annex II, require an investor of the other Party, by
reason of its nationality, to sell or otherwise dispose of an investment existing at the time the
measure becomes effective.

4. Article 10.6 (Market Access) does not apply to any measure of a Party which is
consistent with a reservation listed in Annex III.

5. Articles 10.7 (National Treatment) and 10.9 (Most-Favoured-Nation Treatment) shall

not apply to any measure that constitutes an exception to or derogation from, Articles 3 or 4
of the TRIPS Agreement, as specifically provided in Articles 3 to 5 of the TRIPS Agreement.

6. For greater certainty, articles 10.7 (National Treatment) and 10.9 (Most Favoured
Nation Treatment) shall not be construed as preventing a Party from prescribing information
requirements including for statistical purposes in connection with the establishment or
operation of investors of the other Party or of covered investments provided that it does not
constitute a means to circumvent that Party’s obligations under those articles.

SECTION C: INVESTMENT PROTECTION

Article 10.13
Scope

This Section applies to measures adopted or maintained by a Party affecting:

(a) covered investments; and
(b) investors of a Party with respect to the operation of a covered investment.

Article 10.14
Investment and Regulatory Measures
1. Article 10.2 (Right to Regulate) of this Chapter applies to this Section in accordance
with the following paragraphs:

2. The provisions of this Section shall not be interpreted as a commitment from a Party
that it will not change its legal and regulatory framework, including in a manner that may
negatively affect the operation of covered investments or the investor’s expectations of
profits.

3. For greater certainty, the mere fact that a subsidy or grant has not been issued,
renewed or maintained, or has been modified or reduced, by a Party:
(a) in the absence of any specific commitment under law or contract to issue,
renew or maintain that subsidy or grant; or
(b) in accordance with any terms or conditions attached to the issuance, renewal,
modification, reduction or maintenance of that subsidy or grant,
does not constitute a breach of obligations of this Section (Investment Protection), even if
there is loss or damage to the covered investment as a result.

4. For greater certainty, nothing in this Section shall be construed as preventing a Party
from discontinuing the granting of a subsidy14 or requesting its reimbursement, where such
action has been ordered by one of its competent authorities listed in [Annex X], or as
requiring that Party to compensate the investor therefor.

Article 10.15
Treatment of Investors and of Covered Investments

1. Each Party shall accord in its territory to covered investments of the other Party, and to
investors with respect to their covered investments, fair and equitable treatment and full
protection and security in accordance with paragraphs [2 to 6].

2. A Party breaches the obligation of fair and equitable treatment referenced in paragraph 1 if
a measure or series of measures constitutes15:

14
In the case of the EU, ‘subsidy’ includes ‘state aid’ as defined in EU law.
15
For greater certainty, in determining whether a measure or series of measures amounts to a breach of
fair and equitable treatment, a tribunal shall take into account, inter alia, the following:
(i) With regard to the subparagraphs 2 (a) and 2 (b), whether the measure or series of measures involves gross
misconduct that offends judicial propriety. The mere fact that an investor’s challenge of the impugned measure
in domestic proceeding has been rejected or dismissed or has otherwise failed does not in itself constitute a
denial of justice as referred to in the subparagraph 2 (a).
 (a) denial of justice in criminal, civil or administrative proceedings; or
(b) fundamental breach of due process in judicial and administrative proceedings;
or
(c) manifest arbitrariness; or
(d) targeted discrimination on manifestly wrongful grounds, such as gender, race
or religious belief; or
(e) abusive treatment of investors, such as coercion, duress, harassment.

3. In determining a breach of paragraph 2, a tribunal may take into account specific and
unambiguous representations made to an investor by a Party, and upon which the investor
reasonably relied in deciding to make or maintain the covered investment, but that the Party
subsequently frustrated.

4. Full protection and security refers to the Party’s obligations relating to physical
security of investors and covered investments16.

5. For greater certainty, a breach of another provision of this Agreement, or of any other
international agreement, does not constitute a breach of this Article.

6. The fact that a measure breaches the law of a Party does not, in and of itself, establish
a breach of this Article. In order to ascertain whether the measure breaches this Article, the
Tribunal shall consider whether a Party has acted inconsistently with paragraphs 1 to 4.

Article 10.16
Treatment in Case of Strife

1. Investors of a Party whose covered investments suffer losses owing to war or other
armed conflict, [revolution] or other civil strife, a state of national emergency17 in the territory

(ii) With regard to the subparagraph 2 (c) and (d), whether the measure or series of measures were patently not
founded on reason or fact or were patently founded on illegitimate grounds such as prejudice or bias. The mere
illegality, or a merely inconsistent or questionable application of a policy or procedure, does not in itself
constitute manifest arbitrariness as referred to in the subparagraph 2 (c), while a total and unjustified repudiation
of a law or regulation, or a measure without reason, or a conduct that is specifically targeted to the investor or its
covered investment with the purpose of causing damage are likely to constitute manifest arbitrariness as referred
to in the subparagraphs 2 (c) and (d).
(iii) With regard to the subparagraph 2 (e), whether a Party acted ultra vires, whether the episodes of alleged
harassment or coercion were repeated and sustained.
16
For greater clarity, full protection and security refers to Party’s obligations to act as may be reasonably
necessary to protect physical security of investors and covered investment.
of the other Party shall be accorded by that Party, with respect to restitution, indemnification,
compensation or other form of settlement, treatment no less favourable than that accorded by
that Party to its own investors, or to the investors of any non-Party.

2. Without prejudice to paragraph 1 of this Article, investors of a Party who, in any of

the situations referred to in that paragraph, suffer losses in the territory of the other Party shall
be accorded prompt, adequate and effective restitution or compensation by the other Party, if
these losses result from:
(a) requisitioning of their covered investment or a part thereof by the latter’s
armed forces or authorities; or
(b) destruction of their covered investment or a part thereof by the latter’s armed
forces or authorities, which was not required by the necessity of the situation.
The amount of such compensation shall be determined in accordance with the provisions of
paragraph 2 of Article 10.17 (Expropriation), from the date of requisitioning or destruction
until the date of actual payment.

Article 10.17
Expropriation18

1. Neither Party shall nationalise or expropriate a covered investment either directly or

indirectly through measures having an effect equivalent to nationalisation or expropriation
(hereinafter referred to as “expropriation”) except:
(a) for a public purpose;
(b) in a non-discriminatory manner;
(c) on payment of prompt, adequate and effective compensation;
(d) in accordance with due process of law.

2. The compensation referred to in paragraph 1 shall:

(a) be paid without delay;
(b) be equivalent to the fair market value of the expropriated investment at the
time immediately before the expropriation took place (“the date of
expropriation”) or the impending expropriation became known, whichever is
earlier;
(c) be fully realisable and freely transferable in any freely convertible currency

17
For greater certainty, the sole declaration of a state of national emergency does not by itself constitute a
breach of this provision.
18
For greater certainty, this Article shall be interpreted in accordance with Annex X (Expropriation).
 (d) include interest at a normal commercial rate from the date of expropriation
until the date of payment.

3. The investor affected shall have a right, under the law of the expropriating Party, to
prompt review of its claim and of the valuation of its investment, by a judicial or other
independent authority of that Party, in accordance with the principles set out in this Article.

4. This Article does not apply to the issuance of compulsory licenses granted in relation
to intellectual property rights, or to the revocation, limitation, or creation of such rights, to the
extent that such issuance revocation, limitation, or creation is consistent with the Agreement
on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO
Agreements (“TRIPS Agreement”)19.

Article 10.18
Transfers20

1. Each Party shall permit all transfers relating to a covered investment to be made in a
freely convertible currency, freely and without delay and at the market rate of exchange
prevailing on the date of transfer. Such transfers include:
(a) contributions to capital;
(b) profits, dividends, capital gains and other returns, proceeds from the sale of all
or any part of the investment or from the partial or complete liquidation of the
investment;
(c) interest, royalty payments, management fees, and technical assistance and other
fees;
(d) payments made under a contract entered into by the investor, or its investment,
including payments made pursuant to a loan agreement;
(e) earnings and other remuneration of personnel engaged from abroad and
working in connection with an investment;
(f) payments made pursuant to Article 10.16 (Treatment in Case of Strife) and
Article 10.17 (Expropriation); and
(g) payments arising under the application of Section D [Resolution of Investment
Disputes and Investment Court System].

19
For greater certainty, the term “revocation” of intellectual property rights referred to in this paragraph
includes the cancellation or nullification of such rights, and the term “limitation” of intellectual property rights
also includes exceptions to such rights.
20
For greater certainty, this Article is subject to Annex XXX (Transfers).
2. Neither Party may require its investors to transfer, or penalise its investors for failing
to transfer, the income, earnings, profits or other amounts derived from, or attributable to,
investments in the territory of the other Party.

Article 10.19
Subrogation

If a Party, or any agency designated by the Party, makes a payment to an investor of the Party
under a guarantee, a contract of insurance or other form of indemnity that it has entered into
with respect to a covered investment, the other Party in whose territory the covered
investment was made shall recognise the subrogation or transfer of any rights the investor
would have possessed under this Chapter with respect to the covered investment but for the
subrogation, and the investor shall not pursue these rights to the extent of the subrogation.

Article 10.20
Denial of Benefits

A Party may deny the benefits of this Chapter to an investor of the other Party or to a covered
investment if the denying Party adopts or maintains measures related to the maintenance of
international peace and security, including the protection of human rights, which:

(a) prohibit transactions with that investor or covered investment, or

(b) would be violated or circumvented if the benefits of this Chapter where

accorded to that investor or covered investment, including where the measures
prohibit transactions with a natural or juridical person who owns or controls
either of them.

Article 10.21
Termination

1. In the event that this Agreement is terminated pursuant to Article [X.X] (Duration),
this Section and Section C (Resolution of Investment Disputes and Investment Court System)
shall continue to be effective for a further period of 5 years from the date of termination, with
respect to investments made before the date of termination of the present Agreement.
2. The period referred to in paragraph 1 shall be extended for a single additional period
of 5 years, provided that no other investment protection agreement between the Parties is in
force.

3. This Article shall not apply in the case where the provisional application of this
Agreement is terminated and this Agreement does not enter into force.

Article 10.22
Relationship with Other Agreements

1. Upon the entry into force of this Agreement, the agreements between Member States
of the European Union and Chile listed in Annex XXXX (Agreements between the Member
States of European Union and Chile) including the rights and obligations derived therefrom,
shall cease to have effect and shall be replaced and superseded by this Agreement.

2. In the event of the provisional application in accordance with paragraph 4 of Article

xxxx (Entry into Force), including this Chapter, the application of the agreements listed in
Annex XXXX (Agreements between the Member States of the European Union and Chile), as
well as the rights and obligations derived therefrom, shall be suspended as of the date of
provisional application. In the event that the provisional application of this Agreement is
terminated and this Agreement does not enter into force, the suspension shall cease and the
agreements listed in Annex XXXX (Agreements between the Member States of the European
Union and Chile) shall have effect. ]

3. Notwithstanding paragraphs 1 and 2, a claim may be submitted pursuant to an

agreement listed in Annex XXXX (Agreements between the Member States of the European
Union and Chile), in accordance with the rules and procedures established in that agreement,
provided that:
(a) the claim arises from an alleged breach of that agreement that took place prior
to the date of suspension of the agreement pursuant to paragraph 2 or, if the
agreement is not suspended pursuant to paragraph 2, prior to] the date of entry
into force of this Agreement; and
(b) no more than three years have elapsed from the date of suspension of the
agreement pursuant to paragraph 2 or, if the agreement is not suspended
pursuant to paragraph 2, from] the date of entry into force of this Agreement
until the date of submission of the claim.

4. Notwithstanding paragraphs 1 and 2, if the provisional application of this Agreement,

including this Chapter, is terminated and this Agreement does not enter into force, a claim
may be submitted pursuant to this Agreement, in accordance with the rules and procedures
established in this Agreement, provided that:
(a) the claim arises from an alleged breach of this Agreement that took place
during the period of provisional application of this Agreement; and
(b) no more than three years have elapsed from the date of termination of the
provisional application until the date of submission of the claim.

5. For the purposes of this Article, the definition of “entry into force of this Agreement”
provided for in paragraph 7 of Article [X.X] (Entry into Force) shall not apply.

Article 10.23
Responsible Business Conduct

1. Without prejudice to the TSD Chapter, each Party shall encourage covered
investments to incorporate into their internal policies internationally recognised principles and
guidelines of Corporate Social Responsibility / Responsible Business Conduct such as the
OECD Guidelines for MNEs, the ILO Declaration for MNEs, and the UN Guiding Principles
on Business and Human Right.

2. The Parties reaffirm the importance of investors conducting a due diligence process to
identify, prevent, mitigate, and account for the environmental and social risks and impacts of
its investment.

[Add ICS section + annexes]

 SECTION D

RESOLUTION OF INVESTMENT DISPUTES AND INVESTMENT COURT SYSTEM

SUB-SECTION 1

Scope and Definitions

Article 10.24

Scope and Definitions

1. This Section shall apply to a dispute between, on the one hand, a claimant of one Party
and, on the other hand, the other Party arising from an alleged breach under Article
10.7(2) (National Treatment) or Article 10.9(2) (Most Favoured Nation Treatment) of
Section B (Liberalisation of Investments) or Section C (Investment Protection), which
breach allegedly causes loss or damage to the claimant or its locally established
company.

2. Where applicable, this Section shall also apply to counterclaims in accordance with article
10.30 (Counterclaims).

3. A claim with respect to the restructuring of debt of a Party shall be decided in

accordance with Annex [numbering tbd] (Public debt) to Section C (Investment
Protection).

4. For the purposes of this Section:

(a) “proceeding”, unless otherwise specified, means a proceeding before the Tribunal
or Appeal Tribunal under this Section;
 (b) “disputing parties” means the claimant and the respondent;

(c) “claimant” means an investor of a Party, as defined in Article 10.1 (Definitions) of

Section A (General Provisions), that is a party to an investment dispute with the
other Party which seeks to submit or has submitted a claim, pursuant to this
Section, either

(i) acting on its own behalf; or

(ii) acting on behalf of a locally established enterprise which it owns or

controls.
The locally established company shall be treated as a national of another
Contracting State for the purposes of Article 25 (2) (b) of the Convention on
the Settlement of Investment Disputes between States and Nationals of
Other States of 18 March 1965 (ICSID-Convention).

(d) “non-disputing Party” means either Chile, when the respondent is the European
Union or a Member State of the European Union; or the European Union, when
Chile is the respondent.

(e) “respondent” means either Chile, or in the case of the European Union, either the
European Union or the Member State of the European Union concerned as
determined pursuant to Article 10.27 (Request for Determination of the
Respondent).

(f) “locally established enterprise” means a juridical person established in the

territory of one Party, and owned or controlled by an investor of the other Party.21

(g) “UNCITRAL Transparency Rules” means the UNCITRAL Rules on

Transparency in Treaty-based Investor-State Arbitration.

(h) “Third Party funding” means any funding provided to a disputing party, by a
natural or legal person who is not a party to the dispute, to finance part or all of

21
A juridical person is: (i) owned by natural or juridical persons of the other Party if more than 50 per cent
of the equity interest in it is beneficially owned by natural or juridical persons of that Party; (ii)
controlled by natural or juridical persons of the other Party if such natural or juridical persons have the
power to name a majority of its directors or otherwise to legally direct its actions.
 the cost of the proceedings in return for a remuneration dependent on the outcome
of the dispute or in the form of a donation or grant.22

(i) “ICSID Additional Facility Rules” means the Rules Governing the Additional
Facility for the Administration of Proceedings by the Secretariat of the
International Centre for Settlement of Investment Disputes;

(j) “ICSID Convention” means the Convention on the Settlement of Investment

Disputes between States and Nationals of other States, done at Washington,
March 18, 1965;

(k) “New York Convention” means the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958; and

(l) “UNCITRAL Arbitration Rules” means the arbitration rules of the United
Nations
Commission on International Trade Law.

SUB-SECTION 2

Alternative Dispute Resolution and Consultations

Article 10.25

Mediation

1. The disputing parties may at any time agree to have recourse to mediation.

2. Recourse to mediation is voluntary and without prejudice to the legal position of either
disputing party.

22
For greater certainty, such funding may be provided directly or indirectly, to a disputing party, its
affiliate or representative.
3. Mediation procedures shall be governed by the rules set out in Annex [numbering tbd]
(Mediation Mechanism for Investor-to-State Disputes) and, where available, rules on
mediation adopted by the [Investment] Committee. 23 The [Investment] Committee shall
make best efforts to ensure that the rules on mediation are adopted no later than the first
day of the [provisional application or] entry into force of this Agreement, as the case
may be, and in any event no later than two years after such date.

4. The […] Committee shall, upon the entry into force of this Agreement, establish a list of
six individuals, of high moral character and recognised competence in the fields of law,
commerce, industry or finance, who may be relied upon to exercise independent
judgment and who are willing and able to serve as mediators.

5. The mediator shall be appointed by agreement of the disputing parties. The disputing
parties may jointly request the President of the Tribunal to appoint a mediator from the
list established pursuant to this Article, or, in the absence of a list, from individuals
proposed by either Party.

6. Once the disputing parties agree to have recourse to mediation, the time-limits set out in
Articles 10.26 (5) (Consultations and amicable resolution), 2.22 (7) (Consultations and
amicable resolution), 10.53 (10) (Provisional Award) and 10.54 (5) (Appeal Procedure)
shall be suspended from the date on which it was agreed to have recourse to mediation
to the date on which either disputing party decides to terminate the mediation, by way of
written notice to the mediator and the other disputing party. At the request of both
parties, the Tribunal or the Appeal Tribunal shall stay the proceedings.

Article 10.26

Consultations and amicable resolution

1. A dispute may, and should as far as possible, be settled amicably through negotiations,
good offices or mediation and, where possible, before the submission of a request for
consultations pursuant to this article. Such settlement may be agreed at any time, including
after proceedings under this Section have been commenced.

23
Any time limit mentioned in Annex [numbering tbd] (Mediation Mechanism for Investor-to-State
Disputes) may be modified by agreement between the disputing parties.
2. A mutually agreed solution between the disputing parties pursuant to paragraph 1 shall
be notified to the non-disputing Party within 15 days of the mutually agreed solution being
agreed. Each disputing party shall abide by and comply with any mutually agreed solution
reached in accordance with this article or with Article 10.25 (Mediation). The [..] Committee
shall keep under surveillance the implementation of such mutually agreed solutions and the
Party to the mutually agreed solution shall regularly report to the [..] Committee on the
implementation of such solution.

3. Where a dispute cannot be resolved as provided for under paragraph 1, a claimant of a

Party alleging a breach of the provisions referred to in Article 10.24 (1) (Scope and
Definitions) and seeking to submit a claim shall submit a request for consultations to the other
Party.

4. The request shall contain the following information:

(a) the name and address of the claimant and, where such request is submitted on
behalf of a locally established company, the name, address and place of
incorporation of the locally established company

(b) a description of the investment and of its ownership and control;

(c) the provisions referred to in Article 10.24 (1) (Scope and Definitions) alleged to
have been breached;

(d) the legal and factual basis for the claim, including the measure alleged to be
inconsistent with the provisions in Article 10.24 (1) (Scope and Definitions);

(e) the relief sought and the estimated amount of damages claimed; and

(f) information concerning the ultimate beneficial owner and corporate structure of
the claimant and evidence establishing that the claimant is an investor of the other
Party and that it owns or controls the investment and, where it acts on behalf of a
locally established enterprise, that it owns or controls the locally established
enterprise.

5. Unless the disputing parties agree to a longer period, consultations shall commence no
later than 60 days of the submission of the request for consultations.
6. Unless the disputing parties agree otherwise, the place of consultation shall be:

(a) Santiago de Chile where the consultations concern an alleged breach by Chile;

(b) Brussels where the consultations concern an alleged breach by the European
Union; or

(c) the capital of the Member State of the European Union concerned, where the
consultations concern an alleged breach by that Member State exclusively.

The disputing parties may agree to hold consultations through videoconference or other
means where appropriate.

7. The request for consultations must be submitted:

(a) within three years of the date on which the claimant or, if the claimant acts on
behalf of the locally established enterprise, the date on which the locally
established enterprise, first acquired, or should have first acquired, knowledge of
the measure alleged to be inconsistent with the provisions referred to in Article
10.24 (1) (Scope and Definitions) and of the loss or damage alleged to have been
incurred thereby; or

(b) within two years of the date on which the claimant or, if the claimant acts on
behalf of the locally established enterprise, the date on which the locally
established enterprise ceases to pursue claims or proceedings before a tribunal or
court under the domestic law of a Party; and, in any event, no later than 5 years
after the date on which the claimant or, if the claimant acts on behalf of the locally
established enterprise, the date on which the locally established enterprise first
acquired, or should have first acquired knowledge, of the measure alleged to be
inconsistent with the provisions referred to in Article 10.24 (1) (Scope and
Definitions) and of the loss or damage alleged to have been incurred thereby.

8. In the event that the claimant has not submitted a claim pursuant to Article 10.29
(Submission of a Claim) within 18 months of submitting the request for consultations,
the claimant shall be deemed to have withdrawn its request for consultations and, where
applicable, the notice requesting a determination of the respondent pursuant to Article
 10.27 (Request for Determination of the Respondent) and may not submit a claim under
this Section with respect to the same alleged breach. This period may be extended by
agreement between the parties involved in the consultations.

9. A continuing breach may not renew or interrupt the periods set out in paragraph 7.

10. In the event that the request for consultations concerns an alleged breach of the
Agreement by the European Union, or by a Member State of the European Union, it
shall be sent to the European Union. Where an alleged breach of the Agreement by a
Member State of the European Union is identified, it shall also be sent to the Member
State concerned.

SUB-SECTION 3

Submission of a Claim and Conditions Precedent

Article 10.27

Request for Determination of the Respondent

1. If the dispute cannot be settled within 90 days of the submission of the request for
consultations, the request concerns an alleged breach of the Agreement by the European
Union or a Member State of the European Union and the claimant intends to initiate
proceedings pursuant to Article 10.29 (Submission of a Claim), the claimant shall
deliver a notice to the European Union requesting a determination of the respondent.

2. The notice shall identify the measures in respect of which the claimant intends to initiate
proceedings. Where a measure of a Member State of the European Union is identified,
such notice shall also be sent to the Member State concerned.

3. The European Union shall, after having made a determination, inform the claimant as
soon as possible, and in any case no later than 60 days of the receipt of the notice
 referred to in paragraph 1, as to whether the European Union or a Member State of the
European Union shall be the respondent24.

4. If the claimant has not been informed of the determination within 60 days after
delivering the notice referred to in paragraph 1, the respondent shall be:

(a) the Member State, if the measure or measures identified in the notice are exclusively
measures of a Member State of the European Union; or

(b) the European Union, if the measure or measures identified in the notice include
measures of the European Union.

5. If the claimant submits a claim pursuant to Article 10.29 (Submission of a Claim), it

shall do so on the basis of such determination and, if no such determination has been
communicated to the investor, on the basis of the application of paragraph 4.

6. Where either the European Union or a Member State of the European Union acts as
respondent following a determination made pursuant to paragraph 3, neither the
European Union nor the Member State concerned may assert the inadmissibility of the
claim, lack of jurisdiction of the Tribunal or otherwise assert that the claim or award is
unfounded or invalid on the ground that the proper respondent should be or should have
been the European Union rather than the Member State or vice versa.

7. The Tribunal and the Appeal Tribunal shall be bound by the determination made
pursuant to paragraph 3 and, if no such determination has been communicated to the
claimant, the application of paragraph 4.

8. Nothing in this Agreement or the applicable rules on dispute settlement shall prevent the
exchange of all information relating to a dispute between the European Union and the
Member State concerned.

Article 10.28

24
For greater certainty, the European Union shall make such determination solely based on the application of
the FRR 912/2014.
 Requirements for a submission of a claim

1. Before submitting a claim the claimant shall:

(a) Withdraw any pending claim or proceeding before any domestic or international court or
tribunal under domestic or international law concerning any measure alleged to constitute a
breach referred to in Article 10.24 (1) (Scope and Definitions);

(b) provide a written waiver that it will not initiate any claim or proceedings before any
domestic or international court or tribunal under domestic or international law concerning any
measure alleged to constitute a breach referred to in Article 10.24 (1) (Scope and Definitions);

(c) a declaration that it will not enforce any award rendered pursuant to this Section before
such award has become final pursuant to Article 10.55 (Final Award), and will not seek to
appeal, review, set aside, annul, revise or initiate any other similar procedure before an
international or domestic court or tribunal, as regards an award pursuant to this section.

2. The Tribunal shall dismiss a claim by a claimant who has submitted a claim to the Tribunal
or to any other domestic or international court or tribunal concerning the same measure as that
alleged to be inconsistent with the provisions referred to in Article 10.24 (1) (Scope and
Definitions) unless the claimant withdraws such pending claim. This paragraph shall not
apply where the claimant submits a claim to a domestic court or tribunal seeking interim
injunctive or declaratory relief.

3. For the purposes of this Article, the term "claimant" includes the investor and, if the
investor acted on behalf of the locally established enterprise, the locally established
enterprise. In addition, for the purposes of paragraphs 1(a) and 2 this Article the term
“claimant” also includes:

(a) where the claim is submitted by an investor acting on its own behalf, all persons who,
directly or indirectly, have an ownership interest in or are controlled by the investor; or

(b) where the claim is submitted by an investor acting on behalf of a locally established
enterprise, all persons who, directly or indirectly, have an ownership interest in or are
controlled by the locally established enterprise,
and claim to have suffered the same loss or damage as the investor or locally established
enterprise.25

Article 10.29

Submission of a Claim

1. If the dispute cannot be settled within six months of the submission of the request for
consultations and, where applicable, at least three months have elapsed from the
submission of the notice requesting a determination of the respondent pursuant to
Article 10.27 (Request for Determination of the Respondent), the claimant, provided
that it satisfies the requirements set out in this Article and in Article 10.31 (Consent),
may submit a claim to the Tribunal established pursuant to Article 10.33 (Tribunal of
First Instance (“Tribunal”)).

2. A claim may be submitted to the Tribunal under one of the following sets of rules on
dispute settlement:

(a) the Convention on the Settlement of Investment Disputes between States and
Nationals of Other States of 18 March 1965 (ICSID) provided that both the
respondent and the State of the claimant are parties to the ICSID Convention;

(b) the ICSID Additional Facility Rules provided that either the respondent or the
State of the claimant is a party to the ICSID Convention;

(c) the UNCITRAL Arbitration Rules; or

(d) any other rules agreed by the disputing parties at the request of the claimant.

25
For greater certainty, the same loss or damage means loss or damage flowing from the same measure
which the person seeks to recover in the same capacity as the claimant (e.g. if the claimant sues as a
shareholder, this provision would cover a related person also pursuing recovery as a shareholder).
3. The rules on dispute settlement referred to in paragraph 2 shall apply subject to the rules
set out in this Chapter, as supplemented by any rules adopted by the [...] Committee.

4. All the claims identified by the claimant in the submission of its claim pursuant to this
Article must be based on information identified in its request for consultations pursuant
to Article 10.26 (4) (c) and (d) (Consultations and amicable resolution).

5. Claims submitted in the name of a class composed of a number of unidentified

claimants, or submitted by a representative intending to conduct the proceedings in the
interests of a number of identified or unidentified claimants that delegate all decisions
relating to the proceedings on their behalf, shall not be admissible.

6. For greater certainty, a claimant may not submit a claim under this Section if its
investment has been made through fraudulent misrepresentation, concealment,
corruption, or conduct amounting to an abuse of process.

Article 10.30

Counterclaims

1. The respondent may submit a counterclaim on the basis of an investor’s failure to

comply with an international obligation applicable in the territories of both Parties, 26
arising in connection with the factual basis of the claim. 27

2. The counterclaim shall be submitted no later than in the Respondent’s counter-memorial

or statement of defence, or at a later stage in the proceedings if the Tribunal decides that
the delay was justified under the circumstances.

3. For greater certainty, claimant’s consent to the procedures under this Section includes
the submission of counterclaims by the respondent.

26
For greater certainty, the obligations referred to in this paragraph shall be based on legal commitments that
the Parties have consented to.
27
The Joint Council/Committee shall, at the request of a Party, issue binding interpretations pursuant to article
[insert] to clarify the scope of international obligations that are referred to in this paragraph.
 Article 10.31

Consent

1. The respondent consents to the submission of a claim under this Section.

2. The consent under paragraph 1 and the submission of a claim under this Section shall be
deemed to satisfy the requirements of:

(a) Article 25 of the ICSID Convention and the ICSID Additional Facility Rules for
written consent of the disputing parties; and,

(b) Article II of the New York Convention for the Recognition and Enforcement of
Foreign Arbitral Awards for an “agreement in writing”.

3. The claimant is deemed to give consent in accordance with the procedures provided for
in this Section at the time of submitting a claim pursuant to Article 10.29 (Submission
of a Claim).

Article 10.32

Third Party Funding

1. If a disputing party has received or is receiving third party funding, or has arranged to
receive third party funding, the disputing party benefiting from it shall disclose to the other
disputing party and to the division of the Tribunal, or where the division of the Tribunal is not
established, to the President of the Tribunal, the name and address of the third party funder,
and where applicable, ultimate beneficial owner and corporate structure.

2. This disputing party shall make the disclosure under paragraph 1 at the time of
submission of a claim, or, if the third party funding is arranged after the submission of a
claim, without delay, as soon as the arrangement is concluded or the donation or grant is
made. The disputing party shall immediately notify the tribunal of any changes to the
information disclosed.

3. The Tribunal may order disclosure of further information regarding the funding
arrangement and the third party funder if it deems it necessary at any stage of the proceeding.

SUB-SECTION 4

Investment Court System

Article 10.33

Tribunal of First Instance (“Tribunal”)

1. A Tribunal of First Instance (“Tribunal”) is hereby established to hear claims submitted

pursuant to Article 10.29 (Submission of a Claim).

2. The […] Committee shall, upon the entry into force of this Agreement, appoint nine
Judges to the Tribunal. Three of the Judges shall be nationals of a Member State of the
European Union, three shall be nationals of Chile and three shall be nationals of third
countries. In appointing the Judges, the Committee is encouraged to consider the need
to ensure diversity and a fair gender representation.

3. The […] Committee may decide to increase or to decrease the number of the Judges by
multiples of three. Additional appointments shall be made on the same basis as provided
for in paragraph 2.

4. The Judges shall possess the qualifications required in their respective countries for
appointment to judicial office, or be jurists of recognised competence. They shall have
demonstrated expertise in public international law. It is desirable that they have
 expertise in international investment law, international trade law and the resolution of
disputes arising under international investment or international trade agreements.

5. The Judges appointed pursuant to this Section shall be appointed for a five-year term.
However, the terms of five (two nationals of a Member State of the European Union,
two nationals of Chile and one national of third countries) of the nine persons appointed
immediately after the entry into force of the Agreement, to be determined by lot, shall
extend to eight years. Vacancies shall be filled as they arise. A person appointed to
replace a person whose term of office has not expired shall hold office for the remainder
of the predecessor’s term. A person who is serving on a division of the Tribunal when
his or her term expires may, with the authorization of the President of the Tribunal,
continue to serve on the division until the closure of the proceedings of that division and
shall, for that purpose only, be deemed to continue to be a Judge of the Tribunal.

6. The Tribunal shall have a President and Vice-President responsible for organisational
issues, with the assistance of the Secretariat. The President and the Vice-President shall
be selected by lot for a two-year term from among the Judges who are nationals of third
countries. They shall serve on the basis of a rotation drawn by lot by the Chair of the
[…] Committee. The Vice-President shall replace the President when the President is
unavailable.

7. The Tribunal shall hear cases in divisions consisting of three Judges, of whom one shall
be a national of a Member State of the European Union, one a national of Chile and one
a national of a third country. The division shall be chaired by the Judge who is a
national of a third country.

8. When a claim is submitted pursuant to 10.29 (Submission of a Claim), the composition

of the division of the Tribunal hearing the case shall be established by the President of
the Tribunal on a rotation basis, ensuring that the composition of the divisions is
random and unpredictable, while giving equal opportunity to all Judges to serve.

9. Notwithstanding paragraph 7, the disputing parties may agree that a case be heard by a
sole Judge who is a national of a third country, to be selected by the President of the
Tribunal. The respondent shall give sympathetic consideration to such a request from
the claimant, in particular where the compensation or damages claimed are relatively
low. Such a request should be made at the same time as the filing of the claim pursuant
to Article 10.29 (Submission of a Claim).

10. The Tribunal shall draw up its own working procedures, after discussing with the
Parties.
11. The Judges shall be available at all times and on short notice, and shall stay abreast of
dispute settlement activities under this Agreement.

12. In order to ensure their availability, the Judges shall be paid a monthly retainer fee to be
fixed by decision of the […] Committee. The President of the Tribunal and, where
applicable, the Vice-President, shall receive a fee equivalent to the fee determined
pursuant to Article 10.34 (11) (Appeal Tribunal) for each day worked in fulfilling the
functions of President of the Tribunal pursuant to this Section.

13. The retainer fee shall be paid by both Parties taking into account their respective levels
of development into an account managed by the Secretariat of ICSID. In the event that
one Party fails to pay the retainer fee the other Party may elect to pay. Any such arrears
will remain payable, with appropriate interest. The Committee shall regularly review the
amount and repartition of the fees referred to above and may recommend relevant
adjustments.

14. Unless the […] Committee adopts a decision pursuant to paragraph 15, the amount of
the other fees and expenses of the Judges on a division of the Tribunal shall be those
determined pursuant to Regulation 14 (1) of the Administrative and Financial
Regulations of the ICSID Convention in force on the date of the submission of the claim
and allocated by the Tribunal among the disputing parties in accordance with Article
10.53 (4 [specific paras tbd]) (Provisional Award).

15. Upon a decision by the […] Committee, the retainer fee and other fees and expenses
may be permanently transformed into a regular salary. In such an event, the Judges shall
serve on a full-time basis and the […] Committee shall fix their remuneration and
related organisational matters. In that event, the Judges shall not be permitted to engage
in any occupation, whether gainful or not, unless exemption is exceptionally granted by
the President of the Tribunal.

16. The Secretariat of ICSID shall act as Secretariat for the Tribunal and provide it with
appropriate support. The expenses for such support shall be allocated by the Tribunal
among the disputing parties in accordance with Article 10.53 (Provisional Award)
paragraphs 4, 5 and 6 [specific paras tbd].

Article 10.34
 Appeal Tribunal

1. A permanent Appeal Tribunal is hereby established to hear appeals from the awards
issued by the Tribunal.

2. The […] Committee shall, upon the entry into force of this Agreement, appoint six
Members to the Appeal Tribunal. Two of the Members shall be nationals of a Member
State of the European Union, two shall be nationals of Chile and two shall be nationals
of third countries. In appointing the Members of the Appeal Tribunal, the Committee is
encouraged to consider the need to ensure diversity and a fair gender representation.

3. The Committee may decide to increase the number of the Members of the Appeal
Tribunal by multiples of three. Additional appointments shall be made on the same basis
as provided for in paragraph 2.

4. The Members of the Appeal Tribunal shall possess the qualifications required in their
respective countries for appointment to the highest judicial offices, or be jurists of
recognised competence. They shall have demonstrated expertise in public international
law. It is desirable that they have expertise in international investment law, international
trade law and the resolution of disputes arising under international investment or
international trade agreements.

5. Members of the Appeal Tribunal shall be appointed for a five-year term. However, the
terms of three of the six persons appointed immediately after the entry into force of the
Agreement, to be determined by lot, shall extend to eight years. Vacancies shall be
filled as they arise. A person appointed to replace a person whose term of office has not
expired shall hold office for the remainder of the predecessor’s term. A person who is
serving on a division of the Tribunal when his or her term expires may, with the
authorization of the President of the Tribunal, continue to serve on the division until the
closure of the proceedings of that division and shall, for that purpose only, be deemed to
continue to be a Member of the Appeal Tribunal.

6. The Appeal Tribunal shall have a President and Vice-President responsible for
organisational issues, with the assistance of the Secretariat. The President and the Vice-
President shall be selected by lot for a two-year term from among the Members who are
nationals of third countries. They shall serve on the basis of a rotation drawn by lot by
the Chair of the […] Committee. The Vice-President shall replace the President when
the President is unavailable.
7. The Appeal Tribunal shall hear appeals in divisions consisting of three Members, of
whom one shall be a national of a Member State of the European Union, one a national
of Chile and one a national of a third country. The division shall be chaired by the
Member who is a national of a third country.

8. The composition of the division hearing each appeal shall be established in each case by
the President of the Appeal Tribunal on a rotation basis, ensuring that the composition
of each division is random and unpredictable, while giving equal opportunity to all
Members to serve.

9. The Appeal Tribunal shall draw up its own working procedures, after discussing with
the Parties.

10. All Members serving on the Appeal Tribunal shall be available at all times and on short
notice and shall stay abreast of other dispute settlement activities under this agreement.

11. In order to ensure their availability, the Members of the Appeal Tribunal shall be paid a
monthly retainer fee and receive a fee for each day worked as a Member, to be
determined by decision of the […] Committee. The President of the Appeal Tribunal
and, where applicable, the Vice-President, shall receive a fee for each day worked in
fulfilling the functions of President of the Appeal Tribunal pursuant to this Section.

12. The remuneration of the Members shall be paid by both Parties taking into account their
respective levels of development into an account managed by the Secretariat of ICSID.
In the event that one Party fails to pay the retainer fee the other Party may elect to pay.
Any such arrears will remain payable, with appropriate interest. The Committee shall
regularly review the amount and repartition of the abovementioned fees and may
recommend relevant adjustments.

13. Upon a decision by the […] Committee, the retainer fee and the fees for days worked
may be permanently transformed into a regular salary. In such an event, the Members of
the Appeal Tribunal shall serve on a full-time basis and the […] Committee shall fix
their remuneration and related organisational matters. In that event, the Members shall
not be permitted to engage in any occupation, whether gainful or not, unless exemption
is exceptionally granted by the President of the Appeal Tribunal.

14. The Secretariat of ICSID shall act as Secretariat for the Appeal Tribunal and provide it
with appropriate support. The expenses for such support shall be allocated by the
 Appeal Tribunal among the disputing parties in accordance with Article 10.53
(Provisional Award) paragraphs 4, 5, 6 and 7 [specific paras tbd].

Article 10.35

Ethics

1. The Judges of the Tribunal and the Members of the Appeal Tribunal shall be chosen
from persons whose independence is beyond doubt. They shall not be affiliated with any
government.28 They shall not take instructions from any government or organisation
with regard to matters related to the dispute. They shall not participate in the
consideration of any disputes that would create a direct or indirect conflict of interest. In
so doing they shall comply with Annex [numbering tbd] (Code of Conduct for Members
of the Tribunal, the Appeal Tribunal and Mediators). In addition, upon appointment,
they shall refrain from acting as counsel or as party-appointed expert or witness in any
pending or new investment dispute under this or any other agreement or domestic law.

2. If a disputing party considers that a Judge or a Member does not meet the requirements
set out in paragraph 1, it shall send a notice of challenge to the appointment to the
President of the Tribunal or to the President of the Appeal Tribunal, respectively. The
notice of challenge shall be sent within 15 days of the date on which the composition of
the division of the Tribunal or of the Appeal Tribunal has been communicated to the
disputing party, or within 15 days of the date on which the relevant facts came to its
knowledge, if they could not have reasonably been known at the time of composition of
the division. The notice of challenge shall state the grounds for the challenge.

3. If, within 15 days from the date of the notice of challenge, the challenged Judge or
Member has elected not to resign from that division, the President of the Tribunal or the
President of the Appeal Tribunal, respectively, shall, after hearing the disputing parties
and after providing the Judge or the Member an opportunity to submit any observations,
issue a decision within 45 days of receipt of the notice of challenge and forthwith notify
the disputing parties and other Judges or Members of the division.

4. Challenges against the appointment to a division of the President of the Tribunal shall
be decided by the President of the Appeal Tribunal and vice-versa.

28
For greater certainty, the fact that a person receives an income from the government, or was formerly
employed by the government, or has a family relationship with a government official, does not in itself
render that person ineligible.
5. Upon a reasoned recommendation from the President of the Appeal Tribunal,29 the
Parties, by decision of the […] Committee, may decide to remove a Judge from the
Tribunal or a Member from the Appeal Tribunal where their behaviour is inconsistent
with the obligations set out in paragraph 1 and incompatible with their continued
membership of the Tribunal or Appeal Tribunal. If the behaviour in question is alleged
to be that of the President of the Appeal Tribunal then the President of the Tribunal of
First Instance shall submit the reasoned recommendation. Articles 10.33 (2) (Tribunal
of First Instance (“Tribunal”)) and 10.34 (2) (Appeal Tribunal) shall apply mutatis
mutandis for filling vacancies that may arise pursuant to this paragraph.

Article 10.36

Multilateral Dispute Settlement Mechanisms

The Parties shall endeavor to cooperate for the establishment of a multilateral investment
tribunal and appellate mechanism for the resolution of investment disputes. Upon the entry
into force between the Parties of an international agreement providing for such a multilateral
mechanism applicable to disputes under this Agreement, the relevant parts of this Section
shall cease to apply. The […] Committee may adopt a decision specifying any necessary
transitional arrangements.

SUB-SECTION 5

Conduct of Proceedings

Article 10.37

Applicable Law and Rules of Interpretation

29
This recommendation is without prejudice to the ability of the Committee to draw the attention of the
President of the Appeal Tribunal to the behaviour of a Judge from the Tribunal or a Member from the Appeal
Tribunal that may be inconsistent with the obligations set out in paragraph 1 and incompatible with their
continued membership of the Tribunal or Appeal Tribunal.
1. The Tribunal shall determine whether the measure in respect of which the claimant is
submitting a claim is inconsistent with any of the provisions referred to in Article 10.24
(1) (Scope and Definitions).

2. In making such determination, the Tribunal shall apply the provisions of this Agreement
and other rules of international law applicable between the Parties. It shall interpret this
Agreement in accordance with customary rules of interpretation of public international
law, as codified in the Vienna Convention on the Law of Treaties.

3. For greater certainty, in determining the consistency of a measure with the provisions
referred to in Article 10.24 (1) (Scope and Definitions), the Tribunal shall consider,
when relevant, the domestic law of a Party as a matter of fact. In doing so, the Tribunal
shall follow the prevailing interpretation given to the domestic law by the courts or
authorities of that Party and any meaning given to domestic law by the Tribunal shall
not be binding upon the courts or authorities of that Party.

4. For greater certainty, the Tribunal shall not have jurisdiction to determine the legality of
a measure alleged to constitute a breach of the provisions referred to in Article 10.24 (1)
(Scope and Definitions) under the domestic law of the disputing Party.

5. For greater certainty, if an investor of a Party submits a claim under this Section, including
a claim alleging that a Party breached Article 10.15 (Treatment of Investors and
Covered Investment), the investor has the burden of proving its claims, consistent with
general principles of international law applicable to the dispute.

6. Where serious concerns arise as regards matters of interpretation relating to [the

Investment Protection30 or the Resolution of Investment Disputes and Investment Court
System Section of this Agreement], the […] Committee may adopt decisions
interpreting this Agreement. Any such interpretation shall be binding on the Tribunal
and the Appeal Tribunal. The […] Committee may decide that an interpretation shall
have binding effect from a specific date.

30
As referred to in Article 2.19 (Scope and Definitions).
 Article 10.38

Interpretation of Annexes

Following a request for consultations pursuant to Article 10.26(3) (Consultations and

amicable resolution), the respondent may request in writing to the [Committee] that it
determines whether and, if so, to what extent the measure which is the subject of the request
for consultations falls within the scope of a non-conforming measure set out in Annex
[numbering tbd] (Reservations for Existing Measures) or Annex [numbering tbd]
(Reservations for Future Measures). This referral shall be made as soon as possible after the
reception of the request for consultations. Upon the referral to the [Committee] the periods of
time referred to in Article […] shall be suspended. The [Committee] shall attempt in good
faith to make a determination. Any such determination shall be transmitted promptly to the
disputing parties. If the [Committee] has not made a determination within three months after
the referral of the matter, the suspension of the periods of time referred to above ceases to
apply.

Article 10.39

Other Claims

Where claims are brought pursuant to this Section and Section X (State to State dispute
settlement) or another international agreement concerning the same alleged breach referred to
in Article 10.24 (1) (Scope and Definitions), and there is a potential for overlapping
compensation; or the other international claim could have a significant impact on the
resolution of the claim brought pursuant to this Section, the Tribunal shall, where relevant,
after hearing the disputing parties, take into account proceedings pursuant to Section X (State
to State dispute settlement) or another international agreement in its decision, order or award.
To this end, it may also stay its proceedings. In acting pursuant to this provision the Tribunal
shall respect Article 10.53 (10) (Provisional Award).

Article 10.40

Anti-Circumvention
For greater certainty, the Tribunal shall decline jurisdiction where the dispute had arisen, or
was reasonably foreseeable, at the time when the claimant acquired ownership or control of
the investment subject to the dispute or engaged in a corporate restructure and the Tribunal
determines, on the basis of the facts of the case, that the claimant has acquired ownership or
control of the investment or engaged in the corporate restructure for the main purpose of
submitting the claim under this Section. The possibility to decline jurisdiction in such
circumstances is without prejudice to other jurisdictional objections which could be
entertained by the Tribunal.

Article 10.41

Claims manifestly without legal merit

1. The respondent may, no later than 30 days after the constitution of the division of the
Tribunal pursuant to Article 10.33 (7) (Tribunal of First Instance (“Tribunal”)), and in
any event before the first session of the division of the Tribunal, or 30 days after the
respondent became aware of the facts on which the objection is based, file an objection
that a claim is manifestly without legal merit.

2. The respondent shall specify as precisely as possible the basis for the objection.

3. The Tribunal, after giving the disputing parties an opportunity to present their
observations on the objection, shall, at the first session of the division of the Tribunal or
promptly thereafter, issue a decision or provisional award on the objection, stating the
grounds therefor. In the event that the objection is received after the first session of the
division of the Tribunal, the Tribunal shall issue such decision or provisional award as
soon as possible, and no later than 120 days after the objection was filed. In deciding the
objection, the Tribunal shall assume the facts as alleged by the claimant to be true, and
may also consider any relevant facts not in dispute.

4. The decision of the Tribunal shall be without prejudice to the right of a disputing party
to object, pursuant to Article 10.42 (Claims Unfounded as a Matter of Law) or in the
course of the proceeding, to the legal merits of a claim and without prejudice to the
Tribunal's authority to address other objections as a preliminary question.

Article 10.42
 Claims Unfounded as a Matter of Law

1. Without prejudice to the Tribunal’s authority to address other objections as a

preliminary question or to a respondent’s right to raise any such objections at any
appropriate time, the Tribunal shall address and decide as a preliminary question any
objection by the respondent that, as a matter of law, a claim, or any part thereof,
submitted under this Section is not a claim for which an award in favour of the claimant
may be made under Article 10.53 (Provisional Award), even if the facts as alleged by
the claimant were assumed to be true. The Tribunal may also consider any relevant facts
not in dispute.

2. An objection under paragraph 1 shall be submitted to the Tribunal as soon as possible

after the division of the Tribunal is constituted, and in no event later than the date the
Tribunal fixes for the respondent to submit its counter-memorial or statement of
defence. An objection may not be submitted under paragraph 1 as long as proceedings
under Article 10.41 (Claims manifestly without legal merit) are pending, unless the
Tribunal grants leave to file an objection under this Article, after having taken due
account of the circumstances of the case.

3. On receipt of an objection under paragraph 1, and unless it considers the objection

manifestly unfounded, the Tribunal shall suspend any proceedings on the merits,
establish a schedule for considering the objection consistent with any schedule it has
established for considering any other preliminary question, and issue a decision or
provisional award on the objection, stating the grounds therefor.

Article 10.43

Transparency

1. The “UNCITRAL Transparency Rules” shall apply to disputes under this Section
mutatis mutandis, with the following additional obligations.

2. The following documents shall be included in the list of documents referred to in Article
3(1) of the UNCITRAL Transparency Rules: the agreement to mediate referred to in
Article 10.25, the request for consultations referred to in Article 10.26, the notice
requesting a determination of the respondent and the determination of the respondent
 referred to in Article 10.27, the notice of challenge and the decision on this challenge
referred to in Article 10.35, and the consolidation request referred to in Article 10.52
[para xx].

3. For greater certainty, exhibits may be made available to the public in accordance with
Article 3.3 of the of the UNCITRAL Transparency Rules.

4. Notwithstanding Article 2 of the UNCITRAL Transparency Rules, the European Union

or Chile as the case may be shall make publicly available in a timely manner and prior
to the constitution of the division, the request for consultations referred to in Article
10.26 (Consultations and amicable resolution), the request for determination of the
Respondent and the determination of the Respondent referred to in Article 10.27
(Request for Determination of the Respondent), subject to the redaction of confidential
or protected information. Such documents may be made publicly available by
communication to the repository referred to in the UNCITRAL Transparency Rules.

5. Any disputing party that intends to use information in a hearing that is designated as
confidential or protected information shall so advise the tribunal.

6. Any disputing party claiming that certain information constitutes protected or

confidential information, shall clearly designate it as such when it is submitted to the
tribunal.

7. For greater certainty, nothing in this Section requires the respondent to withhold from
the public information required to be disclosed by its law.

Article 10.44

Interim Measures

The Tribunal may order an interim measure of protection to preserve the rights of a disputing
party or to ensure that the Tribunal’s jurisdiction is made fully effective, including an order to
preserve evidence in the possession or control of a disputing party or to protect the Tribunal's
jurisdiction. The Tribunal may not order the seizure of assets nor may it prevent the
application of the treatment alleged to constitute a breach.
 Article 10.45

Discontinuance

If, following the submission of a claim under this Section, the claimant fails to take any steps
in the proceeding during 180 consecutive days or such periods as the disputing parties may
agree, the claimant shall be deemed to have withdrawn its claim and to have discontinued the
proceedings. The Tribunal shall, at the request of the respondent, and after notice to the
disputing parties, take note of the discontinuance in an order and issue an award on costs.
After such an order has been rendered the authority of the Tribunal shall lapse. The claimant
may not subsequently submit a claim on the same matter.

Article 10.46

Security for Costs

1. For greater certainty, upon request by the respondent, the Tribunal may order the
claimant to provide security for all or a part of the costs if there are reasonable grounds
to believe that the claimant risks not being able to honour a possible decision on costs
issued against it.

2. If the security for costs is not provided in full within 30 days after the Tribunal’s order
or within any other time period set by the Tribunal, the Tribunal shall so inform the
disputing parties. The Tribunal may order the suspension or termination of the
proceedings.

3. The Tribunal shall consider all evidence adduced in relation to the circumstances in
paragraph (1), including the existence of third-party funding.

Article 10.47

The Non-Disputing Party to the Agreement

1. The respondent shall, within 30 days after receipt or promptly after any dispute
concerning confidential or protected information has been resolved,31 deliver to the non-
disputing Party:

(a) a request for consultations referred to in Article 10.26 (Consultations and

amicable resolution), a notice requesting a determination referred to in Article
10.27 (Request for Determination of the Respondent), a claim referred to in
Article 10.29 (Submission of a Claim) and any other documents that are appended
to such documents;

(b) on request:

(i) pleadings, memorials, briefs, requests and other submissions made to the
Tribunal by a disputing party;

(ii) written submissions made to the Tribunal by a third person;

(iii) minutes or transcripts of hearings of the Tribunal, where available; and

(iv) orders, awards and decisions of the Tribunal.

(c) on request and at the cost of the non-disputing Party, all or part of the evidence
that has been submitted to the Tribunal.

2. The non-disputing Party has the right to attend a hearing held under this Section.

3. The Tribunal shall accept or, after consultation with the disputing parties, may invite
written or oral submissions on issues relating to the interpretation of this Agreement
from the non-disputing Party. The Tribunal shall ensure that the disputing parties are
given a reasonable opportunity to present their observations on any submission by the
non-disputing Party.

31
For greater certainty, the term confidential or protected information shall be understood as defined in
and determined pursuant to Article 7 of the UNCITRAL Transparency Rules.
 Article 10.48

Intervention by Third Parties

1. The Tribunal shall permit any natural or legal person which can establish a direct and
present interest in the specific circumstances of the dispute (the intervener) to intervene as a
third party. The intervention shall be limited to supporting, in whole or in part, the legal
position of one of the disputing parties.

2. An application to intervene must be lodged within 90 days of the publication of

submission of the claim pursuant to Article 10.29 (Submission of a Claim). The Tribunal shall
rule on the application within 90 days, after giving the disputing parties an opportunity to
submit their observations.

3. If the application to intervene is granted, the intervener shall receive a copy of every
procedural order served on the disputing parties, save, where applicable, confidential or
protected information. The intervener may submit a statement in intervention within a time
period set by the Tribunal after the communication of the procedural orders. The disputing
parties shall have an opportunity to reply to the statement in intervention. The intervener shall
be permitted to attend the hearings held under this Chapter and to make an oral statement.

4. In the event of an appeal, a natural or legal person who has intervened before the
Tribunal shall be entitled to intervene before the Appeal Tribunal. Paragraph 3 shall apply
mutatis mutandis.

5. The right of intervention conferred by this Article is without prejudice to the

possibility for the Tribunal to accept amicus curiae briefs from third persons that have a
significant interest in the proceedings in accordance with Article 4 of the UNCITRAL
Transparency Rules.

6. For greater certainty, the fact that a natural or legal person is a creditor of the claimant
shall not be considered as sufficient in itself to establish that it has a direct and present interest
in the result of the dispute.

Article 10.49
 Expert Reports

Without prejudice to the appointment of other kinds of experts where authorised by the
applicable rules referred to in Article 10.29 (Submission of a claim) paragraph 2, a tribunal,
the request of a disputing party or, after consulting the disputing parties, on its own initiative,
may appoint one or more experts to report to it in writing on any factual issue concerning
environmental, health, safety, or other matters raised by a disputing party in a proceeding.

Article 10.50

Indemnification and Other Compensation

The Tribunal shall not accept as a valid defence or similar claim the fact that the claimant or
the locally established enterprise has received, or will receive indemnification or other
compensation pursuant to an insurance or guarantee contract in respect of all or part of the
compensation sought in a dispute initiated pursuant to this Section.

Article 10.51

Role of the Parties to the Agreement

1. No Party shall bring an international claim, in respect of a dispute submitted pursuant to

Article 10.29 (Submission of a Claim) unless the other Party has failed to abide by and
comply with the award rendered in such dispute. This shall not exclude the possibility
of dispute settlement under Section X (State to State dispute settlement) in respect of a
measure of general application even if that measure is alleged to have violated the
Agreement as regards a specific investment in respect of which a dispute has been
initiated pursuant to Article 10.29 (Submission of a Claim). This is without prejudice to
Article 10.47 (The Non-Disputing Party to the Agreement).

2. Paragraph 1 does not preclude informal exchanges for the sole purpose of facilitating a
settlement of the dispute.

Article 10.52
 Consolidation

1. In the event that two or more claims that have been submitted separately under this
Section have a question of law or fact in common and arise out of the same events and
circumstances, the respondent may submit to the President of the Tribunal a request for
the consolidated consideration of all such claims or part of them. The request shall
stipulate:

(a) the names and addresses of the disputing parties to the claims sought to be
consolidated;

(b) the scope of the consolidation sought; and

(c) the grounds for the request sought.

The respondent shall also deliver the request to each claimant in a claim which the
respondent seeks to consolidate.

2. In the event that all disputing parties to the claims sought to be consolidated agree on
the consolidated consideration of the claims, the disputing parties shall submit a joint
request to the President of the Tribunal pursuant to paragraph 1. Unless the President of
the Tribunal determines that the request is manifestly unfounded, the President of the
Tribunal shall, within 30 days after receiving such joint request, constitute a new
division (the “consolidating division”) of the Tribunal pursuant to Article 10.33
(Tribunal of First Instance (“Tribunal”)) which shall have jurisdiction over some or all
of the claims, in whole or in part, which are subject to the joint consolidation request.

3. In the event that the disputing parties referred to in paragraph 2 have not reached an
agreement on consolidation within thirty days of the receipt of the request for
consolidation referred to in paragraph 1 by the last claimant to receive it, the President
of the Tribunal shall constitute a consolidating division of the Tribunal pursuant to
Article 10.33 (Tribunal of First Instance (“Tribunal”)). The consolidating division shall
assume jurisdiction over some or all of the claims, in whole or in part, if, after
considering the views of the disputing parties, it is satisfied that claims submitted
pursuant to Article 10.29 (Submission of a Claim) have a question of law or fact in
common and arise out of the same events or circumstances, and consolidation would
best serve the interests of fair and efficient resolution of the claims including the interest
of consistency of awards.
4. If the claimants have not agreed upon the dispute settlement rules from the list
contained in Article 10.29 (Submission of a Claim) paragraph 2 within 30 days after the
date of receipt of the request for consolidated consideration by the last claimant to
receive it, the consolidated consideration of the claims shall be submitted to the
consolidating division of the Tribunal under application of the UNCITRAL Arbitration
Rules subject to the rules set out in this Chapter.

5. Divisions of the Tribunal constituted under Article 10.33 (Tribunal of First Instance
(“Tribunal”)) shall cede jurisdiction in relation to the claims, or parts thereof, over
which the consolidating division has jurisdiction and the proceedings of such divisions
shall be suspended. The award of the consolidating division of the Tribunal in relation
to the parts of the claims over which it has assumed jurisdiction shall be binding on the
divisions which have jurisdiction over the remainder of the claims, as of the date the
award becomes final pursuant to Article 10.52 (Final Award).

6. A claimant whose claim is subject to consolidation may withdraw its claim or the part
thereof subject to consolidation from the dispute settlement proceedings under this
Article and such claim or part thereof may not be resubmitted under Article 10.29
(Submission of a Claim).

7. At the request of the respondent, the consolidating division of the Tribunal, on the same
basis and with the same effect as paragraphs 3 and 6 above, may decide whether it shall
have jurisdiction over all or part of a claim falling within the scope of paragraph 1
above, which is submitted after the initiation of the consolidation proceedings.

8. At the request of one of the claimants, the consolidating division of the Tribunal may
take measures in order to preserve the confidentiality of protected information of that
claimant vis-à-vis other claimants. Such measures may include the submission of
redacted versions of documents containing protected information to the other claimants
or arrangements to hold parts of the hearing in private.

Article 10.53
 Provisional Award

1. Where the Tribunal concludes that the respondent has breached any of the provisions
referred to in Article 10.24 (1) (Scope and Definitions) alleged by the claimant, the
Tribunal may, on the basis of a request from the claimant, and after hearing the
disputing parties, award only:

(a) monetary damages and any applicable interest; and

(b) restitution of property, in which case the award shall provide that the respondent
may pay monetary damages, and any applicable interest in lieu of restitution,
determined in a manner consistent with Article 10.17 (Expropriation) of Section C
(Investment Protection) of Chapter 10 (Investment).

Where the claim was submitted on behalf of a locally-established company, any award
under this paragraph shall provide that:

(a) any monetary damages and interest shall be paid to the locally established
company;

(b) any restitution of property shall be made to the locally established company.

For greater certainty, the Tribunal may not award remedies other than those referred to
in paragraph 1, nor may order the repeal, cessation or modification of the measure
concerned.

2. Monetary damages shall not be greater than the loss suffered by the claimant or, if the
claimant acted on behalf of the locally established enterprise, by the locally established
enterprise, as a result of the breach of the relevant provisions of the Agreement, reduced
by any prior damages or compensation already provided by the Party concerned. The
Tribunal shall establish such monetary damages based on the submissions of the
disputing parties, and shall consider, if applicable, contributory fault, whether deliberate
or negligent, or failure to mitigate damages.

3. For greater certainty, if an investor of a Party submits a claim pursuant Article 10.29
(Submission of a Claim) it may recover only for loss or damage that it has incurred in its
capacity as an investor of a Party.
4. The Tribunal may not award punitive damages.

5. The Tribunal shall order that the costs of the conduct of the proceedings be borne by the
unsuccessful disputing party. In exceptional circumstances, the Tribunal may apportion
such costs between the disputing parties if it determines that apportionment is
appropriate in the circumstances of the case.

6. The Tribunal shall also allocate other reasonable costs, including the reasonable costs of
legal representation and assistance, to be borne by the unsuccessful disputing party
when it dismisses a claim and renders an award pursuant to Articles 10.41 (Claims
manifestly without legal merit) and 10.42 (Claims unfounded as a matter of law). In
other circumstances, the Tribunal shall determine the allocation of other reasonable
costs, including the reasonable costs of legal representation and assistance among the
disputing parties, considering the outcome of the proceedings and other relevant
circumstances, such as the conduct of the parties.

7. Where only some parts of the claims have been successful the costs shall be adjusted,
proportionately, to the number or extent of the successful parts of the claims.

8. The Appeal Tribunal shall deal with costs in accordance with this Article.

9. No later than one year after the entry into force of this Agreement, the […] Committee
shall adopt supplemental rules on fees for the purpose of determining the maximum
amount of costs of legal representation and assistance that may be borne by specific
categories of unsuccessful disputing parties, taking into account their financial
resources.

10. The Tribunal shall issue a provisional award within 24 months of the date of submission
of the claim. If that deadline cannot be respected, the Tribunal shall adopt a decision to
that effect, which will specify to the disputing parties the reasons for such delay and
indicate an estimated date for the issuance of the provisional award.

Article 10.54

Appeal Procedure

1. Either disputing party may appeal before the Appeal Tribunal a provisional award,
within 90 days of its issuance. The grounds for appeal are:

(a) that the Tribunal has erred in the interpretation or application of the applicable
law;
 (b) that the Tribunal has manifestly erred in the appreciation of the facts, including
where relevant the appreciation of domestic law; or

(c) those provided for in Article 52 of the ICSID Convention, in so far as they are not
covered by (a) and (b).

2. The Appeal Tribunal shall reject the appeal where it finds that the appeal is unfounded.
It may also reject the appeal on an expedited basis where it is clear that the appeal is
manifestly unfounded.

3. If the Appeal Tribunal finds that the appeal is well founded, the decision of the Appeal
Tribunal shall modify or reverse the legal findings and conclusions in the provisional
award in whole or part. Its decision shall specify precisely how it has modified or
reversed the relevant findings and conclusions of the Tribunal.

4. When the facts established by the Tribunal so permit, the Appeal Tribunal shall apply
its own legal findings and conclusions to such facts and render a final decision. When
that is not possible, it shall refer the matter back to the Tribunal.

5. As a general rule, the appeal proceedings shall not exceed 180 days from the date a
party to the dispute formally notifies its decision to appeal to the date the Appeal
Tribunal issues its decision. When the Appeal Tribunal considers that it cannot issue its
decision within 180 days, it shall inform the disputing parties in writing of the reasons
for the delay together with an estimate of the period within which it will issue its
decision. In no case should the proceedings exceed 270 days.

6. A disputing party lodging an appeal shall provide security for the costs of appeal.

7. The provisions of Articles 10.32 (Third Party Funding), 10.43 (Transparency), 10.44
(Interim Measures), 10.45 (Discontinuance), 10.47 (The Non-Disputing Party to the
Agreement) and, where relevant, other provisions of this Section, shall apply mutatis
mutandis in respect of the appeal procedure.

Article 10.55
 Final Award

1. A provisional award issued pursuant to this Section shall become final if neither
disputing party has appealed the provisional award pursuant to Article 10.54 (Appeal
Procedure).

2. When a provisional award has been appealed and the Appeal Tribunal has rejected the
appeal pursuant to Article 10.54 (Appeal Procedure), the provisional award shall
become final on the date of rejection of the appeal by the Appeal Tribunal.

3. When a provisional award has been appealed and the Appeal Tribunal has rendered a
final decision, the provisional award as modified or reversed by the Appeal Tribunal
shall become final on the date of the issuance of the final decision of the Appeal
Tribunal.

4. When a provisional award has been appealed and the Appeal Tribunal has modified or
reversed the legal findings and conclusions of the provisional award and referred the
matter back to the Tribunal, the Tribunal shall, after hearing the disputing parties if
appropriate, revise its provisional award to reflect the findings and conclusions of the
Appeal Tribunal. The Tribunal shall be bound by the findings made by the Appeal
Tribunal. The Tribunal shall seek to issue its revised award within 90 days of receiving
the decision of the Appeal Tribunal. The revised provisional award will become final 90
days after its issuance.

5. The term "final award" shall include any final decision of the Appeal Tribunal rendered
pursuant to Article 10.54 (Appeal Procedure).

Article 10.56

Enforcement of Awards

1. An award rendered pursuant to this Section shall not be enforceable until it has become
final pursuant to Article 10.55 (Final Award). Final awards issued pursuant to this
 Section by the Tribunal shall be binding between the disputing parties and shall not be
subject to appeal, review, set aside, annulment or any other remedy32.

2. Each Party shall recognize an award rendered pursuant to this Agreement as binding
and enforce the pecuniary obligation within its territory as if it were a final judgement
of a court in that Party.

3. Execution of the award shall be governed by the laws concerning the execution of
judgments or awards in force where such execution is sought.

4. For greater certainty, Article X [numbering tbd] (Rights and obligations of natural or
juridical persons under this Agreement, Chapter Y) shall not prevent the recognition,
execution and enforcement of awards rendered pursuant to this Section.

5. For the purposes of Article 1 of the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, final awards issued pursuant to this Section
are arbitral awards relating to claims that are considered to arise out of a commercial
relationship or transaction.

6. For greater certainty and subject to paragraph 1, where a claim has been submitted to
dispute settlement pursuant to Article 10.29 (2) (a) (Submission of a Claim), a final
award issued pursuant to this Section shall qualify as an award under Section 6 of the
Convention on the Settlement of Investment Disputes between States and Nationals of
Other States of 18 March 1965 (ICSID).

32
For greater certainty, this does not prevent a disputing party from requesting the Tribunal to revise an award
or to interpret an award in accordance with the applicable rules on dispute settlement where this possibility is
available under the applicable rules.
 ANNEX [numbering tbd]

MEDIATION MECHANISM FOR INVESTOR-TO-STATE DISPUTES

Article 1

Initiation of the Procedure

1. Either disputing party may request, at any time, the commencement of a mediation
procedure. Such request shall be addressed to the other party in writing.
Where the request concerns an alleged breach of the Agreement by the authorities of the
European Union or by the authorities of the Member States of the European Union, and
no respondent has been determined pursuant to Article 10.27 (Request for
Determination of the Respondent) of Section D (Resolution of Investment Disputes and
Investment Court System), it shall be addressed to the European Union. Where the
request is accepted, the response shall specify whether the European Union or the
Member State concerned will be a party to the mediation33.

2. The party to which such request is addressed shall give sympathetic consideration to the
request and accept or reject it in writing within 20 working days of its receipt.

Article 2

Rules of the Mediation Procedure

1. The disputing parties shall endeavour to reach a mutually agreed solution within 90
days from the appointment of the mediator. Pending a final agreement, the disputing
parties may consider possible interim solutions.

33
For greater certainty, where the request concerns an alleged breach by the European Union, the party
to the mediation shall be the European Union and any Member State concerned shall be fully associated
in the mediation. Where the request concerns exclusively an alleged breach by a Member State, the
party to the mediation shall be the Member State concerned, unless it requests the European Union to
be party.
2. Mutually agreed solutions shall be made publicly available. However, the version
disclosed to the public may not contain any information that a disputing party has
designated as confidential or protected.

Article 3

Relationship to Dispute Settlement

1. The procedure under this mediation mechanism is not intended to serve as a basis for
dispute settlement procedures under this Agreement or another agreement. A disputing
party shall not rely on or introduce as evidence in such dispute settlement procedures,
nor shall any adjudicative body take into consideration:

(a) positions taken by a disputing party in the course of the mediation procedure;

(b) the fact that a disputing party has indicated its willingness to accept a solution to
the measure subject to mediation; or

(c) advice given or proposals made by the mediator.

2. The mediation mechanism is without prejudice to the rights and obligations of the
Parties and the disputing parties under Section D (Resolution of Investment Disputes
and Investment Court System) and Chapter YY (State to State Dispute Settlement).

3. Unless the disputing parties agree otherwise, and without prejudice to Article 10.26 (6
specific paras tbd) (Consultations and amicable resolution), all steps of the procedure,
including any advice or proposed solution, shall be confidential. However, the Party
engaged in mediation may disclose to the public that mediation is taking place.
 ANNEX [ numbering tbd]

CODE OF CONDUCT FOR MEMBERS OF THE TRIBUNAL, THE APPEAL

TRIBUNAL AND MEDIATORS
 ANNEX XXXX
EXPROPRIATION

The Parties confirm their shared understanding that:

1. Expropriation under Article 10.17 (Expropriation) may be either direct or indirect:

(a) direct expropriation occurs when an investment is nationalised or otherwise
directly expropriated through formal transfer of title or outright seizure.
(b) indirect expropriation occurs where a measure or series of measures by a Party
has an effect equivalent to direct expropriation, in that it substantially deprives
the investor of the fundamental attributes of property in its investment,
including the right to use, enjoy and dispose of its investment, without formal
transfer of title or outright seizure.

2. The determination of whether a measure or series of measures by a Party, in a specific

situation, constitutes an indirect expropriation requires a case-by-case, fact-based inquiry that
considers, among other factors:
(a) the economic impact of the measure or series of measures, although the sole
fact that a measure or series of measures of a Party has an adverse effect on the
economic value of an investment does not establish that an indirect
expropriation has occurred;
(b) the duration of the measure or series of measures by a Party; and
(c) the character of the measure or series of measures, including their object,
purpose and context.

3. For greater certainty, non-discriminatory measures by a Party that are designed and
applied to achieve legitimate policy objectives, such as the protection of public health, social
services, education, safety, environment, including climate change, or public morals, social or
consumer protection, privacy and data protection, or the promotion and protection of cultural
diversity, do not constitute indirect expropriations, unless the impact of a measure or series of
measures is so severe in light of its purpose that it is manifestly excessive.
 ANNEX XXXX
TRANSFERS-CHILE 34

1. Notwithstanding Article 10.18 (Transfers), Chile reserves the right of the Central Bank
of Chile (Banco Central de Chile) to maintain or adopt measures in conformity with Law
18.840, Constitutional Organic Law of the Central Bank of Chile (Ley 18.840, Ley Orgánica
Constitucional del Banco Central de Chile) , Decreto con Fuerza de Ley N°3 de 1997, Ley
General de Bancos (General Banking Act) and Ley de Mercado de Valores N°18.045
(Securities Market Law), in order to ensure currency stability and the normal operation of
domestic and foreign payments. Such measures include, inter alia, the establishment of
restrictions or limitations on current payments and transfers (capital movements) to or from
Chile, as well as transactions related to them, such as requiring that deposits, investments or
credits from or to a foreign country, be subject to a reserve requirement (encaje).

2. Notwithstanding paragraph 1, the reserve requirement that the Central Bank of Chile
can apply pursuant to Article 49 Nº2 of Law 18.840, shall not exceed 30 percent of the
amount transferred and shall not be imposed for a period which exceeds two years.

34
For greater certainty this Annex shall apply to transfers covered by Article 10.18 (Transfers) of the
Investment Chapter, and by the Capital Movement Chapter.
 ANNEX XXXX
PUBLIC DEBT

1. No claim that a restructuring of debt of a Party breaches an obligation under Section C

(Investment Protection) may be submitted to, or if already submitted, be pursued under
Section D (Resolution of Investment Disputes and Investment Court System) if the
restructuring is a negotiated restructuring at the time of submission, or becomes a negotiated
restructuring after such submission.

2. Notwithstanding Article xxxx (Submission of a Claim) of Section D (Resolution of

Investment Disputes and Investment Court System), and subject to paragraph [1] of this
Annex, an investor of the other Party may not submit a claim under Section D (Resolution of
Investment Disputes and Investment Court System) that a restructuring of debt of a Party
breaches Articles 10.7 (National Treatment) or 10.9 (Most Favoured Nation Treatment)35 or
an obligation under Section C (Investment Protection), unless 270 days have elapsed from the
date of submission by the claimant of the written request for consultations pursuant to Article
xxxx (Consultations) of Sub-Section 1 (Scope and Definitions) of Section D (Resolution of
Investment Disputes and Investment Court System).

3. For the purposes of this Annex:

(a) “negotiated restructuring” means the restructuring or rescheduling of debt of a
Party that has been effected through (i) a modification or amendment of debt
instruments, as provided for under their terms, including their governing law,
or (ii) a debt exchange or other similar process in which the holders of no less
than 66% of the aggregate principal amount of the outstanding debt subject to
restructuring, excluding debt held by that Party or by entities owned or
controlled by it, have consented to such debt exchange or other process.
(b) “governing law” of a debt instrument means a jurisdiction’s legal and
regulatory framework applicable to that debt instrument.

4. For greater certainty, “debt of a Party” includes, in the case of the European Union,
debt of a government of a Member State at the central, regional or local level.

35
For greater certainty, a breach of Article 2.3 (National Treatment) or Article 2.4 (Most Favoured Nation
Treatment) of Section A (Liberalisation of Investments) does not occur merely by virtue of a different treatment
provided by a Party to certain categories of investors or investments on grounds of a different macroeconomic
impact, for instance to avoid systemic risks or spillover effects, or on grounds of eligibility for debt restructuring.
 ANNEX XXXX
COMPETENT AUTHORITIES MENTIONED IN ARTICLE 10.14 PARAGRAPH 4 OF
SECTION C (INVESTMENT PROTECTION)

In the case of the EU, the competent authorities entitled to order the actions mentioned in
Article 10.14 (Investment and Regulatory Measures) paragraph 4 are the European
Commission or a court or tribunal of a Member State when applying EU law on state aid.
 ANNEX XXXX
AGREEMENTS BETWEEN MEMBER STATES OF THE EUROPEAN UNION
AND CHILE

1. Agreement between the Belgo-Luxembourg Economic Union and the Republic of

Chile on the Promotion and Reciprocal Protection of Investments, done in Brussels on
15 July 1992;

2. Agreement between the Government of the Czech Republic and the Government of
the Republic of Chile on the Reciprocal Promotion and Protection of Investments,
done in Prague on 24 April 995;

3. Agreement between the Government of the Kingdom of Denmark and the Government
of the Republic of Chile concerning the Promotion and Reciprocal Protection of
Investments, done in Copenhagen on 28 May 1993;

4. Agreement between the Federal Republic of Germany and the Republic of Chile on
the Promotion and Reciprocal Protection of Investment, done in Santiago de Chile on
21 October 1991;

5. Agreement between the Government of the Hellenic Republic and the Government of
the Republic of Chile on the Promotion and Reciprocal Protection of Investments,
done in Athens on 10 July 1996;

6. Agreement between the Kingdom of Spain and the Republic of Chile on the
Reciprocal Protection and Promotion of Investments, done in Santiago de Chile on 2
October 1991;

7. Agreement between the Government of the Republic of France and the Government of
the Republic of Chile on the Reciprocal Promotion and Protection of Investments,
done in Paris on 4 July 1992;

8. Agreement between the Government of the Republic of Croatia and the Government
of the Republic of Chile on the Reciprocal Promotion and Protection of Investments,
done in Santiago de Chile on 28 November 1994;

9. Agreement between the Government of the Republic of Chile and the Government of
the Italian Republic on the Promotion and Protection of Investments, done at Santiago
de Chile on 8 March 1993;

10. Agreement between the Republic of Austria and the Republic of Chile on the
Promotion and Reciprocal Protection of Investments, done in Santiago de Chile on 8
September 1997;
11. Agreement between the Government of the Republic of Poland and the Government of
the Republic of Chile on the Reciprocal Promotion and Protection of Investments,
done in Warsaw on 5 July 1995;

12. Agreement between the Portuguese Republic and the Republic of Chile on the
Promotion and Reciprocal Protection of Investments, done in Lisbon on 28 April
1995;

13. Agreement between the Government of Romania and the Government of the Republic
of Chile on the Reciprocal Promotion and Protection of Investments, done in
Bucharest on 4 July 1995;

14. Agreement between the Government of the Republic of Finland and the Government
of the Republic of Chile on the Promotion and Reciprocal Protection of Investments,
done at Helsinki on 27 May 1993;

15. Agreement between the Government of the Kingdom of Sweden and the Government
of the Republic of Chile on the Promotion and Reciprocal Protection of Investments,
done in Stockholm on 24 May 1993