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1988 MULTILATERAL INVESTMENT GUARANTEE AGENCY ACT, 1988 ARRANGEMENT

SECTIONS Section

1. Interpretation.
2. Approval

terms

Convention.

1. Financial and other provisions.
2. Recognition

subrogation rights. 5. Enforcement

arbitration provisions. 6. Short title. SCHEDULE Number 32

1988 MULTILATERAL INVESTMENT GUARANTEE AGENCY ACT, 1988 AN ACT TO MAKE PROVISION WITH RESPECT TO THE ACCEPTANCE BY THE STATE

THE CONVENTION PROVIDING FOR THE ESTABLISHMENT AND OPERATION

THE MULTILATERAL INVESTMENT GUARANTEE AGENCY AND TO PROVIDE FOR MATTERS, INCLUDING PAYMENTS, RELATED TO THE MATTERS AFORESAID. [23rd November, 1988] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS: Interpretation. 1.—In this Act— “the Agency” means the Multilateral Investment Guarantee Agency; “the Convention” means the Convention (the text

which is set out in the Schedule to this Act) providing for the establishment and operation

the Multilateral Investment Guarantee Agency; “the Minister” means the Minister for Finance. Approval

terms

Convention. 2.—The terms

the Convention are hereby approved. Financial and other provisions. 3.—

this section shall come into operation on the day on which the Convention enters into force for Ireland in accordance with the terms

Section (c)

Article 61

the Convention.

the State, shall be made out

the Central Fund or the growing produce thereof:— (a) payments under Articles 6, 7 and 8

the Convention in respect

subscription to the Agency; and (b) payments under Section (e)

Article 39

the Convention.

Article 7

the Convention, and any payments in respect

any such notes or obligations so created and issued shall be made out

the Central Fund or the growing produce thereof.

the account

the Exchequer and shall form part

the Central Fund and be available in any manner in which that Fund is available.

Ireland shall act as a depository for the holdings

currency

the State and other assets

the Agency and may advance to the Minister for Finance any sum or sums required for payments under this section, subject to such security, rate

interest and other terms and conditions as are agreed between the Minister and the Bank.

any advances made under subsection

this section shall be charged on the Central Fund or the growing produce thereof. Recognition

subrogation rights. 4.—The subrogation rights

the Agency, as set out in Article 18

the Convention, shall be recognised by the State. Enforcement

arbitration provisions. 5.—

Article 4

Annex II

the Convention shall, by leave

the High Court, be enforceable in the same manner as a judgment or order

the High Court to the same effect and, where leave is so given, judgment may be entered for the amount due or, as the case may be, the balance outstanding under the award.

this section, the High Court shall, in any case where enforcement

an award has been stayed in accordance with Section (i)

Article 4

Annex II

the Convention, stay enforcement

the pecuniary obligations imposed by the award and may, in any case where an application has been made in accordance with the aforesaid Section which, if granted, might result in a stay on the enforcement

the award, stay enforcement

the pecuniary obligations imposed by the award. Short title. 6.—This Act may be cited as the Multilateral Investment Guarantee Agency Act, 1988. SCHEDULE CONVENTION ESTABLISHING THE MULTILATERAL INVESTMENT GUARANTEE AGENCY Preamble The Contracting States Considering the need to strengthen international cooperation for economic development and to foster the contribution to such development

foreign investment in general and private foreign investment in particular; Recognising that the flow

foreign investment to developing countries would be facilitated and further encouraged by alleviating concerns related to non-commercial risks; Desiring to enhance the flow to developing countries

capital and technology for productive purposes under conditions consistent with their development needs, policies and objectives, on the basis

fair and stable standards for the treatment

foreign investment; Convinced that the Multilateral Investment Guarantee Agency can play an important role in the encouragement

foreign investment complementing national and regional investment guarantee programs and private insurers

non-commercial risk; and Realising that such Agency should, to the extent possible, meet its obligations without resort to its callable capital and that such an objective would be served by continued improvement in investment conditions, Have Agreed as follows: CHAPTER I Establishment, Status, Purpose and Definitions Article 1. Establishment and Status

the Agency (

1. a)There is hereby established the Multilateral Investment Guarantee Agency (hereinafter called the Agency). (
2. b)The Agency shall possess full juridical personality and, in particular, the capacity to: (
3. i)contract; (
4. ii)acquire and dispose

movable and immovable property; and (iii) institute legal proceedings. Article 2. Objective and Purposes The objective

the Agency shall be to encourage the flow

investments for productive purposes among member countries, and in particular to developing member countries, thus supplementing the activities

the International Bank for Reconstruction and Development (hereinafter referred to as the Bank), the International Finance Corporation and other international development finance institutions. To serve its objective, the Agency shall: (a) issue guarantees, including coinsurance and reinsurance, against non-commercial risks in respect

investments in a member country which flow from other member countries; (b) carry out appropriate complementary activities to promote the flow

investments to and among developing member countries; and (c) exercise such other incidental powers as shall be necessary or desirable in the furtherance

its objective. The Agency shall be guided in all its decisions by the provisions

this Article. Article 3. Definitions For the purposes

this Convention: (

1. a)“Member” means a State with respect to which this Convention has entered into force in accordance with Article 61. (
2. b)“Host country” or “host government” means a member, its government, or any public authority

a member in whose territories, as defined in Article 66, an investment which has been guaranteed or reinsured, or is considered for guarantee or reinsurance, by the Agency is to be located. (c) A “developing member country” means a member which is listed as such in Schedule A hereto as this Schedule may be amended from time to time by the Council

Governors referred to in Article 30 (hereinafter called the Council). (d) A “special majority” means an affirmative vote

not less than two-thirds

the total voting power representing not less than fifty-five percent

the subscribed shares

the capital stock

the Agency. (

1. e)A “freely usable currency” means (
2. i)any currency designated as such by the International Monetary Fund from time to time and (
3. ii)any other freely available and effectively usable currency which the Board

Directors referred to in Article 30 (hereinafter called the Board) may designate for the purposes

this Convention after consultation with the International Monetary Fund and with the approval

the country

such currency. CHAPTER II Membership and Capital Article 4. Membership (a) Membership in the Agency shall be open to all members

the Bank and to Switzerland. (

1. b)Original members shall be the States which are listed in Schedule A hereto and become parties to this Convention on or before October 30, 1987. Article 5. Capital (
2. a)The authorised capital stock

the Agency shall be one billion Special Drawing Rights (SDR 1,000,000,000). The capital stock shall be divided into 100,000 shares having a par value

SDR 10,000 each, which shall be available for subscription by members. All payment obligations

members with respect to capital stock shall be settled on the basis

the average value

the SDR in terms

United States dollars for the period January 1, 1981 to June 30, 1985, such value being 1.082 United States dollars per SDR. (b) The capital stock shall increase on the admission

a new member to the extent that the then authorised shares are insufficient to provide the shares to be subscribed by such member pursuant to Article 6. (c) The Council, by special majority, may at any time increase the capital stock

the Agency. Article 6. Subscription

Shares Each original member

the Agency shall subscribe at par to the number

shares

capital stock set forth opposite its name in Schedule A hereto. Each other member shall subscribe to such number

shares

capital stock on such terms and conditions as may be determined by the Council, but in no event at an issue price

less than par. No member shall subscribe to less than fifty shares. The Council may prescribe rules by which members may subscribe to additional shares

the authorised capital stock. Article 7. Division and Calls

Subscribed Capital The initial subscription

each member shall be paid as follows: (i) Within ninety days from the date on which this Convention enters into force with respect to such member, ten percent

the price

each share shall be paid in cash as stipulated in Section (a)

Article 8

and an additional ten percent in the form

non-negotiable, non-interest-bearing promissory notes or similar obligations to be encashed pursuant to a decision

the Board in order to meet the Agency's obligations. (ii) The remainder shall be subject to call by the Agency when required to meet its obligations. Article 8. Payment

Subscription

Shares (a) Payments

subscriptions shall be made in freely usable currencies except that payments by developing member countries may be made in their own currencies up to twenty-five percent

the paid-in cash portion

their subscriptions payable under Article 7 (i). (b) Calls on any portion

unpaid subscriptions shall be uniform on all shares. (

1. c)If the amount received by the Agency on a call shall be insufficient to meet the obligations which have necessitated the call, the Agency may make further successive calls on unpaid subscriptions until the aggregate amount received by it shall be sufficient to meet such obligations. (
2. d)Liability on shares shall be limited to the unpaid portion

the issue price. Article 9. Valuation

Currencies Whenever it shall be necessary for the purposes

this Convention to determine the value

one currency in terms

another, such value shall be as reasonably determined by the Agency, after consultation with the International Monetary Fund. Article 10. Refunds (

1. a)The Agency shall, as soon as practicable, return to members amounts paid on calls on subscribed capital if and to the extent that: (
2. i)the call shall have been made to pay a claim resulting from a guarantee or reinsurance contract and thereafter the Agency shall have recovered its payment, in whole or in part, in a freely usable currency; or (
3. ii)the call shall have been made because

a default in payment by a member and thereafter such member shall have made good such default in whole or in part; or (iii) the Council, by special majority, determines that the financial position

the Agency permits all or part

such amounts to be returned out

the Agency's revenues. (b) Any refund effected under this Article to a member shall be made in freely usable currency in the proportion

the payments made by that member to the total amount paid pursuant to calls made prior to such refund. (c) The equivalent

amounts refunded under this Article to a member shall become part

the callable capital obligations

the member under Article 7 (ii). CHAPTER III Operations Article 11. Covered Risks (a) Subject to the provisions

Sections (

1. b)and (
2. c)below, the Agency may guarantee eligible investments against a loss resulting from one or more

the following types

risk: (i) Currency Transfer any introduction attributable to the host government

restrictions on the transfer outside the host country

its currency into a freely usable currency or another currency acceptable to the holder

the guarantee, including a failure

the host government to act within a reasonable period

time on an application by such holder for such transfer; (ii) Expropriation and Similar Measures any legislative action or administrative action or omission attributable to the host government which has the effect

depriving the holder

a guarantee

his ownership or control

, or a substantial benefit from, his investment, with the exception

non-discriminatory measures

general application which governments normally take for the purpose

regulating economic activity in their territories; (iii) Breach

Contract any repudiation or breach by the host government

a contract with the holder

a guarantee, when (a) the holder

a guarantee does not have recourse to a judicial or arbitral forum to determine the claim

repudiation or breach, or (b) a decision by such forum is not rendered within such reasonable period

time as shall be prescribed in the contracts

guarantee pursuant to the Agency's regulations, or (

1. c)such a decision cannot be enforced; and (
2. iv)War and Civil Disturbance any military action or civil disturbance in any territory

the host country to which this Convention shall be applicable as provided in Article 66. (b) Upon the joint application

the investor and the host country, the Board, by special majority, may approve the extension

coverage under this Article to specific non-commercial risks other than those referred to in Section (a) above, but in no case to the risk

devaluation or depreciation

currency. (

1. c)Losses resulting from the following shall not be covered: (
2. i)any host government action or omission to which the holder

the guarantee has agreed or for which he has been responsible; and (ii) any host government action or omission or any other event occurring before the conclusion

the contract

guarantee. Article 12. Eligible Investments (a) Eligible investments shall include equity interests, including medium- or long-term loans made or guaranteed by holders

equity in the enterprise concerned, and such forms

direct investment as may be determined by the Board. (b) The Board, by special majority, may extend eligibility to any other medium- or long-term form

investment, except that loans other than those mentioned in Section (

1. a)above may be eligible only if they are related to a specific investment covered or to be covered by the Agency. (
2. c)Guarantees shall be restricted to investments the implementation

which begins subsequent to the registration

the application for the guarantee by the Agency. Such investments may include: (i) any transfer

foreign exchange made to modernise, expand, or develop an existing investment; and (ii) the use

earnings from existing investments which could otherwise be transferred outside the host country. (

1. d)In guaranteeing an investment, the Agency shall satisfy itself as to: (
2. i)the economic soundness

the investment and its contribution to the development

the host country; (ii) compliance

the investment with the host country's laws and regulations; (iii) consistency

the investment with the declared development objectives and priorities

the host country; and (iv) the investment conditions in the host country, including the availability

fair and equitable treatment and legal protection for the investment. Article 13. Eligible Investors (

1. a)Any natural person and any juridical person may be eligible to receive the Agency's guarantee provided that: (
2. i)such natural person is a national

a member other than the host country; (ii) such juridical person is incorporated and has its principal place

business in a member or the majority

its capital is owned by a member or members or nationals thereof, provided that such member is not the host country in any

the above cases; and (iii) such juridical person, whether or not it is privately owned, operates on a commercial basis. (b) In case the investor has more than one nationality, for the purposes

Section (a) above the nationality

a member shall prevail over the nationality

a non-member, and the nationality

the host country shall prevail over the nationality

any other member. (c) Upon the joint application

the investor and the host country, the Board, by special majority, may extend eligibility to a natural person who is a national

the host country or a juridical person which is incorporated in the host country or the majority

whose capital is owned by its nationals, provided that the assets invested are transferred from outside the host country. Article 14. Eligible Host Countries Investments shall be guaranteed under this Chapter only if they are to be made in the territory

a developing member country. Article 15. Host Country Approval The Agency shall not conclude any contract

guarantee before the host government has approved the issuance

the guarantee by the Agency against the risks designated for cover. Article 16. Terms and Conditions The terms and conditions

each contract

guarantee shall be determined by the Agency subject to such rules and regulations as the Board shall issue, provided that the Agency shall not cover the total loss

the guaranteed investment. Contracts

guarantee shall be approved by the President under the direction

the Board. Article 17. Payment

Claims The President under the direction

the Board shall decide on the payment

claims to a holder

a guarantee in accordance with the contract

guarantee and such policies as the Board may adopt. Contracts

guarantee shall require holders

guarantees to seek, before a payment is made by the Agency, such administrative remedies as may be appropriate under the circumstances, provided that they are readily available to them under the laws

the host country. Such contracts may require the lapse

certain reasonable periods between the occurrence

events giving rise to claims and payments

claims. Article 18. Subrogation (a) Upon paying or agreeing to pay compensation to a holder

a guarantee, the Agency shall be subrogated to such rights or claims related to the guaranteed investment as the holder

a guarantee may have had against the host country and other obligors. The contract

guarantee shall provide the terms and conditions

such subrogation. (b) The rights

the Agency pursuant to Section (

1. a)above shall be recognised by all members. (
2. c)Amounts in the currency

the host country acquired by the Agency as subrogee pursuant to Section (a) above shall be accorded, with respect to use and conversion, treatment by the host country as favorable as the treatment to which such funds would be entitled in the hands

the holder

the guarantee. In any case, such amounts may be used by the Agency for the payment

its administrative expenditures and other costs. The Agency shall also seek to enter into arrangements with host countries on other uses

such currencies to the extent that they are not freely usable. Article 19. Relationship to National and Regional Entities The Agency shall cooperate with, and seek to complement the operations

, national entities

members and regional entities the majority

whose capital is owned by members, which carry out activities similar to those

the Agency, with a view to maximising both the efficiency

their respective services and their contribution to increased flows

foreign investment. To this end, the Agency may enter into arrangements with such entities on the details

such cooperation, including in particular the modalities

reinsurance and coinsurance. Article 20. Reinsurance

National and Regional Entities (a) The Agency may issue reinsurance in respect

a specific investment against a loss resulting from one or more

the non-commercial risks underwritten by a member or agency thereof or by a regional investment guarantee agency the majority

whose capital is owned by members. The Board, by special majority, shall from time to time prescribe maximum amounts

contingent liability which may be assumed by the Agency with respect to reinsurance contracts. In respect

specific investments which have been completed more than twelve months prior to receipt

the application for reinsurance by the Agency, the maximum amount shall initially be set at ten percent

the aggregate contingent liability

the Agency under this Chapter. The conditions

eligibility specified in Articles 11 to 14 shall apply to reinsurance operations, except that the reinsured investments need not be implemented subsequent to the application for reinsurance. (b) The mutual rights and obligations

the Agency and a reinsured member or agency shall be stated in contracts

reinsurance subject to such rules and regulations as the Board shall issue. The Board shall approve each contract for reinsurance covering an investment which has been made prior to receipt

the application for reinsurance by the Agency, with a view to minimising risks, assuring that the Agency receives premiums commensurate with its risk, and assuring that the reinsured entity is appropriately committed toward promoting new investment in developing member countries. (c) The Agency shall, to the extent possible, assure that it or the reinsured entity shall have the rights

subrogation and arbitration equivalent to those the Agency would have if it were the primary guarantor. The terms and conditions

reinsurance shall require that administrative remedies are sought in accordance with Article 17 before a payment is made by the Agency. Subrogation shall be effective with respect to the host country concerned only after its approval

the reinsurance by the Agency. The Agency shall include in the contracts

reinsurance provisions requiring the reinsured to pursue with due diligence the rights or claims related to the reinsured investment. Article 21. Cooperation with Private Insurers and with Reinsurers (a) The Agency may enter into arrangements with private insurers in member countries to enhance its own operations and encourage such insurers to provide coverage

non-commercial risks in developing member countries on conditions similar to those applied by the Agency. Such arrangements may include the provision

reinsurance by the Agency under the conditions and procedures specified in Article 20. (

1. b)The Agency may reinsure with any appropriate reinsurance entity, in whole or in part, any guarantee or guarantees issued by it. (
2. c)The Agency will in particular seek to guarantee investments for which comparable coverage on reasonable terms is not available from private insurers and reinsurers. Article 22. Limits

Guarantee (a) Unless determined otherwise by the Council by special majority, the aggregate amount

contingent liabilities which may be assumed by the Agency under this Chapter shall not exceed one hundred and fifty percent

the amount

the Agency's unimpaired subscribed capital and its reserves plus such portion

its reinsurance cover as the Board may determine. The Board shall from time to time review the risk profile

the Agency's portfolio in the light

its experience with claims, degree

risk diversification, reinsurance cover and other relevant factors with a view to ascertaining whether changes in the maximum aggregate amount

contingent liabilities should be recommended to the Council. The maximum amount determined by the Council shall not under any circumstances exceed five times the amount

the Agency's unimpaired subscribed capital, its reserves and such portion

its reinsurance cover as may be deemed appropriate. (b) Without prejudice to the general limit

guarantee referred to in Section (

1. a)above, the Board may prescribe: (
2. i)maximum aggregate amounts

contingent liability which may be assumed by the Agency under this Chapter for all guarantees issued to investors

each individual member. In determining such maximum amounts, the Board shall give due consideration to the share

the respective member in the capital

the Agency and the need to apply more liberal limitations in respect

investments originating in developing member countries; and (ii) maximum aggregate amounts

contingent liability which may be assumed by the Agency with respect to such risk diversification factors as individual projects, individual host countries and types

investment or risk. Article 23. Investment Promotion (a) The Agency shall carry out research, undertake activities to promote investment flows and disseminate information on investment opportunities in developing member countries, with a view to improving the environment for foreign investment flows to such countries. The Agency may, upon the request

a member, provide technical advice and assistance to improve the investment conditions in the territories

that member. In performing these activities, the Agency shall: (

1. i)be guided by relevant investment agreements among member countries; (
2. ii)seek to remove impediments, in both developed and developing member countries, to the flow

investment to developing member countries; and (iii) coordinate with other agencies concerned with the promotion

foreign investment, and in particular the International Finance Corporation. (

1. b)The Agency also shall: (
2. i)encourage the amicable settlement

disputes between investors and host countries; (ii) endeavour to conclude agreements with developing member countries, and in particular with prospective host countries, which will assure that the Agency, with respect to investment guaranteed by it, has treatment at least as favourable as that agreed by the member concerned for the most favoured investment guarantee agency or State in an agreement relating to investment, such agreements to be approved by special majority

the Board; and (iii) promote and facilitate the conclusion

agreements, among its members, on the promotion and protection

investments. (c) The Agency shall give particular attention in its promotional efforts to the importance

increasing the flow

investments among developing member countries. Article 24. Guarantees

Sponsored Investments In addition to the guarantee operations undertaken by the Agency under this Chapter, the Agency may guarantee investments under the sponsorship arrangements provided for in Annex I to this Convention. CHAPTER IV Financial Provisions Article

1. Financial Management The Agency shall carry out its activities in accordance with sound business and prudent financial management practices with a view to maintaining under all circumstances its ability to meet its financial obligations. Article
2. Premiums and Fees The Agency shall establish and periodically review the rates

premiums, fees and other charges, if any, applicable to each type

risk. Article 27. Allocation

Net Income (a) Without prejudice to the provisions

Section (a) (iii)

Article 10

, the Agency shall allocate net income to reserves until such reserves reach five times the subscribed capital

the Agency. (b) After the reserves

the Agency have reached the level prescribed in Section (a) above, the Council shall decide whether, and to what extent, the Agency's net income shall be allocated to reserves, be distributed to the Agency's members or be used otherwise. Any distribution

net income to the Agency's members shall be made in proportion to the share

each member in the capital

the Agency in accordance with a decision

the Council acting by special majority. Article 28. Budget The President shall prepare an annual budget

revenues and expenditures

the Agency for approval by the Board. Article 29. Accounts The Agency shall publish an Annual Report which shall include statements

its accounts and

the accounts

the Sponsorship Trust Fund referred to in Annex I to this Convention, as audited by independent auditors. The Agency shall circulate to members at appropriate intervals a summary statement

its financial position and a profit and loss statement showing the results

its operations. CHAPTER V Organisation and Management Article 30. Structure

the Agency The Agency shall have a Council

Governors, a Board

Directors, a President and staff to perform such duties as the Agency may determine. Article 31. The Council (a) All the powers

the Agency shall be vested in the Council, except such powers as are, by the terms

this Convention, specifically conferred upon another organ

the Agency. The Council may delegate to the Board the exercise

any

its powers, except the power to: (i) admit new members and determine the conditions

their admission; (

1. ii)suspend a member; (iii) decide on any increase or decrease in the capital; (
2. iv)increase the limit

the aggregate amount

contingent liabilities pursuant to Section (a)

Article 22

; (v) designate a member as a developing member country pursuant to Section (c)

Article 3

; (vi) classify a new member as belonging to Category One or Category Two for voting purposes pursuant to Section (a)

Article 39

or reclassify an existing member for the same purposes; (vii) determine the compensation

Directors and their Alternates; (viii) cease operations and liquidate the Agency; (

1. ix)distribute assets to members upon liquidation; and (
2. x)amend this Convention, its Annexes and Schedules. (
3. b)The Council shall be composed

one Governor and one Alternate appointed by each member in such manner as it may determine. No Alternate may vote except in the absence

his principal. The Council shall select one

the Governors as Chairman. (c) The Council shall hold an annual meeting and such other meetings as may be determined by the Council or called by the Board. The Board shall call a meeting

the Council whenever requested by five members or by members having twenty-five percent

the total voting power. Article 32. The Board (a) The Board shall be responsible for the general operations

the Agency and shall take, in the fulfillment

this responsibility, any action required or permitted under this Convention. (b) The Board shall consist

not less than twelve Directors. The number

Directors may be adjusted by the Council to take into account changes in membership. Each Director may appoint an Alternate with full power to act for him in case

the Director's absence or inability to act. The President

the Bank shall be ex

ficio Chairman

the Board, but shall have no vote except a deciding vote in case

an equal division. (c) The Council shall determine the term

fice

the Directors. The first Board shall be constituted by the Council at its inaugural meeting. (d) The Board shall meet at the call

its Chairman acting on his own initiative or upon request

three Directors. (e) Until such time as the Council may decide that the Agency shall have a resident Board which functions in continuous session, the Directors and Alternates shall receive compensation only for the cost

attendance at the meetings

the Board and the discharge

other

ficial functions on behalf

the Agency. Upon the establishment

a Board in continuous session, the Directors and Alternates shall receive such remuneration as may be determined by the Council. Article 33. President and Staff (a) The President shall, under the general control

the Board, conduct the ordinary business

the Agency. He shall be responsible for the organisation, appointment and dismissal

the staff. (b) The President shall be appointed by the Board on the nomination

its Chairman. The Council shall determine the salary and terms

the contract

service

the President. (c) In the discharge

their

fices, the President and the staff owe their duty entirely to the Agency and to no other authority. Each member

the Agency shall respect the international character

this duty and shall refrain from all attempts to influence the President or the staff in the discharge

their duties. (d) In appointing the staff, the President shall, subject to the paramount importance

securing the highest standards

efficiency and

technical competence, pay due regard to the importance

recruiting personnel on as wide a geographical basis as possible. (e) The President and staff shall maintain at all times the confidentiality

information obtained in carrying out the Agency's operations. Article 34. Political Activity Prohibited The Agency, its President and staff shall not interfere in the political affairs

any member. Without prejudice to the right

the Agency to take into account all the circumstances surrounding an investment, they shall not be influenced in their decisions by the political character

the member or members concerned. Considerations relevant to their decisions shall be weighed impartially in order to achieve the purposes stated in Article 2. Article 35. Relations with International Organisations The Agency shall, within the terms

this Convention, cooperate with the United Nations and with other inter-governmental organisations having specialised responsibilities in related fields, including in particular the Bank and the International Finance Corporation. Article 36. Location

Principal

fice (a) The principal

fice

the Agency shall be located in Washington, D.C., unless the Council, by special majority, decides to establish it in another location. (b) The Agency may establish other

fices as may be necessary for its work. Article 37. Depositories for Assets Each member shall designate its central bank as a depository in which the Agency may keep holdings

such member's currency or other assets

the Agency or, if it has no central bank, it shall designate for such purpose such other institution as may be acceptable to the Agency. Article 38. Channel

Communication (a) Each member shall designate an appropriate authority with which the Agency may communicate in connection with any matter arising under this Convention. The Agency may rely on statements

such authority as being statements

the member. The Agency, upon the request

a member, shall consult with that member with respect to matters dealt with in Articles 19 to 21 and related to entities or insurers

that member. (b) Whenever the approval

any member is required before any act may be done by the Agency, approval shall be deemed to have been given unless the member presents an objection within such reasonable period as the Agency may fix in notifying the member

the proposed act. CHAPTER VI Voting, Adjustments

Subscriptions and Representation Article 39. Voting and Adjustments

Subscriptions (a) In order to provide for voting arrangements that reflect the equal interest in the Agency

the two Categories

States listed in Schedule A

this Convention, as well as the importance

each member's financial participation, each member shall have 177 membership votes plus one subscription vote for each share

stock held by that member. (b) If at any time within three years after the entry into force

this Convention the aggregate sum

membership and subscription votes

members which belong to either

the two Categories

States listed in Schedule A

this Convention is less than forty percent

the total voting power, members from such a Category shall have such number

supplementary votes as shall be necessary for the aggregate voting power

the Category to equal such a percentage

the total voting power. Such supplementary votes shall be distributed among the members

such Category in the proportion that the subscription votes

each bears to the aggregate

subscription votes

the Category. Such supplementary votes shall be subject to automatic adjustment to ensure that such percentage is maintained and shall be cancelled at the end

the above-mentioned three-year period. (c) During the third year following the entry into force

this Convention, the Council shall review the allocation

shares and shall be guided in its decision by the following principles: (i) the votes

members shall reflect actual subscriptions to the Agency's capital and the membership votes as set out in Section (a)

this Article; (

1. ii)shares allocated to countries which shall not have signed the Convention shall be made available for reallocation to such members and in such manner as to make possible voting parity between the above-mentioned Categories; and (iii) the Council will take measures that will facilitate members' ability to subscribe to shares allocated to them. (
2. d)Within the three-year period provided for in Section (b)

this Article, all decisions

the Council and Board shall be taken by special majority, except that decisions requiring a higher majority under this Convention shall be taken by such higher majority. (e) In case the capital stock

the Agency is increased pursuant to Section (c)

Article 5

, each member which so requests shall be authorised to subscribe a proportion

the increase equivalent to the proportion which its stock theretofore subscribed bears to the total capital stock

the Agency, but no member shall be obligated to subscribe any part

the increased capital. (f) The Council shall issue regulations regarding the making

additional subscriptions under Section (e)

this Article. Such regulations shall prescribe reasonable time limits for the submission by members

requests to make such subscriptions. Article 40. Voting in the Council (a) Each Governor shall be entitled to cast the votes

the member he represents. Except as otherwise specified in this Convention, decisions

the Council shall be taken by a majority

the votes cast. (b) A quorum for any meeting

the Council shall be constituted by a majority

the Governors exercising not less than two-thirds

the total voting power. (c) The Council may by regulation establish a procedure whereby the Board, when it deems such action to be in the best interests

the Agency, may request a decision

the Council on a specific question without calling a meeting

the Council. Article 41. Election

Directors (

1. a)Directors shall be elected in accordance with Schedule B. (
2. b)Directors shall continue in

fice until their successors are elected. If the

fice

a Director becomes vacant more than ninety days before the end

his term, another Director shall be elected for the remainder

the term by the Governors who elected the former Director. A majority

the votes cast shall be required for election. While the

fice remains vacant, the Alternate

the former Director shall exercise his powers, except that

appointing an Alternate. Article 42. Voting in the Board (a) Each Director shall be entitled to cast the number

votes

the members whose votes counted towards his election. All the votes which a Director is entitled to cast shall be cast as a unit. Except as otherwise specified in this Convention, decisions

the Board shall be taken by a majority

the votes cast. (b) A quorum for a meeting

the Board shall be constituted by a majority

the Directors exercising not less than one-half

the total voting power. (c) The Board may by regulation establish a procedure whereby its Chairman, when he deems such action to be in the best interests

the Agency, may request a decision

the Board on a specific question without calling a meeting

the Board. CHAPTER VII Privileges and Immunities Article 43. Purposes

Chapter To enable the Agency to fulfil its functions, the immunities and privileges set forth in this Chapter shall be accorded to the Agency in the territories

each member. Article 44. Legal Process Actions other than those within the scope

Articles 57 and 58 may be brought against the Agency only in a court

competent jurisdiction in the territories

a member in which the Agency has an

fice or has appointed an agent for the purpose

accepting service or notice

process. No such action against the Agency shall be brought (

1. i)by members or persons acting for or deriving claims from members or (
2. ii)in respect

personnel matters. The property and assets

the Agency shall, wherever located and by whomsoever held, be immune from all forms

seizure, attachment or execution before the delivery

the final judgment or award against the Agency. Article 45. Assets (a) The property and assets

the Agency, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation, expropriation or any other form

seizure by executive or legislative action. (b) To the extent necessary to carry out its operations under this Convention, all property and assets

the Agency shall be free from restrictions, regulations, controls and moratoria

any nature; provided that property and assets acquired by the Agency as successor to or subrogee

a holder

a guarantee, a reinsured entity or an investor insured by a reinsured entity shall be free from applicable foreign exchange restrictions, regulations and controls in force in the territories

the member concerned to the extent that the holder, entity or investor to whom the Agency was subrogated was entitled to such treatment. (c) For purposes

this Chapter, the term “assets” shall include the assets

the Sponsorship Trust Fund referred to in Annex I to this Convention and other assets administered by the Agency in furtherance

its objective. Article 46. Archives and Communications (a) The archives

the Agency shall be inviolable, wherever they may be. (b) The

ficial communications

the Agency shall be accorded by each member the same treatment that is accorded to the

ficial communications

the Bank. Article 47. Taxes (a) The Agency, its assets, property and income, and its operations and transactions authorised by this Convention, shall be immune from all taxes and customs duties. The Agency shall also be immune from liability for the collection or payment

any tax or duty. (b) Except in the case

local nationals, no tax shall be levied on or in respect

expense allowances paid by the Agency to Governors and their Alternates or on or in respect

salaries, expense allowances or other emoluments paid by the Agency to the Chairman

the Board, Directors, their Alternates, the President or staff

the Agency. (c) No taxation

any kind shall be levied on any investment guaranteed or reinsured by the Agency (including any earnings therefrom) or any insurance policies reinsured by the Agency (including any premiums and other revenues therefrom) by whomsoever held: (

1. i)which discriminates against such investment or insurance policy solely because it is guaranteed or reinsured by the Agency; or (
2. ii)if the sole jurisdictional basis for such taxation is the location

any

fice or place

business maintained by the Agency. Article 48.

ficials

the Agency All Governors, Directors, Alternates, the President and staff

the Agency: (i) shall be immune from legal process with respect to acts performed by them in their

ficial capacity; (ii) not being local nationals, shall be accorded the same immunities from immigration restrictions, alien registration requirements and national service obligations, and the same facilities as regards exchange restrictions as are accorded by the members concerned to the representatives,

ficials and employees

comparable rank

other members; and (iii) shall be granted the same treatment in respect

travelling facilities as is accorded by the members concerned to representatives,

ficials and employees

comparable rank

other members. Article 49. Application

this Chapter Each member shall take such action as is necessary in its own territories for the purpose

making effective in terms

its own law the principles set forth in this Chapter and shall inform the Agency

the detailed action which it has taken. Article 50. Waiver The immunities, exemptions and privileges provided in this Chapter are granted in the interests

the Agency and may be waived, to such extent and upon such conditions as the Agency may determine, in cases where such a waiver would not prejudice its interests. The Agency shall waive the immunity

any

its staff in cases where, in its opinion, the immunity would impede the course

justice and can be waived without prejudice to the interests

the Agency. CHAPTER VIII Withdrawal, Suspension

Membership and Cessation

Operations Article 51. Withdrawal Any member may, after the expiration

three years following the date upon which this Convention has entered into force with respect to such member, withdraw from the Agency at any time by giving notice in writing to the Agency at its principal

fice. The Agency shall notify the Bank, as depository

this Convention,

the receipt

such notice. Any withdrawal shall become effective ninety days following the date

the receipt

such notice by the Agency. A member may revoke such notice as long as it has not become effective. Article 52. Suspension

Membership (a) If a member fails to fulfill any

its obligations under this Convention, the Council may, by a majority

its members exercising a majority

the total voting power, suspend its membership. (b) While under suspension a member shall have no rights under this Convention, except for the right

withdrawal and other rights provided in this Chapter and Chapter IX, but shall remain subject to all its obligations. (c) For purposes

determining eligibility for guarantee or reinsurance to be issued under Chapter III or Annex I to this Convention, a suspended member shall not be treated as a member

the Agency. (d) The suspended member shall automatically cease to be a member one year from the date

its suspension unless the Council decides to extend the period

suspension or to restore the member to good standing. Article 53. Rights and Duties

States Ceasing to be Members (a) When a State ceases to be a member, it shall remain liable for all its obligations, including its contingent obligations, under this Convention which shall have been in effect before the cessation

its membership. (

1. b)Without prejudice to Section (
2. a)above, the Agency shall enter into an arrangement with such State for the settlement

their respective claims and obligations. Any such arrangement shall be approved by the Board. Article 54. Suspension

Operations (a) The Board may, whenever it deems it justified, suspend the issuance

new guarantees for a specified period. (b) In an emergency, the Board may suspend all activities

the Agency for a period not exceeding the duration

such emergency, provided that necessary arrangements shall be made for the protection

the interests

the Agency and

third parties. (c) The decision to suspend operations shall have no effect on the obligations

the members under this Convention or on the obligations

the Agency towards holders

a guarantee or reinsurance policy or towards third parties. Article 55. Liquidation (a) The Council, by special majority, may decide to cease operations and to liquidate the Agency. Thereupon the Agency shall forthwith cease all activities, except those incident to the orderly realisation, conservation and preservation

assets and settlement

obligations. Until final settlement and distribution

assets, the Agency shall remain in existence and all rights and obligations

members under this Convention shall continue unimpaired. (b) No distribution

assets shall be made to members until all liabilities to holders

guarantees and other creditors shall have been discharged or provided for and until the Council shall have decided to make such distribution. (c) Subject to the foregoing, the Agency shall distribute its remaining assets to members in proportion to each member's share in the subscribed capital. The Agency shall also distribute any remaining assets

the Sponsorship Trust Fund referred to in Annex I to this Convention to sponsoring members in the proportion which the investments sponsored by each bears to the total

sponsored investments. No member shall be entitled to its share in the assets

the Agency or the Sponsorship Trust Fund unless that member has settled all outstanding claims by the Agency against it. Every distribution

assets shall be made at such times as the Council shall determine and in such manner as it shall deem fair and equitable. CHAPTER IX Settlement

Disputes Article 56. Interpretation and Application

the Convention (a) Any question

interpretation or application

the provisions

this Convention arising between any member

the Agency and the Agency or among members

the Agency shall be submitted to the Board for its decision. Any member which is particularly affected by the question and which is not otherwise represented by a national in the Board may send a representative to attend any meeting

the Board at which such question is considered. (

1. b)In any case where the Board has given a decision under Section (
2. a)above, any member may require that the question be referred to the Council, whose decision shall be final. Pending the result

the referral to the Council, the Agency may, so far as it deems necessary, act on the basis

the decision

the Board. Article 57. Disputes between the Agency and Members (a) Without prejudice to the provisions

Article 56

and

Section (b)

this Article, any dispute between the Agency and a member or an agency thereof and any dispute between the Agency and a country (or agency thereof) which has ceased to be a member, shall be settled in accordance with the procedure set out in Annex II to this Convention. (b) Disputes concerning claims

the Agency acting as subrogee

an investor shall be settled in accordance with either (

1. i)the procedure set out in Annex II to this Convention, or (
2. ii)an agreement to be entered into between the Agency and the member concerned on an alternative method or methods for the settlement

such disputes. In the latter case, Annex II to this Convention shall serve as a basis for such an agreement which shall, in each case, be approved by the Board by special majority prior to the undertaking by the Agency

operations in the territories

the member concerned. Article 58. Disputes Involving Holders

a Guarantee or Reinsurance Any dispute arising under a contract

guarantee or reinsurance between the parties thereto shall be submitted to arbitration for final determination in accordance with such rules as shall be provided for or referred to in the contract

guarantee or reinsurance. CHAPTER X Amendments Article 59. Amendment by Council (a) This Convention and its Annexes may be amended by vote

three-fifths

the Governors exercising four-fifths

the total voting power, provided that: (i) any amendment modifying the right to withdraw from the Agency provided in Article 51 or the limitation on liability provided in Section (d)

Article 8

shall require the affirmative vote

all Governors; and (ii) any amendment modifying the loss-sharing arrangement provided in Articles 1 and 3

Annex I to this Convention which will result in an increase in any member's liability thereunder shall require the affirmative vote

the Governor

each such member. (

1. b)Schedules A and B to this Convention may be amended by the Council by special majority. (
2. c)If an amendment affects any provision

Annex I to this Convention, total votes shall include the additional votes allotted under Article 7

such Annex to sponsoring members and countries hosting sponsored investments. Article 60. Procedure Any proposal to amend this Convention, whether emanating from a member or a Governor or a Director, shall be communicated to the Chairman

the Board who shall bring the proposal before the Board. If the proposed amendment is recommended by the Board, it shall be submitted to the Council for approval in accordance with Article 59. When an amendment has been duly approved by the Council, the Agency shall so certify by formal communication addressed to all members. Amendments shall enter into force for all members ninety days after the date

the formal communication unless the Council shall specify a different date. CHAPTER XI Final Provisions Article 61. Entry into Force (a) This Convention shall be open for signature on behalf

all members

the Bank and Switzerland and shall be subject to ratification, acceptance or approval by the signatory States in accordance with their constitutional procedures. (b) This Convention shall enter into force on the day when not less than five instruments

ratification, acceptance or approval shall have been deposited on behalf

signatory States in Category One, and not less than fifteen such instruments shall have been deposited on behalf

signatory States in Category Two; provided that total subscriptions

these States amount to not less than one-third

the authorised capital

the Agency as prescribed in Article 5. (c) For each State which deposits its instrument

ratification, acceptance or approval after this Convention shall have entered into force, this Convention shall enter into force on the date

such deposit. (d) If this Convention shall not have entered into force within two years after its opening for signature, the President

the Bank shall convene a conference

interested countries to determine the future course

action. Article 62. Inaugural Meeting Upon entry into force

this Convention, the President

the Bank shall call the inaugural meeting

the Council. This meeting shall be held at the principal

fice

the Agency within sixty days from the date on which this Convention has entered into force or as soon as practicable thereafter. Article 63. Depository Instruments

ratification, acceptance or approval

this Convention and amendments thereto shall be deposited with the Bank which shall act as the depository

this Convention. The depository shall transmit certified copies

this Convention to States members

the Bank and to Switzerland. Article 64. Registration The depository shall register this Convention with the Secretariat

the United Nations in accordance with Article 102

the Charter

the United Nations and the Regulations thereunder adopted by the General Assembly. Article 65. Notification The depository shall notify all signatory States and, upon the entry into force

this Convention, the Agency

the following: (a) signatures

this Convention; (b) deposits

instruments

ratification, acceptance and approval in accordance with Article 63; (

1. c)the date on which this Convention enters into force in accordance with Article 61; (
2. d)exclusions from territorial application pursuant to Article 66; and (
3. e)withdrawal

a member from the Agency pursuant to Article

1. Article
2. Territorial Application This Convention shall apply to all territories under the jurisdiction

a member including the territories for whose international relations a member is responsible, except those which are excluded by such member by written notice to the depository

this Convention either at the time

ratification, acceptance or approval or subsequently. Article 67. Periodic Reviews (a) The Council shall periodically undertake comprehensive reviews

the activities

the Agency as well as the results achieved with a view to introducing any changes required to enhance the Agency's ability to serve its objectives. (b) The first such review shall take place five years after the entry into force

this Convention. The dates

subsequent reviews shall be determined by the Council. DONE at Seoul, in a single copy which shall remain deposited in the archives

the International Bank for Reconstruction and Development, which has indicated by its signature below its agreement to fulfil the functions with which it is charged under this Convention. ANNEX I Guarantees

Sponsored Investments Under Article 24 Article 1. Sponsorship (a) Any member may sponsor for guarantee an investment to be made by an investor

any nationality or by investors

any or several nationalities. (b) Subject to the provisions

Sections (b) and (c)

Article 3

this Annex, each sponsoring member shall share with the other sponsoring members in losses under guarantees

sponsored investments, when and to the extent that such losses cannot be covered out

the Sponsorship Trust Fund referred to in Article 2

this Annex, in the proportion which the amount

maximum contingent liability under the guarantees

investments sponsored by it bears to the total amount

maximum contingent liability under the guarantees

investments sponsored by all members. (c) In its decision on the issuance

guarantees under this Annex, the Agency shall pay due regard to the prospects that the sponsoring member will be in a position to meet its obligations under this Annex and shall give priority to investments which are co-sponsored by the host countries concerned. (

1. d)The Agency shall periodically consult with sponsoring members with respect to its operations under this Annex. Article 2. Sponsorship Trust Fund (
2. a)Premiums and other revenues attributable to guarantees

sponsored investments, including returns on the investment

such premiums and revenues, shall be held in a separate account which shall be called the Sponsorship Trust Fund. (b) All administrative expenses and payments on claims attributable to guarantees issued under this Annex shall be paid out

the Sponsorship Trust Fund. (c) The assets

the Sponsorship Trust Fund shall be held and administered for the joint account

sponsoring members and shall be kept separate and apart from the assets

the Agency. Article 3. Calls on Sponsoring Members (a) To the extent that any amount is payable by the Agency on account

a loss under a sponsored guarantee and such amount cannot be paid out

assets

the Sponsorship Trust Fund, the Agency shall call on each sponsoring member to pay into such Fund its share

such amount as shall be determined in accordance with Section (b)

Article 1

this Annex. (b) No member shall be liable to pay any amount on a call pursuant to the provisions

this Article if as a result total payments made by that member will exceed the total amount

guarantees covering investments sponsored by it. (c) Upon the expiry

any guarantee covering an investment sponsored by a member, the liability

that member shall be decreased by an amount equivalent to the amount

such guarantee; such liability shall also be decreased on a pro rata basis upon payment by the Agency

any claim related to a sponsored investment and shall otherwise continue in effect until the expiry

all guarantees

sponsored investments outstanding at the time

such payment. (d) If any sponsoring member shall not be liable for an amount

a call pursuant to the provisions

this Article because

the limitation contained in Sections (

1. b)and (
2. c)above, or if any sponsoring member shall default in payment

an amount due in response to any such call, the liability for payment

such amount shall be shared pro rata by the other sponsoring members. Liability

members pursuant to this Section shall be subject to the limitation set forth in Sections (

1. b)and (
2. c)above. (
3. e)Any payment by a sponsoring member pursuant to a call in accordance with this Article shall be made promptly and in freely usable currency. Article 4. Valuation

Currencies and Refunds The provisions on valuation

currencies and refunds contained in this Convention with respect to capital subscriptions shall be applied mutatis mutandis to funds paid by members on account

sponsored investments. Article 5. Reinsurance (a) The Agency may, under the conditions set forth in Article 1

this Annex, provide reinsurance to a member, an agency thereof, a regional agency as defined in Section (a)

Article 20

this Convention or a private insurer in a member country. The provisions

this Annex concerning guarantees and

Articles 20 and 21

this Convention shall be applied mutatis mutandis to reinsurance provided under this Section. (b) The Agency may obtain reinsurance for investments guaranteed by it under this Annex and shall meet the cost

such reinsurance out

the Sponsorship Trust Fund. The Board may decide whether and to what extent the loss-sharing obligation

sponsoring members referred to in Section (b)

Article 1

this Annex may be reduced on account

the reinsurance cover obtained. Article 6. Operational Principles Without prejudice to the provisions

this Annex, the provisions with respect to guarantee operations under Chapter III

this Convention and to financial management under Chapter IV

this Convention shall be applied mutatis mutandis to guarantees

sponsored investments except that (i) such investments shall qualify for sponsorship if made in the territories

any member, and in particular

any developing member, by an investor or investors eligible under Section (a)

Article 1

this Annex, and (ii) the Agency shall not be liable with respect to its own assets for any guarantee or reinsurance issued under this Annex and each contract

guarantee or reinsurance concluded pursuant to this Annex shall expressly so provide. Article 7. Voting For decisions relating to sponsored investments, each sponsoring member shall have one additional vote for each 10,000 Special Drawing Rights equivalent

the amount guaranteed or reinsured on the basis

its sponsorship, and each member hosting a sponsored investment shall have one additional vote for each 10,000 Special Drawing Rights equivalent

the amount guaranteed or reinsured with respect to any sponsored investment hosted by it. Such additional votes shall be cast only for decisions related to sponsored investments and shall otherwise be disregarded in determining the voting power

members. ANNEX II Settlement

Disputes Between a Member and the Agency Under Article 57 Article 1. Application

the Annex All disputes within the scope

Article 57

this Convention shall be settled in accordance with the procedure set out in this Annex, except in the cases where the Agency has entered into an agreement with a member pursuant to Section (b) (ii)

Article 57. Article 2.

Negotiation The parties to a dispute within the scope

this Annex shall attempt to settle such dispute by negotiation before seeking conciliation or arbitration. Negotiations shall be deemed to have been exhausted if the parties fail to reach a settlement within a period

one hundred and twenty days from the date

the request to enter into negotiation. Article 3. Conciliation (a) If the dispute is not resolved through negotiation, either party may submit the dispute to arbitration in accordance with the provisions

Article 4

this Annex, unless the parties, by mutual consent, have decided to resort first to the conciliation procedure provided for in this Article. (b) The agreement for recourse to conciliation shall specify the matter in dispute, the claims

the parties in respect thereof and, if available, the name

the conciliator agreed upon by the parties. In the absence

agreement on the conciliator, the parties may jointly request either the Secretary-General

the International Centre for Settlement

Investment Disputes (hereinafter called ICSID) or the President

the International Court

Justice to appoint a conciliator. The conciliation procedure shall terminate if the conciliator has not been appointed within ninety days after the agreement for recourse to conciliation. (c) Unless otherwise provided in this Annex or agreed upon by the parties, the conciliator shall determine the rules governing the conciliation procedure and shall be guided in this regard by the conciliation rules adopted pursuant to the Convention on the Settlement

Investment Disputes between States and Nationals

Other States. (d) The parties shall cooperate in good faith with the conciliator and shall, in particular, provide him with all information and documentation which would assist him in the discharge

his functions; they shall give their most serious consideration to his recommendations. (e) Unless otherwise agreed upon by the parties, the conciliator shall, within a period not exceeding one hundred and eighty days from the date

his appointment, submit to the parties a report recording the results

his efforts and setting out the issues controversial between the parties and his proposals for their settlement. (f) Each party shall, within sixty days from the date

the receipt

the report, express in writing its views on the report to the other party. (

1. g)Neither party to a conciliation proceeding shall be entitled to have recourse to arbitration unless: (
2. i)the conciliator shall have failed to submit his report within the period established in Section (
3. e)above; or (
4. ii)the parties shall have failed to accept all

the proposals contained in the report within sixty days after its receipt; or (iii) the parties, after an exchange

views on the report, shall have failed to agree on a settlement

all controversial issues within sixty days after receipt

the conciliator's report; or (

1. iv)a party shall have failed to express its views on the report as prescribed in Section (
2. f)above. (
3. h)Unless the parties agree otherwise, the fees

the conciliator shall be determined on the basis

the rates applicable to ICSID conciliation. These fees and the other costs

the conciliation proceedings shall be borne equally by the parties. Each party shall defray its own expenses. Article 4. Arbitration (a) Arbitration proceedings shall be instituted by means

a notice by the party seeking arbitration (the claimant) addressed to the other party or parties to the dispute (the respondent). The notice shall specify the nature

the dispute, the relief sought and the name

the arbitrator appointed by the claimant. The respondent shall, within thirty days after the date

receipt

the notice, notify the claimant

the name

the arbitrator appointed by it. The two parties shall within a period

thirty days from the date

appointment

the second arbitrator, select a third arbitrator, who shall act as President

the Arbitral Tribunal (the Tribunal). (b) If the Tribunal shall not have been constituted within sixty days from the date

the notice, the arbitrator not yet appointed or the President not yet selected shall be appointed, at the joint request

the parties, by the Secretary-General

ICSID. If there is no such joint request, or if the Secretary-General shall fail to make the appointment within thirty days

the request, either party may request the President

the International Court

Justice to make the appointment. (c) No party shall have the right to change the arbitrator appointed by it once the hearing

the dispute has commenced. In case any arbitrator (including the President

the Tribunal) shall resign, die, or become incapacitated, a successor shall be appointed in the manner followed in the appointment

his predecessor and such successor shall have the same powers and duties

the arbitrator he succeeds. (d) The Tribunal shall convene first at such time and place as shall be determined by the President. Thereafter, the Tribunal shall determine the place and dates

its meetings. (e) Unless otherwise provided in this Annex or agreed upon by the parties, the Tribunal shall determine its procedure and shall be guided in this regard by the arbitration rules adopted pursuant to the Convention on the Settlement

Investment Disputes between States and Nationals

Other States. (f) The Tribunal shall be the judge

its own competence except that, if an objection is raised before the Tribunal to the effect that the dispute falls within the jurisdiction

the Board or the Council under Article 56 or within the jurisdiction

a judicial or arbitral body designated in an agreement under Article 1

this Annex and the Tribunal is satisfied that the objection is genuine, the objection shall be referred by the Tribunal to the Board or the Council or the designated body, as the case may be, and the arbitration proceedings shall be stayed until a decision has been reached on the matter, which shall be binding upon the Tribunal. (g) The Tribunal shall, in any dispute within the scope

this Annex, apply the provisions

this Convention, any relevant agreement between the parties to the dispute, the Agency's by-laws and regulations, the applicable rules

international law, the domestic law

the member concerned as well as the applicable provisions

the investment contract, if any. Without prejudice to the provisions

this Convention the Tribunal may decide a dispute ex aequo et bono if the Agency and the member concerned so agree. The Tribunal may not bring a finding

non liquet on the ground

silence or obscurity

the law. (h) The Tribunal shall afford a fair hearing to all the parties. All decisions

the Tribunal shall be taken by a majority vote and shall state the reasons on which they are based. The award

the Tribunal shall be in writing, and shall be signed by at least two arbitrators and a copy thereof shall be transmitted to each party. The award shall be final and binding upon the parties and shall not be subject to appeal, annulment or revision. (i) If any dispute shall arise between the parties as to the meaning or scope

an award, either party may, within sixty days after the award was rendered, request interpretation

the award by an application in writing to the President

the Tribunal which rendered the award. The President shall, if possible, submit the request to the Tribunal which rendered the award and shall convene such Tribunal within sixty days after receipt

the application. If this shall not be possible, a new Tribunal shall be constituted in accordance with the provisions

Sections (

1. a)to (
2. d)above. The Tribunal may stay enforcement

the award pending its decision on the requested interpretation. (j) Each member shall recognise an award rendered pursuant to this Article as binding and enforceable within its territories as if it were a final judgment

a court in that member. Execution

the award shall be governed by the laws concerning the execution

judgments in force in the State in whose territories such execution is sought and shall not derogate from the law in force relating to immunity from execution. (k) Unless the parties shall agree otherwise, the fees and remuneration payable to the arbitrators shall be determined on the basis

the rates applicable to ICSID arbitration. Each party shall defray its own costs associated with the arbitration proceedings. The costs

the Tribunal shall be borne by the parties in equal proportion unless the Tribunal decides otherwise. Any question concerning the division

the costs

the Tribunal or the procedure for payment

such costs shall be decided by the Tribunal. Article 5. Service

Process Service

any notice or process in connection with any proceeding under this Annex shall be made in writing. It shall be made by the Agency upon the authority designated by the member concerned pursuant to Article 38

this Convention and by that member at the principal

fice

the Agency. SCHEDULE A Membership and Subscriptions CATEGORY ONE Country Number

Shares Subscription (millions

SDR) Australia 1,713 17.13 Austria 775 7.75 Belgium 2,030 20.30 Canada 2,965 29.65 Denmark 718 7.18 Finland 600 6.00 France 4,860 48.60 Germany, Federal Republic

5,071 50.71 Iceland 90 0.90 Ireland 369 3.69 Italy 2,820 28.20 Japan 5,095 50.95 Luxembourg 116 1.16 Netherlands 2,169 21.69 New Zealand 513 5.13 Norway 699 6.99 South Africa 943 9.43 Sweden 1,049 10.49 Switzerland 1,500 15.00 United Kingdom 4,860 48.60 United States 20,519 205.19 ______ ______ 59,473 594.73 CATEGORY TWO* Country Number

Shares Subscription (millions

SDR) Afghanistan 118 1.18 Algeria 649 6.49 Antigua and Barbuda 50 0.50 Argentina 1,254 12.54 Bahamas 100 1.00 Bahrain 77 0.77 Bangladesh 340 3.40 Barbados 68 0.68 Belize 50 0.50 Benin 61 0.61 Bhutan 50 0.50 Bolivia 125 1.25 Botswana 50 0.50 Brazil 1,479 14.79 Burkina Faso 61 0.61 Burma 178 1.78 Burundi 74 0.74 Cameroon 107 1.07 Cape Verde 50 0.50 Central African Republic 60 0.60 Chad 60 0.60 Chile 485 4.85 China 3,138 31.38 Colombia 437 4.37 Comoros 50 0.50 Congo, People's Rep.

the 65 0.65 Costa Rica 117 1.17 Cyprus 104 1.04 Djibouti 50 0.50 Dominica 50 0.50 Dominican Republic 147 1.47 Ecuador 182 1.82 Egypt, Arab Republic

459 4.59 El Salvador 122 1.22 Equatorial Guinea 50 0.50 Ethiopia 70 0.70 Fiji 71 0.71 Gabon 96 0.96 Gambia, The 50 0.50 Ghana 245 2.45 Greece 280 2.80 Grenada 50 0.50 Guatemala 140 1.40 Guinea 91 0.91 Gineau-Bissau 50 0.50 Guyana 84 0.84 Haiti 75 0.75 Honduras 101 1.01 Hungary 564 5.64 India 3,048 30.48 Indonesia 1,049 10.49 Iran, Islamic Republic

1,659 16.59 Iraq 350 3.50 Israel 474 4.74 Ivory Coast 176 1.76 Jamaica 181 1.81 Jordan 97 0.97 Kampuchea, Democratic 93 0.93 Kenya 172 1.72 Korea, Republic

449 4.49 Kuwait 930 9.30 Lao People's Dem. Rep. 60 0.60 Lebanon 142 1.42 Lesotho 50 0.50 Liberia 84 0.84 Libyan Arab Jamahiriya 549 5.49 Madagascar 100 1.00 Malawi 77 0.77 Malaysia 579 5.79 Maldives 50 0.50 Mali 81 0.81 Malta 75 0.75 Mauritania 63 0.63 Mauritius 87 0.87 Mexico 1,192 11.92 Morocco 348 3.48 Mozambique 97 0.97 Nepal 69 0.69 Nicaragua 102 1.02 Niger 62 0.62 Nigeria 844 8.44 Oman 94 0.94 Pakistan 660 6.60 Panama 131 1.31 Papua New Guinea 96 0.96 Paraguay 80 0.80 Peru 373 3.73 Philippines 484 4.84 Portugal 382 3.82 Qatar 137 1.37 Romania 555 5.55 Rwanda 75 0.75 St. Christopher and Nevis 50 0.50 St. Lucia 50 0.50 St. Vincent 50 0.50 Sao Tome and Principe 50 0.50 Saudi Arabia 3,137 31.37 Senegal 145 1.45 Seychelles 50 0.50 Sierra Leone 75 0.75 Singapore 154 1.54 Solomon Islands 50 0.50 Somalia 78 0.78 Spain 1,285 12.85 Sri Lanka 271 2.71 Sudan 206 2.06 Suriname 82 0.82 Syrian Arab Republic 168 1.68 Swaziland 58 0.58 Tanzania 141 1.41 Thailand 421 4.21 Togo 77 0.77 Trinidad and Tobago 203 2.03 Tunisia 156 1.56 Turkey 462 4.62 United Arab Emirates 372 3.72 Uganda 132 1.32 Uruguay 202 2.02 Vanuata 50 0.50 Venezuela 1,427 14.27 Viet Nam 220 2.20 Western Samoa 50 0.50 Yemen Arab Republic 67 0.67 Yemen, People's Dem. Rep.

115 1.15 Yugoslavia 635 6.35 Zaire 338 3.38 Zambia 318 3.18 Zimbabwe 236 2.36 40,527 405.27 Total 100,000 1,000.00 SCHEDULE B Election

Directors 1. Candidates for the

fice

Director shall be nominated by the Governors, provided that a Governor may nominate only one person. 2. The election

Directors shall be by ballot

the Governors. 3. In balloting for the Directors, every Governor shall cast for one candidate all the votes which the member represented by him is entitled to cast under Section (a)

Article 40. 4.

One-fourth

the number

Directors shall be elected separately, one by each

the Governors

members having the largest number

shares. If the total number

Directors is not divisible by four, the number

Directors so elected shall be one-fourth

the next lower number that is divisible by four. 5. The remaining Directors shall be elected by the other Governors in accordance with the provisions

paragraphs 6 to 11

this Schedule. 6. If the number

candidates nominated equals the number

such remaining Directors to be elected, all the candidates shall be elected in the first ballot; except that a candidate or candidates having received less than the minimum percentage

total votes determined by the Council for such election shall not be elected if any candidate shall have received more than the maximum percentage

total votes determined by the Council. 7. If the number

candidates nominated exceeds the number

such remaining Directors to be elected, the candidates receiving the largest number

votes shall be elected with the exception

any candidate who has received less than the minimum percentage

the total votes determined by the Council. 8. If all

such remaining Directors are not elected in the first ballot, a second ballot shall be held. The candidate or candidates not elected in the first ballot shall again be eligible for election. 9. In the second ballot, voting shall be limited to (

1. i)those Governors having voted in the first ballot for a candidate not elected and (
2. ii)those Governors having voted in the first ballot for an elected candidate who had already received the maximum percentage

total votes determined by the Council before taking their votes into account. 10. In determining when an elected candidate has received more than the maximum percentage

the votes, the votes

the Governor casting the largest number

votes for such candidate shall be counted first, then the votes

the Governor casting the next largest number, and so on until such percentage is reached. 11. If not all the remaining Directors have been elected after the second ballot, further ballots shall be held on the same principles until all the remaining Directors are elected, provided that when only one Director remains to be elected, this Director may be elected by a simple majority

the remaining votes and shall be deemed to have been elected by all such votes. *Countries listed under Category Two are developing member countries for the purposes

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