The Government of the Kingdom of the Netherlands
and
the Government of Mongolia,
hereinafter referred to as the Contracting Parties,
Desiring to strengthen the traditional ties of friendship between their countries,
to extend and intensify the economic relations between them particularly with respect
to investments by the nationals of one Contracting Party in the territory of the other
Contracting Party,
Recognizing that agreement upon the treatment to be accorded to such investments will
stimulate the flow of capital and technology and the economic development of the Contracting
Parties and that fair and equitable treatment of investment is desirable,
Have agreed as follows:
For the purposes of the present Agreement:
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a) the term “investments” shall comprise every kind of asset and more particularly, though
not exclusively:
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(i) movable and immovable property as well as any other rights in rem in respect of every
kind of asset;
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(ii) rights derived from shares, bonds and other kinds of interests in companies and joint
ventures;
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(iii) title to money, to other assets or to any performance having an economic value;
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(iv) rights in the field of intellectual property, technical processes, goodwill and know-how;
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(v) rights granted under public law, including rights to prospect, explore, extract and
win natural resources.
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b) the term “nationals” shall comprise with regard to either Contracting Party:
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(i) natural persons having the nationality of that Contracting Party;
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(ii) legal persons constituted under the law of that Contracting Party;
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(iii) legal persons not constituted under the law of that Contracting Party but controlled,
directly or indirectly, by natural persons as defined in (i) or by legal persons as
defined in (ii) above.
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c) the term “territory” shall mean:
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(i) with respect to Mongolia, the territory over which Mongolia has sovereignty or jurisdiction;
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(ii) with respect to the Kingdom of the Netherlands, the territory which constitutes the
Kingdom of the Netherlands including also the maritime areas adjacent to the coast,
to the extent to which the Kingdom of the Netherlands exercises sovereign rights or
jurisdiction in those areas according to international law.
Either Contracting Party shall, within the framework of its laws and regulations,
promote economic cooperation through the protection in its territory of investments
of nationals of the other Contracting Party.
Subject to its right to exercise powers conferred by its laws or regulations, each
Contracting Party shall admit such investments.
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1 Each Contracting Party shall ensure fair and equitable treatment of the investments
of nationals of the other Contracting Party, which shall not be less favourable than
that accorded either to investments of its own nationals or to investments of nationals
of any third State, and shall not impair, by unreasonable or discriminatory measures,
the operation, management, maintenance, use, enjoyment or disposal thereof by those
nationals. Each Contracting Party shall accord to such investments full physical security
and protection.
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2 If a Contracting Party has accorded special advantages to nationals of any third
State by virtue of agreements establishing customs unions, economic unions, or similar
institutions, or on the basis of interim agreements leading to such unions or institutions,
that Contracting Party shall not be obliged to accord such advantages to nationals
of the other Contracting Party.
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5 If the provisions of law of either Contracting Party or obligations under international
law existing at present or established hereafter between the Contracting Parties in
addition to the present Agreement contain a regulation, whether general or specific,
entitling investments by nationals of the other Contracting Party to a treatment more
favourable than is provided for by the present Agreement, such regulation shall to
the extent that it is more favourable prevail over the present Agreement.
The Contracting Parties shall guarantee that payments relating to an investment may
be transferred. The transfers shall be made in a freely convertible currency, without
restriction or delay. Such transfers include in particular though not exclusively:
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a) profits, interest, dividends and other current income;
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b) funds necessary
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(i) for the acquisition of raw or auxiliary materials, semi-fabricated or finished products,
or
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(ii) to replace capital assets in order to safeguard the continuity of an investment;
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c) additional funds necessary for the development of an investment;
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d) funds in repayment of loans;
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e) royalties or fees;
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f) earnings of natural persons;
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g) the proceeds of sale or liquidation of the investment.
Neither Contracting Party shall take any measures depriving, directly or indirectly,
nationals of the other Contracting Party of their investments unless the following
conditions are complied with:
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a) the measures are taken in the public interest and under due process of law;
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b) the measures are not discriminatory or contrary to any undertaking which the Contracting
Party which takes such measures may have given;
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c) the measures are taken against just compensation. Such compensation shall represent
the genuine value of the investments affected, shall include interest at a normal
commercial rate until the date of payment and shall, in order to be effective for
the claimants, be paid and made transferable, without delay, to the country designated
by the claimants concerned and in the currency of the country of which the claimants
are nationals or in any freely convertible currency accepted by the claimants.
Nationals of the one Contracting Party who suffer losses in respect of their investments
in the territory of the other Contracting Party owing to war or other armed conflict,
revolution, a state of national emergency, revolt, insurrection or riot shall be accorded
by the latter Contracting Party treatment, as regards restitution, indemnification,
compensation or other settlement, no less favourable than that which that Contracting
Party accords to its own nationals or to nationals of any third State, whichever is
more favourable to the nationals concerned.
If the investments of a national of the one Contracting Party are insured against
non-commercial risks or otherwise give rise to payment of indemnification in respect
of such investments under a system established by law, regulation or government contract
any subrogation of the insurer or re-insurer or Agency designated by the one Contracting
Party to the rights of the said national pursuant to the terms of such insurance or
under any other indemnity given shall be recognized by the other Contracting Party.
Each Contracting Party hereby consents to submit any legal dispute arising between
that Contracting Party and a national of the other Contracting Party concerning an
investment of that national in the territory of the former Contracting Party to the
International Centre for Settlement of Investment Disputes for settlement by conciliation
or arbitration under the Convention on the Settlement of Investment Disputes between
States and Nationals of other States opened for signature at Washington on 18 March
1965. A legal person which is a national of one Contracting Party and which before
such a dispute arises is controlled by nationals of the other Contracting Party shall
in accordance with Article 25 (2) (b) of the Convention for the purpose of the Convention
be treated as a national of the other Contracting Party.
The provisions of this Agreement shall apply to investments made by nationals of the
one Contacting Party in the territory of the other Contracting Party after 31 December
1992. It shall however not apply to any dispute concerning an investment which arose,
or any claim concerning an investment which was settled before its entry into force.
Either Contracting Party may propose the other Party that consultations be held on
any matter concerning the interpretation or application of the Agreement. The other
Party shall accord sympathetic consideration to the proposal and shall afford adequate
opportunity for such consultations.
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1 Any dispute between the Contracting Parties concerning the interpretation or application
of the present Agreement, which cannot be settled within a reasonable lapse of time,
by means of diplomatic negotiations, shall, unless the Parties have otherwise agreed,
be submitted, at the request of either Party, to an arbitral tribunal, composed of
three members. Each Party shall appoint one arbitrator and the two arbitrators thus
appointed shall together appoint a third arbitrator as their chairman who is not a
national of either Party.
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3 If the two arbitrators are unable to reach agreement, in the two months following
their appointment, on the choice of the third arbitrator, either Party may invite
the President of the International Court of Justice, to make the necessary appointment.
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4 If, in the cases provided for in the paragraphs 2. and 3. of this Article, the President
of the International Court of Justice is prevented from discharging the said function
or is a national of either Contracting Party, the Vice-President shall be invited
to make the necessary appointments. If the Vice-President is prevented from discharging
the said function or is a national of either Party the most senior member of the Court
available who is not a national of either Party shall be invited to make the necessary
appointments.
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5 The tribunal shall decide on the basis of respect for the law. Before the tribunal
decides, it may at any stage of the proceedings propose to the Parties that the dispute
be settled amicably. The foregoing provisions shall not prejudice the power of the
tribunal to decide the dispute ex aequo et bono if the Parties so agree.
As regards the Kingdom of the Netherlands, the present Agreement shall apply to the
part of the Kingdom in Europe, the Netherlands Antilles and to Aruba, unless the notification
provided for in Article 13, paragraph 1 provides otherwise.
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1 The present Agreement shall enter into force on the first day of the second month
following the date on which the Contracting Parties have notified each other in writing
that the procedures constitutionally required therefor in their respective countries
have been complied with, and shall remain in force for a period of fifteen years.
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2 Unless notice of termination has been given by either Contracting Party at least
six months before the date of the expiry of its validity, the present Agreement shall
be extended tacitly for periods of ten years, each Contracting Party reserving the
right to terminate the Agreement upon notice of at least six months before the date
of expiry of the current period of validity.
