The Government of the Islamic Republic of Pakistan and the Government of the Kingdom
of the Netherlands;
Reaffirming the friendly relations existing between the two countries and their peoples;
Firmly desiring to intensify these relations, to promote economic cooperation, to
provide mutual protection of investments, and to create the necessary legal and administrative
framework for that purpose;
Have agreed as follows:
For the purposes of the present Agreement:
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(a) the term "investments" shall comprise every kind of goods, rights and interests of
whatsoever nature, which have been invested in accordance with the laws of the Party
in the territory of which the investment is made, in particular, though not limited
to the following:
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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, and other assets and to any performance having an economic value;
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(iv) rights in the field of intellectual property, technical processes and know-how;
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(v) rights granted under public law, including rights to prospect, explore, extract and
exploit 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 in accordance with
its laws;
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(ii) without prejudice to the provisions of (iii) hereafter, legal persons constituted
in accordance with the laws of that Contracting Party;
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(iii) legal persons controlled, directly or indirectly, by nationals of that Contracting
Party but constituted in accordance with the laws of the other Contracting Party.
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(c) the term "territory" includes the maritime areas adjacent to the coast of the Country
concerned, to the extent to which that Country may exercise sovereign rights or jurisdiction
in those areas according to international law.
The Contracting Parties shall within the framework of their laws and regulations and
taking into account their international obligations, do their utmost to develop and
strengthen, on a mutually advantageous basis, economic and technological cooperation
between the two countries.
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2 The cooperation which the Contracting Parties undertake to encourage according to
paragraph (1) shall in particular include the establishment of projects and enterprises.
Such cooperation may be undertaken through equity participation, loan finance, joint
venture or otherwise.
The Contracting Parties recognize that the cooperation may concern inter alia industry,
mining, energy, land and water development, commerce, agriculture, area- and rural
development, infrastructure, transportation-infrastructure, communications, engineering
and other services.
They shall inform each other of specific sectors in which they consider cooperation
desirable.
The technological cooperation referred to in Article 3 may be implemented, subject
to the laws and regulations of either Contracting Party, through projects and enterprises
in which economic cooperation between their respective nationals will be initiated
or enhanced. Such cooperation may include inter alia:
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(a) the facilitation of direct contacts, the exchange of information and the elaboration
of programmes;
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(b) the joint conduct of research projects;
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(c) the exchange of visits and study tours of specialized delegations, research personnel
and specialists;
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(d) the development of training techniques and systems and the training of technical personnel;
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(e) the provision of managerial and technical expertise;
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(f) the convening of symposia and meetings on subjects of mutual interest.
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1 Each Contracting Party shall ensure fair and equitable treatment to the investments
of nationals of the other Contracting Party and shall not impair, by unjustified or
discriminatory measures, the operation, management, maintenance, use, enjoyment or
disposal thereof by those nationals.
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2 More particularly, each Contracting Party shall accord to such investments, in the
framework of its laws and regulations, full security and protection which in any case
shall not be less than that accorded to investments of nationals of any third Country.
Each Contracting Party shall authorize the transfer, without undue restriction and
delay, to the country of the other Contracting Party and in the currency of that country
or any freely convertible currency of payments resulting from investment activities
and in particular of the following items:
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(a) profits, interests, dividends and other current income;
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(b) reasonable proportions of earnings of natural persons;
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(c) the proceeds of liquidation of capital;
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(d) funds in repayment of loans;
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(e) management fees;
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(f) royalties.
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 former
Contracting Party may have given;
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(c) the measures are accompanied by provision for the payment of just compensation. Such
compensation shall represent genuine value of the investments affected and shall,
in order to be effective for the claimants, be paid and made transferable, without
undue delay, to the country of which those claimants are nationals and in the currency
of that country, or in any convertible currency.
If the investments of a national of the one Contracting party are insured against
non-commercial risks under a system established by law, any subrogation of the insurer
or re-insurer into the rights of the said national pursuant to the terms of such insurance
shall be recognized by the other Contracting Party.
The Contracting Party in the territory of which a national of the other Contracting
Party makes or intends to make an investment, shall assent to any demand on the part
of such national to submit, for arbitration or conciliation, to the Centre established
by the Convention of Washington of 18 March 1965 on the settlement of investment disputes
between States and nationals of other States, any dispute that may arise in connection
with the investment.
The provisions of the Agreement shall, from the date of entry into force thereof,
also apply:
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- with regard to the Islamic Republic of Pakistan: to investments which have been made
by nationals of the Kingdom of the Netherlands with the approval of the Government
of the Islamic Republic of Pakistan on or after 1 September, 1954.
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- with regard to the Kingdom of the Netherlands: to investments of nationals of the
Islamic Republic of Pakistan which have been made in accordance with the laws and
regulations of the Kingdom before the entry into force of the present Agreement.
The Contracting Parties agree to establish a Joint Committee on economic and technological
cooperation. The Committee shall be composed of representatives to be appointed by
the respective governments in connection with any meeting of the Committee. Experts
and advisors from both private and public sectors may be called upon at the request
of either side, to attend the meeting of the Committee.
The Committee shall:
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- discuss any matter pertaining to the implementation of the present Agreement, and
make recommendations thereon;
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- explore and define sectors in which it considers the cooperation between the two countries
may be broadened, and make recommendations thereon.
The Committee may appoint specialized working parties to deal with cooperation in
particular sectors. The working parties shall report to the Joint Committee.
The Committee shall meet at the request of either Party to the Agreement.
In respect of any matter governed by the present Agreement nothing in this Agreement
shall prevent a national of the one Contracting Party from benefiting from any right
more favourable to him and accorded by the other Contracting Party.
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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 of the dispute, 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 Country.
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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 case provided for in the second and third paragraph of this Article, the
President of the International Court of Justice is prevented from discharging the
said function or is a national of either Country, the Vice-President should make the
necessary appointments. If the Vice-President is prevented from discharging the said
function or is a national of either Country, the most senior member of the Court available
who is not a national of either Country should make the necessary appointments.
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5 The tribunal shall decide of 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 in justice and good faith 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 and to Aruba, unless the notification provided for in
Article 16, 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 informed each other in writing
that the procedures constitutionally required therefor in their respective countries
have been complied with, and shall remain to force for a period of 15 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 10 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.