CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES ACT 1966

Convention on the Settlement of Investment Disputes LAWS OF MALAYSIA REPRINT Act 392 CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES ACT 1966 Incorporating all amendments up to 1 January 2006 PUBLISHED BY THE COMMISSIONER OF LAW REVISION, MALAYSIA UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 IN COLLABORATION WITH PERCETAKAN NASIONAL MALAYSIA BHD 2006 1 2 CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES ACT 1966 First enacted … ... ... ... … … … 1966 (Act No. 14 of 1966) Revised 1989 (Act 392 w.e.f. 19 October 1989) … … … … … … … PREVIOUS REPRINT First Reprint ... ... ... ... ... 2001 3 LAWS OF MALAYSIA Act 392 CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES ACT 1966 ARRANGEMENT OF SECTIONS Section 1. Short title 2. Interpretation 3. Confinement of award SCHEDULE 4 Laws of Malaysia ACT 392 Convention on the Settlement of Investment Disputes 5 LAWS OF MALAYSIA Act 392 CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES ACT 1966 An Act to give legal sanction to the Convention on the Settlement of Investment Disputes. [15 March 1966] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: Short title 1. This Act may be cited as the Convention on the Settlement of Investment Disputes Act 1966. Interpretation 2. In this Act, unless the context otherwise requires— “award” means an award given by the arbitrator appointed under the Convention; “Convention” means the Convention on the Settlement of Investment Disputes appearing in the Schedule; “Court” means the High Court. Confinement of award 3. An award made by an arbitrator under the Convention shall be binding and may be enforced in the same manner as if it is a decree judgment or order of the Court. 6 Laws of Malaysia ACT 392 SCHEDULE [Section 2] CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES BETWEEN STATES AND NATIONALS OF OTHER STATES PREAMBLE The Contracting States Considering the need for international co-operation for economic development, and the role of private international investment therein; Bearing in mind the possibility that from time to time disputes may arise in connection with such investment between Contracting States and nationals of other Contracting States; Recognizing that while such disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases; Attaching particular importance to the availability of facilities for international conciliation or arbitration to which Contracting States and nationals of other Contracting States may submit such disputes if they so desire; Desiring to establish such facilities under the auspices of the International Bank for Reconstruction and Development; Recognizing that mutual consent by the parties to submit such disputes to conciliation or to arbitration through such facilities constitutes a binding agreement which requires in particular that due consideration be given to any recommendation of conciliators, and that any arbitral award be complied with; and Declaring that no Contracting State shall by the mere fact of its ratification, acceptance or approval of this Convention and without its consent be deemed to be under any obligation to submit any particular dispute to conciliation or arbitration, Have agreed as follows: CHAPTER I INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES SECTION 1 ESTABLISHMENT AND ORGANIZATION Article 1 (1) There is hereby established the International Centre for Settlement of Investment Disputes (hereinafter called the Centre). Convention on the Settlement of Investment Disputes 7 (2) The purpose of the Centre shall be to provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States in accordance with the provisions of this Convention. Article 2 The seat of the Centre shall be at the principal office of the International Bank for Reconstruction and Development (hereinafter called the Bank). The seat may be moved to another place by decision of the Administrative Council adopted by a majority of two-thirds of its members. Article 3 The Centre shall have an Administrative Council and a Secretariat and shall maintain a Panel of Conciliators and a Panel of Arbitrators. SECTION 2 THE ADMINISTRATIVE COUNCIL Article 4 (1) The Administrative Council shall be composed of one representative of each Contracting State. An alternate may act as representative in case of his principal’s absence from a meeting or inability to act. (2) In the absence of a contrary designation, each governor and alternate governor of the Bank appointed by a Contracting State shall be ex officio its representative and its alternate respectively. Article 5 The President of the Bank shall be ex officio Chairman of the Administrative Council (hereinafter called the Chairman) but shall have no vote. During his absence or inability to act and during any vacancy in the office of President of the Bank, the person for the time being acting as President shall act as Chairman of the Administrative Council. Article 6 (1) Without prejudice to the powers and functions vested in it by other provisions of this convention, the Administrative Council shall— (a) adopt the administrative and financial regulations of the Centre; (b) adopt the rules of procedure for the institution of conciliation and arbitration proceedings; (c) adopt the rules of procedure for conciliation and arbitration proceedings (hereinafter called the Conciliation Rules and the Arbitration Rules); (d) approve arrangements with the Bank for the use of the Bank’s administrative facilities and services; 8 Laws of Malaysia ACT 392 (e) determine the conditions of service of the Secretary-General and of any Deputy Secretary-General; (f) adopt the annual budget of revenues and expenditures of the Centre; (g) approve the annual report on the operation of the Centre. The decisions referred to in subparagraphs (a), (b), (c) and (f) above shall be adopted by a majority of two-thirds of the members of the Administrative Council. (2) The Administrative Council may appoint such committees as it considers necessary. (3) The Administrative Council shall also exercise such other powers and perform such other functions as it shall determine to be necessary for the implementation of the provisions of this Convention. Article 7 (1) The Administrative Council shall hold an annual meeting and such other meetings as may be determined by the Council, or convened by the Chairman, or convened by the Secretary-General at the request of not less than five members of the Council. (2) Each member of the Administrative Council shall have one vote and, except as otherwise herein provided, all matters before the Council shall be decided by a majority of the votes cast. (3) A quorum for any meeting of the Administrative Council shall be a majority of its members. (4) The Administrative Council may establish, by a majority of two-thirds of its member, a procedure whereby the Chairman may seek a vote of the Council without convening a meeting of the Council. The vote shall be considered valid only if the majority of the members of the Council cast their votes within the time limit fixed by the said procedure. Article 8 Members of the Administrative Council and the Chairman shall serve without remuneration from the Centre. SECTION 3 THE SECRETARIAT Article 9 The Secretariat shall consist of a Secretary-General, one or more Deputy Secretaries-General and staff. Convention on the Settlement of Investment Disputes 9 Article 10 (1) The Secretary-General and any Deputy Secretary-General shall be elected by the Administrative Council by a majority of two-thirds of its members upon the nomination of the Chairman for a term of service not exceeding six years and shall be eligible for re-election. After consulting the members of the Administrative Council, the Chairman shall propose one or more candidates for each such office. (2) The offices of Secretary-General and Deputy Secretary-General shall be incompatible with the exercise of any political function. Neither the Secretary-General nor any Deputy Secretary-General may hold any other employment or engage in any other occupation except with the approval of the Administrative Council. (3) During the Secretary-General’s absence or inability to act, and during any vacancy of the office of Secretary-General, the Deputy Secretary-General shall act as Secretary-General. If there shall be more than one Deputy Secretary-General, the Administrative Council shall determine in advance the order in which they shall act as Secretary-General. Article 11 The Secretary-General shall be the legal representative and the principal officer of the Centre and shall be responsible for its administration, including the appointment of staff, in accordance with the provisions of this Convention and the rules adopted by the Administrative Council. He shall perform the function of registrar and shall have the power to authenticate arbitral awards rendered pursuant to this Convention, and to certify copies thereof. SECTION 4 THE PANELS Article 12 The Panel of Conciliators and the Panel of Arbitrators shall each consist of qualified persons, designated as hereinafter provided, who are willing to serve thereon. Article 13 (1) Each Contracting State may designate to each Panel four persons who may but need not be its nationals. (2) The Chairman may designate ten persons to each Panel. The persons so designated to a Panel shall each have a different nationality. 10 Laws of Malaysia ACT 392 Article 14 (1) Persons designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry of finance, who may be relied upon to exercise independent judgment. Competence in the field of law shall be of particular importance in the case of persons on the Panel of Arbitrators. (2) The Chairman, in designating persons to serve on the Panels, shall in addition pay due regard to the importance of assuring representation on the Panels of the Principal legal systems of the world and of the main forms of economic activity. Article 15 (1) Panel members shall serve for renewable periods of six years. (2) In case of death or resignation of a member of a Panel, the authority which designated the member shall have the right to designate another person to serve for the remainder of that member’s term. (3) Panel members shall continue in office until their successors have been designated. Article 16 (1) A person may serve on both Panels. (2) If a person shall have been designated to serve on the same Panel by more than one Contracting State, or by one or more Contracting States and the Chairman, he shall be deemed to have been designated by the authority which first designated him or, if one such authority is the State of which he is a national, by that State. (3) All designations shall be notified to the Secretary-General and shall take effect from the date on which the notification is received. SECTION 5 FINANCING THE CENTRE Article 17 If the expenditure of the Centre cannot be met out of charges for the use of its facilities, or out of other receipts, the excess shall be borne by Contracting States which are members of the Bank in proportion to their respective subscriptions to the capital stock of the Bank, and by Contracting States which are not members of the Bank in accordance with rules adopted by the Administrative Council. Convention on the Settlement of Investment Disputes 11 SECTION 6 STATUS, IMMUNITIES AND PRIVILEGES Article 18 The Centre shall have full international legal personality. The legal capacity of the Centre shall include the capacity: (a) to contract; (b) to acquire and dispose of movable