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Chapter Eight: Investment – Text of the Canada-Korea Free Trade Agreement

Section A – Investment

Article 8.1: Scope and Coverage

1. This Chapter applies to measures adopted or maintained by a Party relating to:

2. For greater certainty, this Chapter does not apply to an act or fact that took place or a situation that ceased to exist before the date of entry into force of this Agreement.

3. For the purposes of this Chapter, measures adopted or maintained by a Party means measures adopted or maintained by:

Article 8.2: Relation to Other Chapters

1. In the event of an inconsistency between this Chapter and another Chapter, the other Chapter prevails to the extent of the inconsistency.

2. A requirement by a Party that a service supplier of the other Party post a bond or other form of financial security as a condition of the cross-border supply of a service does not of itself make this Chapter applicable to measures adopted or maintained by the Party relating to such cross-border supply of the service. This Chapter applies to measures adopted or maintained by the Party relating to the posted bond or financial security to the extent that such bond or financial security is a covered investment.

3. This Chapter does not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapter Ten (Financial Services).

Article 8.3: National Treatment

1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that sub-national government to investors, and to investments of investors, of the Party of which it forms a part.

Article 8.4: Most-Favoured-Nation TreatmentFootnote 1 Footnote 2

1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of a non-party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments of investors of a non-party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

Article 8.5: Minimum Standard of TreatmentFootnote 3

1. Each Party shall accord to covered investments treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.

2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be accorded to covered investments. The concepts of “fair and equitable treatment” and “full protection and security” in paragraph 1 do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.

3. The obligation in paragraph 1 to provide:

4. A breach of another provision of this Agreement, or of a separate international agreement, does not establish a breach of this Article.

Article 8.6: Compensation for Losses

1. Each Party shall accord to investors of the other Party, and to covered investments, non-discriminatory treatment with respect to measures it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife.

2. Paragraph 1 does not apply to existing measures relating to subsidies or grants that would be inconsistent with Article 8.3, but for Article 8.9.5(b).

Article 8.7: Senior Management and Boards of Directors

1. A Party shall not require an enterprise of that Party, which is a covered investment, to appoint natural persons of a particular nationality to senior management positions.

2. A Party may require that a majority of the board of directors, or a committee, of an enterprise of that Party, which is a covered investment, be of a particular nationality, or resident in the territory of that Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.

Article 8.8: Performance Requirements

1. A Party shall not, in connection with the establishment, acquisition, expansion, management, conduct, or operation of an investment in its territory of an investor of a Party or of a non-party, impose or enforce a requirement or enforce a commitment or undertakingFootnote 4:

2. A measure that requires an investment to use a technology to meet generally applicable health, safety, or environmental requirements is not to be construed to be inconsistent with paragraph 1(f). For greater certainty, Articles 8.3 and 8.4 apply to the measure.

3. A Party shall not make the receipt or continued receipt of an advantage, in connection with the establishment, acquisition, expansion, management, conduct, or operation of an investment in its territory of an investor of a Party or of a non-party, conditional on compliance with any of the following requirements:

4. Paragraph 3 is not to be construed to prevent a Party from making the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-party, conditional on compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.Footnote 5

5. Paragraph 1(f) does not apply:

6. The provisions of:

7. Paragraphs 1 and 3 do not apply to a commitment, undertaking, or requirement other than those set out in those paragraphs.

8. This Article does not preclude enforcement of a commitment, undertaking, or requirement between private parties, if a Party did not impose or require the commitment, undertaking, or requirement. For the purposes of this Article, private parties include designated monopolies or state enterprises, if such entities are not exercising delegated governmental authority.

Article 8.9: Non-Conforming Measures

1. Articles 8.3, 8.4, 8.7, and 8.8 do not apply to:

2. Articles 8.3, 8.4, 8.7, and 8.8 do not apply to a measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities, as set out in its Schedule to Annex II.

3. A Party shall not, under a measure adopted after the date of entry into force of this Agreement and set out in its Schedule to Annex II, require an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.

4. Articles 8.3 and 8.4 do not apply to a measure that is an exception to, or derogation from, the obligations under Article 16.6 (National Treatment) as specifically provided in that Article.

5. Articles 8.3, 8.4, and 8.7 do not apply to:

Article 8.10: Investment and Environment

1. This Chapter is not to be construed to prevent a Party from adopting, maintaining, or enforcing a measure consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.

2. The Parties recognise that it is inappropriate to encourage investment by relaxing domestic health, safety, or environmental measures. Accordingly, a Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion, or retention in its territory of an investment of an investor. If a Party considers that the other Party has offered such an encouragement, that Party may request consultations with the other Party and the Parties shall consult with a view to avoiding any such encouragement.

Article 8.11: Expropriation and CompensationFootnote 9

1. A Party shall not expropriate or nationalise a covered investment, directly or indirectly, through a measure equivalent to expropriation or nationalisation (hereinafter referred to as “expropriation”), except:

2. The compensation referred to in paragraph 1(d) shall:

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

4. This Article does not apply to compulsory licenses granted in relation to intellectual property rights under the TRIPS Agreement, or to the revocation, limitation, or creation of intellectual property rights, provided that the issuance, revocation, limitation, or creation is consistent with the WTO Agreement.

Article 8.12: Transfers

1. Each Party shall permit transfers relating to a covered investment to be made freely, and without delay, into and out of its territory. Those transfers include:

2. Each Party shall permit transfers relating to a covered investment to be made in a freely usable currency. Transfers shall be made at the market rate of exchange prevailing at the time of transfer.

3. Each Party shall permit returns in kind relating to a covered investment to be made as authorised or specified in a written agreement between the Party and a covered investment or an investor of the other Party.

4. Notwithstanding paragraphs 1, 2, and 3, a Party may prevent a transfer through the equitable, non-discriminatory, and good faith application of its domestic law relating to:

5. A Party shall not require its investors to transfer, or penalise its investors for failure to transfer the income, earnings, profits, or other amounts derived from, or attributable to investments in the territory of the other Party.

6. Paragraph 5 is not to be construed to prevent a Party from imposing a measure through the equitable, non-discriminatory, and good faith application of its domestic law relating to the matters referred to in paragraphs 4(a) through (e).

7. Notwithstanding paragraph 1, a Party may restrict transfers of returns in kind in circumstances where it could otherwise restrict those transfers under this Agreement and as set out in paragraph 4.

Article 8.13: Subrogation

1. If a Party or an agency of a Party makes a payment to one of its investors under a guarantee or a contract of insurance that it has entered into in respect of an investment, the other Party shall recognise the validity of the subrogation in favour of that Party or the agency of the Party to a right or title held by the investor.

2. A Party or an agency of a Party which is subrogated to the rights of an investor in accordance with paragraph 1, is entitled in all circumstances to the same rights as those of the investor in respect of the investment. These rights may be exercised by the Party or an agency of the Party, or by the investor if the Party or an agency of the Party so authorises.

Article 8.14: Denial of Benefits

1. A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to investments of that investor if persons of a non-party own or control the enterprise and the denying Party adopts or maintains measures with respect to the non-party or a person of the non-party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise or to its investments.

2. A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to investments of that investor if the enterprise has no substantial business activities in the territory of the other Party under whose domestic law it is constituted or organised and persons of a non-party, or of the denying Party, own or control the enterprise.

Article 8.15: Special Formalities and Information Requirements

1. Article 8.3 is not to be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with the establishment of investments by investors of the other Party, including a requirement that investments be legally constituted under the laws or regulations of the Party, provided that those formalities do not materially impair the protections afforded by a Party to investors of the other Party and investments of investors of the other Party under this Chapter.

2. Notwithstanding Articles 8.3 and 8.4, a Party may require an investor of the other Party, or its investment in the Party’s territory, to provide routine information concerning that investment solely for informational or statistical purposes. The Party shall protect such business information that is confidential from disclosure that would prejudice the competitive position of the investor or the investment. This paragraph is not to be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its law.

Article 8.16: Corporate Social Responsibility

Each Party should encourage enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate internationally recognised standards of corporate social responsibility in their practices and their internal policies, including statements of principle that are endorsed or supported by the Parties. These principles address issues such as labour, environment, human rights, community relations, and anti-corruption.

Section B – Investor-State Dispute Settlement

Article 8.17: Purpose

Without prejudice to the rights and obligations of the Parties under Chapter Twenty-One (Dispute Settlement), this Section establishes a mechanism for the settlement of investment disputes.

Article 8.18: Claim by an Investor of a Party on Its Own Behalf

An investor of a Party may submit to arbitration under this Section a claim that the other Party has breached an obligation under Section A, other than Articles 8.10, 8.15, and 8.16 and that the investor has incurred loss or damage by reason of, or arising out of, that breach.

Article 8.19: Claim by an Investor of a Party on Behalf of an Enterprise

1. An investor of a Party, on behalf of an enterprise of the other Party that is a juridical person that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim that the other Party has breached an obligation under Section A, other than Articles 8.10, 8.15, and 8.16 and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.

2. If an investor makes a claim pursuant to this Article and the investor or a non controlling investor in the enterprise makes a claim pursuant to Article 8.18 arising out of the same events that gave rise to the claim under this Article, and two or more of the claims are submitted to arbitration pursuant to Article 8.23, the claims should be heard together by a Tribunal established under Article 8.28, unless the Tribunal finds that the interests of a disputing party would be prejudiced as a result.

3. An investment shall not make a claim under this Section.

Article 8.20: Notice of Intent to Submit a Claim to Arbitration

1. The disputing investor shall deliver to the disputing Party written notice of its intent to submit a claim to arbitration (hereinafter referred to as the “Notice of Intent”) at least 90 days before submitting the claim. The Notice of Intent must specify:

2. The disputing investor shall also deliver, with its Notice of Intent, evidence establishing that it is an investor of the other Party. Examples of evidence that might be relevant include a copy of a title to property, a deed of incorporation of the enterprise, share certificates, and a joint venture agreement.

Article 8.21: Consultation and Negotiation

In the event of an investment dispute, the disputing investor and the disputing Party shall initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding third-party procedures.

Article 8.22: Conditions Precedent to Submission of a Claim to Arbitration

1. A disputing investor may submit a claim to arbitration pursuant to Article 8.18 only if:

2. A disputing investor may submit a claim to arbitration pursuant to Article 8.19 only if:

3. A consent and waiver required by this Article shall be delivered to the disputing Party and shall be included in the submission of a claim to arbitration.

4. A waiver from the enterprise under paragraph 1(e) or 2(e) shall not be required only if a disputing Party has deprived a disputing investor of control of the enterprise.

5. Failure to meet any of the conditions precedent provided for in paragraphs 1, 2, and 3 nullifies the consent of the Parties given in Article 8.24.

Article 8.23: Submission of a Claim to Arbitration

1. Except as provided in Annex 8-C, a disputing investor who meets the conditions precedent provided for in Article 8.22 may submit the claim to arbitration:

2. The applicable arbitration rules govern the arbitration unless they are modified by this Section.

Article 8.24: Consent to Arbitration

1. Each Party consents to the submission of a claim to arbitration in accordance with the procedures set out in this Agreement.

2. The consent given in paragraph 1 and the submission by a disputing investor of a claim to arbitration shall satisfy the requirement of:

Article 8.25: Arbitrators

1. Except in respect of a Tribunal established pursuant to Article 8.28, and unless the disputing parties agree otherwise, the Tribunal shall be composed of three arbitrators, one arbitrator appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the disputing parties.

2. Arbitrators must:

3. The disputing parties should agree on the arbitrators’ remuneration. If the disputing parties do not agree on such remuneration before the Tribunal is constituted, the prevailing ICSID rate for arbitrators applies.

Article 8.26: Constitution of a Tribunal by the Secretary-General

1. The Secretary-General shall serve as appointing authority for an arbitration under this Section if a Party fails to appoint an arbitrator or the disputing parties are unable to agree on a presiding arbitrator.

2. If a Tribunal, other than a Tribunal established pursuant to Article 8.28, is not constituted within 90 days from the date that a claim is submitted to arbitration, the Secretary-General, at the request of either disputing party, shall appoint, in his or her discretion, the arbitrator or arbitrators not yet appointed. The presiding arbitrator shall not be a national of either Party.

Article 8.27: Agreement to Appointment of Arbitrators

For the purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator based on a ground other than nationality:

Article 8.28: Consolidation

1. A Tribunal established under this Article shall be established under the UNCITRAL Arbitration Rules and shall conduct its proceedings in accordance with those Rules, unless otherwise provided in this Section.

2. If a Tribunal established under this Article is satisfied that claims submitted to arbitration under Article 8.23 have a question of law or fact in common, the Tribunal may, in the interests of fair and efficient resolution of the claims, and after hearing the disputing parties, by order:

3. A disputing party that seeks an order under paragraph 2 shall request that the Secretary-General establish a Tribunal and shall specify in the request:

4. The disputing party shall deliver a copy of the request to the disputing Party or disputing investors against which the order is sought.

5. The Secretary-General shall, within 60 days of receipt of the request, establish a Tribunal composed of three arbitrators appointed from the ICSID Panel of Arbitrators. To the extent arbitrators are not available from that Panel, appointments shall be at the discretion of the Secretary-General. The Secretary-General shall appoint one member who is a national of the disputing Party, one member who is a national of the Party of the disputing investors and a presiding arbitrator, who is not a national of either Party.

6. If a Tribunal is established pursuant to this Article, a disputing investor that has submitted a claim to arbitration pursuant to Article 8.23 and that has not been named in a request made pursuant to paragraph 3 may submit a written request to the Tribunal that it be included in an order made pursuant to paragraph 2, and shall specify in the request:

7. A disputing investor referred to in paragraph 6 shall deliver a copy of its request to the disputing parties named in a request made pursuant to paragraph 3.

8. A Tribunal established pursuant to Article 8.23 does not have jurisdiction to decide a claim, or a part of a claim, over which a Tribunal established pursuant to this Article has assumed jurisdiction.

9. On the application of a disputing party, a Tribunal established pursuant to this Article, pending its decision pursuant to paragraph 2, may order that the proceedings of a Tribunal established pursuant to Article 8.23 be stayed, unless the latter Tribunal has already adjourned its proceedings.

Article 8.29: Notice to the Non-Disputing Party

A disputing Party shall deliver to the non-disputing Party a copy of the Notice of Intent and other documents, such as the Notice of Arbitration and the Statement of Claim, within 30 days of the date that those documents are delivered to the disputing Party.

Article 8.30: Documents

1. The non-disputing Party is entitled, at its cost, to receive from the disputing Party:

2. The non-disputing Party receiving information pursuant to paragraph 1 shall treat the information on the same basis as the Party providing the information treats them.

Article 8.31: Participation by the Non-Disputing Party

1. On written notice to the disputing parties, the non-disputing Party may make oral or written submissions to a Tribunal on a question of interpretation of this Agreement. Upon the request of a disputing party, the non-disputing Party shall submit its oral submission in writing.

2. The non-disputing Party shall treat the information it receives at hearings on the same basis as the Party providing the information treats them.

Article 8.32: Place of Arbitration

1. Unless otherwise agreed by the disputing parties, a Tribunal shall hold an arbitration in the territory of a Party that is a party to the New York Convention, selected in accordance with:

2. Unless otherwise agreed by the disputing parties, the Tribunal may determine a place for meetings and hearings, other than the legal place of arbitration. In doing so, the Tribunal shall take into consideration, its convenience for the parties and the arbitrators, the location of the subject matter, and the proximity of the evidence.

Article 8.33: Language of Proceedings

1. Unless otherwise agreed by the disputing parties, the language of the arbitration proceedings, including hearings, decisions, and awards, shall be:

2. Communications, submissions, witness statements and documentary evidence can be submitted in either one of the language of the arbitration without a translation.

Article 8.34: Preliminary Objections to Jurisdiction or Admissibility

If issues relating to jurisdiction or admissibility are raised as preliminary objections, the Tribunal shall, whenever possible, decide the matter before proceeding to the merits.

Article 8.35: Transparency of Arbitral Proceedings

1. Subject to paragraphs 2, 3, and 4, the disputing Party shall, after receiving the following documents, promptly transmit them to the non-disputing Party and make them available to the public:

2. The Tribunal shall conduct hearings open to the public and shall determine, in consultation with the disputing parties, the appropriate logistical arrangements. However, a disputing party that intends to use information designated as protected information in a hearing shall advise the Tribunal. The Tribunal shall make appropriate arrangements to protect the information from disclosure.

3. This Section does not require a disputing Party to disclose protected information or to furnish or allow access to information that it may withhold in accordance with Articles 22.2 (National Security) and 22.5 (Disclosure of Information).

4. Any protected information that is submitted to the Tribunal shall be protected from disclosure in accordance with the following procedures:

5. This Section does not require a disputing Party to withhold from the public information required to be disclosed in accordance with its domestic law.

6. Each Party may share with officials of its respective national, sub-national, and local governments all relevant unredacted documents in the course of dispute settlement under this Agreement, but it shall ensure that those persons protect any confidential information in those documents.

Article 8.36: Submissions by a Non-Disputing Party

1. Any person of a Party, or a person with a significant presence in the territory of a Party, that wishes to file a written submission with a Tribunal (hereinafter referred to as the “applicant”) shall apply for leave from the Tribunal to file a non disputing party submission, in accordance with Annex 8-D. The applicant shall attach the submission to the application.

2. The applicant shall serve the application for leave to file a non-disputing party submission and its written submission on all disputing parties and the Tribunal.

3. The Tribunal shall set an appropriate date for the disputing parties to comment on the application for leave to file a non-disputing party submission.

4. In determining whether to grant leave to file a non-disputing party submission, the Tribunal shall consider, among other things, the extent to which:

5. The Tribunal shall ensure that:

6. After consulting the disputing parties, the Tribunal shall decide whether to grant leave to file a non-disputing party submission. If leave to file a non-disputing party submission is granted, the Tribunal shall set an appropriate date for the disputing parties to respond in writing to the non-disputing party submission. By that date, the non-disputing Party may, pursuant to Article 8.31, address any issues of interpretation of this Agreement presented in the non-disputing party submission.

7. The Tribunal that grants leave to file a non-disputing party submission is not required to address the submission at any point in the arbitration, and the non-disputing party that files the submission is not entitled to make further submissions in the arbitration.

8. The provisions pertaining to public access to hearings and documents pursuant to Article 8.35 govern access to hearings and documents by non-disputing parties that file applications pursuant to this Article.

Article 8.37: Governing Law

1. A Tribunal established under this Section shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.

2. The Commission’s interpretation of a provision of this Agreement shall be binding on a Tribunal established under this Section and an award under this Section shall be consistent with that interpretation.

Article 8.38: Interpretation of Annexes

1. If the disputing Party asserts as a defence that the measure alleged to be a breach is within the scope of a reservation or exception set out in Annex I, Annex II or Annex III, the Tribunal shall, at the request of that disputing Party, request the Commission to interpret the issue. Within 60 days of delivery of the request, the Commission shall submit in writing its interpretation to the Tribunal.

2. Further to Article 8.37.2, the interpretation by the Commission submitted under paragraph 1 is binding on the Tribunal. If the Commission fails to submit an interpretative decision within 60 days, the Tribunal shall decide the issue.

Article 8.39: Expert Reports

Without prejudice to the appointment of other kinds of experts, if authorised by the applicable arbitration rules, the Tribunal, at the request of a disputing party or, unless the disputing parties disapprove, on its own initiative, may appoint one or more experts to report to it in writing on a factual issue concerning environmental, health, safety or other scientific matters raised by a disputing party in a proceeding, subject to such terms and conditions as the disputing parties may agree.

Article 8.40: Interim Measures of Protection

The Tribunal may order an interim measure of protection to preserve the rights of a disputing party, or to ensure that the Tribunal’s jurisdiction is made fully effective, including an order to preserve evidence in the possession or control of a disputing party or to protect the Tribunal’s jurisdiction. The Tribunal shall not order attachment or enjoin the application of the measure alleged to constitute a breach referred to in Article 8.18 or 8.19. For the purposes of this Article, an order includes a recommendation.

Article 8.41: Final Award

1. If the Tribunal makes a final award against a disputing Party, the Tribunal may award, separately or in combination, only:

The Tribunal may also award costs in accordance with the applicable arbitration rules.

2. Subject to paragraph 1, if a claim is made pursuant to Article 8.19.1:

3. The Tribunal shall not order a disputing Party to pay punitive damages.

Article 8.42: Finality and Enforcement of an Award

1. An award made by the Tribunal does not have binding force except between the disputing parties and in respect of that particular case.

2. Subject to paragraph 3 and the applicable review procedure for an interim award, a disputing party shall abide by and comply with an award without delay.

3. A disputing party shall not seek enforcement of a final award until:

4. Each Party shall provide for the enforcement of an award in its territory.

5. If the disputing Party fails to abide by or comply with a final award, the Party of the disputing investor may refer the matter to a dispute settlement panel under Chapter Twenty-One (Dispute Settlement). The Party of the disputing investor may seek the following in these proceedings:

6. A disputing investor may seek to enforce an arbitration award under the ICSID Convention, or the New York Convention regardless of whether proceedings are taken pursuant to paragraph 5.

7. A claim that is submitted to arbitration under this Section is considered to arise out of a commercial relationship or transaction for the purposes of Article I of the New York Convention.

Article 8.43: Procedural and Other Matters

Time when a Claim is Submitted to Arbitration

1. A claim is submitted to arbitration under this Section when:

Service of Documents

2. Notices and other documents shall be delivered to a Party at the place named for that Party below:

or their respective successors.

Receipts under Insurance or Guarantee Contracts

3. In an arbitration under this Section, a disputing Party shall not assert, as a defence, counterclaim, right of setoff, or otherwise, that the disputing investor has received or will receive, pursuant to an insurance or guarantee contract, indemnification or other compensation for all or part of its alleged damages.

Article 8.44: Exclusions

The dispute settlement provisions of this Section and of Chapter Twenty-One (Dispute Settlement) shall not apply to the matters referred to in Annex 8-F.

Section C – Definitions

Article 8.45: Definitions

For the purposes of this Chapter:

confidential information means confidential business information and information that is privileged or otherwise protected from disclosure under a Party’s domestic law;

covered investment means, with respect to a Party, an investment in its territory of an investor of the other Party existing on the date of entry into force of this Agreement, or established, acquired, or expanded thereafter;

disputing investor means an investor that makes a claim under Section B;

disputing Party means a Party against which a claim is made under Section B;

disputing party means the disputing investor or the disputing Party;

enterprise means an “enterprise” as defined in Article 1.8 (Definitions of General Application) and a branch of an enterprise;

enterprise of a Party means an enterprise constituted or organised under the domestic law of a Party, and a branch of that enterprise located in the territory of a Party and carrying out business activities there;

freely usable currency means “freely usable currency” as determined by the International Monetary Fund under its Articles of Agreement and amendments thereto;

ICSID means the International Centre for Settlement of Investment Disputes;

ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington on 18 March 1965;

intellectual property rights means copyright and related rights, trademark rights, rights in geographical indications, rights in the industrial designs, patent rights, rights in layout designs of integrated circuits, and rights in relation to protection of undisclosed information;

investment means any asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, the assumption of risk, and a certain duration. Forms that an investment may take include:

For the purposes of this Agreement, a claim to payment that arises solely from the commercial sale of goods and services is not an investment, unless it is a loan that has the characteristics of an investment.

investment of an investor of a Party means an investment owned or controlled directly or indirectly by an investor of that Party;

investor of a PartyFootnote 12 means a Party or a state enterprise thereof, or a national or enterprise of a Party that seeks to make, is making, or has made an investment in the territory of the other Party, provided however that:

investor of a non-party means an investor other than an investor of a Party, that seeks to make, is making, or has made an investment;

New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958;

non-disputing Party means the Party that is not a party to an investment dispute under Section B;

Secretary-General means the Secretary-General of ICSID;

transfers include international payments;

Tribunal means an arbitration tribunal established pursuant to Article 8.23 or Article 8.28;

UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law, approved by the United Nations General Assembly on 15 December 1976.

Annex 8-A: Customary International Law

The Parties confirm their shared understanding that “customary international law” generally and as specifically referenced in Article 8.5 results from a general and consistent practice of States that they follow from a sense of legal obligation. With regard to Article 8.5, the customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the investments of aliens.

Annex 8-B: Expropriation

The Parties confirm their shared understanding that:

Annex 8-C: Submission of a Claim to Arbitration

1. An investor of Canada shall not submit to arbitration under Section B a claim that Korea has breached an obligation under Section A:

if the investor or the enterprise, respectively, has alleged that breach of an obligation under Section A in proceedings before a court or administrative tribunal of Korea.

2. If an investor of Canada or an enterprise of Korea that is a juridical person that an investor of Canada owns or controls directly or indirectly makes an allegation that Korea has breached an obligation under Section A before a judicial or administrative tribunal of Korea, that election is final and that investor shall not thereafter allege the same breach in an arbitration under Section B.

3. Paragraphs 1 and 2 do not preclude an investor of Canada from initiating an action that seeks interim injunctive relief and does not involve the payment of monetary damages before a judicial or administrative tribunal of Korea, provided that the action is brought for the sole purpose of preserving the disputing investor’s or the enterprise’s rights and interests during the pendency of the arbitration.

4. An investor of Korea may initiate or continue proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before a judicial or administrative tribunal under the domestic law of Canada.

Annex 8-D: Submissions by Non-Disputing Parties

1. An application for leave to file a non-disputing party submission must:

2. The submission filed by a non-disputing party must:

Annex 8-E: Possibility of a Bilateral Appellate Mechanism

Within three years after the date this Agreement enters into force, the Parties shall consider whether to establish a bilateral appellate body or similar mechanism to review awards rendered pursuant to Article 8.42 in arbitrations commenced after they establish the appellate body or similar mechanism.

Annex 8-F: Exclusions from Dispute Settlement

A decision by Canada following a review under the Investment Canada Act, with respect to whether or not to permit an investment that is subject to review, is not subject to the dispute settlement provisions of Section B of this Chapter or of Chapter Twenty-One (Dispute Settlement).

Date Modified: