AGREEMENT

BE'l'WgEN
THE GOVERNMENT OF THE UNITED ARAB EMIRATES
AND
THE GOVERNMENT OF' THE ITALIAN REPUBLIC
'[<'OR
THE PROMOTION AND PROTECTION OF INVESTMENTS
 -2-

ARTICLE 1
Definitions

For the purposes of this Agreement:

(1) The term 'inves tment' sha 11 compr i se every kind of asset
invested by the Government or by a natural or legal person
of one Contracting State in the territory of the other
Contract ing State in accordance wi th the laws, regulations
and administrative practices of that State. Without
restricting the generality of the foregoing the term
'investment' shall include:

(a) movable and immovable property as well as any other

property rights in rem such as mortagages, liens,
pledges, usufruct and similar rights;
(b) shares, stocks and debentures of companies or other
rights or interests in such companies, loans and
bonds issued by a Contracting State or any of its
natural or legal person and returns retained for the
purpose of re-investments;
(c) claims to money or to any performance having
economic value associated with an investment;
(d) copyrights, trademarks. patents. industrial designs
and other indus tr ia 1 proper ty rights, know- how.
trade secrets, trade names and goodwill;
(e) any rights of fincial nature conferred by law or
contract and any 1 icences and permi ts pursuant to
law. including the rights to search for extraction
and exploitation of natural resources.
AGREEMENT BETWEEN THE GOVERNMENT OF THE ITALIAN REPUBLICE AND

THE GOVERNMENT OF THE UNITED ARAB EMIRATES FOR THE PROMOTION

AND PROTECTION OF INVESTMENTS.

The Government of the Ita 1 ian Republ ic and the

Government of the United Arab Emirates (hereinafter
collectively referred to as the "Contracting States and each
referred to as a Contracting State");

Desiring to create favourable conditions for greater

economic co-operation between the two countries and in
particular for investments by investors of one Contracting
State in the territory of the other Contracting State:

Recognizing that the encouragement and reciprocal

protection under international agreements of such investments
will be conducive to the stimulation of business intiative and
will increase prosperity in both Contracting States.

Have agreed as follows

 -3-

Any alteration of the form in which assets are invested

shall not affect their classification as investments.
provided that such alteration is not contrary to the
admission, if any. granted in respect of the assets
originally invested ;

(2) The term 'investor' shall mean the Government of a

Contract ing S ta te 0 r any of its natura 1 or lega 1 per son
who invest in the territory of the other Contracting
State ;

(3) The' na tura 1 person' sha 11 mean wi th respect to either

Contracting State a natural person holding the
nationality of that State in accordance with its laws

{4} The term 'legal person' shall mean with respect to either
Contract ing State. any ent i ty es tabl i shed in accordance
with, and recognized as legal person by the law of the
State. such as public and private companies.
corporations. business associations. authorities.
partnerships. foundations. firms, institutions,
establishments, agencies, development funds, enterprises,
cooperatives, and organizations or other similar entities
irrespective of whether their liabilities are limited or
otherwise; and any ent i ty es tabl i shed outs ide the
jurisdiction of a Contracting State as a legal person and
in which such State or any of its nationals or any legal
person estabilshed within its jurisdiction has a
predominating interest ;
 --4-

(5) The term 'income' shall mean amounts yielded by an

investment and in particular. though not exclusively.
includes profits. interests, capital gains. share
dividends. roya 1 ties or fees, and any payments in kind
including reinvestment income.

(6 ) The term 'territory' shall be construed to mean, in

addition to the zones contained within the land
boundaries. the maritime zones.The latter also Comprise
the marine and submarine zones over which the Contracting
parties exrcise Sovereignty. or exercise sovereign or
jurisdictional rights. under international law.

(7) 'Associated activities' include the organization.

contro 1. opera t ion. ma intenance and dis pos it ion of lega 1
person."S. branches. agencies. offices. factories or other
facilities for the conduct of business; making.
performance and enforcement of contracts; the
acqu is i t ion. use. protect ion and d ispos it ion of property
of all kinds. including intellectual and industrial
property rights; and the borrowing of funds. the purchase
and issuance of equity shares and the purchase of foreign
exchange for imports ;

(B) The term 'f reely usable currency I means any convert ible
currencies widely used. to make payments for
international transactions and for which there are ready
buyers in the principal exchange markets.
 -5-

ARTICLE 2
Promotion And Protection Of Investments

(1) Each Contracting State shall encourage and create

favourable conditions for investors of the other
Contracting State to make investments in its territory
and, in exercise of powers conferred by its laws,
regulations and administrative practices, shall admit
such investments and activities associated therewith.

(2) Once established, investments shall at all times enjoy

full protection and security, in a manner consistent with
international law.

(3) Each Contracting State shall at all times ensure fair and
equitable treatment to the investments of investors of
the other Contracting State. Each Contracting State shall
ensure tha t the management, ma intenance, use, enj oyment,
transformation, cessation and liquidation, acquisition or
disposal of investments or rights related to investment
and its associated activities in its territory of
investors of the other Contracting State shall not in any
way be subjected to or impaired by arbitrary,
unreasonable or discriminatory measures .

(4) (i) Each Contract ing State sha 11 endeavour to take the
necessary measures and legislation for granting of
appropriate facilities, incentives and other forms
of encouragement for investments made by investors
of the other Contracting State .
 -6-

(ii) Investors of ei ther Contracting State shall be

entitled to apply to the competent author it ies in
the host State for the appropriate facilities,
incentives and other forms of encouragement and the
host State shall grant them all assistance. consents.
approvals, licences and authorizations to such an
extent and on such terms and conditions as shall,
from time to time. be determined by the laws and
regulations of the host State.

(5) With respect to its tax policies. each Contracting State

should strive to accord fairness and equity in the
trea tment of inves tment of investors of the other
Contracting State.

(6) The Contracting States shall periodically consult between

themselves concerning investment opportunities within the
territory of each other in various sectors of the economy
to determine where investments from one Contracting State
into the other may be most beneficial in the interest of
both Contracting States.

(7) To attain the objectives of this Agreement. the

Contracting States shall encourage and facilitate the
formation and establishment of the appropriate joint
legal entities between the investors of the Contracting
States to establish. develop and execute investment
projects in different economic sectors in accordance with
the laws and regulations of the host State.
 -8-

(2) Each Contracting State shall in its territory accord

investors of the other Contracting State, as regards
management, maintenance, use, enjoyment, acquisition or
disposal of their investments, or any other activity
associated therewith, treatment not less favourable than
that which it accords to its own investors or to
investors of any third State whichever is the most
favourable.

ARTICLE 4
Exception

The provisions of this Agreement relating to the granting

of treatment not less favourable than that accorded to its own
investors or the investors of any third State shall not be
construed so as to oblige one Contracting State to extend to
the investors of the other the benefit of any treatment,
preference or privilege resulting from:-

(1) any existing or future customs union, an economic

union or free trade area or a common external tariff
area or a monetary union or similar international
agreement or other forms of regional or SUb-regional
cooperation arrangement to which either of the
Contracting States is or may become a party: or
(2) the adoption of an agreement designed to lead to the
formation or extension of such a union or area
within a reasonable length of time; or
 -9-

(3) any international or regional or sUb-regional

agreement or other arrangement relating wholly or
mainly to taxation or movement of capital or
domestic legislation relating wholly or mainly to
taxation.
(4) or an Agreement with the Contracting State with
another State relating to crossborder trade and to
prevent double taxation.

ARTICLE 5
Compensation for Damage or Loss

(1) Investors of one Contracting State whose investments in

the territory of the other Contracting State suffer
losses owing to war or other armed conflict, revolution,
a state of national emergency, revolt, insurrection or
riot or other similar events in the territory of the
latter Contracting State shall be accorded by the latter
Contracting State treatment, as regards restitution.
indemnification. compensation or other settlement. not
less favourable than that which the latter Contracting
State accords to its own investors or to investors of any
third State whichever is the most favourable.

(2) Without prejudice to Paragraph (1) of this Article.

investors of one Contracting State who in any of the
events referred to in that paragraph suffer damage or
loss in the territory of the other Contracting State
resulting from:
 -10-

(a) .requisition of theix: investment o.r p.rope.rty by its

fo.rces o.r authorities,

(b) destruction of their investment or p.roperty by its

forces o.r authorities which was not caused in combat
action or was not .required by the necess i ty of the
situation.

shall be accorded p.rompt and adequate compensation for the

damage or loss sustained during the period of
requisitioning or as a result of the destruction of the
property. Resulting payments shall be in freely usable
currency and freely transferable without undue delay.

ARTICLE 6
Nationalization or Expropriation

(1) (a) Investments of either Contracting State or its

natural or legal persons shall not be subject to
sequest.ration. confiscation o.r any similar measures
which might limit permanently or temporarily the
joint right of ownership, possession. control, or
enjoyment save when specificaly provided by law or by
judgment of a competent court issued in accordance
with laws in force;
 -11-

(2) Investments of natural or legal person of either

Contracting State shall not be directly or indirectly
nationalized, frozen, expropriated or subjected to
measures having effect equivalent to nationalization
or expropriation in the territory of the other
Contracting State including the leving of taxes, the
compulsory sale of all or part of an investment or
the impairment or deprivation of its mangement or
control.
All such actions referred to as expropriation unless
the expropriation:

(a) is done for public purpose or national interest.

(b) is accomplished under due procedures of law and not
discriminatory.
(c) does not violate any specific provision or
contractuals stability or expropriation contains in
an investment Agreement between the natural or legal
person and the party making the expropriation.
(d) it is done in accordance with and from a competent
legalquarters.
(e) that the investor is given the right to prompt review
by the expropriated legal or administrative bodies of
the other Contracting State to determine whether the
expropriat ion is occured and it is confirmed to the
principle of the national law.
(f) the investor shall have the right to contest against
the expropriation and any such prevented measures to
the competent court of the other Contracting State
.that take such measures.
 -12-

(g) is accompanied by a prompt. adequate and effective

compensation.

(3) The adequate compensation shall be calculated on the

basis of the real market value of the investment
immediately prior to the moment in which the decision
to nationalize or expropriate is announced or made
public and shall be calculated in accordance with
evaluation principles that are acknowledged to provide
the market value according to internationally
acknowledged evaluation standards. Whenever there are
difficulties in ascertaining the market value the
compensation shall be calculated on the basis of the
value that typify the company·s activities.
Compensation shall include interest calculated on a
six - month LIBOR basis accruing from the date of
nationalization or expropriation to the date of
payment. In the event of failure to reach an Agreement
between the investor and the Contracting State having
liability. the amount of such compensation shall be
calculated following the settlement of dispute
procedures provided by Article 9 of this Agreement.
Once the compensation has been determined shall be
paid promptlyand authorization for its repariation in
convertible currency issued.currency issued.
 -13-

(4) Where a Contracting State nationalizes or expropriates

the investment of a legal person which is established
or licenced under the the law in force in its
territory and in which the other Contracting State or
any of its investors owns shares. stocks. debentures
or other rights of interest, it shll insure that
prompt, adequate and effective compensation is
received and allowed to be repatriated. Such
comensation shall be determined and paid in accordance
with the provisions of this Article.

(5) 'I'he provisions of this Article shall also apply to

income from an investment as will as. in the event of
liquidation. to the proceeds from the liquidation.

(6) Should measures indicated on this Article not be

stated as enforceable wi thin the terms fixed by the
relevant laws or regulations or whenever the said
measures have been acknowledged, by the competent
Authorities, to be no more consistent with public
purposes or national interests. the concerned investor
shall at its request be allowed to apply for the
recovery of the property or possession of the affected
investments.
 -14-

ARTICLE 7
Repatriation of Capital and Income

(1) Each Contracting State shall guarantee without undue

delay and after the performance of all fiscal obligation
including income tax the transfer out of its territory in
any freely usable currency of :-

(a) the net income •. dividends. royalties.

technical
assistance and technical service fees. interests and
other income. accruing from any investment by an
investor of the other Contracting State;

(b) the proceeds accruing from the sale. total or

partial liquidation of any investment made by an
investor of the other contracting State;

(c) funds in repayment of borrowings;

(d) the remuneration and allowances paid to natural

persons of the other Contracting State who are
allowed to work in connection with an investment in
its territory;

(e) Capital spent for the management of investment and

capital depreciation which includes additional funds
for the maintenance of the investment.
 -15

(2) Without restricting the generality of Article 3 of this

Agreement the Contracting States undertak.e to accord to
transfers referr~d to in Paragraph (1) of this Article a
treatment as favourable as that accorded to transfers
originating from investments made by investors of any
third State.

(3) The transfer refer to in Articles 5.6.7. and 8 shall be

effective without undue delay. the exchange rates
applicable to such transfers in paragraph (1) of this
Article shall be the rate of exchange prevailing at the
time of remittance.

ARTICLE 8
Subrogation

(1) In the event that

one Contracting State has provided a
guarantee in respect of non - commercial risk.s for the
investment effected by one of its investors in the
territory of the other Contracting State, and has
effected payment to said investor
on the basis of that
guarantee, the other Contracting State shall recognize the
assignment of the rights of the investor to the first
-named Contracting State, whose right of subrogation
shall not exceed the original right of the investor. In
relation to the transfer of payments to the Contracting
State by virtue of this assignment, the provisions of
Articles 5, 6 and 7 shall apply.
 -16-

(2) This Article shall. notwithstanding the provision of

Article 1 of this Agreement. apply only to investments
made after the entry into force of this Agreement. where
the investment has been registered if necessary with the
competent authorities of the Contracting State in whose
territory it is made.

ARTICLE 9
Settlement of Investment Disputes

(1) A1l kinds of disputes or differences. including disputes

over the amount of compensation for expropriation.
requisition.nationalization or similar measures. between
the Contracting State and an investor of the other
Contracting State concerning an investment of that
investor in the territory and maritime zones of the
former Contracting State shall. if possible. be settled
amicably.

(2) If such disputes or differences cannot be settled

according to the provisions of paragraph (1) of this
Article within six months from the date of a written
request for settlement. the investor concerned may submit
the dispute to:

(a) The competent court of the Contracting State having

territorial jurisdiction for decision;. or

(b) The Arbitral Tribunal according to the provisions

provided in the protocol.
 -17-

(c) the IIInternational Center for the Settlement of

Investment Disputes ll
, for the application of the
arbitration procedures provided by the Washington
Convention of 18th March 1965 on the "Settlement of
Investment Disputes between States and Nationals of
other States ll •

(3) Neither Contracting State shall pursue through diplomatic

channels any matter referred to arbitration until the
proceedings have been exhuasted and a Contracting State
has failed to abide by or to comply with the award
rendered by the Arbitral 'l'ribunal within the term
prescribed by the judgement pursuant to internal laws.

ARTICLE 10
Settlement of Disputes between Contracting States

(1) Disputes between the Contracting States concerning the

interpration and application of this Agreement shall be
settled. as far as possible, amicably by both States
through diplomatic channels

(2) If the dispute cannot be so settled within three months

from the date on which either Contracting State, informs
in writing the other Contracting State. they shall, upon
the request of either Contracting State, be submitted to
an ad hoc arbitral tribunal in accordance with the
provisions of this Article.
 -18-

(3) The Arbitral Tribunal shall be constituted in the

following way: within two months of the receipt of the
request for arbitration. each Contracting State shall
appoint one member of the tribunal. The two members
shall then select a national of a third State having
diplomatic relations with both Contracting States who
shall act as Chairman (hereafter referred to as the
Chairman) .
The Chairman shall be appinted within three months from
the date of appointmedt of the other two members.

(4) If within the period specified in Paragraph (3) of this

Article either State shall not have appointed its
arbi trator or the two arbitrators shall not have agreed
on the Chairman. a request may be made to the President
of the International Court of Justice to make the
appointment. If he happens to be a national of either
Contracting State or if he is otherwise prevented from
discharging the said function. the Vice-President shall
be invited to make the appointment. If the Vice-President
also happens to be a national of either Contracting State
or is prevented from discharging the said fUnction. the
member of the International Court of Justice next in
seniority who is not a national of either Contracting
State shall be invited to make the appointment.
 -19-

(5) The Arbitration Tribunal shall reach its decision by a

majority of votes. Such decision shall be binding. Each
Contracting State shall bear the costs of its own
arbitrator and its counsel in the arbitral proceedings:
the cost of the President and the remaining costs shall
be borne in equal parts by both Contracting States. The
arbitral tribunal shall determine its own procedures.

ARTICLE 11
Application to Investments

This Agreement shall apply to investments made in the

terri tory of either Contracting State in accordance with
its legislation or rules or regulations by investors of
the other Contracting State prior to as well as after the
entry into force of this Agreement.

ARTICLE 12
Relation between Governments

The provisions of this Agreement shall apply irrespective

of the existence of diplomatic or consular relations between
the Contracting States.
 -20-

ARTICLE 13
Application of Other Rules and Special Commitments

(1) Where a matter is governed simultaneously both by this

Agreement and by other agreements to which both the
Contracting States are parties or general pr inciples of
law commonly recognized by both Contracting States or
domestic law of the host State, nothing in this Agreement
shall prevent either Contracting State or any of its
investors who own investments in the territory of the
other Contracting State from taking advantage of
Whichever rules are the more favourable to their cases.

(2) Investments subject to special contracts or commitments

undertaken by one Contracting State with respect to the
investors of the other Contracting State shall be
governed, notwithstanding' the provisions of this
Agreement by the terms of
those contracts and
commitments insofar as their
provisions are more
favourable than those provided by this Agreement.

(3) Each Contracting State shall observe any obligation

deriving from this Agreement in accordance with its
domestic laws.
 -21-

ARTICLE 14
Entry into Force

This Agreement shall become effective as from the moment

in which the two Contracting State will notify each other
their respective constitutional procedures have been completed.

ARTICLE 15
Duration and Termination

(1) This Agreement shall remain in force for a period of ten

(10) years and shall continue in force thereafter for
similar period or periods unless. one year before the
expiry of the initial period or any subsequent period.
either Contracting State notifies the other in writing of
its intention to terminate this Agreement. The notice of
termination shall become effective one year after it has
been received by the other Contracting State.

(2) In respect of investments made prior to the date when the

notice of termination of this Agreement becomes
effective. the provisions of this Agreement shall
continue to be effective for a period of five (5) years
from the date of termination of this Agreement

In witness whereof the undersigned duly authorized

thereto by their respective Governments. have signed this
Agreement .
 -22-

Done in duplicate at .Abu Dhabi. this Sunday. 22nd of

Jan 1995. corresponding to 21st Saaban 1415 Higria in the
Italian English ,and Arabic languages, all texts being equally
authentic In case of divergency, the English text shall
prevail .

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF

THE UNITED ARAB EMIRATES THE ITALIAN REPUBLIC

~~
~VANN I FERRERO ~
Minister of State Ambassador of Italy
For Finance and Industry
 PROTOCOL

On signing the Agreement between the Government of the

Italian Republic and the Government or the United Arab Emirates
the Promotion of Investments.The Contracting States also agreed
to the following clauses which shall be deemed to form an
integral part of the Agreement.

1. In reference to Article 3:

Both Contracting States shall regulate. according to their

legislation. regulations the procedures relating to entry.
residence work and travel within their respective
territories required by nationals of the other contracting
State and members of their families engaged in activities
connected with investments in the spirit of this Ageement.

2. In reference to Article 9:

In relation to arbitation. under Article 9 it be conducted

in accordance with Arbitration Standards of the United
Nations Commission on Internationl Trade Law (UNCITRAL).
pursuant to Resolution 31'98 of 15th December 1976
adopted by the United Nations General Assembly. and with
the following provisions:
 -2-

(a) The.re shall be th.ree A.rbit.rato.rs. and if they a.re not

nationals of the Cont.racting States they shall be
nationals of States which have diplomatic .relations with
both Cont.racting States.
For a.rbi t.ra tors to be appointed pursuant to the
p.rovisions of the UNCITRAL Rules. the President of the
Intstitute of Arbitration of the Stockholm Chambe.r of
Commerce shall be the " Appointing Authority". The
abritration will be held in Stokholm. except other
ar.rangement between the involved Cont.racting Parties.

(b) The acknowledgement and the enforcement of the decision

of the Arbitration Tribunal in the territories of the
Cont.racting Parties shall be governed by their respective
national in accordance with the relevant Inte.rnational
Conventions to which they are pa.rties.
 -3-

Done in duplicate at Abu Dhabi this Sunday 22nd of Jan

1995. corresponding to 21st Shaaban 1415 Higria in the
I talian. English and Arabic languages. a 11 texts being
equally authentic. In case of divergency • the English text
shall prevail.

POR THE GOVERNMENT OF FOR THE GOVERNMENT OF

THE UNITED ARAB EMIRATES THE ITALIAN REPUBLIC

f~
Giovanni Ferrero ---
Minister of State Ambassador of Italy
For Finance and Industry