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Sanctioned: May 22, 2002.
Enacted: June 27, 2002.
The Senate and Chamber of Deputies of the Argentine Nation assembled in Congress, etc. sanction with force of Law:
ARTICLE 1 Appropriate the VIGESIMO FIRST ADDITIVE PROTOCOL. OF ECONOMIC COMPLEMENTATION AGREEMENT No. 35 CELEBRATE BETWEEN THE GOVERNMENTS OF STATES PARTIES TO MERCOSUR AND THE GOVERNMENT OF THE REPUBLIC DE CHILE, subscribed to Montevideo UREPUBLICA ORIENTAL DEL URUGUAY el on October 19, 1999, which consists of CUARENTA and TRES (43) articles, whose authenticated photocopy forms part of this law. ARTICLE 2 Contact the national executive branch.AT THE SESSION OF THE ARGENTINE CONGRESS, IN GOOD AIRES, 22 MAY 2002.
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EDUARDO O. CHANGE. . JUAN C. MAQUEDA. . Eduardo D. Rollano. . Juan C. Oyarzún.
ECONOMIC COMPLEMENTATION AGREEMENT No. 35 BETWEEN THE GOVERNMENTS OF THE STATES PARTIES OF MERCOSUR AND THE GOVERNMENT OF THE CHILE REPUBLIC
Next Protocol
CONTROVERSAL SOLUTION REGIME
The Plenipotentiaries of the Argentine Republic, of the Federal Republic of Brazil, of the Republic of Paraguay and of the Eastern Republic of Uruguay, as States Parties of the Common Market of the South (MERCOSUR), on the one hand, and of the Republic of Chile, on the other, accredited by their respective Governments according to powers that were granted in good and proper form, deposited in due course in the General Secretariat of the Association.
CONSIDERING that, in accordance with Article 22 of the ACE No. 35 MERCOSUR-Chile, the Parties have concluded the negotiations necessary to define and agree on an arbitral procedure,
CONVIENEN
Article 1 . Approving the "Controversy Settlement Regime" as Annex to this Protocol and is part of it.
Article 2 . This Protocol shall enter into force on the date on which the General Secretariat informs the Parties of the receipt of the last notification regarding compliance with the domestic legal provisions for its entry into force.
The General Secretariat of the Association shall be the depositary of this Protocol, of which it shall send duly authenticated copies to the signatory Governments.
IN WITNESDAY, the respective Plenipotentiaries subscribe to this Protocol in the city of Montevideo, at the nineteenth day of the month of October, nine hundred and nine, in an original in the Spanish and Portuguese languages, both texts being equally valid.
Annex
CONTROVERSAL SOLUTION REGIME
CHAPTER I
PARTIES AND ENVIRONMENT OF IMPLEMENTATION
Article 1
The Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay, States Parties to the Common Market of the South (MERCOSUR), and the Republic of Chile, shall be called Signatory Parties. The Contracting Parties to this Protocol are MERCOSUR and the Republic of Chile.
Article 2
Disputes arising in relation to the interpretation, application or non-compliance with the provisions contained in the Partial Scope Agreement for Economic Complementation No. 35 between MERCOSUR and the Republic of Chile AACE No. 35., henceforth referred to as "Agreement", and the protocols and instruments signed or signed within the framework of the Agreement, shall be subject to the dispute settlement procedure established in this Protocol.
However, disputes arising in respect of the interpretation, application or non-compliance with Article 15, Title V of the "Agreement" may be submitted, if the Parties so agree during the direct negotiation phase, to the procedure set out in this Additional Protocol or to the Understanding on the Rules and Procedures Governing the Settlement of Disputes that is part of the Agreement on the World Trade Organization (WTO).
If there is no agreement between the Parties, the decision shall be taken by the claimant, on the understanding that once the action has commenced, the selected forum shall be exclusive and final.
Article 3
For the purposes of this Protocol, they may be part of the dispute, henceforth called "Parts", both Contracting Parties, that is, MERCOSUR and the Republic of Chile, as well as one or more States Parties of MERCOSUR and the Republic of Chile.
CHAPTER II
DIRECT NEGOTIATIONS
Article 4
The Parties shall seek to resolve the disputes referred to in article 2 through the conduct of direct negotiations, which will enable a mutually satisfactory solution.
Direct negotiations will be conducted, in the case of MERCOSUR, through the Pro-Témpore Presidency or the National Coordinators of the Common Market Group, as appropriate, and in that of the Republic of Chile, through the Directorate General for International Economic Relations of the Ministry of Foreign Affairs, henceforth DIRECON.
Direct negotiations may be preceded by mutual consultations between the Parties.
Article 5
In order to initiate the procedure, either Party shall, in writing, request the other Party to conduct direct negotiations, specifying the reasons and informing the signatory Parties, the Pro-Témpore Presidency and DIRECON.
Article 6
A Party receiving a request for direct negotiations shall respond to the request within 10 days of receipt.
The Parties shall exchange the information necessary to facilitate direct negotiations and provide such information with reserved treatment.
These negotiations may not be extended for more than thirty (30) days, from the date of receipt of the formal request to initiate them, unless the Parties agree to extend that period to a maximum of fifteen (15) additional days.
CHAPTER III
INTERVENTION OF THE ADMINISTRATIVE COMMISSION
Article 7
If a mutually satisfactory solution is not reached within the time limit specified in Article 6 or if the dispute is resolved only partially, any Party may request in writing that the Administering Commission meet, henceforth "Commission", to deal with the matter.
This request shall contain the factual circumstances and the legal basis relating to the dispute, indicating the provisions of the Agreement, Additional Protocols and instruments signed within the framework of the Agreement.
Article 8
The Commission shall meet within thirty (30) days from receipt by all signatory Parties of the request referred to in the preceding article.
For the purposes of the computation of the deadline set out in the preceding paragraph, the signatory Parties shall immediately acknowledge receipt of the request.
Article 9
The Commission may accumulate, by consensus, two or more procedures relating to cases it knows only when, by its nature or eventual thematic linkage, it deems appropriate to consider them together.
Article 10
The Commission will assess the dispute and give the parties opportunity to issue their positions and, if necessary, provide additional information with a view to reaching a mutually satisfactory solution.
The Commission shall make such recommendations as it deems relevant, for which purpose it shall have a period of thirty (30) days from the date of its first meeting.
Where the Commission deems it necessary to advise experts to make its recommendations, or so requested by any Party, it shall order, within the time limit set out in the preceding paragraph, the formation of a Panel of Experts, henceforth "Group", in accordance with the provisions of article 13, applying in such a case the procedure provided for in article 16.
Article 11
For the purposes provided for in the final subparagraph of Article 10, each of the Signatory Parties shall notify the Commission of a list of ten experts, four of whom shall not be nationals of any of the Signatory Parties, within thirty (30) days of the entry into force of this Protocol.
The list shall be composed of persons of recognized competence in matters related to the Agreement.
Article 12
The Commission shall constitute the list of experts on the basis of the designations of the Signatory Parties through mutual communications. The list and its modifications shall be notified to the General Secretariat of ALADI for the purpose of its deposit.
Article 13
The Panel shall consist of the following:
(a) Within ten (10) days after the Panel ' s request for conformation, each Party shall designate an expert from the list referred to in the preceding article.
(b) Within the same time period, the Parties shall jointly designate a third expert from the listed above, which shall not be national of any of the Signatory Parties and shall coordinate the proceedings of the Panel.
(c) If the designations referred to in the above verbatims are not carried out within the specified time limit, they shall be made by lot by the General Secretariat of ALADI, at the request of any Party, from among the experts that make up the list mentioned in the previous article.
(d) The designations provided for in subparagraphs (a), (b) and (c) of this article shall be communicated to the Contracting Parties.
Article 14
Individuals who have intervened in any form at the previous stages of the procedure or who do not have the necessary independence in relation to the positions of the Parties may not act as experts.
In the exercise of their functions, the experts shall act with technical independence and impartiality.
Article 15
The costs arising from the performance of the Panel shall be borne by the Parties in equal amounts.
These expenses include monetary compensation for their performance and the costs of passage, transportation costs, roads and other erogations that demand their work.
The monetary compensation referred to in the preceding paragraph shall be agreed upon by the Parties and agreed with the experts within a period not exceeding five (5) days after their designation.
Article 16
Within thirty (30) days from the communication of the designation of the third expert, the Panel shall submit to the Commission its joint report or the conclusions of its members, when it does not reach unanimity to issue its report.
The report of the Panel or the conclusions of the experts shall be communicated to the Commission in the form provided for in article 37, which shall have a period of fifteen (15) days, counted from the day following the date of its receipt, to issue its recommendations.
Article 17
The Commission shall set a time limit not exceeding fifteen (15) days for Parties to evaluate the outcome of the report or conclusions of the Panel and the recommendations of the Commission referred to in articles 10 or 16, if any, for the purpose of achieving an arrangement.
If the Parties do not arrive at a mutually satisfactory solution within the aforementioned period, the stage of the procedure provided for in this Chapter shall be immediately terminated.
CHAPTER IV
ARBITRAL PROCEDURES
Article 18
Where the dispute could not have been settled by the application of the procedures provided for in Chapters II and III, the rights provided for by the Parties had not been exercised, or the deadlines provided for in those chapters had not been met, any Party may decide to submit it to the arbitral proceedings provided for in this Chapter, for which purpose the decision shall be communicated to the other Party, to the Commission and to the General Secretariat of the General Assembly.
Article 19
The Signatory Parties declare to recognize as binding, ipso facto and without special agreement, the jurisdiction of the Arbitral Tribunal that in each case is constituted to know and resolve the disputes referred to in this Protocol.
Article 20
Within thirty (30) days of the entry into force of this Protocol, each of the Signatory Parties shall designate twelve arbitrators, four of whom shall not be nationals of any of the Signatory Parties, to integrate the list of arbitrators. The list of arbitrators and their successive modifications shall be communicated to the other signatory Parties and to the General Secretariat of ALADI for the purpose of their deposit.
Arbitrators that integrate the list referred to in the preceding paragraph shall be jurists of recognized competence in matters that may be disputed.
From the time that a Party has communicated to the other Party its intention to appeal to the Arbitral Tribunal as provided for in article 18 of the present protocol, the list referred to in paragraph 1 of this article cannot be modified for that matter.
Article 21
The Arbitral Tribunal to which the proceedings will be conducted shall consist of three arbitrators from which the list referred to in article 20.
The Arbitral Tribunal shall be constituted as follows:
(a) Within twenty (20) days after the submission to the other Party referred to in article 18, each Party shall designate an arbitrator and its alternate of the list referred to in article 20.
(b) Within the same period, the Parties shall jointly designate a third arbitrator and his alternate from the aforementioned list of article 20 who shall preside over the Arbitral Tribunal. This designation shall be for persons who are not nationals of the Signatory Parties.
(c) If the designations referred to in the above verbatims are not made within the specified time limit, they shall be made by lot by the General Secretariat of ALADI at the request of any Party from among the arbitrators that make up the aforementioned list.
(d) The designations provided for in subparagraphs (a), (b) and (c) of this article shall be communicated to the Contracting Parties.
The alternate members shall replace the holder in the event of his inability or excuse to form the Arbitral Tribunal, either at the time of his or her integration or during the course of the proceedings.
Article 22
Persons who have intervened in any form at the previous stages of the proceedings may not act as arbitrators or who do not have the necessary independence with respect to the Governments of the Parties.
Rule 23
For the case in which the accumulation is decided in the terms provided for in article 10, if other signatory Parties are to intervene in the dispute, they must unify their representation before the Arbitral Tribunal and therefore designate a single arbitrator, in common agreement within the time limit set out in article 21, paragraph 2, subparagraph (a).
Article 24
The Arbitral Tribunal shall establish its headquarters, in each case, in the territory of any of the Signatory Parties.
The Tribunal shall adopt its own rules of procedure on the basis of the general guidelines adopted by the Commission at the first meeting following the entry into force of this Protocol.
Such general rules and guidelines will ensure that each Party has full opportunity to be heard and present its evidence and arguments and will also ensure that the processes are conducted expeditiously.
Article 25
The Parties shall designate their representatives to the Arbitral Tribunal and may appoint advisers for the defence of their rights.
All notifications to the Parties by the Arbitral Tribunal shall be addressed to the designated representatives. Until the Parties designate their representatives to the Tribunal, notifications shall be made in the manner provided for in article 37.
Article 26
The Parties shall report to the Arbitral Tribunal on the instances before the arbitral proceedings and shall submit the factual and lawful grounds of their respective positions.
Article 27
At the request of one of the Parties and to the extent that there are substantial presumptions that the maintenance of the situation would cause serious and irreparable damage to one of the Parties, the Arbitral Tribunal may dictate the provisional measures it deems appropriate, in accordance with the circumstances and conditions established by the Tribunal itself, to prevent such damage.
The Parties shall comply immediately, or within the time period determined by the Arbitral Tribunal, any provisional measure which shall be extended until the award referred to in article 30 is issued.
Rule 28
The Arbitral Tribunal shall decide the dispute on the basis of the provisions of the Agreement, Additional Protocols and instruments signed within the framework of the Agreement and the principles and provisions of international law applicable in the matter.
The provisions of this article do not restrict the authority of the Arbitral Tribunal to decide the ex aequo et bono dispute, if the Parties so agree.
Rule 29
The Arbitral Tribunal shall take into consideration the arguments submitted by the Parties, the evidence produced and the reports received, without prejudice to other elements it deems appropriate.
Article 30
The Arbitral Tribunal shall issue its award in writing within sixty (60) days of its constitution, which shall be formalized at fifteen (15) days after the president has accepted his designation.
The time limit indicated above may be extended for a maximum of thirty (30) days which shall be notified to the Parties.
The arbitral award shall be adopted by a majority, substantiated and signed by the members of the Tribunal. These may not substantiate votes in dissent and shall maintain the confidentiality of the vote.
Rule 31
The arbitral award must necessarily contain the following elements, without prejudice to others which the Arbitral Tribunal deems appropriate:
I- indication of the Parties to the dispute;
II- the name, nationality of each member of the Arbitral Tribunal and the date of its formation;
III. The names of the representatives of the Parties;
IV- the object of the dispute;
V- a report on the development of the arbitral proceedings, including a summary of the acts performed and the claims of each Party;
VI- the decision reached regarding the dispute, conferring on the basis of fact and law;
VII- the proportion of the costs of the arbitral proceedings to be covered by each Party;
VIII- the date and place in which it was issued; and
IX- the signature of all members of the Arbitral Tribunal.
Rule 32
Arbitral awards are inapplicable, obligatory for the Parties from the receipt of the respective notification and shall have for them the force of judgement.
The awards shall be fulfilled within thirty (30) days, unless the Arbitral Tribunal establishes a different one.
Rule 33
Any Party may, within fifteen (15) days of the notice of the award, request clarification of the award or an interpretation of the manner in which it is to be fulfilled.
The Arbitral Tribunal shall rule within fifteen (15) days thereafter.
If the Arbitral Tribunal considered that the circumstances required it, it could suspend the award until it decided on the application.
Rule 34
If, within the time limit set out in article 32, the arbitral award had not been complied with or partially complied with, the complaining Party may inform the other signatory Parties, in writing, of its decision to temporarily suspend the complained Party, concessions or other equivalent obligations, with a view to obtaining compliance with the award.
The complaining Party shall first attempt to suspend concessions or other obligations relating to the same sector or sectors concerned. If the complaining Party finds the application of such measures impracticable or ineffective, it may suspend other concessions or obligations, and should indicate the reasons on which it is based in the communication in which it announces its decision to effect the suspension.
In the event that the Party complained of considers the suspension of concessions or obligations adopted by the complaining Party to be excessive, it may request the arbitral tribunal to issue the award in respect of whether the measure taken is equivalent to the degree of injury suffered, providing for it a period of thirty (30) days after its constitution.
The Party complained of shall communicate its objections to the other Party and to the Commission.
Rule 35
In the event of the situations referred to in articles 33 and 34, they should be decided by the same Arbitral Tribunal that rendered the award.
Where the Arbitral Tribunal cannot be established with the original, incumbent and alternate members, the procedure provided for in article 21 shall be applied to complete its integration.
Article 36
The costs of the Arbitral Tribunal include the financial compensation of the President and the other arbitrators as well as the costs of passages, costs of transfer, roads, notifications and other erogations required by the arbitration.
The pecuniary compensation of the President of the Arbitral Tribunal, as well as that corresponding to each of the other arbitrators, shall be agreed by the Parties and agreed with the arbitrators within a time limit that shall not exceed five (5) days after the appointment of the President of the Tribunal.
Each Party shall bear the expenses incurred by the performance of the arbitrator designated by it. The pecuniary compensation for the President of the Tribunal and the other expenses required by the arbitration shall be paid in equal amounts by the Parties, unless the Tribunal decides to distribute them in different proportions.
CHAPTER V
GENERAL PROVISIONS
Rule 37
Communications between MERCOSUR or its States Parties and the Republic of Chile should be submitted, in the case of MERCOSUR, to the Pro-Témpore Presidency or to the National Coordinators of the Common Market Group, as appropriate, and in the Republic of Chile, to the General Directorate for International Economic Affairs of the Ministry of Foreign Affairs.
Rule 38
The references made in this Protocol to communications addressed to the Commission imply communications to all signatory Parties.
Rule 39
The time frames referred to in this Protocol are understood to be expressed in days and will be counted from the day after the act or act referred to. When the deadline starts or expires on Saturday or Sunday, it will begin to run or expire on the following Monday.
Article 40
The members of the Panel and the Arbitral Tribunal, in accepting its designation, shall in writing assume the commitment to act in accordance with the provisions of this Protocol and, in particular, articles 14 and 22 thereof, respectively. Such written commitment shall be addressed to the General Secretariat of ALADI.
The Commission at the first meeting following the entry into force of the present protocol shall elaborate the texts of the declarations of commitment referred to in the preceding paragraph.
Rule 41
All documentation and proceedings relating to the procedure set out in this Protocol, as well as the sessions of the Arbitral Tribunal, shall be reserved, except for the awards of the Arbitral Tribunal.
Rule 42
At any stage of the proceedings, the Party submitting the claim may withdraw from the claim, or the Parties may reach a transaction, with the dispute terminated in both cases. Detriments or transactions shall be communicated to the Commission or the Arbitral Tribunal, as appropriate, for appropriate action.
Rule 43
The present protocol shall enter into force on the date on which the General Secretariat informs the Parties of the receipt of the last notification regarding compliance with the domestic legal provisions for its entry into force.
