Agreement between Australia and the Lao People's Democratic Republic on the
Reciprocal Promotion and Protection of Investments(Vientiane, 6 April 1994)
Entry into force: 8 April 1995
AUSTRALIAN TREATY SERIES
1995 No. 9
Australian Government Publishing Service
Canberra(c) Commonwealth of Australia 1995

AGREEMENT BETWEEN AUSTRALIA AND THE LAO PEOPLE'S
DEMOCRATIC REPUBLIC ON THE RECIPROCAL PROMOTION AND
PROTECTION OF INVESTMENTS
AUSTRALIA AND THE LAO PEOPLE'S DEMOCRATIC REPUBLIC ("the Contracting
Parties"),
RECOGNISING the importance of promoting the flow of capital for economic activity
and development and aware of its role in expanding economic relations and technicalco-operation between them, particularly with respect to investment by nationals of
one Contracting Party in the territory of the other Contracting Party;
CONSIDERING that investment relations should be promoted and economic cooperation strengthened in accordance with the internationally accepted principles ofmutual respect for independence and sovereignty, equality, mutual benefit, nondiscrimination and mutual confidence;
ACKNOWLEDGING that investments of nationals of one Contracting Party in the
territory of the other Contracting Party would be made within the framework of laws ofthat other Contracting Party; andRECOGNISING that pursuit of these objectives would be facilitated by a clear
statement of principles relating to the protection of investments, combined with rules
designed to render more effective the application of these principles within the
territories of the Contracting Parties,
HAVE AGREED as follows:Article 1
Definitions(1) For the purposes of this Agreement:(a) "investment" means every kind of asset, owned or controlled by nationals of one
Contracting Party and admitted by the other Contracting Party subject to its laws andinvestment policies applicable from time to time and includes:(i) tangible and intangible property, including rights such as mortgage, liens and otherpledges;(ii) shares, stocks, bonds and debentures and any other form of participation in acompany;(iii) a loan or other claim to money or a claim to performance having economic value;(iv) intellectual and industrial property rights, including rights with respect tocopyright, patents, trademarks, trade names, industrial designs, trade secrets, knowhow and goodwill;(v) business concessions and any other rights required to conduct economic activity
and having economic value conferred by law or under a contract, including rights toengage in agriculture, forestry, fisheries and animal husbandry, to search for, extract
or exploit natural resources and to manufacture, use and sell products; and(vi) activities associated with investments, such as the organisation and operation ofbusiness facilities, the acquisition, exercise and disposition of property rights
including intellectual property rights, the raising of funds and the purchase and saleof foreign exchange;(b) "return" means an amount yielded by or derived from an investment, including
profits, dividends, interest, capital gains, royalty payments, management or technicalassistance fees, payments in connection with intellectual property rights, and all otherlawful income;(c) "national" of a Contracting Party means:(i) a company, or(ii) a natural person who is a citizen of a Contracting Party or whose residence in aContracting Party is not limited as to time under its law;(d) "company" means any corporation, association, partnership, trust or other legally
recognised entity that is duly incorporated, constituted, set up, or otherwise dulyorganised:(i) under the law of a Contracting Party, or(ii) under the law of a third country and is owned or controlled by an entity describedin paragraph (1)(d)(i) of this Article or by a natural person who is a national of aContracting Party under its law,regardless of whether or not the entity is organised for pecuniary gain, privately orotherwise owned, or organised with limited or unlimited liability;(e) "freely convertible currency" means a convertible currency as classified by theInternational Monetary Fund or any currency that is widely traded in international
foreign exchange markets;(f) "territory" in relation to(i) Australia means all the territory over which Australia has sovereignty or jurisdictionin accordance with international law and includes the territorial sea, maritime zone orcontinental shelf where Australia exercises its sovereignty, sovereign rights or
jurisdiction in accordance with international law,(ii) the Lao People's Democratic Republic means all the territory over which the Lao
People's Democratic Republic has sovereignty and/or jurisdiction in accordance withinternational law.
(2) For the purposes of paragraph (1)(a) of this Article, returns that are invested shallbe treated as investments and any alteration of the form in which assets are invested
or reinvested shall not affect their character as investments.
(3) For the purposes of this Agreement, a natural person or company shall be
regarded as controlling a company or an investment if the person or company has asubstantial interest in the company or the investment. Any question arising out of thisAgreement concerning the control of a company or an investment shall be resolved
to the satisfaction of the Contracting Parties.
(4) A reference to "laws" in this Agreement shall be taken to include regulations madethereunder.
Article 2
Application of Agreement(1) This Agreement shall apply to investments made after 1 January 1988 andadmitted by each Contracting Party subject to its laws and investment policies
applicable from time to time.

(2) Where a company of a Contracting Party is owned or controlled by a citizen or acompany of any third country, the Contracting Parties may decide jointly inconsultation not to extend the rights and benefits of this Agreement to such company.
(3) A company duly organised under the law of a Contracting Party shall not betreated as a national of the other Contracting Party, but any investments in thatcompany by nationals of that other Contracting Party shall be protected by thisAgreement.
(4) This Agreement shall not apply to a company organised under the law of a third
country within the meaning of paragraph (1)(d)(ii) of Article 1 where the provisions ofan investment protection agreement with that country have already been invoked in
respect of the same matter.
(5) This Agreement shall not apply to a natural person who is not a citizen of aContracting Party but whose residence in that Contracting Party is not limited as totime where:(a) the provisions of an investment protection agreement between the other
Contracting Party and the country of which the person is a citizen have already been
invoked in respect of the same matter; or(b) the person is a citizen of the other Contracting Party.
Article 3
Promotion and protection of investments(1) Each Contracting Party shall encourage and promote investments in its territory
by nationals of the other Contracting Party and shall, in accordance with its laws andinvestment policies applicable from time to time, admit investments.
(2) A Contracting Party shall ensure fair and equitable treatment in its own territory toinvestments.
(3) A Contracting Party shall, subject to its laws, accord within its territory protection
and security to investments and shall not impair the management, maintenance, use,enjoyment or disposal of investments.
(4) This Agreement shall not prevent a national of one Contracting Party from taking
advantage of the provisions of any law or policy of the other Contracting Party which
are more favourable than the provisions of this Agreement.

Article 4
Most favoured nation provisions
A Contracting Party shall at all times treat investments in its own territory on a basis
no less favourable than that accorded to investments of nationals of any third
country, provided that a Contracting Party shall not be obliged to extend toinvestments any treatment, preference or privilege resulting from:(a) any customs union, economic union, free trade area or regional economic
integration agreement to which the Contracting Party belongs; or(b) the provisions of a double taxation agreement with a third country.
Article 5
Entry and sojourn of personnel(1) A Contracting Party shall, subject to its laws applicable from time to time relating
to the entry and sojourn of non-citizens, permit natural persons who are nationals of
the other Contracting Party and personnel employed by companies of that other
Contracting Party to enter and remain in its territory for the purpose of engaging in
activities connected with investments.
(2) A Contracting Party shall, subject to its laws applicable from time to time, permit
nationals of the other Contracting Party who have made investments in the territory of
the first Contracting Party to employ within its territory key technical and managerial
personnel of their choice regardless of citizenship.
Article 6
Transparency of laws
Each Contracting Party shall, with a view to promoting the understanding of its lawsthat pertain to or affect investments in its territory by nationals of the other
Contracting Party, make, to the best of its ability, such laws public and readily
accessible.
Article 7
Expropriation and nationalisation(1) Neither Contracting Party shall nationalise, expropriate or subject to measures
having effect equivalent to nationalisation or expropriation (hereinafter referred to as"expropriation") the investments of nationals of the other Contracting Party unless thefollowing conditions are complied with:(a) the expropriation is for a public purpose related to the internal needs of thatContracting Party and under due process of law;(b) the expropriation is non-discriminatory; and(c) the expropriation is accompanied by the payment of prompt, adequate andeffective compensation.
(2) The compensation referred to in paragraph 1 of this Article shall be computed on
the basis of the market value of the investment immediately before the expropriation
or impending expropriation became public knowledge. Where that value cannot bereadily ascertained, the compensation shall be determined in accordance withgenerally recognised principles of valuation and equitable principles taking into
account factors including the capital invested, depreciation, capital alreadyrepatriated, replacement value and currency exchange rate movements.
(3) The compensation shall be paid without undue delay, shall include interest at acommercially reasonable rate from the date the measures were taken to the date ofpayment and shall be freely transferable between the territories of the Contracting
Parties. The compensation shall be payable either in the currency in which theinvestment was originally made or, if requested by the national, in any other freely
convertible currency.
Article 8Compensation for losses
When a Contracting Party adopts any measures relating to losses in respect ofinvestments in its territory by citizens or companies of any other country owing to war
or other armed conflict, revolution, a state of national emergency, civil disturbance orother similar events, the treatment accorded to nationals of the other Contracting
Party as regards restitution, indemnification, compensation or other settlement shallbe no less favourable than that which the first Contracting Party accords to citizens orcompanies of any third country.
Article 9
Transfers(1) A Contracting Party shall, when requested by a national of the other Contracting
Party, and subject to its right in exceptional balance of payments difficulties toexercise equitably and in good faith powers conferred by its law, permit all funds ofthat national related to an investment in its territory to be transferred freely andwithout unreasonable delay. Such funds include the following:(a) the initial capital plus any additional capital used to maintain or expand theinvestment;

(b) returns;(c) proceeds from the sale or partial sale or liquidation of the investment;(d) payments made pursuant to a loan agreement or for the losses referred to in
Article 8; and(e) unspent earnings and other remuneration of personnel engaged from abroad inconnection with that investment;(2) The transfers abroad of such funds and the earnings of personnel shall bepermitted in freely convertible currency. Unless otherwise agreed by the national andthe Contracting Party concerned, transfers shall be made at the exchange rateapplying on the date of transfer in accordance with the law of the Contracting Party
which has admitted the investment.
(3) A Contracting Party may protect the rights of all creditors, or ensure thesatisfaction of judgments in adjudicatory proceedings, through the equitable, nondiscriminatory and good faith application of its law.
Article 10
Consultations between Contracting Parties
The Contracting Parties shall consult at the request of either of them on mattersconcerning the interpretation or application this Agreement.
Article 11
Settlement of disputes between Contracting Parties(1) The Contracting Parties shall endeavour to resolve any dispute between themconnected with this Agreement by prompt and friendly consultations andnegotiations.
(2) If a dispute is not resolved by such means within six months of one Contracting
Party seeking in writing such negotiations or consultations, it shall be submitted at therequest of either Contracting Party to an Arbitral Tribunal established in accordancewith the provisions of Annex A of this Agreement or, by agreement, to any otherinternational tribunal.
Article 12
Settlement of disputes between a Contracting Party and a national of
the other Contracting Party(1) In the event of a dispute between a Contracting Party and a national of the other
Contracting Party relating to an investment, the parties to the dispute shall initiallyseek to resolve the dispute by consultations and negotiations.

(2) If the dispute in question cannot be resolved through consultations andnegotiations, either party to the dispute may:(a) in accordance with the law of the Contracting Party which has admitted theinvestment, initiate proceedings before that Contracting Party's competent judicial oradministrative bodies;(b) if both Contracting Parties are at that time party to the 1965 Convention on the
Settlement of Investment Disputes between States and Nationals of other States("the Convention"), refer the dispute to the International Centre for the Settlement of
Investment Disputes ("the Centre") for conciliation or arbitration pursuant to Articles
28 or 36 of the Convention;(c) if both Contracting Parties are not at that time party to the Convention, refer the
dispute to an Arbitral Tribunal constituted in accordance with Annex B of thisAgreement, or by agreement, to any other arbitral authority.
(3) Where a dispute is referred to the Centre pursuant to sub-paragraph (2)(b) of this
Article:(a) where that action is taken by a national of one Contracting Party, the other
Contracting Party shall consent in writing to the submission of the dispute to theCentre within thirty days of receiving such a request from the national;(b) if the parties to the dispute cannot agree whether conciliation or arbitration is themore appropriate procedure, the national affected shall have the right to choose;(c) a company which is constituted or incorporated under the law in force in the
territory of one Contracting Party and in which before the dispute arises the majorityof the shares are owned by nationals of the other Contracting Party shall, in
accordance with Article 25(2)(b) of the Convention, be treated for the purposes of theConvention as a company of the other Contracting Party.
(4) Once an action referred to in paragraph (2) of this Article has been taken, neither
Contracting Party shall pursue the dispute through diplomatic channels unless:(a) the relevant judicial or administrative body, the Secretary-General of the Centre,
the arbitral authority or tribunal or the conciliation commission, as the case may be,
has decided that it has no jurisdiction in relation to the dispute in question; or(b) the other Contracting Party has failed to abide by or comply with any judgment,
award, order or other determination made by the body in question.

(5) In any proceeding involving a dispute relating to an investment, a Contracting
Party shall not assert, as a defence, counter-claim, right of set-off or otherwise, thatthe national concerned has received or will receive, pursuant to an insurance orguarantee contract, indemnification or other compensation for all or part of any
alleged loss.
Article 13
Settlement of disputes between nationals of the Contracting Parties
A Contracting Party shall in accordance with its law:(a) provide nationals of the other Contracting Party who have made investments
within its territory and personnel employed by them for activities associated withinvestments full access to its competent judicial or administrative bodies in order toafford means of asserting claims and enforcing rights in respect of disputes with its
own nationals;(b) permit its nationals to select means of their choice to settle disputes relating toinvestments with the nationals of the other Contracting Party, including arbitration
conducted in a third country; and(c) provide for the recognition and enforcement of any resulting judgments or awards.
Article 14
Subrogation(1) If a Contracting Party or an agency of a Contracting Party makes a payment to anational of that Contracting Party under a guarantee, a contract of insurance or otherform of indemnity it has granted in respect of an investment, the other Contracting
Party shall recognise the transfer of any right or title in respect of such investment.
The subrogated right or claim shall not be greater than the original right or claim of
the national.
(2) Where a Contracting Party has made a payment to its national and has takenover rights and claims of the national, that national shall not, unless authorised to act
on behalf of the Contracting Party making the payment, pursue those rights andclaims against the other Contracting Party.
Article 15
Entry into force, duration and termination(1) This Agreement shall enter into force thirty days after the date on which theContracting Parties shall have notified each other that their constitutional
requirements for the entry into force of this Agreement have been fulfilled. It shallremain in force for a period of fifteen years and thereafter shall remain in force
indefinitely, unless terminated in accordance with paragraph (2) of this Article.
(2) Either Contracting Party may terminate this Agreement at any time after it has
been in force for fifteen years by giving one year's written notice to the other
Contracting Party.
(3) Notwithstanding termination of this Agreement pursuant to paragraph (2) of this
Article, the Agreement shall continue to be effective for a further period of fifteen
years from the date its termination in respect of investments made or acquired before
the date of termination of this Agreement.
IN WITNESS WHEREOF the undersigned, being duly authorised, have signed thisAgreement.
DONE in duplicate at Vientiane on the 6th day of April, 1994 in the English and Lao
languages, both texts being equally authentic.
FOR AUSTRALIA: MICHAEL MANN
[Signed:]FOR THE LAO PEOPLE'S DEMOCRATIC REPUBLIC: LEUANE SOMBOUNKHANH[Signed:]

ANNEX APROVISIONS FOR THE ESTABLISHMENT OF AN ARBITRAL TRIBUNAL FOR
THE SETTLEMENT OF DISPUTES BETWEEN THE CONTRACTING PARTIES(1) The Arbitral Tribunal referred to in Article 11 shall consist of three persons
appointed as follows:(a) each Contracting Party shall appoint one arbitrator;(b) the arbitrators appointed by the Contracting Parties shall, within sixty days of theappointment of the second of them, by agreement, select a third arbitrator who shallbe a national of a third country which has diplomatic relations with both Contracting
Parties;(c) the Contracting Parties shall, within sixty days of the selection of the third
arbitrator, approve the selection of that arbitrator who shall act as Chairman of the
Tribunal.
(2) Arbitration proceedings shall be instituted upon notice being given through the
diplomatic channel by the Contracting Party instituting such proceedings to the other
Contracting Party. Such notice shall contain a statement setting forth in summary
form the grounds of the claim, the nature of the relief sought, and the name of thearbitrator appointed by the Contracting Party instituting such proceedings. Withinsixty days after the giving of such notice the respondent Contracting Party shall notify
the Contracting Party instituting proceedings of the name of the arbitrator appointed
by the respondent Contracting Party.
(3) If, within the time limits provided for in paragraph (1)(c) and paragraph (2) of thisAnnex, the required appointment has not been made or the required approval has
not been given, either Contracting Party may request the President of theInternational Court of Justice to make the necessary appointment. If the President isa national of either Contracting Party or is otherwise unable to act, the Vice-President
shall be invited to make the appointment. If the Vice-President is a national of either
Contracting Party or is unable to act, the Member of the International Court of Justicenext in seniority who is not a national of either Contracting Party shall be invited tomake the appointment.
(4) In case any arbitrator appointed as provided for in this Annex shall resign or
become unable to act, a successor arbitrator shall be appointed in the same manneras prescribed for the appointment of the original arbitrator and the successor shallhave all the powers and duties of the original arbitrator.
(5) The Arbitral Tribunal shall convene at such time and place as shall be fixed by the
Chairman of the Tribunal. Thereafter, the Arbitral Tribunal shall determine where andwhen it shall sit.
(6) The Arbitral Tribunal shall decide all questions relating to its competence andshall, subject to any agreement between the Contracting Parties, determine its own
procedure.
(7) Before the Arbitral Tribunal makes a decision, it may at any stage of theproceedings propose to the Contracting Parties that the dispute be settled amicably.
The Arbitral Tribunal shall reach its award by majority vote taking into account the

provisions of this Agreement, the international agreements both Contracting Parties
have concluded and the generally recognised principles of international law.
(8) Each Contracting Party shall bear the costs of its appointed arbitrator. The cost of
the Chairman of the Tribunal and other expenses associated with the conduct of thearbitration shall be borne in equal parts by both Contracting Parties. The Arbitral
Tribunal may decide, however, that a higher proportion of costs shall be borne by oneof the Contracting Parties.
(9) The Arbitral Tribunal shall afford to the Contracting Parties a fair hearing. It may
render an award on the default of a Contracting Party. Any award shall be renderedin writing and shall state its legal basis. A signed counterpart of the award shall betransmitted to each Contracting Party.
(10) An award shall be final and binding on the Contracting Parties.
ANNEX BPROVISIONS FOR THE ESTABLISHMENT OF AN ARBITRAL TRIBUNAL FOR
THE SETTLEMENT OF DISPUTES BETWEEN A CONTRACTING PARTY AND A
NATIONAL OF THE OTHER CONTRACTING PARTY(1) The Arbitral Tribunal referred to in paragraph (2)(c) of Article 12 shall consist of 3
persons appointed as follows:(a) each party to the dispute shall appoint one arbitrator;(b) the arbitrators appointed by the parties to the dispute shall, within sixty days of theappointment of the second of them, by agreement, select an arbitrator as Chairmanof the Tribunal who shall be a national of a third country which has diplomatic
relations with both Contracting Parties.
(2) Arbitration proceedings shall be instituted by written notice setting forth thegrounds of the claim, the nature of the relief sought and the name of the arbitrator
appointed by the party instituting such proceedings.
(3) If a party to the dispute, receiving notice in writing from the other party of theinstitution of arbitration proceedings and the appointment of an arbitrator, shall fail toappoint its arbitrator within sixty days of receiving notice from the other party, or if,
within one hundred and twenty days after a party has given notice in writing instituting
the arbitration proceedings, agreement has not been reached on a Chairman of the
Tribunal, either party to the dispute may request the Secretary-General of thePermanent Court of Arbitration at The Hague to make the necessary appointment.

(4) In case any arbitrator appointed as provided in this Annex shall resign or become
unable to act, a successor arbitrator shall be appointed in the same manner asprescribed for the appointment of the original arbitrator and the successor shall have
all the powers and duties of the original arbitrator.
(5) The Arbitral Tribunal shall, subject to the provisions of any agreement between
the parties to the dispute, determine its procedure by reference to the rules ofprocedure contained in the Arbitration Rules of the United Nations Commission on
International Trade Law adopted by the United Nations General Assembly in its
Resolution 31/98 of 15 December 1976.
(6) The Arbitral Tribunal shall decide all questions relating to its competence.
(7) Before the Arbitral Tribunal makes a decision it may at any stage of theproceedings propose to the parties that the dispute be settled amicably. The Arbitral
Tribunal shall reach its award by majority vote taking into account the provisions of
this Agreement, any agreement between the parties to the dispute and the relevant
domestic law of the Contracting Party which has admitted the investment.
(8) An award shall be final and binding and shall be enforced in the territory of eachContracting Party in accordance with its law.
(9) Each party to the dispute shall bear the costs of its appointed arbitrator. The costof the Chairman of the Tribunal and other expenses associated with the conduct of
the arbitration shall be borne equally by the parties. The Arbitral Tribunal may,
however, decide that a higher proportion of the costs shall be borne by one of theparties.