UNOFFICIAL TRANSLATION OF THE SPANISH ORIGINAL

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1 AGREEMENT FOR THE RECIPROCAL PROMOTION AND PROTECTION OF INVESTMENTS BETWEEN THE UNITED MEXICAN STATES AND THE KINGDOM OF SPAIN The Mexican United States and the Kingdom of Spain, hereinafter The Contracting Parties, DESIRING to intensify the economic cooperation for the mutual benefit of both countries; PROPOSING to create favourable conditions for investments made by investors of each of the Contracting Parties in the territory of the other; and RECOGNIZING that the promotion and protection of investment under this Agreement encourages initiatives in this field, Have agreed as follows: For purposes of this Agreement, 1. [The term] "investors" will be understood as: ARTICLE I DEFINITIONS a) natural persons who hold one of the Contracting Parties nationality under its legislation and who make investments in the territory of the other Contracting Party; b) enterprises, understanding as such, legal persons, including companies, associations of companies, trading companies, branches and other incorporated or otherwise duly constituted organizations under the law of that Contracting Party and which have their headquarters in the territory of that same Contracting Party. 2. [I]nvestment means all kinds of assets, such as goods and rights of any kind, and in particular, albeit not exclusively, the following: a) shares, bonds, securities, and other forms of corporate participation; b) rights derived from all kinds of contributions made with the intention of creating economic value, including loans granted for that purpose; c) chattels, immovable assets, real estate, pledged rights, usufruct or other tangible or intangible property, acquired or used for economic activities or other business objectives; d) intellectual or industrial property rights including, amongst others, patents, utility models, industrial designs, trademarks, commercial names, authorship rights, trade secrets, and goodwill; e) interests or rights derived from the contribution of capital or other resources in the territory of a Contracting Party for the development of an economic activity in the territory of the other Contracting Party, as a result of the grant of an contract or concession. Likewise considered investments are those made in the territory of a Contracting Party by enterprises of the same Contracting Party which are effectively controlled by investors of the other Contracting Party

2 Without prejudice to the corresponding rights and obligations, this definition does not include: a payment obligation, or the grant of a credit to the State or to a State Enterprise, as well as the pecuniary claims derived exclusively from: i) Commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Contracting Party to an enterprise in the territory of the other Contracting Party; or ii) the grant of a credit related to a commercial transaction, which expiry date is less than three years, such as trade financing. 3. The term investment income refers to the revenues from an investment and includes, in particular, albeit not exclusively, profits, capital earnings, dividends, interests, royalties and levies. 4. The term territory means the land mass and the territorial waters of each of the Contracting Parties as well as the exclusive economic zone and continental platform lying beyond the limits of the territorial waters of each of the Contracting Parties over which the Parties have or may have, jurisdiction and sovereign rights for the exploitation, exploration and preservation of natural resources under international law. ARTICLE II PROMOTION AND ADMISSION 1. Each Contracting Party will promote access to its territory for investments of investors of the other Contracting Party and will allow them in accordance with their current applicable legislation. 2. This Agreement will also apply to investments made prior to its entry into force by the investors of one of the Contracting Parties in accordance with the prevailing applicable legislation of the other Contracting Party in the territory of the latter. 3. With the intention of significantly increasing the flow of reciprocal investment, the Contracting Parties will draft documents encouraging investment and will make public detailed information regarding: a) investment opportunities; b) laws, bylaws, or provisions that, directly or indirectly affect foreign investment including, amongst others, foreign exchange and tax regimes.; and c) the behaviour of foreign investment in their respective territories. ARTICLE III PROTECTION 1. Each Contracting Party will grant full protection and security to investments made by investors of the other Contracting Party, in accordance with international law, and will not hinder, through measures without legal foundation or discriminatory [measures], the management, maintenance, development, use, enjoyment, expansion, sale, or, liquidation of such investments. 2. Each Contracting Party will grant, pursuant to its legislation, the necessary authorizations in relation to these investments and will allow the execution of contracts in relation to labour, manufacturing permits and technical, commercial, financial, and administrative support

3 3. Each Contracting Party will grant, within the scope of its legislation, as necessary, the required authorizations in relation to activities performed by consultants or experts retained by investors of the other Contracting Party. ARTICLE IV TREATMENT 1. Each Contracting Party will guarantee, within its territory, fair and equitable treatment, in accordance with international law, to investments made by investors of the other Contracting Party. 2. This treatment will be no less favourable than the one granted in like circumstances by each Contracting Party to investments made in its territory by investors of a third State. 3. This treatment will not be extended, however, to the privileges granted by a Contracting Party to the investors of third countries by virtue of its present or future association or participation in a free trade area, a customs union, a common market, economic and monetary unions, or by virtue of any other international agreement of similar characteristics. 4. The treatment granted in accordance with this article will not be extended to tax deductions, tax exemptions, nor to any other analogous privileges granted by any of the Contracting Parties to investors of third countries by virtue of an agreement to avoid double taxation or any other tax agreement. 5. Each Contracting Party, pursuant to the limits and modalities of its national legislation, will accord investments of investors of the other Contracting Party treatment not less favourable than that accorded to its own investors. ARTICLE V NATIONALIZATION Y EXPROPRIATION 1. The nationalization, expropriation, or any other measure of similar characteristics or effects (hereinafter expropriation ) that may be adopted by the authorities of a Contracting Party against investments made in its territory by investors of the other Contracting Party, shall be applied exclusively for public purposes, in accordance with the law, in no case will it be discriminatory, and will give rise to the payment of compensation to the investor or its assignee or legal successor pursuant to paragraphs 2 and 3 of this Article. 2. Compensation will be equivalent to the market value that the expropriated investment had immediately prior to the moment in which the expropriation was adopted or announced or published, whichever occurs first. The valuation criteria will be determined in accordance with the current applicable legislation in the territory of the Contracting Party that receives the investment. 3. Compensation will be paid without delay in freely convertible and transferable currency. ARTICLE VI DAMAGES - 3 -

4 Investors of a Contracting Party whose investments or investment income in the territory of the other Contracting Party suffers damages due to war, other armed conflicts, a state of national emergency, rebellion or riot, or other similar circumstances, will be accorded, in terms of restitution, compensation or other agreement, treatment no less favourable than that accorded to its own investors and investors of any third country. Any payment made pursuant to this article will be made without delay, in convertible currency and free for transfer. ARTICLE VII TRANSFERS 1. Each Contracting Party, pursuant to its legislation, will guarantee investors of the other Contracting Party, in respect to investments made in its territory, the free transfer of payments related to the same and, in particular, but not exclusively, the following: a) investment income, as defined in article I; b) the compensation contemplated in Article V; c) the compensations contemplated in Article VI; d) the product obtained from the total or partial sale or liquidation of the investments; e) the amounts necessary for the repayment of loans related to an investment; f) the amounts necessary for the maintenance and development of the investment; g) the wages, salaries, and other remunerations received by the nationals of a Contracting Party, for their work or services performed in the other Contracting Party in relation with an investment. 2. The Contracting Party receiving the investment will facilitate access to the currency market in a nondiscriminatory basis to the investor of the other Contracting Party in order to acquire the necessary currency to perform the transfers protected by this Article. 3. The transfers mentioned in this Agreement will be performed in freely convertible currencies at the current exchange rate on the day of the transfer and in accordance with the fiscal obligations established by the current legislation of the Contracting Party receiving the investment. 4. The Contracting Parties undertake to facilitate the necessary procedures to perform such transfers without delay or restrictions, in accordance with the practices of international financial centres. In particular, no more than three months shall elapse from the date in which the investor dully files the required applications to perform the transfer, and the date in which the transfer is effectively performed. Therefore, each Contracting Party undertakes to comply with the necessary formalities regarding both the purchase of currency and its effective transfer to other countries before the above-mentioned period expires. 5. The Contracting Parties will accord to the transfers mentioned in this Article, treatment no less favourable than that accorded to investors of any third State. 6. In the event of a fundamental imbalance in the balance of payments, a Contracting Party may establish temporary controls to currency exchange operations, provided that measures or a program pursuant to generally accepted international criteria is implemented. These restrictions will be established for a limited period of time, on an equitable, non-discriminatory manner and in good faith. ARTICLE VIII - 4 -

5 MOST FAVORABLE CODITIONS 1. If a general or especial regulation between the Contracting Parties emerges from present or future legal provisions of one of the Contracting Parties or from obligations under International Law that fall outside the scope of this Agreement, pursuant to which the investments of investors of the other Contracting Party should be accorded a more favourable treatment than that accorded under this Agreement, such regulation will prevail over this Agreement insofar as it is more favourable. 2. More favourable conditions than those in this Agreement that may have been agreed by one of the Contracting Parties with investors of the other Contracting Party will not be affected by this Agreement. ARTICLE IX SUBROGATION In the event that a Contracting Party or the entity appointed by it, grants any kind of financial guarantee regarding non-commercial risks in relation to an investment made by its investors in the territory of the other Contracting Party, and from the moment in which the first Contracting Party or its appointed entity performs any payment against the guarantee offered, the first Contracting Party or its appointed entity will be the direct beneficiaries of any kind of payment that the investor has a right to receive. In the event of a dispute, only the investor may initiate or participate in the proceedings before the national tribunals or submit a claim to international arbitration tribunals pursuant to the provisions of Article XI of this agreement. ARTICLE X DISPUTES BETWEEN THE CONTRACTING PARTIES 1. Any dispute between the Contracting Parties referring to the interpretation or enforcement of this Agreement will be resolved, insofar as possible, by amicable agreement. 2. If the dispute can not be solved in this manner within a period of six months since the beginning of the negotiations, it will be submitted, by request of any of the two Contracting Parties, to an arbitration tribunal. 3. The arbitral tribunal will be constituted as follows: each Contracting Party will appoint an arbitrator and these two arbitrators will appoint a citizen from a third country as president. The arbitrators will be appointed within three months and the president within five months from the date in which any of the two Contracting Parties informs the other Contracting Party its intention to submit the dispute to an arbitration tribunal. 4. If one of the Contracting Parties fails to designate its arbitrator within the established period, the other Contracting Party may request the President of the International Court of Justice to make the appointment. In the event that the two arbitrators fail to reach an agreement regarding the appointment of the third arbitrator within the established period, any Contracting Party may request the President of the International Court of Justice to make the appointment. 5. If, in the cases mentioned in paragraph 4 of this Article, the President of the Supreme Court of Justice cannot perform said task, or is a national of any of the Contracting Parties, the Vice-president shall be called to make the appropriate appointments. If the Vice-president cannot perform such task, or is a - 5 -

6 national of any of the Contracting Parties, the appointments will be performed by the most senior member of the above-mentioned Court who is not a national of any of the Contracting Parties. 6. The arbitral tribunal will render its award adhering to the law, the provisions in this Agreement or any other agreements in force between the Contracting Parties, and pursuant to universally recognized principles of International Law. 7. Unless the Contracting Parties decide otherwise, the tribunal will establish its own procedure. 8. The tribunal will adopt its decision by majority of votes and it shall final and binding to both Contracting Parties. 9. Each Contracting Party will cover the expenses of the arbitrator it appoints and the expenses related with its legal representation in the arbitral proceedings. Both Contracting Parties will share equally in the rest of the expenses, including the President s expenses. ARTICLE XI DISPUTES BETWEEN A CONTRACTING PARTY AND INVESTORS OF THE OTHER CONTRACTING PARTY 1. All disputes related to investments that arise between one of the Contracting Parties and an investor of the other Contracting Party regarding issues regulated under this Agreement will be notified in writing, including detailed information by the investor to the Contracting Party receiving the investment. Insofar as possible, the parties to the dispute will endeavour to resolve the dispute by means of an amicable agreement 2. If the dispute cannot be resolved in this manner within a six month period, starting from the date in which the written notification mentioned in paragraph 1 was provided, it will be submitted to the dispute settlement mechanism provided for in the Appendix to this Agreement. ARTICLE XII ENTRY INTO FORCE, EXTENSION, AND WITHDRAWAL 1. This Agreement will enter into force on the day in which the Contracting Parties exchange reciprocal notifications that the constitutional formalities required for the entry into force of international agreements have been fulfilled. It will remain in force for an initial period of ten years and will be renewed, by tacit extension, for consecutive periods of two years. 2. Each Contracting Party may denounce this Agreement through written notification, six months in advance of the expiration date. 3. This Agreement will continue to apply for a period of ten years to investments made before the denunciation date. Done in Mexico City on June 22, 1995, in two original copies, in the Spanish language, both texts being equally authentic.- Signing on behalf of the United Mexican States: The Secretary of Commerce and Industrial Development, Herminio Blanco Mendoza.- Signature.- On behalf of the Kingdom of Spain: The Secretary of Commerce, Apolonio Ruiz Ligero.- Singature

7 APPENDIX DISPUTE SETTLEMENT BETWEEN A CONTRACTING PARTY AND AN INVESTOR OF THE OTHER CONTRACTING PARTY For purposes of this Appendix: TITLE FIRST DEFINITIONS Arbitration means the international arbitration mechanism contained in this Appendix; 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 signed in Washington, on March 18, 1965; New York Convention means the United Nations Convention on the Recognition and enforcement of Foreign Arbitral Awards, signed in New York on June 10, 1958; Disputing Investor means an investor that files a claim under the terms contained in this Agreement; Disputing Party means the disputing investor or the Contracting Party; Disputing Parties means the disputing investor and the Contracting Party; UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL), approved by the United Nations General Assembly on December 15, 1976; NAFTA Arbitration Rules means the rules applicable to the Dispute Settlement Mechanism provided in section B or Chapter XI of the North American Free Trade Agreement; Tribunal means an arbitral tribunal established under the Third Title of this Appendix; Consolidation Tribunal means an arbitral tribunal established under the Fifth Title of this Appendix. TITLE SECOND DISPUTE SETTLEMENT BETWEEN A CONTRACTING PARTY AND AN INVESTOR OF THE OTHER CONTRACTIG PARTY 1. This Appendix establishes a mechanism for the settlement of investment disputes arising between one Contracting Party and an investor of the other Contracting Party from the date of entry into force of this Agreement that both assures equal treatment among investors of the Contracting Parties under the principle of international reciprocity, and the due exercise of the right to a hearing and defence within a legal process before an impartial tribunal

8 2. The investor who initiates proceedings before any judicial or administrative tribunal in relation to the measure allegedly violating this Agreement may not file a claim pursuant to this Appendix. Nor may the investor submit a claim under this Appendix on behalf of an enterprise, if such enterprise has filed a claim before any judicial or administrative tribunal with regard to the allegedly violating measure. The foregoing does not apply to administrative proceedings before the same authorities taking the measure allegedly in violation of this Agreement, provided for in the legislation of that Contracting Party. 3. An enterprise incorporated under the legislation of a Contracting Party cannot submit a claim for arbitration under this Appendix against that same Contracting Party. 4. The investor of a Contracting Party may submit, on its own behalf, or on behalf of an enterprise that it owns or controls directly of indirectly, a claim alleging that the other Contracting Party has breached an obligation established under this Agreement, provided that the investor or its investment suffered losses or damages by virtue of the violation or as a consequence thereof. 5. The investor may not submit a claim to arbitration under this Agreement if more than three years have elapsed from the date in which the investor acquired knowledge or should have acquired knowledge of the alleged breach as well as the losses and damages suffered. 6. The investor submitting a claim under this Appendix, or the enterprise on which behalf the claim is being submitted by an investor, may not initiate proceedings before any judicial or administrative tribunal in relation to the same measure alleged to be in violation [of this Agreement]. TITLE THIRD SUBMISSION TO ARBITRATION 1. Provided that six months have elapsed from the date in which the events giving rise to a claim occurred, and that the disputing investor have provided written notification to the Contracting Party of its intention to submit the claim to arbitration 90 days in advance, the disputing investor may submit the claim to arbitration under: a) the ICSID Convention, provided that both the disputing Party and the Party of the investor are parties to the Convention; b) the Additional Facility Rules of ICSID, provided that one of the Contracting Parties, but not both, are a State Party to the ICSID Convention; c) the UNCITRAL Arbitration Rules; or d) the NAFTA Arbitration Rules, except for the part referring to the appointment of the arbitrators which will be ruled by Title Fourth. 2. The ICSID Convention or the mentioned rules, will govern the arbitration, except by the extent of the modifications provided in this Appendix. TITLE FOURTH NUMBER OF ARBITRATORS AND METHOD OF APPOINTMENT 1. The Tribunal shall be comprised of three arbitrators, unless the disputing parties otherwise agree on any other uneven number of arbitrators. Each of the disputing parties will appoint an arbitrator, the third arbitrator, who shall be the presiding arbitrator, will be appointed by agreement of the disputing parties

9 2. The arbitrators appointed under this Appendix, shall have experience in international law and investment matters. 3. When a tribunal appointed under this Appendix has not been constituted within 90 days from the date in which the claim was submitted to arbitration, because a Contracting Party has failed to appoint an arbitrator, or the disputing parties fail to reach an agreement on the appointment of the president of the arbitral tribunal, the ICSID Secretary-General, upon request by any of the disputing parties, will appoint exercising his own criteria, the arbitrator or arbitrators that remain to be appointed. Notwithstanding the foregoing, when appointing the president of the tribunal, the ICSID Secretary-General shall make sure that the president is not a national of the Contracting party or a national of the Contracting Party of the disputing investor. TITLE FIFTH CLAIMS CONSOLIDATION 1. Claims may be consolidated in the following cases: a) when a disputing investor files a claim on behalf of an enterprise under its direct or indirect control and, in a parallel manner, other non-controlling investor or investors that participate in the same enterprise file a claim on their own right arising from the same breaches; or b) when two or more claims are submitted to arbitration arguing common questions of fact an law. 2. A disputing party seeking consolidation will request ICSID Secretary-General of ICSID to establish a tribunal and will specify in its request: a) the name of the Contracting Party or the disputing investors against which the consolidation order is intended to be obtained; b) the nature of the requested consolidation order; and c) the basis for the request. 3. The consolidation tribunal will be established under the UNCITRAL Arbitration Rules and will proceed as stipulated in said rules, unless this Appendix establishes otherwise. 4. The consolidation tribunal will decide the issue of jurisdiction concerning the claims and will jointly examine such claims, unless it determines that the interests of any of the disputing parties would be injured. 5. If the consolidation tribunal determines that the proceedings or the claims submitted to arbitration pursuant to Title Third, have common questions of fact or law, said tribunal, in the interest of arriving at a fair and efficient resolution, and having heard the disputing parties, may assume jurisdiction and resolve: a) all or part of the proceedings jointly; or b) one or more claims in said proceedings on the basis that these contribute to the resolution of the others. 6. If the disputing parties opt for the mechanism established in Title Third, paragraph 1(d), the consolidation rules mentioned therein will apply. Notwithstanding the foregoing, arbitrators will be appointed in accordance with Title Fourth of this Appendix

10 TITLE SIXTH APPLICABLE LAW 1. Any tribunal established under this Appendix will decide all the disputes submitted to its consideration in conformity with the provisions in this Agreement and applicable rules of international law. 2. A joint interpretation by the Contracting Parties concerning a provision in this Agreement, will be binding for any tribunal established thereto. TITLE SEVENTH FINAL AWARD 1. When a tribunal established pursuant to this Appendix issues an award that is unfavourable to a Contracting Party, the tribunal may only order, jointly or separately: a) the payment of monetary damages and, if applicable, the corresponding interests; b) the restitution of the property, and if so, the award will decide if the Contracting Party may pay monetary damages, plus the corresponding interests, instead of the restitution. 2. When the claim is filed by an investor on behalf of an enterprise: a) an award for monetary damages and, as the case may be, the corresponding interest, will determine the amount of money that should be paid to the enterprise; b) an award providing for restitution shall provide that restitution be given to the enterprise. 3. The award shall be issued without prejudice to the legal rights of any person over damages suffered, under the current legislation. TITLE EIGHT ENFORCEMENT OF THE AWARD 1. An award issued by any tribunal established under this Agreement shall be mandatory only for the disputing parties and only in regard to a particular case. 2. The disputing parties will obey and comply with the award without delay. 3. The corresponding Contracting Party will provide for the appropriate execution of the award in its territory. 4. The disputing investor may petition the execution of an arbitral award under the ICSID Convention or under the New York Convention. 5. For the purposes of Article I of the New York Convention, the claim submitted to arbitration under this agreement will be considered as emerging from a commercial relation or operation. TITLE NINTH

11 PAYMENTS UNDER INSURANCE OR GUARANTEE CONTRACTS In an arbitral proceeding established under this Appendix, a Contracting Party may not argue as a defence against a claim, a right for compensation or others, that the disputing investor has received or will receive compensations from an insurance contract or guarantee agreement for a part or all of the damages. TITLE TENTH AWARD PUBLICATION The final award will only be published in the event of a written agreement between the disputing parties