Section 169p. 169

PUBLIC INTERNATIONAL LAW COMPENDIUM VOLUME I

(iv) States Parties shall, upon receipt of the notification,

make available their respective shares of debt guarantees

for the Enterprise in accordance with subparagraph (b).

(e) (i) If the Enterprise so requests, State Parties may

provide debt guarantees in addition to those provided in

accordance with the scale referred to in subparagraph (b).

(ii) In lieu of debt guarantees, a State Party may make a

voluntary contribution to the Enterprise in an amount

equivalent to that portion of the debts which it would

otherwise be liable to guarantee.

(f) Repayment of the interest-bearing loans shall have

priority over the repayment of the interest-free loans.

Repayment of interest-free loans shall be in accordance

with a schedule adopted by the Assembly, upon the

recommendation of the Council and the advice of the

Board. In the exercise of this function the Board shall be

guided by the relevant provisions of the rules, regulations

and procedures of the Authority, which shall take into

account the paramount importance of ensuring the

effective functioning of the Enterprise and, in particular,

ensuring its financial independence.

(g) Funds made available to the Enterprise shall be in

freely usable currencies or currencies which are freely

available and effectively usable in the major foreign

exchange markets. These currencies shall be defined in

the rules, regulations and procedures of the Authority in

accordance

with

prevailing

international

monetary

practice. Except as provided in paragraph 2, no State

Party

shall

maintain

or

impose

restrictions

on

the

holding, use or exchange by the Enterprise of these

funds.

(h) "Debt guarantee" means a promise of a State Party to

creditors of the Enterprise to pay, pro rata in accordance

with the appropriate scale, the financial obligations of the

Enterprise covered by the guarantee following notice by

the creditors to the State Party of a default by the

Enterprise.

Procedures

for

the

payment

of

those

obligations

shall

be

in

conformity

with

the

rules,

regulations and procedures of the Authority.

4. The funds, assets and expenses of the Enterprise shall

be kept separate from those of the Authority. This article

shall

not

prevent

the

Enterprise

from

making

arrangements

with

the Authority regarding facilities,

personnel

and

services

and

arrangements

for

reimbursement of administrative expenses paid by either

on behalf of the other.

5. The records, books and accounts of the Enterprise,

including its annual financial statements, shall be audited

annually by an independent auditor appointed by the

Council.

Article 12. Operations

1. The Enterprise shall propose to the Council projects for

carrying out activities in accordance with article 170. Such

proposals shall include a formal written plan of work for

activities in the Area in accordance with article 153,

paragraph 3, and all such other information and data as

may be required from time to time for its appraisal by the

Legal and Technical Commission and approval by the

Council.

2. Upon approval by the Council, the Enterprise shall

execute the project on the basis of the formal written

plan of work referred to in paragraph 1.

3. (a) If the Enterprise does not possess the goods and

services required for its operations it may procure them.

For that purpose, it shall issue invitations to tender and

award contracts to bidders offering the best combination

of quality, price and delivery time.

(b)

If

there

is

more

than one bid offering such a

combination,

the

contract

shall

be

awarded

in

accordance with:

(i) the principle of non-discrimination on the basis of

political

or

other considerations not relevant to the

carrying

out

of

operations

with

due

diligence

and

efficiency; and

(ii) guidelines approved by the Council with regard to the

preferences

to

be

accorded

to

goods

and

services

originating

in

developing

States,

including

the

land-locked and geographically disadvantaged among

them.

(c) The Governing Board may adopt rules determining the

special

circumstances

in

which

the

requirement

of

invitations

to bid may, in the best interests of the

Enterprise, be dispensed with.

4. The Enterprise shall have title to all minerals and

processed substances produced by it.

5.

The

Enterprise

shall

sell

its

products

on

a

non-discriminatory

basis.

It

shall

not

give

non-commercial discounts.

6. Without prejudice to any general or special power

conferred on the Enterprise under any other provision of

this Convention, the Enterprise shall exercise such powers

incidental to its business as shall be necessary.

7. The Enterprise shall not interfere in the political affairs

of any State Party; nor shall it be influenced in its

decisions by the political character of the State Party

concerned.

Only

commercial

considerations

shall be

relevant to its decisions, and these considerations shall be

weighed impartially in order to carry out the purposes

specified in article 1 of this Annex.

Article 13. Legal status, privileges and immunities

1. To enable the Enterprise to exercise its functions, the

status, privileges and immunities set forth in this article

shall be accorded to the Enterprise in the territories of

States

Parties.

To

give

effect

to

this

principle

the

Enterprise and States Parties may, where necessary, enter

into special agreements.

2. The Enterprise shall have such legal capacity as is

necessary

for

the

exercise

of its functions and the

fulfilment of its purposes and, in particular, the capacity:

(a) to enter into contracts, joint arrangements or other

arrangements, including agreements with States and

international organizations;

(b) to acquire, lease, hold and dispose of immovable and

movable property;

(c) to be a party to legal proceedings.

3. (a) Actions may be brought against the Enterprise only

in a court of competent jurisdiction in the territory of a

State Party in which the Enterprise:

(i) has an office or facility;

(ii) has appointed an agent for the purpose of accepting

service or notice of process;

(iii) has entered into a contract for goods or services;

(iv) has issued securities; or

(v) is otherwise engaged in commercial activity.

(b) The property and assets of the Enterprise, wherever

located and by whomsoever held, shall be immune from

all forms of seizure, attachment or execution before the

delivery of final judgment against the Enterprise.

4. (a) The property and assets of the Enterprise, wherever

located and by whomsoever held, shall be immune from

requisition, confiscation, expropriation or any other form

of seizure by executive or legislative action.

(b) The property and assets of the Enterprise, wherever

located and by whomsoever held, shall be free from

discriminatory

restrictions,

regulations,

controls

and

moratoria of any nature.

(c) The Enterprise and its employees shall respect local

laws and regulations in any State or territory in which the

Enterprise or its employees may do business or otherwise

act.

© Compiled by RGL

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