Law No. (45) of 1975
on approving the Agreement
to Establish the Arab Petroleum Investments Corporation
In the name of the People,
The Revolutionary Command Council:
Upon review of:
· The Constitutional Declaration issued on 2 Shawwal 1389 AH, corresponding to 12 December 1969 AD;
· The Cabinet decree issued 10 December 1967 AD on the accession of the Libyan Arab Republic to the Agreement of the Organization of Arab Petroleum Exporting Countries;
· Based on the submission of the Minister of Petroleum and the approval of the Cabinet;
issued the following Law:
Article (1)
The Agreement Establishing the Arab Petroleum Investments Corporation, ratified by the Council of Ministers of the Organization of Arab Petroleum Exporting Countries in their session held on 20 Jumada al-Thani 1394 AH, corresponding to 10 July 1974 AD, shall be ratified and the Minister of Petroleum shall be authorized to sign such Agreement.
Article (2)
The Minister of the Treasury shall be authorised to pay on behalf of the Libyan Arab Republic the financial obligations arising under the Agreement referred to in the preceding Article, in accordance with the terms and conditions set out therein.
Article (3)
The Ministers of Foreign Affairs, Petroleum, and the Treasury shall implement this Law. This Law shall come into force on the date of its issue and be published in the Official Gazette.
The Revolutionary Command Council – Libya
Major Abdessalam Ahmed Jalloud
Prime Minister
Major Abdel Moneim al-Honi
Minister of Foreign Affairs
Muhammad al-Zaruq Rajab
Minister of the Treasury
Ezzedine Mabrouk
Minister of Petroleum
Issued on 7 Jumada al-Oula 1395 AH
Corresponding to 19 May 1975 AD
Agreement Establishing
the Arab Petroleum Investments Corporation
· Whereas the governments of the Member States of the Organization of Arab Petroleum Exporting Countries, signatories to this Agreement;
· Seeking to work to achieve the objectives for which the Organization was established;
· Recognizing the importance of investing their petroleum resources in diversified economic production and development projects that provide them with the foundations for life and prosperity;
· Appreciating the need to provide Member States with a Corporation which works to realize such investments in the best manner;
· In implementation of the provisions of Article (2), Paragraph (e), of the Agreement of the Organization of Arab Petroleum Exporting Countries for the utilization of the common resources and capabilities of the Member States to establish joint ventures in the various activities in the petroleum industry;
Chapter (1)
Definitions
Article (1)
In this Agreement, the following expressions shall have the meanings set out opposite each:
The Organization: The Organisation of Arab Petroleum Exporting Countries.
The Council of Ministers: The Organization’s Council of Ministers, limited to representatives of the Member States that hold shares in the Corporation, unless otherwise stated.
The Corporation: The Arab Petroleum Investments Corporation.
Member State: Any of the Organization’s Member States that hold shares in the Corporation.
The Agreement: The present Agreement on the establishment of the Corporation.
Chapter (2)
Establishment and Objectives of the Organization
Article (2)
Pursuant to this Agreement, a corporation named the “Arab Petroleum Investments Corporation” shall be established. This corporation shall be subject to the provisions of this Agreement and the Annexes thereto.
Annex 1 attached hereto shall set out the Corporation’s Statute, Annex 2 shall state the procedures for announcing the establishment of the Corporation, and Annex 3 shall set out the methods for settling disputes among Member States over the application, interpretation, or implementation of the Agreement and Annexes thereto. These Annexes shall be deemed an integral part of this Agreement.
The Statute shall determine the Member State where the Corporation’s head office shall be located.
Article (3)
The objectives of the Corporation shall be to contribute to financing petroleum projects and industries, and activities that are subsidiary, ancillary, associated, or complimentary to such projects and industries, with priority being given to Arab joint ventures which benefit the Member States and enhance their capabilities to utilize their petroleum resources and to invest their savings in ways that strengthen their economic and financial potential.
Chapter (3)
Legal Structure
Article (4)
The Corporation shall primarily be subject to the provisions of this Agreement. These provisions shall hold force even if they conflict with the domestic law of any Member State. In the absence of a provision in the Agreement, the shared general principles in the laws of the Member States shall be adopted, to the extent that such principles are consistent with the principles of this Agreement.
Article (5)
The Corporation shall be a legal entity and shall have full capacity to achieve its objectives.
Article (6)
The Corporation may exercise its activities within and outside the territories of the Member States. With regard to the Member States and third parties, the Corporation shall have all the rights and privileges of nationality enjoyed by national companies in each Member State.
The Member States shall undertake, jointly and severally, to support and protect the Corporation and adopt its causes so as to ensure the protection of the Corporation’s rights and interests internationally and otherwise. They also undertake to facilitate all activities related to its objectives and to adopt all possible measures in pursuit of such.
Article (7)
The Corporation shall be independent in its administration and in the performance of its activities. It shall carry out its operations on a commercial, for-profit basis.
Chapter (4)
Capital of the Corporation
Article (8)
The right to hold shares in the Corporation shall be restricted to the Organization’s Member States. These states may entrust any body, establishment, or company affiliated thereto, whether a private or public legal entity, to represent it in the exercise of this right.
Every Member State shall have the right to release a number of its shares in to its nationals, whether natural persons or legal entities, provided such not exceed forty-nine percent (49%) of the total shares allocated thereto. In this case, the Member State shall regulate the relationship between itself and the nationals that hold shares in the Corporation as it deems appropriate, provided such not conflict with the provisions of the Agreement. In all cases, the state shall remain the guarantor of and be responsible to the Corporation for the obligations of their shareholding nationals.
No body, establishment, or company holding the nationality of a Member State may acquire shares in the Corporation unless all its capital is owned by the concerned state and/or nationals thereof.
Article (9)
The Corporation shall have authorized capital and subscribed capital. Upon subscription in the Corporation’s capital, Member States shall be entitled to hold shares on an equal basis. If a state subscribes to an amount less than its entitled share, the remainder shall be distributed equally among all Member States wishing to increase their share.
In all cases, no Member State may hold shares amounting to less than three percent (3%) of the Corporation’s capital.
The maximum subscription of each state to the Corporation’s capital shall be twenty percent (20%), unless it becomes necessary to supplement the Corporation’s capital, at which time the aforementioned maximum limit may be exceeded, without prejudice to the principle of equality among the Member States wishing for such increase.
Article (10)
Without prejudice to the preceding Article, the Corporation’s General Assembly shall undertake the necessary measures to redistribute the Corporation’s capital in the following circumstances:
a. A new state acquires shares in the Corporation.
b. A portion of the shares of any Member State or those of its nationals is transferred to another Member State.
Article (11)
The Corporation’s shares shall be nominal. The shares owned by a Member State or owned by the nationals thereof shall be deemed to be transferable between the state and its nationals or between nationals of the same Member State. Shares that are in the possession of nationals of any Member State may not be seized except in the interest of such state or the nationals thereof.
If ownership of shares is transferred to a non-national of a Member State through inheritance or bequest, the government of the deceased national shall either purchase the shares directly or sell them to nationals thereof on behalf of the heirs.
Chapter (5)
Exemptions and Facilities
Article (12)
Every Member State shall refrain from appropriating or nationalizing the Corporation and its funds and assets. Member States shall also refrain from appropriating or nationalizing any of the Corporations branches or the funds or assets thereof.
Except pursuant to a final judicial ruling, no Member State may seize the Corporation’s funds and assets, or seize the funds and assets of its branches, or initiate compulsory enforcement proceedings against them.
Article (13)
The Corporation and branches thereof in the host country and in Member States shall be exempted from payment of duties, taxes, and all public financial costs and burdens for all operations related to the Corporation’s objectives. It shall also be exempted from fees related to subscription, establishment, registration, and increase of capital, dissolution, and liquidation.
The aforementioned exemptions shall not include duties and fees due for services provided to the Corporation and branches thereof.
Article (14)
All tools, equipment, or materials required for operations related to the Corporation’s objectives imported thereby and by branches thereof shall be exempted from all taxes, custom duties, and the like in all Member States. The Corporation and branches thereof shall also be exempted from all import restrictions, with the exception of restrictions related to public security and health requirements, provided such tools, equipment, or materials are not available locally at comparable prices and quality similar to that of the imported materials.
Ownership of items imported by the Corporation or branches thereof subject to such exemptions may not be disposed of except by an agreement with the government of the concerned state.
Article (15)
The Corporation and branches thereof shall have the right to keep foreign currencies and maintain accounts in any currency. It shall also have the right to transfer its funds wherever it deems appropriate to its interests.
The Corporation shall be exempted from all restrictions and procedures related to currency control and funds transfer.
Chapter (6)
Corporation Management
Article (16)
The Corporation shall have a General Assembly consisting of representatives of the Member States, a Board of Directors on which each share-holding state shall one member selected by the General Assembly, and a General Manager from outside the Board with staff affiliated thereto.
Article (17)
When voting in the General Assembly and the Board of Directors, each share owned by a Member State and nationals thereof shall be counted as one vote.
Chapter (7)
Personnel
Article (18)
The selection of the Corporation’s personnel shall be on the basis of academic qualifications and professional capabilities as required by the nature of the Corporation’s activities. When qualifications and capabilities are equal, preference shall be given to nationals of Member States, then to nationals of other Arab countries.
Article (19)
Each Member State shall undertake to grant the required entry and residence permits to employees of the Corporation and branches thereof as well as to dependent family members, taking into consideration security, public order, and health requirements.
Corporation personnel shall be exempted from taxes on their salaries or remuneration.
Chapter (8)
General Provisions
Article (20)
Each Member State shall pay fifty percent (50%) of the value of its shares in the capital subscribed to upon the establishment of the Corporation, and each shall pay the remaining portion thereof as determined by the Board of Directors, provided such payment is made within two months from the date the Member State receives a request for payment.
Article (21)
All disputes between the governments of Member States on the application, interpretation, or implementation of this Agreement shall be referred to the Judicial Commission provided under Article (21) of the Organization’s Agreement, and the ruling of the said Commission shall be final and binding. If a dispute occurs prior to the formation of said Commission, it shall be subject to the arbitration procedures set out in Annex (3) of this Agreement.
Article (22)
The provisions of this Agreement shall be valid for as long as the Corporation exists.
Article (23)
The Agreement may be amended by a resolution of the Council of Ministers issued by a two-thirds majority of Member States representing at least two-thirds of the capital. Concerning such amendment, the ratification procedures followed in each State shall apply. The Corporation’s Statute may be amended in accordance with the provisions contained therein.
Article (24)
The Agreement shall come into force when a number of Member States whose shares represent two-thirds of the Corporation’s subscribed capital deposit their instruments of ratification with the Organization’s General Secretariat.
For any other Member State, the Agreement shall come into force as of the first day of the month after that Member State deposits its instrument of ratification of the Agreement or accession document and pays its outstanding financial obligations to the Corporation.
Article (25)
Member States and nationals thereof shall cease to hold shares in the Corporation upon termination of their membership therein, and shall remain liable for all obligations to the Corporation ensuring therefrom.
Article (26)
Any Member State may withdraw from this Agreement after four years have passed from the effective date thereof by a written notice sent to the Organization’s General Secretariat, which shall then notify the rest of the Member States and the Corporation. The withdrawal and resulting termination of the Corporation shares held by the State and its nationals shall enter into force one year after the date of such notice.
Article (27)
In the cases set out in the two preceding Articles, Member States shall be entitled to subscribe to the shares owned by the State and nationals thereof who have ceased to be shareholders in the Corporation, each in proportion to the shares they possess. If any shares remain after this, they shall be distributed to all Member States, each in proportion to their share. The Corporation shall conclude a special agreement with the concerned State to settle the financial situation arising from the loss of its shareholding in the Corporation.
The General Assembly shall adopt the necessary measures in this regard.
Article (28)
The Organization’s General Secretariat shall notify all states that ratify this Agreement and any Member States that might accede thereto of the Secretariat’s receipt of any ratification or accession documents as well as the effective date thereof.
This Agreement was initialled in Cairo on 21 Jumada al-Thani 1394 AH, corresponding to 11 July 1974 AD.
The authorized representatives, named below, have signed on behalf of their governments on 27 Shaaban 1394 AH, corresponding to 14 September 1974 AD, in one copy to be kept at the headquarters of the Organization’s General Secretariat, which shall provide the ratifying and acceding states with a true copy thereof.
For the government of the United Arab Emirates
For the government of the State of Bahrain
For the government of the People’s Democratic Republic of Algeria
For the government of the Kingdom of Saudi Arabia
For the government of the Syrian Arab Republic
For the government of the Republic of Iraq
For the government of the State of Qatar
For the government of the State of Kuwait
For the government of the Libyan Arab Republic
For the government of the Arab Republic of Egypt
Annex (1)
Statute of the Arab Petroleum Investments Corporation
Chapter (1)
Name, Headquarters, and Duration
Article (1)
“The Arab Petroleum Investments Corporation” is a corporation established in accordance with a special international agreement and is subject to the provisions of this Agreement and the present Statue.
Article (2)
The Corporation’s headquarters shall be in the city of ……
Article (3)
The Corporation shall be established for an unlimited duration, and may be dissolved by a resolution from the General Assembly adopted by a three-quarter majority of the Corporation’s share-capital.
Chapter (2)
Corporation Objectives and Operations
Article (4)
The objectives of the Corporation shall be to contribute to financing petroleum projects and industries, and activities that are subsidiary, ancillary, associated, or complimentary to such projects and industries, with priority being given to Arab joint ventures which benefit the member states and enhance their capabilities to utilize their petroleum resources and invest their savings in ways that strengthen their economic and financial potential.
Article (5)
The Corporation may undertake all operations required to achieve its objectives in the Member States, and, with the exception of such States, preference shall be given to projects in other Arab countries. The Corporation may, in particular, undertake the following:
1. Study and prepare projects in which the Corporation can invest its funds.
2. Establish branches and offices for the Corporation and establish subsidiary financial companies inside and outside the Member States.
3. Hold shares in companies specialized in sectors related to the Corporation’s objectives.
4. Establish companies specialized in sectors related to the Corporation’s objectives, after approved by the Organization’s Council of Ministers formed as set out in the Agreement Establishing the Organization.
5. Purchase and dispose of shares and equity capital of companies and organizations operating in sectors related to the Corporation’s objectives, whether in Member States or otherwise.
6. Participate in the issuance and underwriting of securities of companies and organizations established or operating in the Member Countries in the petroleum industries sector.
7. Grant medium- or long-term loans to finance investments and operations in the petroleum industries sector.
When granting loans for a project in a Member State, the Corporation shall observe that a guarantee is obtained from that State to repay the loan principal and interest thereon. If the location of the project is outside the Member States, such loan shall only be granted pursuant to a guarantee from a Member State.
The Corporation may provide its guarantee for medium- and long-term loans granted by other financial or commercial establishments, provided such loans meet all the terms that must be met in similar loaning operations undertaken by or for the Corporation.
The Corporation shall take the necessary precautions to ensure that any loans it grants or guarantees are used for the purpose for which such loans were granted.
8. Issue bonds and borrow from the markets of any Member State, after obtaining the approval thereof, as well as from international money markets.
The Corporation may also borrow from the governments of Member States directly or through one of their establishments, whether for the general financing of its operations or to finance a particular project.
Under no circumstances may the total debts of the Corporation, at any time, exceed the amount set by the Corporation’s General Assembly as the maximum borrowing limit. With regard to debt amounts and payment date and terms, the Corporation shall also ensure to always maintain a financial position with adequate liquidity and financial soundness.
The Corporation shall determine the costs of the loans it grants, the commission, manners of debt payment, and maturity and payment dates.
The Corporation shall observe that the loans granted thereby and the interest thereon are paid in the same currency as that in which the loan was made.
9. Utilize in a temporary manner any surplus liquid funds, taking into consideration the timing of the Corporation’s obligations to third parties and expected loan withdrawals, and, in general, ensure the liquidity of the assets invested in and the convertibility of the currencies denominating said assets.
Chapter (3)
Capital of the Corporation
Article (6)
The Corporation’s authorized capital shall be set at three billion, six hundred million Saudi riyals (3,600,000,000 SAR) and the subscribed capital set at one billion, two hundred million Saudi riyals (1,200,000,000 SAR), divided into one thousand shares, with a nominal value of twelve thousand Saudi riyals (12,000 SAR) each, all of which have been fully-subscribed and distributed as follows:
|
State |
Number of Subscribed Shares |
Value of Shares in Saudi Riyals |
|
Government of the State of United Arab Emirates |
17,000 |
204,000,000 |
|
Government of the State of Bahrain |
3,000 |
36,000,000 |
|
Government of the Popular Democratic Republic of Algeria |
5,000 |
60,000,000 |
|
Government of the Kingdom of Saudi Arabia |
17,000 |
204,000,000 |
|
Government of the Syrian Arab Republic |
3,000 |
36,000,000 |
|
Government of the Republic of Iraq |
10,000 |
120,000,000 |
|
Government of the State of Qatar |
10,000 |
120,000,000 |
|
Government of the State of Kuwait |
17,000 |
204,000,000 |
|
Government of the Libyan Arab Republic |
15,000 |
180,000,000 |
|
Government of the Arab Republic of Egypt |
3,000 |
36,000,000 |
Article (7)
Each Member State shall pay fifty percent (50%) of the value of its shares in the capital subscribed to upon the establishment of the Corporation, and each shall pay the remaining portion thereof as determined by the Board of Directors, provided such payment is made within two months from the date the Member State receives a request for payment.
Article (8)
The shares of the Corporation shall be nominal.
Article (9)
Every Member State shall have the right to release a number of its shares to its nationals, whether natural persons or legal entities, provided such not exceed forty-nine percent (49%) of the total shares allocated thereto. In this case, the Member State shall regulate the relationship between itself and the nationals that hold shares in the Corporation as it deems appropriate, provided such not conflict with the provisions of the Agreement. In all cases, the State shall remain the guarantor of and be responsible to the Corporation for the obligations of their shareholding nationals.
No body, establishment, or company holding the nationality of a Member State may acquire shares in the Corporation unless all its capital is owned by the concerned state and/or nationals thereof.
Article (10)
The Corporation’s capital may be increased or reduced pursuant to a resolution of the General Assembly by a majority representing two-thirds of the Corporation’s capital.
If the capital is increased, each Member State shall be entitled to subscribe to the new shares in proportion to the number of shares then in the possession of the State and nationals thereof.
The General Assembly shall determine the conditions for the issuance of new shares and payment of their value.
Article (11)
The rights and obligations arising from the shares shall be equal and the liabilities of shareholders shall be limited to the subscribed amounts.
The possession of a share shall be deemed acceptance of the Corporation’s Statute.
Chapter (4)
General Assembly
Article (12)
The General Assembly shall be formed of the Corporation’s shareholders which shall include national groups represented by their governments. Each national group shall include the Member State and its shareholding nationals. National groups shall exercise their voting right in proportion to the nominal value of the total shares held by each respective group.
Article (13)
The General Assembly shall hold an ordinary meeting once a year, within six months following the end of the financial year.
An extraordinary meeting of the General Assembly may be called at the request of the Board of Directors, the auditors, or at the request of a national group or groups representing one-quarter of the capital.
The meeting, whether ordinary or extraordinary, shall be called by a letter from the Chairman of the Board of Directors to be sent three weeks before the date set for the meeting. This letter shall include the agenda and the nature of the meeting, whether ordinary or extraordinary.
The General Assembly shall hold its meetings at the Corporation’s headquarters unless the Board of Directors selects another location for the meeting.
Article (14)
The Board of Directors shall have the right to attend General Assembly meetings. Deliberations of the General Assembly shall not be valid except with the representation of a numerical majority of the national groups representing the majority of the Corporation’s capital. If quorum is not met, the Board of Directors shall call a second meeting of the General Assembly within thirty days from the date of the first meeting, indicating lack of quorum in the first meeting. The second meeting shall be deemed valid if attended by representatives of one-third of the number of the national groups representing one-third of the capital. Failing such, the Board of Directors shall call a third meeting of the general assembly within fifteen days from the date of the second meeting, indicating lack of quorum on two occasions. The last meeting shall be deemed valid if attended by one-fifth of the number of the national groups representing one-fifth of the capital.
Article (15)
General Assembly meetings shall be presided over by the Chairman of the Board of Directors or representative thereof. The General Assembly shall select two members by a majority of those present to supervise voting, and shall also appoint a secretary for the meeting who is not required to be a member.
Article (16)
The General Assembly shall have minutes in which its deliberations and resolutions are recorded and signed by the session chair and meeting secretary. Copies of such minutes and resolutions or extracts thereof shall be signed by the Chairman of the Board of Directors or representative thereof.
Article (17)
The General Assembly shall review all matters of importance to the Corporation and shall have the following competencies in particular:
1. Approve the by-laws for the Board of Directors’ activities.
2. Select the principal members of the Board of Directors and an alternate member for each principal member.
3. Determine the remuneration for members of the Board of Directors for attending meetings.
4. Appoint auditors.
5. Determine the Corporation’s maximum possible borrowing limit.
6. Amend the Corporation’s Statute.
7. Increase or reduce the Corporation’s capital.
8. Redistribute the Corporation’s capital.
9. Approve the annual report of the Board of Directors and the auditors’ report on the Corporation’s budget and the profit and loss account for the financial year ended, allocate and distribute net profits, and give clearance to members of the Board of Directors for their management.
10. Dissolve the Corporation and appoint liquidators.
Article (18)
The General Assembly shall adopt its resolutions by a majority of votes representing the shares in the meeting. However, resolutions related to setting the Corporation’s maximum permissible borrowing limit and amending the Statute shall require a two-thirds majority of the Corporation’s subscribed capital.
Resolutions issued by the General Assembly shall be binding on all shareholders, including those absent or opposed to such resolutions.
Chapter (5)
The Board of Directors
Article (19)
The Board of Directors shall be formed of a number of members equal to the number of states holding shares in the Corporation, such that each state has one member representing it on the Board in a principal capacity.
The Board shall elect a chairman and a vice chairman from among its members.
Each State holding shares in the Corporation shall have an alternate member to take the place of a principal member on the Board of Directors, when absent.
Article (20)
Membership on the Board of Directors shall be for a renewable term of four years. If a seat on the Board becomes vacant, for any reason, the concerned Member State shall appoint another member to represent it for the remaining term, provided such is submitted to the General Assembly at the first meeting subsequent thereto.
Article (21)
The Corporation shall be represented before the judiciary and third parties by the Chairman, representative thereof, or anyone authorized to act on his behalf by the Board.
Article (22)
The Board of Directors shall meet at least once every three months at the invitation of the Chairman or if requested by not less than three Board members.
The Board shall hold its meetings at the Corporation’s headquarters or at any other location selected by the Board.
Article (23)
The Board of Directors shall hold competence to settle all matters which do not fall pursuant to an explicit provision within the competence of another agency of the Corporation, and may in particular undertake the following:
1. Prepare by-laws for its activities.
2. Approve the financial and administrative regulations of the Corporation’s agencies.
3. Appoint the General Manager and deputies thereof and determine their salaries.
4. Form an executive committee headed by the General Manager vested with the competencies that the Board deems suitable, with the aim of rapid settlement of certain certain matters and issues.
5. Approve project financing operations.
6. Approve loan agreements.
7. Approve the establishment of the Corporation’s branches and offices and the establishment of subsidiary financial companies as well as shareholding in companies specialized in sectors related to the Corporation’s objectives.
8. Establish companies specialized in sectors related to the Corporation’s objectives, after obtaining the approval referred to in Article (5), item (4) of this Statute.
9. Utilize the Corporation’s surplus liquid funds.
10. Approve the report of the Board of Directors and the annual ordinary estimated draft budget and balance sheet for the financial year ended, for submission to the General Assembly.
Article (24)
Board Resolutions shall be adopted by a majority of votes representing the shares in the meetings. In the event of a tie, review of the matter in question shall be postponed.
Article (25)
The Board of Directors shall have minutes in which its deliberations and resolutions shall be recorded and signed by the session chair. All correspondence and extracts shall be signed by the Chairman or representative thereof.
Article (26)
No member of the Board of Directors may, during their term, undertake any commitment related to the Corporation’s operations for their personal interest. Nor may any members connect or work with any person, body, or state on any work or project that conflicts with the Corporation’s interests.
Article (27)
Members of the Board of Directors shall be jointly and severally liable before the Corporation and to third parties for any violation of the provisions of the Agreement and Annexes thereof, and for any mismanagement of the Corporation.
Chapter (6)
The General Manager and Deputies Thereof
Article (28)
The Board of Directors shall appoint a General Manager for the Corporation. Such person may not be a member of the Board and must be a national of a Member State of the Organization and have a high level of expertise and qualifications in financial investment fields.
The appointment of such person shall be for a renewable term of five years.
Article (29)
The General Manager shall be Chief Executive of the Corporation and shall be responsible for all activities under the supervision of the Board of Directors. The General Manager shall also implement the Corporation’s internal administrative, financial, and technical regulations and shall have the right to appoint and dismiss staff in accordance with the Corporation’s regulations.
Article (30)
The General Manager shall have one or more deputies selected by the Board of Directors, based on the proposal of the General Manager.
Article (31)
The General Manager shall determine the duties and powers of his deputies and anyone acting on his behalf when absent.
Article (32)
The provisions of Articles (26) and (27) of this Statute shall apply to the Corporation’s General Manager.
Article (33)
The General Manager, his deputies, and staff shall be loyal to the Corporation and must refrain from anything that might impact the administration of its business against the Corporation’s interests, and shall adhere to neutrality in their work.
Chapter (7)
Accounts and Liquidation
Article (34)
The Corporation’s financial year shall begin on 1 January and end on 31 December of each year. The first financial year shall begin on the date of the Corporation’s establishment and end on the subsequent 31 December, unless such period is less than six months in which case it shall be extended to 31 December of the following year.
Article (35)
The Corporation’s annual net profits after deduction of general expenditures, depreciation, and other costs shall be distributed as follows:
1. First, an amount equivalent to ten percent (10%) shall be deducted from the profits to form a reserve account. Such deduction shall cease when the total reserve amounts to one hundred percent (100%) of the Corporation’s subscribed capital. If the reserve falls below such amount, deduction shall be resumed.
2. Then, the amount needed to distribute dividends to shareholders shall be deducted, amounting to five percent (5%) of the value of their paid up shares, when profits permit.
3. After that, the remaining profits shall be divided equally to form an additional reserve and to distribute a second dividends payment to the shareholders.
No dividends may be distributed until the Corporation’s prior losses have been covered, if any.
Article (36)
Annual dividends shall be paid on the dates specified by the General Assembly.
Article (37)
The Corporation’s accounts shall be audited by auditors appointed annually by the General Assembly.
Auditors shall, in particular, verify whether the budget and profit and loss account are in conformity with accounting records and whether said records are kept accurately and in conformity with sound accounting principles.
In the course of performing their duties, auditors shall have the right to refer to accounting records and all related documents. The budget and profit and loss account must be at the auditors’ disposal at least thirty days prior to the date of the General Assembly meeting. The auditors must submit a written report to the General Assembly with their observations.
The General Assembly shall determine the auditors’ fees.
Article (38)
If dissolved, the Corporation shall enter into the stage of liquidation. From that time, it shall be deemed standing for the purpose of liquidation.
Such liquidation shall be performed by liquidators appointed by the General Assembly, which shall determine their fees.
The liquidators shall have broad authority to verify the Corporation’s assets and the powers required to perform their duties. The appointment of the liquidators shall terminate the authority of the Board of Directors. The General Assembly shall remain standing in order to approve the liquidation conditions and give clearance to the liquidators. The General Assembly shall be presided over by a person selected from among its members for this purpose at the beginning of each meeting called by the liquidators. After termination of liabilities and return of the share value, the remaining balance shall be distributed to the shareholders in proportion to their shareholding in the Corporation
Article (39)
Any dispute related to the dissolution or liquidation of the Corporation shall be settled in accordance with Article (21) of the Agreement.
Article (40)
Shareholders shall receive notifications by registered mail.
Official declarations and amendments of the Statute shall be published in the official gazettes of the Member States.
Article (41)
This Statute shall be deemed effective from the date the Agreement becomes effective.
Annex (2)
Procedures for Declaring the Establishment of the Corporation
· The governments of the Member States of the Organization of Arab Petroleum Exporting countries, signatory to the Agreement Establishing the Arab Petroleum Investments Corporation;
· In implementation of Article (2) of the Agreement;
have agreed upon the following:
Article (1)
Once the Agreement becomes effective, the Organization’s Secretary General shall call a meeting of the Council of Ministers of the states that have ratified the Agreement dedicated to taking the necessary steps to announce the establishment of the Corporation. Such meeting shall be considered a meeting of the Corporation’s Founding General Assembly.
Article (2)
The meeting of the Founding General Assembly shall be presided over by the representative of the country where the Corporation’s headquarters is located. Said country shall provide the necessary facilities to hold such meeting.
Article (3)
The Founding General Assembly shall select the Corporation’s first Board of Directors. This Board shall exercise its competencies in accordance with the rules set out in the Statute. The Founding General Assembly shall also appoint the first auditors.
Article (4)
The Founding General Assembly shall call upon Member States to pay the value of their shares at the banking institutions specified thereby, and to deposit the amounts paid in the Corporation’s account with such institutions.
Article (5)
The Founding General Assembly shall announce the Corporation’s establishment and shall authorize the Board of Directors to undertake the necessary procedures to commence its activities.
Article (6)
This Annex shall be deemed effective on the date the Agreement enters into force.
For the government of the United Arab Emirates
For the government of the State of Bahrain
For the government of the People’s Democratic Republic of Algeria
For the government of the Kingdom of Saudi Arabia
For the government of the Syrian Arab Republic
For the government of the Republic of Iraq
For the government of the State of Qatar
For the government of the State of Kuwait
For the government of the Libyan Arab Republic
For the government of the Arab Republic of Egypt
Annex (3)
Dispute Settlement
Article (1)
Any dispute among Member States on the application, interpretation, or implementation of the Agreement, occurring prior to the establishment of the Judicial Commission provided under Article (21) of the Organization’s Agreement, shall be subject to the following provisions.
Article (2)
If an amicable settlement is not reached, the dispute shall be referred to an arbitration panel formed of three members. Each party to the dispute shall select one member and the two members shall select a third member as chair of the panel.
If an agreement is not made on the selection of the third member as chair of the panel, the Organization’s Secretary General shall make this selection.
Article (3)
1. The concerned state shall inform the Organization’s Secretary General pursuant to a detailed memorandum of the facts of the dispute and its financial and legal dimensions. The Secretary General shall contact both parties to the dispute within sixty days of receiving such memorandum in order to attempt to reach an amicable settlement.
2. If it is not possible to reach an amicable settlement within said period, the dispute shall be deemed subject to arbitration. The Secretary General shall request both parties to the dispute to select an arbitrator within a period of not more than thirty days from the date they receive such request.
3. The two arbitrators shall meet within fifteen days from the date the period set for their appointment by the parties to the dispute ends, in order to select the third member to head the panel.
4. If either party to the dispute does not appoint an arbitrator during the set period, the Secretary General shall appoint one and call upon the two arbitrators to select a third member as chair of the panel within fifteen days from the date of their meeting set by the Secretary General.
5. If the two arbitrators do not agree on the third member to head the panel within the set period, the Secretary General shall make the selection, fix the date for the panel’s meeting, and notify the parties to the dispute of such.
6. If the third member to head the panel is selected by the Secretary General, said member must not be of the nationality of either disputing party.
Article (4)
If for any reason a member of the arbitration panel fails to perform their duties prior to the issuance of the panel’s decision on the dispute, another member shall be appointed in their place in the same manner by which the original member was selected.
Article (5)
The chair of the arbitration panel shall determine the procedures necessary for the panel to convene, perform its duties, and the preliminary arbitration fees to be deposited equally by each party to the dispute.
Each party to the dispute shall bear the remuneration for its arbitrator, and both parties to the dispute shall agree on the remuneration of the chair of the panel. Failing such, the remuneration shall be determined by the Organization’s Secretary General.
Each party to the dispute shall also bear the expenses of the advisers, experts, and the like representing them before the panel.
A panel decision on the dispute shall determine which party shall finally bear the arbitration expenses.
Article (6)
The panel shall determine the procedures for reviewing the dispute, including the dates of sessions, exchange of memorandums and pleadings, and anything else required to settle the dispute, including the appointment of experts and the like.
The panel shall issue its decision on the dispute in accordance with legal principles of dispute resolution. Failing such, it shall take into consideration the principles of justice.
Article (7)
Panel decisions shall be issued by a majority of members of the arbitration panel. If such majority cannot be reached, the decision of the panel chair shall be final and binding.
Article (8)
The arbitration decision shall stipulate a specific date for its implementation, and any party that does not implement the decision after the passage of said date shall be deemed to be in breach of its obligations. At that time, the other party shall be entitled to take whatever steps it deems necessary to protect its rights.
Article (9)
At the request of either of the parties to the dispute, the panel that issued the decision shall have the powers to interpret it and settle matters arising from the implementation thereof.
Article (10)
Any Member State may request to intervene in the dispute while it is under review. The panel may decide whether to accept or reject such intervention. Such intervention shall not under any circumstances affect the formation of the panel.
Article (11)
This Annex shall be deemed effective on the date the Agreement enters into force.
Made on 27 Shaaban 1394 AH, corresponding to 14 September 1974 AD, in one copy filed with the General Secretariat of the Organization, which shall provide the ratifying and acceding states with an authentic copy of this Annex.
For the government of the United Arab Emirates
For the government of the State of Bahrain
For the government of the People’s Democratic Republic of Algeria
For the government of the Kingdom of Saudi Arabia
For the government of the Syrian Arab Republic
For the government of the Republic of Iraq
For the government of the State of Qatar
For the government of the State of Kuwait
For the government of the Libyan Arab Republic
For the government of the Arab Republic of Egypt
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