(3) In the case of an application based on Article 2 (b), the Secretary-General shall give his approval only if he is satisfied (a) that the requirements of that provision are fulfilled, and (b) that the underlying transaction has features which distinguish it from an ordinary commercial transaction.

(4) If in the case of an application based on Article 2 (b) the jurisdictional requirements ratione personae of Article 25 of the Convention shall have been met and the Secretary-General is of the opinion that it is likely that a Conciliation Commission or Arbitral Tribunal, as the case may be, will hold that the dispute arises directly out of an investment, he may make his approval of the application conditional upon consent by both parties to submit any dispute in the first instance to the jurisdiction of the Centre.

(5) The Secretary-General shall as soon as possible notify the parties whether he approves or disapproves the agreement of the parties. He may hold discussions with the parties or invite the parties to a meeting with the officials of the Secretariat either at the parties' request or at his own initiative. The Secretary-General shall, upon the request of the parties or any of them, keep confidential any or all information furnished to him by such parties or party in connection with the provisions of this Article.

(6) The Secretary-General shall record his approval of an agreement pursuant to this Article together with the names and addresses of the parties in a register to be maintained at the Secretariat for that purpose. Such approval shall be a conclusive determination that the proceedings contemplated by the agreement come within the scope of these Rules.

(i) Paragraphs (1) and (6): The Additional Facility is neither intended as an alternative to the Convention nor as a broad alternative to existing mechanisms for the settlement of commercial disputes. The requirement of advance approval serves to prevent access to the Additional Facility beyond its intended scope. In order to avoid surprises and possible frustration of the conciliation or arbitration undertaking, it is advisable as a practical matter that such undertakings (compromissory clauses or compromis) be submitted for approval prior to being entered into. Approval once obtained is a conclusive determination that the proceedings contemplated by the agreements come within the scope of the Additional Facility, thus barring jurisdictional objectives on this issue once proceedings have been instituted.

(ii) Paragraph (2): This paragraph calls for a compromissory clause providing in the alternative for consent to the jurisdiction of the Centre, if at the time of institution of proceedings the State party to the dispute as well as the State whose national is the other party to the dispute are parties to the Convention, or Additional Facility proceedings if the requirements ratione personae have not been met at that time. Its purpose is to promote use of the Convention whenever this is possible.

(iii) Paragraph (3): This provision guards against the use of the Additional Facility for disputes arising out of an "ordinary commercial transaction". While the term is not defined, and hardly capable of precise definition, the Administrative Council in approving the provision recorded the following: "Economic transactions which (a) may or may not, depending on their terms,

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