The Law Commission of India has, on 27th August 2015, i.e. today also submitted its Report No. 260 on the “Analysis of the 2015 Draft Model Indian Bilateral Investment Treaty” to the Union Minister of Law and Justice. The report is presented with a view to assist the Government of India in achieving a balanced negotiating text that takes into consideration the protection of Indian investors investing abroad, as well as safeguarding the regulatory powers of the State.
India’s bilateral investment treaty (BIT) programme is part of a larger trade and investment agenda of the Indian government to boost investor confidence and increase investment flows into and out of the country. India signed its first BIT with the United Kingdom in 1994, and has signed 83 BITs till date, of which 74 are in force. India has also entered into eleven Free Trade Agreements which have a dedicated chapter on investment, that are substantially similar to the standalone BITs.
India had a Model BIT (referred to as the ‘2003 Model’ in the report), which formed the basis for conducting subsequent BIT negotiations between India and other countries for many years. For about two decades, BITs in India did not attract much attention. India also had limited involvement with Investment Treaty Arbitration (ITA), which refers to the dispute resolution mechanism available under BITs. The period after 2010, however, saw a surge in India’s involvement with ITA. Towards the end of 2011, India received its first adverse award in relation to a BIT in the White Industries Australia Limited V. Republic of India case. India has also received numerous ITA notices from various investors and under various BITs. As on date, there are fourteen known pending proceedings of claims brought against India.
During this period, the Government undertook a review of the text of its earlier 2003 Model BIT, and in March 2015, made public a new Draft Model Indian Bilateral Investment Treaty (the ‘2015 Model’). The objective of the 2015 Model, as stated on the Government’s website, was “to provide appropriate protection to foreign investors in India and Indian investors in the foreign country, in the light of the relevant international precedents and practices, while maintaining a balance between the investor’s rights and the Government obligations.” The Government added that the 2015 Model would form the basis for negotiations with other countries.
The Law Commission undertook a study of the 2015 Model, and found that the text has some concerns that could be addressed before it is finalised. Accordingly, the Law Commission has made certain suggestions on specific clauses of the 2015 Model. The suggestions in the report are presented with a view to assist the Government to achieve a balanced negotiating text, and are not to be regarded as recommendations.
(Release ID :126381)
Source: Press Information Bureau (PIB)
Source: Bombay High Court