Investment Protection and Host State's Right to Regulate in Indian Model Bilateral Investment Treaty 2016: Lessons for Asian Countries
Julien Chaisse et al (Eds) International Law of Foreign Investment in Asia: Sustainability, Regionalization and Arbitration, January 2017
Posted: 27 Dec 2016 Last revised: 15 Dec 2017
Date Written: October 1, 2016
India’s decision to adopt a new model BIT especially in light of the growing debate on how to reconcile investment protection with host State’s right to regulate, should be welcomed. India, at last, woke up, courtesy foreign investors suing India under different BITs, to the reality that broad and vague investment protection standards can be interpreted in manners that give precedence to investment protection over host State’s right to regulate. The Indian attempt in the new model BIT should have been to reconcile investment protection with host State’s right to regulate. However, as this paper shows, the new model BIT has been able to do this reconciliation only as far some standards are concerned such as fair and equitable treatment, FPS and MTPs. For some other provisions such as definition of investment, exclusion of a MFN clause and of taxation measures, and the complicated investor state dispute settlement system fail to reconcile investment protection with host State’s right to regulate.
Keywords: India, Model bilateral investment treaty, BIT, right to regulate
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