Investor-state arbitration is dead: long live investor-state arbitration in India

Abstract

Investor-State arbitration has been presented as an undesirable consequence of bilateral investment treaties [“BIT”], and States have gone to the extent of terminating their BITs to escape from it. India is no exception to this phenomenon – having terminated the bulk of its BITs after the award passed in White Industries Australia Ltd. v. Republic of India [“White Industries”]. These terminated treaties have been sought to be replaced by a new generation of BITs, which are to be signed on the basis of a new Model Indian BIT released in 2015. This article seeks to evaluate whether the termination of these BITs has been a favorable development, and how successful India has been in its aim to replace them. The article also suggests pathways to deal with potential claims that may arise from the sunset clauses of terminated BITs and alternatives to ensure continued investor-protection in the absence of BITs, with an aim to promote foreign investment.