{"id":252117,"date":"2023-07-14T19:55:27","date_gmt":"2023-07-14T14:25:27","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=252117"},"modified":"2023-08-31T12:50:13","modified_gmt":"2023-08-31T07:20:13","slug":"out-of-alignment-on-india-uk-bilateral-investment-treaty","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/out-of-alignment-on-india-uk-bilateral-investment-treaty\/","title":{"rendered":"Out of alignment \u2013 On India-UK Bilateral Investment Treaty"},"content":{"rendered":"\n

Source-<\/strong> The post is based on the article \u201cOut of alignment\u201d published in the \u201cThe Indian Express\u201d on 14th July 2023.<\/p>\n

Syllabus:<\/strong> GS 2 – Bilateral, regional and global groupings and agreements<\/p>\n

Relevance –<\/strong> Issues related to foreign investment<\/p>\n

News – <\/strong>Negotiations are undergoing on the India-UK bilateral investment treaty.<\/p>\n

What is the main point of contention in negotiation?<\/strong><\/h2>\n

London has conveyed its unease regarding New Delhi’s insistence on including the “exhaustion of local remedies clause”<\/strong> in dispute resolution mechanisms. <\/strong><\/p>\n

This clause has played a central role in India’s decision to unilaterally terminate<\/strong> 68 out of 87 Bilateral Investment Treaties between 2013 and 2019. It has also been a fundamental aspect of a model BIT <\/strong>by the Indian government.<\/p>\n

Why is the “exhaustion of local remedies clause” problematic? <\/strong><\/h2>\n

1) It is impractical to expect foreign investors to rely solely on local remedies<\/strong>. The Indian judicial system<\/strong> is known for its slow pace.<\/p>\n

Policy interventions<\/strong> by the government further complicate matters<\/strong>. For example, the Vodafone case lasted 13 years, partly due to the government retroactively amending tax laws.\u00a0 <\/strong>This compelled Vodafone to appeal to the Permanent Court of Arbitration<\/strong>.<\/p>\n

2) Courts and regulators have not consistently upheld contractual obligations<\/strong>. In the dispute between Amazon and Future Group<\/strong>, the Singapore International Arbitration Centre <\/strong>(SIAC) initially ruled in favour of Amazon,<\/p>\n

A decision later confirmed by a single-judge Bench of the Delhi High Court. However, on appea<\/strong>l, a Division Bench of the same court favoured Future Group<\/strong>. But the Supreme Court upheld the SIAC’s decision.<\/strong><\/p>\n

The government claims that international arbitration<\/strong> favours investors over governments. But it is incorrect.<\/p>\n

Data from the UNCTAD<\/strong> demonstrates that out of 1,104 known cases of international dispute settlement, 274 rulings were in favour of states, while 212 rulings favoured investors.<\/p>\n

What should be the India government’s approach towards investment treaties?<\/strong><\/h2>\n

India should accept international arbitration for confidence-boosting of investors.<\/strong><\/p>\n

It should honour decisions of arbitration courts<\/strong>. It will avoid the embarrassment caused by seizing of Indian assets abroad<\/strong> by corporations to enforce arbitral awards<\/strong>, which occurred in the case of Cairn Energy.<\/p>\n

India should not impose this clause<\/strong> in investment treaties.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Source- The post is based on the article \u201cOut of alignment\u201d published in the \u201cThe Indian Express\u201d on 14th July 2023. Syllabus: GS 2 – Bilateral, regional and global groupings and agreements Relevance – Issues related to foreign investment News – Negotiations are undergoing on the India-UK bilateral investment treaty. What is the main point… Continue reading Out of alignment \u2013 On India-UK Bilateral Investment Treaty<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10500,239,238],"class_list":["post-252117","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-indian-express","tag-international-relations","tag-ir","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/252117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=252117"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/252117\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=252117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=252117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=252117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}