BS EDIT: India’s move on international arbitration to boost investment

By Business StandardPublished On Oct 11, 2024

India relaxes BIT provisions

India shortens dispute resolution period in UAE investment treaty, allowing arbitration after three years instead of five—marking a major shift from its model BIT

Investment protection expanded

The revised UAE BIT now covers portfolio investments, allowing investors with stocks and bonds to use ISDS for disputes, potentially drawing a wider range of investors

Changing arbitration framework

Adverse rulings led India to adopt a stricter BIT in 2015, mandating a five-year wait on local remedies before arbitration, but this also hindered swift dispute resolution

Balancing investor rights

Data from the United Nations shows that out of 1,332 arbitration cases, 361 favoured states, while 268 favoured investors

Potential short-term risks

India’s revised BIT terms may initially increase arbitration claims, but they are likely to boost investor confidence by offering a clearer dispute resolution path

Need for judicial reforms

To ensure lasting success, India must reform its judicial system for faster dispute resolution. Stable, predictable policies will boost business and attract foreign investors