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Investor Obligations in India’s New Bilateral Investment Treaties: Emergence of New Treaty Practice

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Asian Yearbook of International Economic Law 2022

Part of the book series: Asian Yearbook of International Economic Law ((AYIEL,volume 2022))


Typically, Bilateral investment treaties (BITs) are unidimensional instruments that confer rights on foreign investors and impose obligations on host States. As the backlash against international investment law has intensified in the last few years, this structural aspect has come under increasing scrutiny. The argument is that BITs should also impose obligations on foreign investors to bring a semblance of balance. In view of this, the paper examines the issue of investor obligations in the case of India’s new investment treaty practice. After being sued by several foreign investors, India set on the path of developing a new Model BIT with the objective to strike a balance between investment protection and host State’s right to regulate. As part of this, India is developing a new treaty practice where obligations are imposed on foreign investors. However, these obligations are negative in nature often exist in the form of best endeavour clauses. The paper argues that India should develop its treaty practice so as to impose positive obligations on foreign investors.

Some parts of this paper draw from the following work of the author: Prabhash Ranjan, ‘Investor’s Obligation in Investment Treaties: Missing Text Or A Matter of Application’ in Jean Ho and Mavluda Sattarova (Eds) Investor’s International Law, 2021, Hart Publishing, an imprint of Bloomsbury Publishing Plc., pp. 125–148.

The author is grateful to Priyadarshani Venkatesh for her assistance.

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    Article 11 India-Kyrgyzstan BIT. See also Article 7(1) of the 2019 Netherlands Model BIT, which provides: “investors and their investments shall comply with domestic laws and regulations of the host State, including laws and regulations on human rights, environmental protection and labour laws.” The content of the obligations imposed on foreign investors will depend on the content of domestic laws. If domestic laws contain weak provisions on human rights or environmental protection, for example, then the corresponding obligations on the foreign investors will also be weak.

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    Same formulation exists in some other Brazilian BITs such as Article 15(2) of the Brazil-UAE BIT and Article 15(2) of the Brazil-Guyana BIT.

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Ranjan, P. (2022). Investor Obligations in India’s New Bilateral Investment Treaties: Emergence of New Treaty Practice. In: Chi, M., Bungenberg, M., Bjorklund, A.K. (eds) Asian Yearbook of International Economic Law 2022. Asian Yearbook of International Economic Law, vol 2022. Springer, Cham.

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