CL-2022-000304 - [2025] EWHC 1553 (Comm)

The Government of India and the Government of the United Arab Emirates reached a written agreement dated 12 December 2013 (“the BIT”). The title to the BIT stated that it was an agreement “on the promotion and protection of investments”.

The BIT provided for texts in Arabic, Hindi and English languages with “all texts being equally authentic” and “in case of divergence in interpretation, the English text shall prevail”. The recitals provided that the Governments (each a “Contracting Party”) had agreed:

“Desiring to create conditions favo[u]rable for fostering greater Investment by Investors of one Contracting Party in the territory of the other Contracting Party;

Recognizing that the encouragement and reciprocal protection of such Investment, made in accordance with the laws and regulations of the host Contracting Party will be conducive to the stimulation of individual business initiative and will increase prosperity in both Contracting Parties …”

By Article 2(1) (“Scope of the Agreement”):

“This Agreement shall apply to all Investments made by Investors of one Contracting Party in the territory of the other Contracting Party, whether made before or after the coming into force of this Agreement, but shall not apply to any dispute arising out of any Measure applied to an Investment before the entry into force of this Agreement”

Article 1 (“Definitions”) provided:

“1.

The term “Investment” means every kind of asset invested by the Investors of one Contracting Party in the territory of the other Contracting Party in accordance with the laws, and regulations of the Contracting Party in whose territory the Investment is made and in particular, though not exclusively, includes:

(i)

movable and immovable property as well as any other property rights in rem such as mortgages, liens, pledges, or usufruct;

(ii)

shares, stocks, bonds, debentures and any other similar forms of participation in a company and other debts and loans and securities issued by an Investor of a Contracting Party and returns retained for the purpose of reinvestment;

(iii)

rights or claims to money or to any performance under contract having financial or economic value;

(iv)

intellectual property rights, goodwill, technical processes, know-how, copyrights, trademarks, trade names and patents in accordance with the relevant laws of the respective Contracting Parties;

(v)

any right conferred by law or by virtue of any licenses or permits granted pursuant to law, excluding any right conferred in respect of hydrocarbons.

Any change of the form in which assets are invested or reinvested does not affect their character as Investment.”

Article 1 continued:

“2.

“Investor” means any national, company or government of a Contracting Party.

3.

“National” means a natural person holding the nationality of a Contracting Party in accordance with its applicable law.

…

8.

“Measure” means any form of binding action taken by a Contracting Party under any law, rule or regulation and applied directly to an Investment.”

By Article 4 (“Protection of Investments”):

“1.

Investments by Investors of either Contracting Party shall enjoy full protection and security in the territory of the other Contracting Party in a manner consistent with the provisions of domestic laws of the host Contracting Party, this Agreement and applicable rules of international law. Neither Contracting Party shall in any way impair by arbitrary or discriminatory Measures, the management, maintenance, use, enjoyment, or disposal of Investments.”

By Article 5 (“Treatment of Investments”):

“Each Contracting Party shall, at all times, ensure Investments made in its territory by Investors of the other Contracting Party, fair and equitable treatment. Such treatment shall not be less favo[u]rable than that which it accords to Investments of its own investors or investors of any third Party, whichever is the most favo[u]rable.”

By Article 7 (“Expropriation”):

“1 a) Investments made by Investors of one Contracting Party in the territory of the other Contracting Party shall not be nationali[s]ed, expropriated, dispossessed or subjected to direct or indirect Measures having effect equivalent to nationali[s]ation, expropriation or dispossession (hereinafter collectively referred to as “expropriation”) by the other Contracting Party except for a public purpose related to the internal needs of that Contracting Party and against expeditious, adequate and effective compensation and on condition that such Measures are taken on a non-discriminatory basis and in accordance with the procedures established under law.

…

3.

Where a Contracting Party expropriates the assets of a company which is incorporated or constituted under its applicable law in force in any party of its own territory, and in which Investors of the other Contracting Party own shares, stocks, debentures or other rights of interest it shall ensure that the provisions of clause (1) of the Article are applied to the extent necessary to ensure fair and equitable compensation in respect of their Investments to such Investors of the other Contracting Party who are owners of such rights or interest.

4.

The term “expropriation” shall also apply to interventions or regulatory Measures by a Contracting Party such as the freezing or blocking of the Investment, compulsory sale of all or part of the Investment, or other comparable Measures, that have a de facto confiscatory or expropriatory effect in that their effect results in totally or near totally depriving the Investor from the ownership, control or substantial benefits over his Investment or which may result in total or near total loss or damage to the economic value of his Investment.”

By Article 10 (“Settlement of Disputes between Contracting Party and the Investor”):

“1.

Disputes arising between a Contracting Party and an Investor of the other Contracting Party in respect of an Investment under this Agreement shall be governed by this Article.

2.

In the context of Republic of India, this Article shall cover Measures underlying a dispute taken by the Central Government and/or the state governments while exercising their executive powers in accordance with the Constitution of India.

…

4.

Any dispute arising between a Contracting Party and an investor of the other Contracting Party in respect of an Investment under this Agreement shall, as far as possible, be settled amicably through negotiations between the parties to the dispute. …

5.

If such dispute cannot be settled amicably within a period of six months from the date of receipt of Notice of Dispute, the dispute may be submitted to one of the following dispute settlement mechanisms: …

b.

an arbitral tribunal established under the Arbitration Rules of the [UNCITRAL], in force at the time of commencement of the dispute; …”.

By Article 14.2:

“Nothing in this Agreement precludes the host Contracting Party from taking necessary reasonable Measures in accordance with its laws applied generally on a non-discriminatory basis, in circumstances of extreme emergency for the specific purposes of prevention of diseases or pests”.

I keep in mind that on India’s case the result of these and its other provisions is that the drafting of the BIT is individual to the point of “exceptional”. I also keep in mind, as asked by both parties, the whole of the terms of the BIT. This includes, as asked by India, the width of a State-to-State dispute resolution provision at Article 11 although I do not set this out.