IAMC HYDERABAD HOSTS A ROUNDTABLE CONFERENCE ON PROTECTING INVESTMENTS POST-BIT TERMINATIONS IN COLLABORATION WITH CHANDHIOK & MAHAJAN AND HICF

The International Arbitration and Mediation Centre (IAMC), in collaboration with Chandhiok & Mahajan and the Hyderabad In-house Counsels’ Forum (HICF), held a successful Roundtable Conference titled “Strategies for Protecting Investments Post-BIT Terminations: A Practical Guide” on October 1, 2024. The event took place at the IAMC Hyderabad premises.

With the terminations of bilateral investment treaties (BITs) by India, the conference focused on the implications for protecting foreign investments. This conference brought together legal experts and General Counsels to discuss effective strategies for safeguarding investments and navigating the complex legal landscape that follows these terminations.

Honourable Sri Justice P. Naveen Rao, Former Judge, High Court for the State of Telangana, Arbitrator, and Mediator, graced the event as the Chief Guest and delivered the opening remarks. He explained India’s journey from signing the first BIT to terminating more than 77 BITs.  He emphasized that apart from incorporating sunset clauses; there is a need to protect investor confidence and develop innovative solutions to address the challenges arising from BIT termination.

The Roundtable Conference was led by Ms. Kirtan Prasad, Counsel at RPC, UK. Ms. Prasad began by tracing the history of BITs, explaining how initially, only one sovereign could bring a claim against another. With the evolution of BITs, treaties now offer various protections such as fair and equitable treatment, full protection and security, protection against expropriation, and umbrella clauses, amongst others.

Ms. Prasad further explained the nature of these rights by giving various examples and stressed that “the termination of BITs has brought India back to a stage where lobbying might be required, as the investors might not be able to directly bring claims after the expiry of sunset clauses.” However, she also shared a few practical strategies that can be used in different contexts to safeguard investments, such as stabilization clauses, directly negotiating the contracts with the state, restructuring investments, and political risk insurance.

Ms. Prasad discussed various provisions of Indian Model BIT 2015, highlighting that the provision seems to be more favourable to the State than the investors, including Indian investors. She shared her practical experience with investment dispute claims and noted that “investment claims have higher thresholds as opposed to commercial disputes.”

Mr. Avinash Amarnath, Partner at Chandhiok & Mahajan, moderated the event and identified the three scenarios that could shape the new investment landscape: the period before new BITs are signed, the possibility of renegotiations, and the role of multilateral investment treaties. The discussion then focused on these three scenarios.

The Roundtable discussion was followed by a Q&A session, which allowed the participants to seek clarity on various points, such as the stakes involved, the success rate in investment arbitration and commercial arbitration, stabilization clauses, and the impact of these terminations on India’s outbound investments.

The Roundtable Conference, well-received by all attendees, marks another significant step in encouraging constructive dialogue to improve the dispute resolution landscape in India.