A guide to the use of bilateral investment treaties
Since the mid-1990s, India has moved rapidly to sign bilateral investment treaties (BITs) with various countries. It signed its first BIT with the UK in 1994 and went on to reach agreements with the Netherlands, France, Germany and the Russian Federation. It now has at least 66 BITs, including with countries such as Ghana, Yemen and Sudan, although it has yet to conclude an agreement with its largest trading partner – the US – or with China.
The issue of BITs has risen to prominence recently as a result of claims against India from foreign investors in the telecom sector. Several of these claims, individually, could result in damages of billions of US dollars.
Sistema, a Russian company, announced in April that it would bring international claims against India to recoup the US$3.1 billion it had invested in India’s telecom sector. Days later, Telenor, a Norwegian company, announced that it would seek US$14 billion in damages from India over the cancellation of 22 2G licences by the government.
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Michael Nolan is a partner in the Washington, DC, office of Milbank Tweed Hadley & McCloy. He is a member of the board of directors of the American Arbitration Association and of the panel of ICSID arbitrators. Teddy Baldwin is a senior associate in the arbitration and litigation department at the same office.