Commercial Reservation of New York Convention in India & Latest Developments in India's International Investment Treaty Practice

India was one of the founding signatories to the New York Convention, 1958, formally known as the Convention on Recognition & Enforcement of Foreign Arbitral Awards, 1958. The commercial reservation meant that the New York Convention insofar as applicable to India was only in respect of international commercial arbitration and not international investment arbitration.

This position was reiterated in Union of India vs. Vodafone Group Plc United Kingdom and Ors. (07.05.2018 - DELHC) : MANU/DE/1673/2018, where the Delhi High Court held:

"89. Also, though the BIPA constitutes an arbitration agreement between a private investor on the one side and the host State on the other, yet it is neither an International Commercial Arbitration governed by the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996") nor a domestic arbitration.

90. The Act, 1996 including Sections 5 and 45 thereof, do not apply proprio vigore to a BIPA..." 

BIPA referenced here was the UK Bilateral Investment Protection Agreement.

There have been numerous papers, etc. written on the lack of enforcement mechanisms of BIT awards in India. The Model BIT addresses this issue by holding:

"27.5 A claim that is submitted to arbitration under this Article shall be considered to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention."

This provision has now found its place in various BITs signed since 2015-2016. For instance, the Belarus India BIT, 2018 states:

"27.5 A claim that is submitted to arbitration under this Chapter shall be considered to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention."

Note that this BIT has been signed and is in force as well.

Similar provision exists in Article 27.5 of the India Kyrgyzstan BIT (2019) too, although it does not find any place in the Brazil India BIT, 2020 most likely because the Brazil India BIT does not provide for Investor-State Disputes. 

Thus, it appears that India has now sought to address the problem of enforceability of the BIT awards through recognition that BITs are "commercial" transactions for the purpose of the New York Convention, thereby retaining the Commercial Reservation but also by providing that BIT awards would be enforceable under Part II of the Arbitration and Conciliation Act, 1996, which deals with enforcement of foreign awards.

Slides of the Lecture Series on Introduction to International Law

In the previous post, we had listed out the lectures in the introductory lecture series on international investment law. We have been getting comments from many who have been watching those videos to post the content in a text document. Owing to constraints of time, we are not able to do so now. But, those interested can access the slides that were used for recording the videos. 

Links to these slides are given below (click on "link to the Slides" given against each Chapter.):

Chapter 0: Overview of Lectures: Lecture 0 (link to the Slides)

Chapter I: History & Nature of International Investment Law: Lectures 1 to 5 (link to the Slides)

• Lecture 1: Origins of International Investment Law before 1870 (click on the lecture name)
• Lecture 2: More About Origins & A Bit about Phase I
• Lecture 3: Inter-War Period & Evolution Thereafter
• Lecture 4: The Era of Dichotomy
• Lecture 5: The Eras of Proliferation and Reorientation

Chapter II: Investment Treaty/ Contract: Lectures 6 to 14 (link to the Slides)

• Lecture 6: Nature of Foreign Investment
• Lecture 7: What is Investment?
• Lecture 8: What is Investment? Part II
• Lecture 9: Who is an Investor?
• Lecture 10: Natural Persons as Investors
• Lecture 11: Legal Persons as Investors
• Lecture 12: Who is an Investor? Treaty Shopping
• Lecture 13: Shareholders as Investors
• Lecture 14: Elements of an Investment Treaty

Chapter III: Substantive Standards I: Lectures 15 to 27 (link to the Slides)

• Lecture 15: Fair & Equitable Treatment: An Introduction
• Lecture 16: Fair & Equitable Treatment: Preliminary Aspects
• Lecture 17: More on Fair and Equitable Standards
• Lecture 18: India and the FET Standard
• Lecture 19: Introduction to Full Protection and Security Standard
• Lecture 20: More on Full Protection and Security Standard
• Lecture 21: Full Protection & Security in LDA v India Arbitration
• Lecture 22: Non-Impairment Standard: An Introduction
• Lecture 23: More on the Non-Impairment Standard
• Lecture 24: The Umbrella Clause
• Lecture 25: More on the Umbrella Clause
• Lecture 26: Approaches to the Umbrella Clause
• Lecture 27: Nissan v India and the Umbrella Clause

Chapter IV: Substantive Standards of Protection II: Lectures 28 to 44 (link to the Slides)

• Lecture 28: Most Favoured Nation Standard
• Lecture 29: More on the MFN Standard
• Lecture 30: MFN & Procedural Rules
• Lecture 31: National Treatment
• Lecture 32: More on National Treatment
• Lecture 33: Some Features of National Treatment & the LDA Award
• Lecture 34: Expropriation
• Lecture 35: Direct and Indirect Expropriation
• Lecture 36: Ingredients of Indirect Expropriation
• Lecture 37: Indirect Expropriation: Some More Examples
• Lecture 38: Compensation for Expropriation
• Lecture 39: More on Compensation for Expropriation
• Lecture 40: Some More on Compensation for Expropriation
• Lecture 41: Use of DCF Methodology
• Lecture 44: Moral Damages in International Investment Law

Chapter V: Dispute Resolution in International Investment Law: Lectures 45 to 49 (link to the Slides)

• Lecture 45: Dispute Resolution in BITs
• Lecture 46: Recent Trends in Dispute Resolution: Brazil India BIT 2020
• Lecture 47: Local Exhaustion
• Lecture 48: Local Exhaustion II
• Lecture 49: A Bit More on ELR

Chapter VI: Recent Developments & Concluding Observations: Lectures 42-43 & 50 (link to the Slides)

• Lecture 42: Comment on the 10th Report of the Committee of External Affairs (2020-2021)- Part I
• Lecture 43: Comment on the 10th Report of the Committee of External Affairs (2020-2021)- Part II
• Lecture 50: Recent Developments & Concluding Observations

Happy Reading!

Lecture Series on Introduction to International Investment Law: (Lectures 1 to 50: Complete Lectures)

On 20 March 2021, almost ten months back, we began a lecture series introducing the topic of international investment law. With the 50th and the last lecture uploaded on 14 January 2022, we complete this introductory lecture series on international investment law.

The objective behind this lecture series was to provide a set of simple lectures on the subject, given the lack of openly accessible materials on the subject. Most law schools in India do not teach this important subject. With these lectures freely accessible, no law student in India, for that matter, no student anywhere in the world, will have problem understanding the basics of international investment law. All one needs is a decent internet connection and a smart phone or a laptop. The links provided in the description constitute important materials regarding the topics discussed there. Most of the materials referred to in these lectures are also openly accessible.

This post provides an overview of the complete set of lectures and draws from content provided in two previous posts (here and here) of this blog. The Playlist of the lectures can be accessed from here. Link to each lecture is provided below:

Chapter I : History & Nature of International Investment Law

Lecture 1: Origins of International Investment Law before 1870 (click on the lecture name)

Historically, International Investment Law has evolved in three distinct phases in the modern history: Phase I is the period from 1870 to 1914; Phase II is the inter-war period, between 1918 to1945, and phase III is the post-war period, beginning from 1945. But, even before the first phase (1870), certain developments in international politics have had influence in the evolution of IIL. This lecture deals with those developments.

Lecture 2: More About Origins & A Bit about Phase I

In this lecture we delve into the evolution of IIL in the first phase that is, between 1870 and 1914. But before we go further, those watching may refer to two interesting papers on the origins before 1870, one by Kate Miles, the author of the book which we referred to in last lecture, and the other by Anne-Charlotte Martineau.

Lecture 3: Inter-War Period & Evolution Thereafter

Evolution of International Investment Law during the inter-war period, between 1914 and 1945, and during the post-II world war phase till 1964.

Lecture 4: The Era of Dichotomy

In the last lecture, we saw that there are four phases through which IIL evolved after the World War II. We saw that the first phase, known as the era of infancy spanned up to 1964. In this lecture, we look at the Era of Dichotomy from 1965 to 1987.

Lecture 5: The Eras of Proliferation and Reorientation

In this lecture, we discuss how International Investment Law evolved through the eras of proliferation (1990-2007) and reorientation (2008- till date).

Chapter II: Investment Treaty/ Contract

Lecture 6: Nature of Foreign Investment

In the first five lectures we introduced the subject and provided a historical overview of how IIL evolved. In this lecture, we will have a look at the nature of foreign investment.

Lecture 7: What is Investment?

In this lecture, we will answer the fundamental question: what is investment?

Lecture 8: What is Investment? Part II

In the last video, we discussed the concept of “Investment” and analysed two different types of definition of investment, taking the India-UAE BIT and the Brazil- India BIT as examples. We also saw the general practices regarding the definition of investment. In this video, we’ll discuss the ICSID practice and the Salini test on the definition of investment.

Lecture 9: Who is an Investor?

In this video we will be dealing with another important threshold question: Who is an investor?

Lecture 10: Natural Persons as Investors

In the last lecture, we discussed certain general aspects relating to the question: “who is an investor?”. In this lecture, we will look at how the question is answered from the perspective of natural persons.

Lecture 11: Legal Persons as Investors

In this, video, we will discuss various tests to determine the nationality of juridical persons.

Lecture 12: Who is an Investor? Treaty Shopping

In this lecture we will deal with an important aspect relating to the question "who is an investor?": Treaty shopping.

Lecture 13: Shareholders as Investors

The general principles regarding investor and investment apply equally to shareholders. This lecture deals with the law relating to whether shareholders could initiate investment treaty claims.

Lecture 14: Elements of an Investment Treaty

In this lecture, we will see the core elements of an investment treaty. We will also use the India-UAE BIT, 2013 and the Brazil India BIT, 2020 to provide an idea of how these provisions look in practice.

Chapter III: Substantive Standards I

Lecture 15: Fair & Equitable Treatment: An Introduction

In this lecture, we will discuss one of the most widely used substantial protections under international investment law, that is, Fair and Equitable Treatment, or FET.

Lecture 16: Fair & Equitable Treatment: Preliminary Aspects

This lecture deals with certain preliminary aspects of the FET standard, including its brief history and its nature and function.

Lecture 17: More on Fair and Equitable Standards

This lecture addresses issues such as whether FET standard is a part of customary international law relating to minimum standard of treatment and the evolution of FET standard

Lecture 18: India and the FET Standard

This lecture looks at India’s skirmishes with the FET standard in the White Industries Award and the Cairn BIT Award. Note that the purpose of this lecture series is to introduce readers to the subject and therefore, this lecture does not critically examines the Award insofar as the FET standard is concerned but would only provide a descriptive comment.

Lecture 19: Introduction to Full Protection and Security Standard

This lecture introduces the full protection and security standard. It talks about how the standard finds its place in certain Indian BITs and about the first case in BIT history, which pertained to this standard.

Lecture 20: More on Full Protection and Security Standard

Lecture 20 discusses the scope of the FPSS and provides an overview of its features.

Lecture 21: Full Protection & Security in LDA v India Arbitration

This lecture concerns the application of the Full Protection and Security standard in the Louis Dreyfus Armateurs SAS (France) v. India arbitration, which India successfully defended.

Lecture 22: Non-Impairment Standard: An Introduction

Lecture 22 discusses Non-impairment standard, which is another substantive protection in investment treaties. The lecture discusses the non-impairment.

Lecture 23: More on the Non-Impairment Standard

Lecture 23 discusses the measures that can constitute a violation of the non-impairment standard. The cases of EDF (Services) Limited v. Romania, ELSI Elettronica Sicula SpA, Siemens v. Argentina, LG&E Energy Corp v. Argentina have also been discussed.

Lecture 24: The Umbrella Clause

This lecture discusses the meaning, evolution, and variants of the Umbrella clause.

Lecture 25: More on the Umbrella Clause

This lecture discusses the case of SGS v Pakistan insofar as it relates to the Umbrella clause.

Lecture 26: Approaches to the Umbrella Clause

Umbrella clause has not received a uniform interpretation. Different tribunals, including the one in SGS v. Pakistan, have construed the clause differently.

Lecture 27: Nissan v India and the Umbrella Clause

This lecture discusses the recent case of Nissan v. India which relates to the Umbrella clause.

Chapter IV: Substantive Standards of Protection II

Lecture 28: Most Favoured Nation Standard

The Most Favoured Nation or the MFN standard.

Lecture 29: More on the MFN Standard

Exceptions to MFN standard and the temporal scope of the standard.

Lecture 30: MFN & Procedural Rules

Extension of MFN to procedural rules. The MFN standard has been construed to extend even to procedural provisions such as dispute resolution although MFN in itself is a substantive standard.

Lecture 31: National Treatment

Basics of the national treatment standard and the relevance of WTO jurisprudence relating to national treatment in construing the contours of the national treatment obligations in international investment agreements.

Lecture 32: More on National Treatment

Factors to determine violation of the national treatment standard.

Lecture 33: Some Features of National Treatment & the LDA Award

Basic features of the national treatment standard and the Louis Dreyfus Armateurs SAS (France) v. India insofar as it relates to the national treatment standard.

Lecture 34: Expropriation

Concept of expropriation.

Lecture 35: Direct and Indirect Expropriation

The India UAE and the Brazil India BITs with reference to direct and indirect expropriation.

Lecture 36: Ingredients of Indirect Expropriation

The ingredients of indirect expropriation.

Lecture 37: Indirect Expropriation: Some More Examples

The ingredients of indirect expropriation with examples.

Lecture 38: Compensation for Expropriation

Compensation for expropriation.

Lecture 39: More on Compensation for Expropriation

Determination of Fair Market Value as compensation for expropriation.

Lecture 40: Some More on Compensation for Expropriation

Various aspects relating to compensation for unlawful expropriation.

Lecture 41: Use of DCF Methodology

Key ideas presented in the webinar organised by FTI Consulting and Mumbai Centre for International Arbitration on the topic of compensation in international investment law on 2 December 2021 concerning the topic of compensation for expropriation.

Lecture 44: Moral Damages in International Investment Law

Concept of moral damages in international investment law.

Chapter V: Dispute Resolution in International Investment Law

Lecture 45: Dispute Resolution in BITs

General aspects relating to dispute resolution in international investment treaties.

Lecture 46: Recent Trends in Dispute Resolution: Brazil India BIT 2020

Recent trends in dispute resolution provisions with special reference to Brazil India BIT, 2020.

Lecture 47: Local Exhaustion

Exhaustion of Local Remedies (ELR)

Lecture 48: Local Exhaustion II

More on Exhaustion of Local Remedies (ELR)

Lecture 49:  A Bit More on ELR

Overview of some case law on the principle of Exhaustion of Local Remedies or ELR and the relevant provisions in India’s Model BIT on ELR.

Chapter VI: Recent Developments & Concluding Observations

Lecture 42: Comment on the 10th Report of the Committee of External Affairs (2020-2021)- Part I

Descriptive comment on the Parliament of India’s Standing Committee Report of September 2021 titled “Tenth Report of the Committee on External Affairs (2020-21) on the subject ‘India and Bilateral Investment Treaties’.”

Lecture 43: Comment on the 10th Report of the Committee of External Affairs (2020-2021)- Part II

Second Part of the descriptive comment on the first two chapters of the Departmentally Related Standing Committee Report of September 2021 titled “Tenth Report of the Committee on External Affairs (2020-21) on the subject ‘India and Bilateral Investment Treaties’.

Lecture 50: Recent Developments & Concluding Observations

Recent developments in international investment law and concluding observations

Lecture Series on International Investment Law: Lectures 16 to 30

Just before the Second Wave of Covid19 in India, we started off a lecture series introducing international investment law. As was stated in a previous post in this blog, the objective of the lecture series was to cover the fundamentals of International Investment Law and making the subject more accessible through short lectures (approximately 8 to 10 minutes). The lecture series is not restricted to any particular jurisdiction, although many of the examples provided relate to India. Overview of the first fifteen lectures is contained in this post. This post covers lectures 16 to 30.

Chapter 3: Substantive Standards of Protection I

Lecture 15: Fair & Equitable Treatment: An Introduction

In this lecture, we discuss one of the most widely used substantial protections under international investment law, that is, Fair and Equitable Treatment, or FET. We also deal with the FET clause in the India-UAE BIT, 2013 and the Brazil India BIT, 2020

Lecture 16: Fair & Equitable Treatment: Preliminary Aspects

This lecture deals with certain preliminary aspects of the FET standard, including its brief history and its nature and function.

Lecture 17: More on Fair and Equitable Standards

This lecture addresses issues such as whether FET standard is a part of customary international law relating to minimum standard of treatment and the evolution of FET standard

Lecture 18: India and the FET Standard

This lecture looks at India’s skirmishes with the FET standard in the White Industries Award and the Cairn BIT Award. Note that the purpose of this lecture series is to introduce readers to the subject and therefore, this lecture does not critically examines the Award insofar as the FET standard is concerned but would only provide a descriptive comment.

Lecture 19: Introduction to Full Protection and Security Standard

This lecture introduces the full protection and security standard. It talks about how the standard finds its place in certain Indian BITs and about the first case in BIT history, which pertained to this standard.

Lecture 20: More on Full Protection and Security Standard

Lecture 20 discusses the scope of the FPSS and provides an overview of its features.

Lecture 21: Full Protection & Security in LDA v India Arbitration

This lecture concerns the application of the Full Protection and Security standard in the Louis Dreyfus Armateurs SAS (France) v. India arbitration, which India successfully defended.

Lecture 22: Non-Impairment Standard: An Introduction

Lecture 22 discusses Non-impairment standard, which is another substantive protection in investment treaties. The lecture discusses the non-impairment.

Lecture 23: More on the Non-Impairment Standard

Lecture 23 discusses the measures that can constitute a violation of the non-impairment standard. The cases of EDF (Services) Limited v. Romania, ELSI Elettronica Sicula SpA, Siemens v. Argentina, LG&E Energy Corp v. Argentina have also been discussed.

Lecture 24: The Umbrella Clause

This lecture discusses the meaning, evolution, and variants of the Umbrella clause.

Lecture 25: More on the Umbrella Clause

This lecture discusses the case of SGS v Pakistan insofar as it relates to the Umbrella clause.

Lecture 26: Approaches to the Umbrella Clause

Umbrella clause has not received a uniform interpretation. Different tribunals, including the one in SGS v. Pakistan, have construed the clause differently.

Lecture 27: Nissan v India and the Umbrella Clause

This lecture discusses the recent case of Nissan v. India which relates to the Umbrella clause.

Chapter IV: Substantive Standards of Protection II

Lecture 28: Most Favoured Nation Standard

In this lecture, we discuss the Most Favoured Nation or the MFN standard.

Lecture 29: More on the MFN Standard

In this lecture, we cover the issues of exceptions to MFN standard and the temporal scope of the standard.

Lecture 30: MFN & Procedural Rules

In this lecture, we deal with an interesting topic under MFN-extension of MFN to procedural rules. The MFN standard has been construed to extend even to procedural provisions such as dispute resolution although MFN in itself is a substantive standard.

Lecture 2: History of International Investment Law from 1870 to 1914 (Script & Video)

Those watching this lecture series would recollect that in the last lecture, we discussed about the origins of the IIL wherein we saw that it evolved out of colonialism. We also discussed that many concepts that evolved out of colonialism and imperialism are used even in the latest of Investment treaties.

In this lecture we delve into the evolution of IIL in the first phase that is, between 1870 and 1914. But before we go further, those watching may refer to two interesting papers on the origins before 1870, one by Kate Miles, the author of the book which we referred to in last lecture, and the other by Anne-Charlotte Martineau.

The two papers are:

• Kate Miles, International Investment Law: Origins, Imperialism and Conceptualizing the Environment, 21 Colo. J. Int'l Envtl. L. & Pol'y 1 (2010); and
• Anne-Charlotte Martineau, A Forgotten Chapter in the History of International Commercial Arbitration: The Slave Trade's Dispute Settlement System, Leiden Journal of International Law (2018), page 1 of 23.

The first lecture was mainly based on Chapter I of Kate Miles book, whose content is similar to the first paper.

The second paper above is equally interesting: it traces the origins of the present system of IIL and Dispute resolution system in IIL to slave trade in the 16^th to 18^th centuries. It states that the institution of judges-conservators established to resolve disputes out of slave trade was the precursor to arbitral tribunals established for resolving disputes through international arbitration.

Interesting conclusions are drawn in the paper: one, contrary to the widely held belief that international law came to rescue slaves by advocating its abolition, international law created, supported and perpetrated the slave trade regime for at least three centuries.

The author speaks of ‘private’ dimensions of formal and informal imperialism. This important and interesting. Colonialism has its roots in corporations effecting economic and political control over the third world. East India Company in India an apt example. 

The author is therefore correct in saying that : “There is nothing neutral, normal or apolitical in investment law and adjudication.”

So, the evolution of IIL is not about good faith, treaties and precedents, but about blood, sweat and tears.

Now, coming to the evolution of IIL from 1870, this phase saw two prominent developments.

One was the entrenchment of the expropriation doctrine. Standards for compensation due to expropriation were developed. For example, the Convention of Friendship, Commerce and Extradition Between the United States and Switzerland, 1850 stated in Article 2(3):

“In case of [] expropriation for purposes of public utility, the citizens of one of the two countries residing or established in the other shall be placed upon an equal footing with the citizens of the country in which they reside, with respect to indemnities for damages they may have sustained.”

Thus, the standard for compensation on account of expropriation was national treatment.

In this phase, expropriation was considered lawful if certain conditions were met. These conditions were:

a) it was carried out for a public purpose;

b) it was not arbitrary or discriminatory; and

c) prompt, adequate, and effective compensation was paid.

It would be interesting to note that the phrase “prompt, adequate, and effective” was coined in 1940 by United States Secretary of State Cordell Hull in diplomatic correspondence with Mexico. This became the ‘Hull Formula’. Interestingly, Hull was awarded the Nobel Peace Prize in 1945 for playing a pivotal role in establishing the United Nations.

Another development in this period was the entrenchment of the international minimum standards and the national treatment doctrines and the tension between these concepts.

While US and other European powers subscribed to the international minimum standard rule, the countries in the third world, especially the Latin American nations advocated the national treatment rule. Their argument was that the international minimum standards rule impinged on their sovereignty and foreign persons could not be afforded a treatment that was beyond what a state offered to its citizens.

National treatment was also the second limb of the famous Calvo Doctrine. This doctrine arose from the ideas of Carlos Calvo, a jurist from Argentina, first published in 1868.

The first limb of the Calvo doctrine was that state sovereignty precluded states from interfering into the affairs of another state, either through diplomatic channels or by force.

Although the Calvo doctrine came to be looked upon with disfavour by the Western nations, it has had a considerable influence in the evolution of IIL.

This is possibly a precursor to the local exhaustion rule in international investment law.

More on the first phase in the next lecture.

Lecture Series on International Investment Law: Lectures 1 to 15

Recently, we had commenced a lecture series introducing the subject of International Investment Law. We have completed the first fifteen lectures of the lecture series. The lecture series is aimed at covering the fundamentals of International Investment Law and making the subject more accessible through short lectures (approximately 8 to 10 minutes). The lecture series is divided into various chapters addressing specific topics and each chapter contains several lectures.

In this post, we will provide links to the first fifteen lectures with a brief overview of each video.

[Note: The first few videos have feeble audio. Readers may use headphones. For subsequent videos, laptop's inbuilt speaker will do.]

Chapter 1: Chapter 1 : History & Nature of International Investment Law

Lecture 1: Origins of International Investment Law before 1870 (click on the lecture name)

Historically, International Investment Law has evolved in three distinct phases in the modern history: Phase I is the period from 1870 to 1914; Phase II is the inter-war period, between 1918 to1945, and phase III is the post-war period, beginning from 1945. But, even before the first phase (1870), certain developments in international politics have had influence in the evolution of IIL. This lecture deals with those developments.

Lecture 2: More About Origins & A Bit about Phase I

In this lecture we delve into the evolution of IIL in the first phase that is, between 1870 and 1914. But before we go further, those watching may refer to two interesting papers on the origins before 1870, one by Kate Miles, the author of the book which we referred to in last lecture, and the other by Anne-Charlotte Martineau.

Lecture 3: Inter-War Period & Evolution Thereafter

In this lecture, we will see how International Investment Law evolved during the inter-war period, between 1914 and 1945,. We will also discuss its evolution during the post-II world war phase till 1964.

Lecture 4: The Era of Dichotomy

In the last lecture, we saw that there are four phases through which IIL evolved after the World War II. We saw that the first phase, known as the era of infancy spanned up to 1964. In this lecture, we look at the Era of Dichotomy from 1965 to 1987.

Lecture 5: The Eras of Proliferation and Reorientation

In this lecture, we discuss how International Investment Law evolved through the eras of proliferation (1990-2007) and reorientation (2008- till date).

Chapter 2: Investment Treaty/ Contract

Lecture 6: Nature of Foreign Investment

In the first five lectures we introduced the subject and provided a historical overview of how IIL evolved. In this lecture, we will have a look at the nature of foreign investment.

Lecture 7: What is Investment?

In this lecture, we will answer the fundamental question: what is investment?

Lecture 8: What is Investment? Part II

In the last video, we discussed the concept of “Investment” and analysed two different types of definition of investment, taking the India-UAE BIT and the Brazil- India BIT as examples. We also saw the general practices regarding the definition of investment. In this video, we’ll discuss the ICSID practice and the Salini test on the definition of investment.

Lecture 9: Who is an Investor?

In this video we will be dealing with another important threshold question: Who is an investor?

Lecture 10: Natural Persons as Investors

In the last lecture, we discussed certain general aspects relating to the question: “who is an investor?”. In this lecture, we will look at how the question is answered from the perspective of natural persons.

Lecture 11: Legal Persons as Investors

In this, video, we will discuss various tests to determine the nationality of juridical persons.

Lecture 12: Who is an Investor? Treaty Shopping

In this lecture we will deal with an important aspect relating to the question "who is an investor?": Treaty shopping.

Lecture 13: Shareholders as Investors

The general principles regarding investor and investment apply equally to shareholders. This lecture deals with the law relating to whether shareholders could initiate investment treaty claims.

Lecture 14: Elements of an Investment Treaty

In this lecture, we will see the core elements of an investment treaty. We will also use the India-UAE BIT, 2013 and the Brazil India BIT, 2020 to provide an idea of how these provisions look in practice.

Chapter 3: Fair and Equitable Treatment

Lecture 15: Fair & Equitable Treatment: An Introduction

In this lecture, we will discuss one of the most widely used substantial protections under international investment law, that is, Fair and Equitable Treatment, or FET.

History of International Investment Law: Lecture Series on Introduction to International Law

In the past three months, we have been uploading a lecture every fortnight on the broad purpose of providing an introductory overview to international investment law. The purpose of these lectures is to make the subject more accessible. The lectures uploaded so far can be accessed from here. The first five lectures provide a brief historical overview of the subject. The transcript of the first lecture on the origins of international investment law before 1870 are dealt with in this post.

Lecture 1: Origins of International Investment Law before 1870

Lecture Link: https://youtu.be/_x57zCsHOxU

Hello and welcome to the video lectures on the Introduction to International Investment Law.

In this lecture series, we would be covering about 10-12 broad topics on the subject, and these would include important and controversial topics such as expropriation, Fair and Equal Treatment and Most Favoured Nation principles, as well as the latest developments, both in international investment law and international investor-state arbitration.

This lecture series can be taken up by students and others who are interested in getting an introductory overview of the subject.

Moving on to the first chapter of this series, “Nature & Evolution of International Investment Law”, we can see that historically International Investment Law has evolved in three distinct phases in the modern history:

Phase I is the period from 1870 to 1914; Phase II is the inter-war period, between 1918 to1945, and phase III is the post-war period, beginning from 1945.

But, even before the first phase, certain developments in international politics have had influence in the evolution of IIL.

For example, in 1778, USA and France concluded the first commercial treaty, known as the Treaty of Alliance; in fact there were many treaties and they are collectively called Treaties of Alliance. The treaty importantly provided for commercial relationship between both countries.

Then followed the various Friendship, Commerce and Navigation Treaties entered into between countries, especially between US and others. Take the example of the United States–Paraguay Treaty of Friendship, Commerce and Navigation of 1859.

These treaties protected individual and other rights such as:

• Protection of individuals and their property,
• freedom of movement and worship,
• assuring rights to trade and to engage in commercial enterprise,
• granting national treatment and most-favoured-nation status,
• allowing for access to ports, and
• granting navigation rights through territorial waters

One would note that even the recent most treaties guarantee these rights.

There were also Unequal or capitulation treaties. These conferred one-sided rights on the dominant conquering colonizer. These were the products of actual or threatened use of force by the dominant powers, especially those from the West. Although these treaties were couched in neutral language, they were actually meant to protect the rights, property and investment of the colonizer.

Examples of such treaties include treaties between Western powers and China between 1840s to 1860s.

In fact, it has been argued that the imposition of such unequal treaties was a key legal strategy in the European colonization. Key features of these treaties included:

• Travel prerogatives of foreign traders,
• the securing of extensive trading and investment rights,
• non-discriminatory commercial access to the host state,
• grant of concessions to foreign companies,
• the protection of Christian missionaries,
• leasing or ceding of territory to foreign states, and
• governance powers, including establishment of parallel systems of governance.

Thus, the origins of the IIL themselves have been tainted by colonialism and the superstructure of IIL was built with colonialism and power dynamics between nations as the base.

Another important aspect is the evolution of the law on diplomatic protection to alien property in the 19th and the early 20th centuries.

A new branch of international law began to emerge in the 19th century known as diplomatic protection of aliens. This concerned establishment of an internationally acceptable minimum standard for the treatment of foreign persons and foreign companies, protection of person and property, etc. Violation of these standards meant that the host state was responsible and this meant military or other intervention by the state to which that alien belonged.

For more information on this, readers can refer to the first chapter of the book by Kate Miles titled “The Origins of International Investment Law: Empire, Environment and the Safeguarding of Capital” and published by the CUP in the year 2013.