According to the new Bilateral Investment Treaty ( BIT ) India and the United Arab Emirates ( UAE ), no investor claims will be allowed for the investment linked with corruption, fraud, round tripping.. etc.
The key objectives of the 2024 BIT include providing minimum standards of treatment to investors and ensuring non-discrimination between foreign and domestic investors. It also establishes an independent arbitration process for investor-state disputes, offering a reliable mechanism for resolving conflicts.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
Investors involved in corrupt or fraudulent activities will not be able to seek protection under the treaty, ensuring that only genuine investments are protected.
On February 13, 2024, India and the UAE signed a new Bilateral Investment Treaty (BIT) in Abu Dhabi, which officially came into effect on August 31, 2024.
The treaty replaced the earlier Bilateral Investment Promotion and Protection Agreement (BIPPA), which had been in place since December 2013 and expired on September 12, 2024. The new BIT ensures continued protection for investors from both nations, promoting stable and secure investment opportunities.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The UAE is a significant investor in India, ranking as the seventh largest source of Foreign Direct Investment (FDI), contributing 3% of the total FDI inflow into India. Between April 2000 and June 2024, cumulative investments from the UAE into India reached approximately $19 billion.
Similarly, India has been a substantial investor in the UAE, accounting for 5% of its total Overseas Direct Investments, with investments amounting to $15.26 billion from April 2000 to August 2024.
The new India-UAE BIT is expected to further strengthen investor confidence, increase bilateral investments, and foster greater economic cooperation between the two countries.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
Additional highlights of the treaty include a closed asset-based definition of investments, covering portfolio investments, protection against expropriation, and assurances of transparency and compensation for losses.
The BIT also allows for investor-state dispute settlement (ISDS) through arbitration, although investors are required to exhaust local remedies for a period of three years before seeking international arbitration.
Moreover, it includes important carve-outs for areas like taxation, local government measures, and compulsory licensing, allowing both governments to retain the necessary policy space for regulation.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
