The new BIT, not yet in force, was signed on 13 February and will supersede the current BIT between both countries which was signed on 12 December 2013 and came into force on 21 August 2014.
The precise scope of investor protections under the new BIT remains to be seen, but until the new treaty enters into force, the current BIT will continue to prevail.
So far, at least two cases have been invoked under the current BIT with notices of arbitration filed in 2015 and 2016 respectively.
Among them was a case involving the Strategic Infrasol Foodstuff LLC and the Joint Venture of Thakur Family Trust of the UAE against India, which is currently pending.
The case of Ras al-Khaimah Investment Authority of the UAE (RAKIA) against India was in relation to a cancelled bauxite supply agreement that was ultimately decided in favour of the India government by an UNCITRAL tribunal 6 years after the claim was filed.
In 2020, Dubai-based Seclink Technologies threatened to bring an arbitration under the current BIT against India, in relation to a major redevelopment project in Mumbai.
International arbitration and investor-state dispute settlement expert Sylvia Tonova of Pinsent Masons said: “In view of India’s track record of terminating a number of BITs, the BIT marks a significant development. It will be interesting to see the precise scope of investment protection in the new BIT when it becomes publicly available.”Indore Investment
Dubai-based international arbitration and construction disputes expert Mark Raymont of Pinsent Masons said he hoped that the new treaty would act as a gateway for new and continued investment opportunities for UAE investors in India.
“India and the UAE have recently entered into two new long-term liquefied natural gas supply agreements between ADNOC Gas and Indian Oil Corporation Ltd and Gas Authority of India Ltd. These agreements are expected to mark the beginning of a new era in the energy partnership between the two countries. The UAE is committed to solidifying its reputation as a favourable destination for global capital,” Raymont added.
International arbitration specialist Scheherazade Dubash of Pinsent Masons said: “UAE-India trade relations have multiplied since the entry into force of the Comprehensive Economic Partnership Agreement on 1 May 2022, as a result of which the two countries are optimistic to elevate bilateral trade from the current US$85 billion to an impressive US$100 billion by 2030.”Jaipur Wealth Management
“This surge in trade volumes will create a ripple effect, unlocking investment opportunities that will benefit businesses and the overall economy. The UAE was the fourth largest investor in India in 2023 and the seventh largest source of FDI overall. The Middle East and North Africa region holds immense significance for India, and the BIT and CEPA will set the stage for India’s presence in a key economic hub. India’s decision to enter into this BIT reflects its commitment to attracting foreign investment from the UAE and encourages deeper commercial and geopolitical collaboration between the two countries”.
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