India Seeks To Renegotiate 47 Investment Treaties Because Of Their Corporate Sovereignty Clauses
Corporate sovereignty has become a big issue as a result of its inclusion in TPP and TAFTA/TTIP, but it's present in hundreds of other trade and investment treaties.The heated discussion of investor-state dispute settlement (ISDS) chapters in those negotiations has led some countries to realize that corporate sovereignty could prove very costly to them one day. As we've written, both South Africa and Bolivia have decided to dismantle the ISDS provisions by renegotiating treaties, and according to a new report in The Economic Times, India has decided to do the same on a large scale:
India has written to 47 countries to nullify the existing bilateral investment agreements and ink fresh treaties that will make it mandatory for foreign investors to exhaust local judicial remedies before seeking arbitration.Forcing foreign investors to use domestic courts is designed to stop them circumventing Indian's laws by going outside the system to arbitration tribunals. Among the 47 treaties that India wants to renegotiate are relatively new ones, as well as others that can be cancelled quite easily. The Economic Times provides some information on the growing magnitude of India's ISDS problem:
The government amended the text after being dragged into international arbitration by as many as 17 companies or individuals including Deutsche Telekom of Germany, Vodafone International Holdings BV, Sistema of Russia, Children's Investment Fund and TCI Cyprus Holdings. India even lost an international arbitration case involving White Industries of Australia.This is a very sensible move by the Indian government, and a great signal to other countries exposed to the threat of costly corporate sovereignty claims in the future. It will be interesting to see who is next now that India has helped legitimize further the idea of renegotiating these deals.
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