India-Brazil Bit: A Global Rethink of Investor-State Arbitration?
Volume III, Issue VI, 2020
When an Investment Corporation treaty with the Brazilian president, Jair Bolsonaro, joined hands with India for corporation in the fields of oil and natural gas, cyber-security, science & technology, health and traditional medicine etc. In addition to this treaty, India opened up its market to allow 100% FDI in coal and Lignite along with offering 100% acquisition of Air India at the World Economic Forum. This treaty had a global recognition because India for the first time officially disregarded the Investor State Arbitration and thus India changed its approach from an investor protective dispute resolution mechanism to a whole different approach of resolving disputes by completely following the Brazil Model BIT. In this article, a comparative analyses has been done between the India Model BIT and the Brazil Model BIT and analyzed as to how there has been a dynamic shift in the Dispute resolution mechanisms all across the globe along with an Indian perspective. This paper has also discussed the provisions of the India-Brazil BIT which act as a paradigm of change in Investment Arbitration such as the constitution of a joint committee, a provision for state-state arbitration, dispute prevention mechanism and the prohibition on the tribunal to pass a compensatory award. Then a comparison has been made between State-State Arbitration and Investor-State Arbitration which is continued by a critical analyses on the whole Dispute prevention mechanism which has been adopted by the India-Brazil BIT. The article has been analyzed from a practical perspective and an alternative framework has also been recommended. It recommends various alternatives in case the Dispute prevention fails to prevent the disputes altogether as there hasn’t been an alternative provided in the treaty as even the Arbitral tribunal has been only empowered to pass an award of interpretation of the provision and not a compensatory award which could have a deep impact on the investor.