THE ENFORCEMENT OF INTERNATIONAL INVESTMENT ARBITRATIONS IN INDIA
INTRODUCTION
The Arbitration and Conciliation Act, 1996 ("Act") governs all commercial arbitrations, domestic and international, in India. However, while investment treaty arbitrations are guided by the institutional choice and seat, the manner of enforcement of investment treaty arbitral awards ("ITAs") in India remains unanswered.
The issue of enforcement of ITAs in India arises, as India is not a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 1965 ("ICSID Convention").
Consequently, India is not covered by the ICSID arbitration framework, which stipulates the manner of enforcement of signatory parties. This issue further gained prominence post the successful awards recently passed in favour of Vodafone and Cairn, against India.
This piece seeks to examine the basis for India not being a nonsignatory to the ICSID Convention, the manner in which ITAs are satisfied by India and if there exists any mechanism in law for enforcement of ITAs in India.
I. BASIS FOR INDIA'S RELUCTANCE TO SIGN THE ICSID CONVENTION
India submitted at the First Session of the Consultative Meeting of Legal Experts in 1964, during the drafting of the ICSID Convention, that the ICSID Convention fails to recognise that an investor is also obligated to follow the host State's national policies and laws if the host State is obligated to treat investors justly and equitably. 1
Since such a framework was not recognised in the ICSID Convention, the Indian Council for Arbitration, in 2000, recommended that India maintain its exclusion from the ICSID Convention since:
(1) the Convention's arbitration rules favour developed countries; and
(2) if the ICSID award violates India's public policy, it cannot be reviewed by an Indian Courts (as provided for under Article 54 of the ICSID Convention). 2
Additionally, the automatic mechanism of enforceability of arbitral awards under the ICSID Convention could violate the sovereignty of India, especially if such awards are contradictory to domestic laws.
It is pertinent to note here that in the 2015 Model Bilateral Investment Treaty ("Model BIT"), India requires investors and their investments to adhere to the host State's policies and laws. 3
Footnotes
1 History of ICSID Convention, https://icsid.worldbank.org/resources/pu blications/the-history-of-the-icsidconvention.
2 ICA against India joining Global Dispute Settlement Body, The Hindu BusinessLine (2000), https://www.thehindubusinessline.com/ todays-paper/tpothers/article29064097.ece
3 Model Text for the Indian Bilateral Investment Treaty, Article 11.
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