India Triumphantly Slashes Arbitration Time: A Game-Changer for Foreign Investors in UAE Agreement
India has revised its bilateral investment treaty with the United Arab Emirates, shortening the timeframe for foreign investors to seek international arbitration from five years to three. This new pact, effective from August 31 and replacing an older agreement, allows faster recourse to international arbitration if disputes remain unresolved within the Indian judicial system. Unlike India’s model bilateral investment treaty, the new agreement includes both shares and bonds as protected investments, extending beyond just foreign direct investments.
Union Commerce and Industry Minister Piyush Goyal stated that this move is aimed at boosting investor confidence and ensuring a stable tax regime while providing a framework to resolve bilateral investment issues. Goyal made these remarks following the 12th India-UAE high-level joint task force meeting on investments.
However, some experts express concerns that the shortened arbitration period could heighten India’s exposure to international arbitration claims. The Global Trade Research Initiative suggests this treaty broadens the scope of protected investments, potentially increasing disputes over financial instruments that might not significantly contribute to economic growth.
Despite these concerns, India expects the treaty to enhance investor confidence by assuring fair treatment and offering an independent forum for arbitration. Balancing investor protection with the state’s right to regulate, the treaty is seen as crucial for fostering foreign investment between India and the UAE. The UAE ranks as India’s seventh-largest source of foreign direct investment, with bilateral investments amounting to billions since April 2000. The agreement underscores India’s strategy to fortify foreign investment relationships, aiming for reciprocal promotion and protection of investments globally.
Original Story https://www.business-standard.com/economy/news/india-reduces-arbitration-time-for-foreign-investors-in-uae-agreement-124100700960_1.html
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