Hello friends, Have you ever wondered how an international investment dispute is resolved when it arises against a big country like India? Recently, Justice BV Nagarathna of the Supreme Court has said a very important thing on this issue. She suggested to the government that different ministries should work together to resolve major investment disputes, instead of making separate efforts at their own level.

Why is an inter-ministerial forum necessary?

Justice BV Nagarathna says that if all the ministries make a strategy together from the beginning, then India will not suffer losses in major investment disputes. She advised the government to have proper consultation at the beginning of any dispute so that the matter does not become serious later. She made this statement on the occasion of the inauguration of the first Post Graduate Diploma Course on International Commercial and Investment Treaty Arbitration organized by the National Law University (NLU) Delhi. Former Supreme Court judge Indu Malhotra and Finance Minister Nirmala Sitharaman were also present at the event.

Need to reduce dependence on foreign lawyers

Justice BV Nagarathna pointed out another important issue  India’s dependence on foreign lawyers. He said that whenever India faces a major investment dispute, the government has to take the help of foreign law firms. This not only costs the government heavily but also the country’s legal talent is not utilized properly. He believes that if the country develops a legal understanding of international investment arbitration, India will not need foreign experts. That is why he praised this new course, which will enable young lawyers and government officials to gain expertise in this subject.

Changes in India’s old investment treaties

Justice BV Nagarathna also discussed India’s Bilateral Investment Treaty (BIT) policies. He said that India had signed its first BIT treaty with Britain in 1994 and so far such agreements have been signed with 88 countries. However, in 2016, India changed its policies, terminated 77 old treaties and issued Joint Interpretative Statements with some countries to limit disputes related to arbitration. He gave the example of the White Industries decision against India in 2011, where the foreign arbitration court had ruled on India’s judicial delay. Justice Nagarathna said that it is not appropriate to come to such decisions without properly understanding the judicial system of a country with a huge population like India.

Foreign investors challenging government policies

Justice BV Nagarathna also expressed concern that sometimes foreign companies also challenge the public welfare policies of the government. He gave the example of cases like Philip Morris vs Australia and Vattenfall vs Germany, where investors made the government’s health and environment-related policies a legal dispute. He said that it is very important to maintain a balance between the rights of investors and the sovereign interests of the country.

Need for training of judiciary and lawyers

Justice BV Nagarathna suggested that the judges of the High Courts of India should also be trained in this subject so that they can better understand the complexities associated with investment disputes. He urged the Chief Justices to send the judges of the High Courts to this special course organized by NLU Delhi so that they can deal with investment arbitration cases more effectively. This statement of Justice Nagarathna is very important for India. If the government implements his suggestions, then India will benefit in major disputes related to investment, legal expenses will be reduced and legal expertise in the country will also increase. This course can prove to be a big step towards giving India a strong international legal identity.

Disclaimer: This article is based on the views of Justice BV Nagarathna and its purpose is only to provide information. Do not use the information contained herein as legal advice.

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