Indian Courts and Bilateral Investment Treaty Arbitration

Abstract

Although India has been entangled in close to 15 bilateral investment treaty (BIT) arbitrations, Indian courts have had limited opportunities to deal with these arbitrations. In this paper, we examine the interactions between BIT arbitration and Indian courts through a study of three domestic court cases arising in the context of anti-arbitration injunctions in BIT arbitration. These three cases are Port of Kolkata v LDA, India v Vodafone, and India v Khaitan. Through these three cases, for the first time, Indian courts have thrown light on issues such as jurisdiction of domestic courts on matters pertaining to BIT arbitration, the applicability of the Indian Arbitration and Conciliation Act, 1996 (‘A&C Act’) to BIT arbitration and questions surrounding “abuse of process” by foreign investors. Two cases out of three held that the A&C Act does not apply to BIT arbitration, leading to several questions pertaining to supervisory jurisdiction over BIT arbitration and enforcement of BIT arbitration awards in India. On “abuse of process”, the courts held that these questions should be addressed by BIT arbitration tribunals and not by domestic courts.