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An Overview of Sri Lanka’s Bilateral Investment Treaties: Status Quo and Some Insights into Future Modifications

Published online by Cambridge University Press:  31 August 2016

Dilini PATHIRANA
Dilini PATHIRANA*
Affiliation:
University of Colombo, Sri [email protected]
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Abstract

Sri Lanka is the first country against which a foreign investor has had recourse to international arbitration based on the dispute settlement clause in a bilateral investment treaty (BIT). This was the case of AAPL v. Sri Lanka. Since then, the country has been challenged twice before the International Centre for Settlement of Investment Disputes (ICSID), while its latest encounter was in the case of Deutsche Bank AG v. Sri Lanka. In the intervening years between these two cases, Sri Lanka maintained silence and failed to alter its BITs in a global context where the conventional attitude on international investment agreements (IIAs) is being increasingly reconsidered. This paper provides an overview of Sri Lanka’s BITs, which highlights the urgency of reconsidering the country’s investment treaty-making practice. It suggests some modifications to align the country’s investment treaty-making practice with international investment law (IIL) developments.

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Articles
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Asian Journal of International Law , Volume 7 , Issue 2 , July 2017 , pp. 287 - 318
Copyright
© Asian Journal of International Law 2016 

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Footnotes

*

Attorney-at-Law (Sri Lanka). Lecturer, Faculty of Law, University of Colombo. PhD candidate in International Law, Faculty of International Law, China University of Political Science and Law, Beijing, China. I wish to thank anonymous reviewers for their insightful comments on an earlier draft. Further thanks are due to Mark McLaughlin for his editorial comments on this draft. Any errors remain the responsibility of the author.

References

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2. MOSELEY, James, The Mystery of Herbs and Spices: Intimate Biographies of the World’s Most Notorious Ingredients (Philadelphia: Xlibris, 2006) at 46–47 Google Scholar. See further WICKRAMASINGHE, Nira, Sri Lanka in the Modern Age: A History of Contested Identities (Honolulu: University of Hawai’i Press, 2006) at 16–18 Google Scholar; SCHRIKKER, Alicia, Dutch and British Colonial Intervention in Sri Lanka 1780–1815: Expansion and Reform (Leiden/Boston: Brill, 2007)CrossRefGoogle Scholar. The Portuguese—predecessor of the Dutch—were mainly interested in the cinnamon trade.

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4. Wickramasinghe, supra note 2 at 36.

5. Ibid., at 37.

6. See generally AMERESEKERE, Nihal Sri, IMF, World Bank & ADB Agenda on Privatisation: Pillage of Plantations in Sri Lanka (Bloomington, IN: AuthorHouse, 2011)Google Scholar; SORNARAJAH, M., The International Law on Foreign Investment, 3rd ed. (Cambridge/New York: Cambridge University Press, 2010) at 4 CrossRefGoogle Scholar; Wickramasinghe, supra note 2 at 39; Agrarian Research and Training Institute, “Agrarian Reform and Rural Development in Sri Lanka: Country Review Paper” (May 1978), online: ARTI <http://dl.nsf.ac.lk/ohs/harti/6493_B.pdf> at 10–13; KELEGAMA, Saman, Development under Stress: Sri Lankan Economy in Transition (New Delhi: Sage Publications, 2006) at 39 Google Scholar.

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8. Ibid.

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11. Ibid., at 44.

12. Ibid. See further VANDEVELDE, Kenneth J., “A Brief History of International Investment Agreements” in Karl P. SAUVANT and Lisa E. SACHS, eds., The Effect of Treaties on Foreign Direct Investment: Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows (New York: Oxford University Press, 2009), 3 at 11 Google Scholar.

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14. Ibid. As pointed out by the author, after introducing the open economic policy in 1977, FDI flows rapidly increased continuously until 1983 and its annual average, as a percentage of GDCF, increased to 4.2 percent in the period 1978–1982; see generally Kelegama, supra note 6 at 159.

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16. Section 3 of the Board of Investment of Sri Lanka Law No. 4 of 1978.

17. Ibid.

18. Thilakaweera, supra note 13 at 93; Kelegama, supra note 6 at 129–39, 165–7.

19. Ibid. For example, two of the main multinationals in the electronics field, namely Motorola and Harris, withdrew their investment from the country due to the unstable security situation.

20. Kelegama, supra note 6 at 165.

21. Ibid. For example, Caltex (US) and Shell (the Netherlands) were given an exclusive monopoly in their respective fields, which resulted in the jeopardizing of the establishment of a more competitive market in those fields.

22. Ibid., at 136; Thilakaweera, supra note 13 at 93.

23. Sornarajah, supra note 6 at 187.

24. Art. 157 of the 1978 Sri Lankan constitution reads as follows:

Where Parliament by resolution passed by not less than two-thirds of the whole number of Members of Parliament (including those not present) voting in its favour, approves as being essential for the development of the national economy, any Treaty or Agreement between the Government of Sri Lanka and the Government of any foreign State for the promotion and protection of the investments in Sri Lanka of such foreign State, its nationals, or of corporations, companies and other associations incorporated or constituted under its laws, such Treaty or Agreement shall have the force of law in Sri Lanka and otherwise than in the interests of national security no written law shall be enacted or made, and no executive or administrative action shall be taken, in contravention of the provisions of such Treaty or Agreement.

25. See generally Athukorala, supra note 15 at 5–7; Thilakaweera, supra note 13 at 93–5.

26. See for example, SANDERATNE, Nimal, “The Importance of Foreign Direct Investment” Sunday Times (29 May 2011)Google Scholar, online: Sunday Times <http://www.sundaytimes.lk/110529/Columns/eco.html>.

27. World Bank, “Sri Lanka Overview-World Bank Group” (June 2015), online: WB <http://www.worldbank.org/en/country/srilanka/overview>.

Economic growth in Sri Lanka has been among the fastest in South Asia in recent years. Growth averaged 6.3 percent between 2002 and 2013, with Gross Domestic Product (GDP) per capita rising from US$859 in 2000 to US$3,256 in 2013. Preliminary indications are that GDP further increased by 7.8 percent in 2014.

28. Board of Investment of Sri Lanka, “Investment Guide” (2014), online: BOI <http://www.investsrilanka.com/images/publications/pdf/Investment_Guide_2014.pdf> at 7–9.

29. Ibid., at 9–12.

30. “Sri Lanka Targets $2 Billion in Foreign Direct Investment For 2014” Ceylon Today (30 May 2014), online: Ceylon Today <http://www.ceylontoday.lk/16-65158-news-detail-sri-lanka-targets-2-billion-in-foreign-direct-investment-for-2014.html>.

31. Central Bank of Sri Lanka, “Annual Report” (April 2014), online: CBSL <http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/efr/annual_report/AR2014/English> at 124–30.

32. HETTIARACHCHI, Indika, “Reality Check of Sri Lanka’s FDI and Emerging Role of Financial Investors” Daily Mirror (7 May 2015)Google Scholar, online: Daily Mirror <www.dailymirror.lk/.../reality-check-of-sri-lanka-s-fdi-and-emerging-rol>.

Borrowings or bank loans have accounted for a significant 44 percent of FDI in 2014, compared to 34 percent in 2013. Bank borrowings included in FDI have increased by 55 percent from last year to reach US $740 million in 2014. A large share of bank borrowing appears to be loans given by international banking units of local commercial banks. Also, increase in borrowings and reinvestments represent mostly expansions by the existing businesses and do not represent new business start-ups.

33. See for example, National Fisheries Solidarity Organization, “Tourism Project in Kalpitiya Islands: Stop and Review Now” (March 2011), online: NAFSO <http://www.nafso-online.org/2011/03/tourism-project-in-kalpitiya-islands.html>.

34. See for example, WIJENAYAKA, Vositha, “Colombo Port City Project: A Threat to Sustainable Development?” Daily Mirror (6 March 2015)Google Scholar, online: Daily Mirror <http://www.dailymirror.lk/65601/colombo-port-city-project-a-threat-to-sustainable-development>; Fr Sarath IDDAMALGODA, “Justification of Colombo Port City Project” Colombo Telegraph (13 March 2015), online: Colombo Telegraph <https://www.colombotelegraph.com/index.php/justification-of-colombo-port-city-project/>.

35. See for example, JAYASINGHE, Uditha, “Economic Freedom ‘Jackbooted’: Harsha” DailyFT (24 April 2014)Google Scholar, online: DailyFT<http://www.ft.lk/2014/04/24/economic-freedom-jackbooted-harsha/>.

36. Among the alleged impacts of KITRP, the difficulties faced by the local communities in terms of land alienation, threat of displacement, disruption of the sources of livelihood of the local fishing community, and restriction of people’s access to the sea and fishing activities, have been mainly highlighted. The risk of changing wave patterns due to the rock barriers built in consequence of constructing a number of resorts, increasing erosion along the coastline, damaging the mangroves, and fish migration due to the noise generated by water sports activities, have been identified as possible environmental impacts of this project over the unique ecosystem of the Kalpitiya area. Likewise, the discussions on the environmental impact of Colombo Port City project highlight the risk of increasing the likelihood of earthquakes, reducing water quality, drying up underground water resources, and destroying the rich biodiversity in the affected coastal belt.

37. Miles, supra note 9 at 102–4. Grassroots activism is expounded as resistance movements which “emerged out of communities directly experiencing the detrimental impact of development measures, multinational corporate activity, and the inequities of the globalized economy at the local level”. The public protest at the operation of foreign-owned water utilities in Cochabamba and Bolivia, the protest action by indigenous peoples at oil exploration and extraction in the Amazon and Ecuador, and the community protests at a hazardous waste landfill in Hermosillo and Mexico are some of the cited examples in this respect.

38. See for example, PATTANAIK, Smruti S, “Controversy over Chinese investment in Sri Lanka” (5 June 2015) East Asia Forum Google Scholar, online: EAF <http://www.eastasiaforum.org>.

39. See generally BILLER, Dan and NABI, Ijaz, Investing in Infrastructure: Harnessing Its Potential for Growth in Sri Lanka” (Washington, DC: World Bank, 2013)CrossRefGoogle Scholar.

40. MARCH, Stephanie, “James Packer’s Crown Pulls Plug on $400m Sri Lanka Casino Plan after Colombo Scraps Tax Concessions” Australian Broadcast Corporation (30 January 2015)Google Scholar, online: ABC <http://www.abc.net.au/news/2015-01-30/james-packers-crown-pulls-plug-on-sri-lanka-casino-plan/6058788>.

41. JABBAR, Zacki, “Colombo Port City Project Suspended” The Island (5 March 2015)Google Scholar, online: The Island <http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=120788>.

42. Sri Lanka Parliamentary Debates, 26 January 2016, vol. 22, no. 3 at 217–18. See further WICKREMESINGHE, Ranil, “The Future of Sri Lanka’s Economy” World Economic Forum (19 January 2016)Google Scholar, online: WEF <http://www.weforum.org/agenda/2016/01/the-future-of-sri-lanka-s-economy>.

43. “Sri Lanka Targets USD5 bn FDI in Next Three Years, Malik to Visit China” LBO (18 January 2016), online: LBO <http://www.lankabusinessonline.com/sri-lanka-targets-usd5-bn-fdi-in-next-three-years-malik-to-visit-china/>.

44. FERNANDO, Santhush, “Port City Will Come Under Megapolis Development–Minister Ranawaka” The Sunday Leader (20 September 2015)Google Scholar, online: Sunday Leader <http://www.thesundayleader.lk/2015/09/20/port-city-will-come-under-megapolis-development-minister-ranawaka/>; “Sri Lanka Officially Informs Chinese Investors of Resuming Construction of Colombo Port City Project” Colombopage (14 March 2016), online: Colombopage <http://www.colombopage.com/archive_16A/Mar14_1457965417CH.php>.

45. Sri Lanka Parliamentary Debates, supra note 42 at 219–20.

46. See further Board of Investment of Sri Lanka, “Invest in Sri Lanka: Legal Aspect”, online: BOI <www.investsrilanka.com>.

47. Ibid.

48. Ibid.

49. Ibid.

50. Ibid. See further BOI, supra note 28 at 13.

51. Ibid.

52. Ibid. The laws referred to in Schedule B include the Inland Revenue Act, No. 10 of 2006 as amended, the Customs Ordinance (Chapter 235), the Exchange Control Act (Chapter 423), the Companies Act No. 7 of 2007, Merchant Shipping Act No. 52 of 1971, the Finance Act, No. 65 of 1961 as Amended, the Air Navigation Act (Chapter 365), and the National Film Corporation of Sri Lanka Act No. 47 of 1971.

53. S. 3 of the Strategic Development Projects Act No. 14 of 2008.

54. Ibid.

55. S. 06 of the Strategic Development Projects Act No. 14 of 2008.

56. S. 3(3) of the Strategic Development Projects Act No. 14 of 2008. The laws referred to in the schedule include the Inland Revenue Act No. 10 of 2006, the Value Added Tax Act No. 14 of 2002, the Finance Act No. 11 of 2002, the Finance Act No. 5 of 2005, the Excise (Special Provision) Act No. 13 of 1989, the Economic Service Charge Act No. 13 of 2006 Customs Ordinance (Chapter 235), the Nation Building Tax Act No. 9 of 2009, the Ports and Airports Development Levy Act No. 18 of 2011, the Sri Lanka Export Development Act No. 40 of 1979, and the Betting and Gaming Levy Act No. 40 of 1988.

57. See generally Vandevelde, supra note 1; Sornarajah, supra note 6.

58. See generally Kelegama, supra note 6 at 129–39.

59. MALALGODA, Champika, “World Investment Forum 2014: Investing in Sustainable Development” (16 October 2014)Google Scholar, online: UNCTAD <http://unctad-worldinvestmentforum.org/wp-content/uploads/2014/10/Malalgoda.pdf>.

60. Sri Lanka Parliamentary Debates, supra note 42 at 222.

61. Ibid., at 219.

62. Asian Agricultural Products Ltd (AAPL) v. Democratic Socialist Republic of Sri Lanka, Award [1990] ICSID Case No. ARB/00/2 at paras. 48, 51.

63. Ibid., at para. 62.

64. Ibid., at paras. 60–4.

65. Ibid., at paras. 65–7, 86.

66. Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, Award [2002] ICSID Case No. ARB/00/2 at paras. 22, 26.

67. Ibid., at paras. 47–8, 52, 59, 60–1.

68. Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, Award [2012] ICSID Case No. ARB/09/02 at paras. 285–6.

69. Ibid., at paras. 295–6.

70. Ibid., at para. 348.

71. Ibid., at paras. 474, 479, 480, 484, 489, 490–1, 523.

72. Ibid., at paras. 520–1.

73. Ibid., at paras. 522, 524.

74. Ibid., at para. 561.

75. For example, Venezuela, Bolivia, and Ecuador have denounced the ICSID. See further SUBEDI, Surya P., International Investment Law: Reconciling Policy and Principle (Oxford/Portland, OR: Hart Publishing, 2008) at 3 Google Scholar; SORNARAJAH, M., Resistance and Change in the International Law on Foreign Investment (Cambridge: Cambridge University Press, 2015) at 1 CrossRefGoogle Scholar; SPEARS, Suzanne A., “The Quest for Policy Space in a New Generation of International Investment Agreements” (2010) 13 Journal of International Economic Law 1037 CrossRefGoogle Scholar.

76. See generally ALVAREZ, José E., The Public International Law Regime Governing International Investment (The Hague: Brill, 2011)CrossRefGoogle Scholar; LÉVESQUE, Céline and NEWCOMBE, Andrew, “The Evolution of IIA Practice in Canada and the United States” in Armand De MESTRAL and Céline LÉVESQUE, eds., Improving International Investment Agreements (Abingdon/New York: Routledge, 2013), 25 Google Scholar; Sornarajah, supra note 6 at 175.

77. Malalgoda, supra note 59.

78. MARKER, Lars, “The Crucial Question of Future Investment Treaties: Balancing Investors’ Rights and Regulatory Interests of Host States” in Marc BUNGENBERG, Jorn GRIEBEL, and Steffen HINDELANG, eds., International Investment Law and EU Law (Heidelberg/New York: Springer-Verlag, 2011), 145 at 151–155 Google Scholar; SORNARAJAH, M, “The Neo-Liberal Agenda in Investment Arbitration: Its Rise, Retreat and Impact on State Sovereignty” in Wenhua SHAN, Penelope SIMONS, and Dalvinder SINGH, eds., Redefining Sovereignty in International Economic Law (Portland, OR: Hart Publishing, 2008), 199 at 213 Google Scholar; Alvarez, supra note 76 at 162–76; Sornarajah, supra note 75 at 347–65; Subedi, supra note 75 at 3–4; Miles, supra note 9 at 93; Lévesque and Newcombe, supra note 76; Spears, supra note 75 at 1043.

79. See further RANJAN, Prabhash, “Definition of Investment in Bilateral Investment Treaties of South Asian Countries and Regulatory Discretion” (2009) 26 Journal of International Arbitration 219 Google Scholar.

80. United Nations Conference on Trade and Development (UNCTAD), Scope and Definition: UNCTAD Series on Issues in International Investment Agreements II (New York/Geneva: United Nations, 2011) at 5.

81. Ibid., at 24. See further Organisation for Economic Co-operation and Development, International Investment Law: Understanding Concepts and Tracking Innovations (Paris: OECD, 2008) at 49 Google Scholar.

82. Arti. 1(1) of the China-Sri Lanka BIT of 1987, art. 1 of the Czech Republic-Sri Lanka BIT of 2011, art. 1(1) of the Egypt-Sri Lanka BIT of 1998, art. 1(b) of the India-Sri Lanka BIT of 1998, art. 1(1) of the Indonesia-Sri Lanka BIT of 1997, art. 1(1) of the Iran-Sri Lanka BIT of 2000, art. 2(1) of Italy-Sri Lanka BIT of 1990, art. 1(1) of the Kuwait-Sri Lanka BIT of 2009, art. 1(a) of the Pakistan-Sri Lanka BIT of 2000, art. 1(1) of the Vietnam-Sri Lanka BIT of 2009, art. 1(2) of the Qatar-Sri Lanka BIT of 2012.

83. Art. 1(a) of the 2007 Australia-Sri Lanka BIT. According to this article, investment means “every kind of asset, owned or controlled by investors of one Party and admitted by the other Party subject to its law and investment policies applicable from time to time”.

84. UNCTAD, supra note 80 at 38.

85. KRIEBAUM, Ursula, “Investment Arbitration-Illegal Investments” in Christian KLAUSEGGER, Peter KLEIN, Jenny POWER, Florian KREMSLEHNER, Nikolaus PITKOWITZ, Irene WELSER, and Gerold ZEILER, eds., Austrian Arbitration Yearbook (Manz’scheVerlags-und Universitätsbuchhandlung, 2010), 307 at 315 Google Scholar.

86. UNCTAD, supra note 80 at 38.

87. Ibid., at 10.

88. Kriebaum, supra note 85 at 309; Stephan W. SCHILL, “Illegal Investments in International Arbitration” (January 2012), online: SSRN <http://ssrn.com/abstract=1979734> at 15–18.

89. UNCTAD, supra note 80 at 38; Kriebaum, supra note 85 at 308. See further Plama Consortium Limited v. Republic of Bulgaria, Award [2008] ICSID Case No. ARB/03/24 at para. 138.

90. As to a detailed discussion on FET, see KLÄGER, Roland, “Fair and Equitable Treatment” in International Investment Law (New York: Cambridge University Press, 2011)CrossRefGoogle Scholar; DOLZER, Rudolf and SCHREUER, Christoph, 2nd ed., Principles of International Investment Law (Oxford: Oxford University Press, 2012) at 130–160 CrossRefGoogle Scholar; BONNITCHA, Jonathan, Substantive Protection under Investment Treaties: A Legal and Economic Analysis (Cambridge: Cambridge University Press, 2014) at 143–227 CrossRefGoogle Scholar. See further United Nations Conference on Trade and Development, Fair and Equitable Treatment: UNCTAD Series on Issues in International Investment Agreements II (New York/Geneva: United Nations, 2012)Google Scholar; NEWCOMBE, Andrew and PARADELL, Lluís, Law and Practice of Investment Treaties: Standards of Treatment (Alphen Aan Den Rijn: Kluwer Law International, 2009) at 254–298 Google Scholar; Sornarajah, supra note 6 at 349–58; Subedi, supra note 75 at 63–7; Sornarajah, supra note 75 at 246–99.

91. United Nations Conference on Trade and Development, Fair and Equitable Treatment (New York: United Nations, 1999) at 45 Google ScholarPubMed.

92. Art. 4 of the Japan-Sri Lanka BIT of 1982.

93. Subedi, supra note 75 at 67; Newcombe and Paradell, supra note 90 at 237–40.

94. These treaties include the BITs that Sri Lanka entered into with Australia, China, the Czech Republic, Egypt, India, Indonesia, Korea, Kuwait, Malaysia, Norway, Pakistan, Romania, Singapore, Sweden, the Swiss Confederation, Thailand, the UK, Vietnam, and Qatar.

95. These treaties include the BITs that Sri Lanka entered into with the BLEU, Denmark, and Finland.

96. Iran-Sri Lanka BIT of 2000.

97. Romania-Sri Lanka BIT of 1982.

98. Art. 4 of the BLEU-Sri Lanka BIT of 1984.

99. Art. 4 of the Iran-Sri Lanka BIT of 2000.

100. These treaties include BITs that Sri Lanka entered into with Australia, the BLEU, Denmark, Egypt, Germany, Kuwait, Malaysia, the Netherlands, the UK, the US, Vietnam, and Qatar. As to a detailed discussion on the minimum standard of treatment, see Newcombe and Paradell, supra note 90 at 234–52.

101. These treaties include BITs that Sri Lanka entered into with China, Finland, France, India, Italy, Iran, and Sweden.

102. These treaties include BITs that Sri Lanka entered into with the Czech Republic, Indonesia, Korea, Norway, Pakistan, Romania, Singapore, the Swiss Confederation, and Thailand.

103. Art. 2 of the Germany-Sri Lanka BIT of 2004.

104. Art. 2(2)(a) of the USA-Sri Lanka BIT of 1993.

105. This word appears in the UNCTAD sequel cited in supra note 90 at 20.

106. Art. 4 of the France-Sri Lanka BIT of 1982.

107. Art. 2(2) of the Kuwait-Sri Lanka BIT of 2009.

108. Art. 3 of the Finland-Sri Lanka BIT of 1987.

109. See generally Kläger, supra note 90 at 20.

110. Ibid., at 9–21.

111. UNCTAD, supra note 90 at 10–14, 22. See further Subedi, supra note 75 at 135–7, 160–1,172–5; Sornarajah, supra note 75 at 213–21.

112. Deutsche Bank Award, supra note 68 at paras. 417–20.

113. As to a detailed discussion on the topic of expropriation, see Newcombe and Paradell, supra note 90 at 321–98; Sornarajah, supra note 6 at 363–410; Subedi, supra note 75 at 74–80, 120-22; Sornarajah, supra note 75 at 191–245; Bonnitcha, supra note 90 at 229–71. Dolzer and Schreuer, supra note 90 at 98–126; See further United Nations Conference on Trade and Development, Expropriation-UNCTAD Series on Issues in International Investment Agreements II (New York/Geneva: United Nations, 2012)Google Scholar.

114. Art. 5(4) of the Kuwait-Sri Lanka BIT of 2009.

115. Art. 4(2) of the Germany-Sri Lanka BIT of 2004.

116. Ibid.

117. Ibid.

118. Art. 6(2) of the China-Sri Lanka BIT of 1987.

119. Ibid.

120. Art. 5 of the Italy-Sri Lanka BIT of 1990.

121. These treaties include the BITs that Sri Lanka entered into with the Czech Republic, Egypt, India, Kuwait, Thailand, and Vietnam.

122. Art. III(2) of the USA-Sri Lanka BIT of 1993.

123. Art. 7(1) of the Korea-Sri Lanka BIT of 1980, art. 6(1) of the Netherlands-Sri Lanka BIT of 1985, art. 6(1) of the Pakistan-Sri Lanka BIT of 2000, art. 6 of the Swiss Confederation-Sri Lanka BIT of 1982, and art. 5(1) of the UK-Sri Lanka BIT of 1980.

124. These treaties include the BITs Sri Lanka entered into with Australia, the BLEU, Finland, France, Indonesia, Italy, Iran, Japan, Malaysia, Norway, Romania, Singapore, Sweden, and Qatar.

125. Art. 5(3) of the BLEU-Sri Lanka BIT of 1984, art. 4 (4) of the Germany-Sri Lanka BIT of 2004.

126. Art. 5(5) of the Japan-Sri Lanka BIT of 1892, art. VI(3) of the Thailand-Sri Lanka BIT of 1996.

127. UNCTAD, supra note 113 at 1.

128. Art. 7(1)(a) of the Australia-Sri Lanka BIT of 2007, art. 4(1) of the Denmark-Sri Lanka BIT of 1985, art. 7(1) of the Korea-Sri Lanka BIT of 1980, art. 5(1)(a) of the Kuwait-Sri Lanka BIT of 2009, art. VI(1) of the Thailand-Sri Lanka BIT of 1996.

129. Art. 6(1) of the Netherlands-Sri Lanka BIT of 1985, art. 6(1) of the Pakistan-Sri Lanka BIT of 2000, art. 5(1) of the UK-Sri Lanka BIT of 1980.

130. Art. 6(1) of the China-Sri Lanka BIT of 1987, art. 6(1) of the Singapore-Sri Lanka BIT of 1980.

131. Art. IV(a) of the Indonesia-Sri Lanka BIT of 1997.

132. Art. 7(2) of the France-Sri Lanka BIT of 1982.

133. Art. 4(2) of the Germany-Sri Lanka BIT of 2004, art. 6(1)(1) of the Finland-Sri Lanka BIT of 1987, art. 6 of the Malaysia-Sri Lanka BIT of 1995, art. 6(1)(a) of the Norway-Sri Lanka BIT of 1985, art. 6(1)(a) of the Sweden-Sri Lanka BIT of 1982, art. 5(1) of the Qatar-Sri Lanka BIT of 2012.

134. Art. 6(1) of the Romania-Sri Lanka BIT of 1982.

135. Art. 4(2) of the Italy-Sri Lanka BIT of 1990, art. 7(1) of the Korea-Sri Lanka BIT of 1980, art. 6 of the Swiss Confederation-Sri Lanka BIT of 1982, art. VI(1) of the Thailand-Sri Lanka BIT of 1996, art. 5(1) of the UK-Sri Lanka BIT of 1980.

136. See generally Rajesh BABU, “Changing Trajectories of Investment Protection in India: An Analysis of Compensation for Expropriation” (2014) 6 Trade, Law & Development 359; UNCTAD, supra note 113 at 40–52.

137. As to a discussion on the Hull Formula, see Subedi, supra note at 75 at 16–18, Newcombe and Paradell, supra note 90 at 17.

138. Art. 5(1) of the India-Sri Lanka BIT of 1998, art. 6 of the China-Sri Lanka BIT of 1987.

139. Art. IV(c) of the Indonesia-Sri Lanka BIT of 1997, art. III(1) of the USA-Sri Lanka BIT of 1993.

140. Art. 5(3) of the Japan-Sri Lanka BIT of 1982.

141. Art. 6(1) of the Netherlands-Sri Lanka BIT of 1985.

142. Art. 6(1) of the Romania-Sri Lanka BIT of 1982, art. 5(b) of the Kuwait-Sri Lanka BIT of 2009.

143. Babu, supra note 136 at 383.

144. These treaties include the BITs that Sri Lanka entered into with the Czech Republic, Sri Lanka, Denmark, Norway, Pakistan, and the UK.

145. Art. 6 of the Malaysia-Sri Lanka BIT of 1995, art. 6(1)(c) of the Sweden-Sri Lanka BIT of 1982.

146. These treaties included the BITs that Sri Lanka entered into with the BLEU, China, Denmark, Egypt, India, Japan, Korea, Kuwait, the Netherlands, Pakistan, Romania, Thailand, the UK, Vietnam, and Qatar.

147. Art. 4(2) of the Denmark-Sri Lanka BIT of 1985.

148. Art. 5(4) of the Egypt-Sri Lanka BIT of 1998.

149. Art. 5(2) of the Kuwait-Sri Lanka BIT of 2009.

150. Art. 6(5) of the Vietnam-Sri Lanka BIT of 2009.

151. This word appears in the UNCTAD sequel cited in supra note 113 at 125.

152. Ibid., at 125–6.

153. SHAN, Wenhua, “Calvo Doctrine, State Sovereignty and the Changing Landscape of International Investment Law” in Wenhua SHAN, Penelope SIMONS, and Dalvinder SINGH, eds., Redefining Sovereignty in International Economic Law (Portland, OR: Hart Publishing, 2008), 247 at 307 Google Scholar; see further Spears, supra note 75 at 1042–4.

154. SORNARAJAH, Muthucumaraswamy, “The Case Against a Regime on International Investment Law” in Leon E. TRAKMAN and Nicola W. RANIERI, eds., Regionalism in International Investment Law (New York: Oxford University Press, 2013), 475 CrossRefGoogle Scholar; Sornarajah, supra note 75 at 43–5; Sornarajah, supra note 78; Spears, supra note 75.

155. Shan, supra note 153 at 307. The author presents four reasons for shifting the featured debate in the field from “North-South divide” to “Public-Private debate”, i.e. the shifting of the leading developed countries into major capital-importing countries, the emerging role of developing countries as important capital suppliers in the world, the improvements which have taken place in the domestic legal infrastructure in developing states for the protection and promotion of foreign investment, and the increased participation of civil society in the international investment law-making process.

156. See for example, the “Public Statement on the International Investment Regime” or “Osgoode Hall Statement”. This statement is available at <http://www.osgoode.yorku.ca/public_statement/>. As to a discussion on this statement, see Alvarez, supra note 76 at 341–52.

157. Spears, supra note 75 at 1043–71.

158. See generally Lévesque and Newcombe, supra note 76 at 34.

159. Ibid., at 34–7; Spears, supra note 75 at 1049–57.

160. Annex B of the 2012 US Model BIT.

161. Ibid.

162. Art. 5(1) of the 2012 US Model BIT.

163. Art. 5(2) of the 2012 US Model BIT.

164. Annex A of the 2012 US Model BIT.

165. See generally Lévesque and Newcombe, supra note 76 at 34; Spears, supra note 75 at 1054–62.

166. As to a critical discussion on balanced investment treaties, see Sornarajah, supra note 75 at 300–65.

167. Arts. 10, 11, 16, and 19 of the 2004 Canadian Model BIT.

168. Arts. 11, 12, 13, 18, 19, 20, and 21 of the 2012 US Model BIT.

169. But see Sornarajah, supra note 75 at 363–5; SORNARAJAH, M., “Developing Countries in the Investment Treaty System: A Law for Need or a Law for Greed” in Stephan W. SCHILL, Christian J. TAMS, and Rainer HOFMANN, eds., International Investment Law and Development-Bridging the Gap (Cheltenham: Edward Elgar Publishing Limited, 2015), 43 at 64 Google Scholar. According to the author, the notion of balanced treaties “neither serves the protection of foreign investment nor achieves the aim of conserving the regulatory space of states in a manner acceptable to foreign investors”. Further, the balanced treaties are “essentially unworkable because they contain considerable subjectivity, the need to provide a margin of appreciation to the state exercising its discretionary power and the uncertainty involved in the wide formulation of regulatory space”.

170. See for example, the preamble of the 2004 Canadian Model BIT and the 2012 US Model BIT. See further Spears, supra note 75 at 1062–71.

171. Art. 10 of the Canadian Model BIT of 2012.

172. UNCTAD, supra note 80 at 34.

173. Ibid.

174. See for example, Vandevelde, supra note 1.

175. UNCTAD, supra note 90 at xiii.

176. Ibid. See further Sornarajah, supra note 75 at 246–99.

177. As to different FET formulations, see UNCTAD, supra note 90 at 17–33; Kläger, supra note 90 at 9–22; see further Mahnaz MALIK, “Fair and Equitable Treatment”, International Institute for Sustainable Development, Best Practice Advisory Bulletins, September 2009 at 3.

178. The Australia-Singapore FTA of 2003, the India-Singapore Comprehensive Economic Cooperation Agreement of 2005, the New Zealand-Singapore FTA of 2001, the New Zealand-Thailand Closer Economic Partnership Agreement EPA of 2005, and the Albania-Croatia BIT of 1993 are some of the IIAs that do not include a FET clause. See further Kläger, supra note 90 at 9–10; UNCTAD, supra note 90 at 18 and 104.

179. UNCTAD, supra note 90 at xiii.

180. Ibid., at 29–35.

181. Ibid., at 29.

182. Ibid., at 108.

183. Ibid., at 105–7.

184. See generally Subedi supra note 75 at 157; Bonnitcha, supra note 90 at 230; NIKIÈMA, Suzy H., “Best Practices: Indirect Expropriation”, International Institute for Sustainable Development, Best Practice Advisory Bulletins, March 2012 at 5 Google Scholar.

185. Subedi, supra note 75 at 139–40; Sornarajah, supra note 75 at 191–212; Sornarajah, supra note 78.

186. See generally Spears supra note 75 at 1037–40; Subedi, supra note 75 at 160–1; Nikièma, supra note 184 at 3–5.

187. UNCTAD, supra note 113 at 127–30.

188. See annex B of the 2004 Canada Model BIT and annex B of the 2012 US Model BIT.

189. Ibid.

190. Nikièma, supra note 184 at 9–11. See further art. 20(8) of the Investment Agreement for the COMESA Common Investment Area of 2007, and annex 2 of the ASEAN Comprehensive Investment Agreement of 2009.

191. Ibid., at 8–9.

192. Ibid. See further UNCTAD, supra note 113 at 89–90.

193. As to a detailed discussion on including general exception clauses into IIAs, see Spears, supra note 75 at 1059–64; SPEARS, Suzanne A., “Making Way for the Public Interest in International Investment Agreements” in Chester BROWN and Kate MILES, eds., Evolution in International Treaty Arbitration (New York: Cambridge University Press, 2011), 271 at 287–290 Google Scholar; NEWCOMBE, Andrew, “The Use of General Exceptions in IIAs: Increasing Legitimacy or Uncertainty?” in Armand De MESTRAL and Céline LÉVESQUE, eds., Improving International Investment Agreements (London: Routledge, 2013), 276 Google Scholar.

194. Nikièma, supra note 184 at 10–11.

195. Art. C(2) of the Protocol to the China-Japan-Korea trilateral investment treaty of 2012.

196. Annex B. 13(1) of the Canadian Model BIT of 2004.

197. His Excellency Maithiripala Sirisena’s Election Manifesto 2015, online: <http://www.asianmirror.lk/news/item/5782-full-text-of-maithripala-sirisena-s-election-manifesto>; see further “The National Debt Increased in Sri Lanka”countryeconomy.com (18 March 2016), online: countryeconomy.com <http://countryeconomy.com/national-debt/sri-lanka>.

198. Art. 12(3) of the US Model BIT of 2012.

199. See generally Spears, supra note 75 at 1047–8.

200. Ibid., at 1065; UNCTAD, supra note 90 at 113. See further art. 31 of the Vienna Convention on the Law of Treaties [VCLT].

201. For example, the preamble of the 2004 Canadian Model BIT. See further preamble of the 2008 Canada-Colombia Free Trade Agreement. Among others, the preamble of Canada-Colombia FTA articulates the State Parties’ desire to undertake their trade and investment obligations in a manner that is consistent with environmental protection and conservation; enhance and enforce environmental laws and regulations; strengthen co-operation on environmental matters; protect, enhance, and enforce basic workers’ rights; strengthen co-operation on labour matters and build on their respective international commitments on labour matters; and promote sustainable development.

202. See for example, the preamble of the 2005 USA-Uruguay BIT. It articulates the parties’ desire to achieve the objectives of the treaty in a manner consistent with the protection of health, safety, and the environment, and the promotion of consumer protection and internationally recognized labour rights.

203. Spears, supra note 75 at 1067–8.

204. Ibid., at 1065; Sornarajah, supra note 75 at 44.