1. The term IIAs, in this article, means stand-alone Bilateral Investment Treaties (BITs), investment chapters in Comprehensive Economic Cooperation Agreements (CECAs), and Free Trade Agreements (FTAs). In India, IIAs are called “Bilateral Investment Promotion Agreements” (BIPAs). The term IIAs, in this article, does not include Double Taxation Avoidance Agreements. The text of Indian IIAs, referred to in this article is taken from the seven volume compendium of India's investment agreements published by the Ministry of Finance, Government of India (on file with the author).

2. SALACUSE, Jeswald W., “BIT by BIT: The Growth of Bilateral Investment Treaties and Their Impact on Foreign Investment in Developing Countries” (1990) 24 International Lawyer 503Google Scholar.

3. World Investment Report (New York/Geneva: United Nations, 2010), 83–4. This number does not include Double Taxation Treaties.

4. For detailed discussion on IIAs, see Andrew NEWCOMBE and Lluís PARADELL, Law and Practice of Investment Treaties (The Hague: Kluwer, 2009)Google Scholar; Campbell McLACHLAN, SHORE, Laurence, and Matthew WEINIGER, International Investment Arbitration – Substantive Principles (Oxford: Oxford University Press, 2007)Google Scholar; SALACUSE, Jeswald W., The Law of Investment Treaties (Oxford: Oxford University Press, 2010)CrossRefGoogle Scholar; VANDEVELDE, Kenneth, Bilateral Investment Treaties: History, Policy and Interpretation (Oxford: Oxford University Press, 2010)Google Scholar; DOLZER, Rudolf and STEVENS, Margrete, Bilateral Investment Treaties (The Hague: Kluwer International, 1995)Google Scholar; SORNARAJAH, M., The International Law on Foreign Investment, 3rd ed. (Cambridge: Cambridge University Press, 2010)CrossRefGoogle Scholar; DOLZER, Rudolf and SCHREUER, Christoph, Principles of International Investment Law (Oxford: Oxford University Press, 2008)CrossRefGoogle Scholar; MUCHLINSKI, Peter, ORTINO, Federico, and Christoph SCHREUER, eds., The Oxford Handbook of International Investment Law (Oxford: Oxford University Press, 2008)CrossRefGoogle Scholar; SUBEDI, Surya P., International Investment Law: Reconciling Policy and Practice (Oxford: Hart Publishing, 2008)Google Scholar.

5. Latest Developments in Investor-State Dispute Settlement, IIA Issues Note No. 1 (New York/Geneva: United Nations, 2010) at 2.

6. Metalclad Corporation v. United Mexican States 5 ICSID 236; Methanex Corporation v. United States of America (2005) 44 I.L.M. 1345.

7. Eureko BV v. Republic of Poland, UNCITRAL Ad Hoc Arbitration, Partial Award, 19 August 2005.

8. MTD Equity v. Republic of Chile (2005) 44 I.L.M. 91.

9. CMS Gas Transmission Co. v. Argentina, ICISD Case No. ARB/01/8 (Annulment Proceedings), 25 September 2007) [CMS Annulment]; CMS Gas Transmission Co. v. Argentina, ICISD Case No. ARB/01/8, 12 May 2005 [CMS]; Enron Creditors Recovery Corp v. Argentina ICSID Case No. ARB/01/3 (Annulment Proceedings), 30 July 2010 [Enron Annulment]; Enron Corporation v. Argentina, ICSID Case No. ARB/01/3, 22 May 2007 [Enron]; Sempra Energy International v. Argentina, ICSID Case No. ARB/02/16 (Annulment Proceedings), 29 June 2010 [Sempra Annulment]; Sempra Energy International v. Argentina, ICSID Case No. ARB/02/16, 28 September 2007 [Sempra]; LG&E Energy Corporation v. Argentina, ICISD Case No. ARB/02/1, 3 October 2006 [LG&E]; Continental Casualty Company v. Argentina, ICSID Case No. ARB/03/9, 5 September 2008 [Continental].

10. Occidental Exploration and Production Co v. Republic of Ecuador, LCIA Case No. UN 3467, Award, 1 July 2004.

11. Dolzer and Schreuer, supra note 4 at 7–8; KAUSHAL, Asha, “Revisiting History: How the Past Matters for the Present Backlash Against the Foreign Investment Regime” (2009) 50 Harvard International Law Journal 491 at 511–512Google Scholar.

12. FRANCK, Susan, “Empirically Evaluating Claims About Investment Treaty Arbitration” (2007) 86 North Carolina Law Review 1Google Scholar. Sornarajah has arguied that one should not look merely at the results of investment disputes but also at the nature of pro-investor doctrines created by arbitrators on the basis of treaty interpretation; see Sornarajah, supra note 4 at 235. Also see GALLAGHER, Kevin P. and Elen SHRESTHA, “Investment Treaty Arbitration and Developing Countries: A Re-Appraisal”, Global Development and Environment Institute, Working Paper No. 11-01 (May 2011)Google Scholar which challenges Franck's study.

13. Salacuse, supra note 4 at 342. See, for example, Occidental Exploration v. Republic of Ecuador, supra note 10, where “like circumstances” in the national treatment provision was interpreted in an unexpected manner to compare treatment given to a foreign oil company (involved in exporting oil) not with a domestic oil company but with all exporters, including flower exporters.

14. For a detailed discussion on such inconsistent decisions, see FRANCK, Susan, “The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public International Law Through Inconsistent Decisions” (2005) 73 Fordham Law Review 1521, at 1558–1582Google Scholar. Also see REINISCH, August, “The Future of Investment Arbitration” in Christina BINDER, Ursula KRIEBAUM, August REINISCH, and Stephan WITTICH, eds., International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer (Oxford: Oxford University Press: 2009), 894 at 905–908Google Scholar.

15. For example, in CME Czech Republic B.V. v. Czech Republic, Final Award of 14 March 2003, UNCITRAL Arbitration, the Czech Republic paid US$355 million to CME as damages for violating the IIA on account of adopting a regulatory measure.

16. Department of Trade and Industry, Republic of South Africa, Notice 961 of 2009, online: 〈http://www.info.gov.za/view/DownloadFileAction?id=103768〉.

17. List of Contracting States and other Signatories to the ICSID convention (as of 7 January 2010), online: 〈http://icsid.worldbank.org/ICSID〉.

18. Denunciation of the ICSID Convention and BITs, IIA Issues Note No. 2 (December 2010), online: 〈http://www.unctad.org/en/docs/webdiaeia20106_en.pdf〉.

19. Salacuse, supra note 4 at 470; SALACUSE, Jeswald W., “The Emerging Global Regime for Investment” (2010) 51 Harvard International Law Journal 427Google Scholar.

20. ALVAREZ, Guillermo A. and PARK, William W., “The New Face of Investment Arbitration: NAFTA Chapter 11” (2003) 28 The Yale Journal of International Law 365 at 383–386Google Scholar; VANDEVELDE, Kenneth J., “A Comparison of the 2004 and 1994 US Model BITs: Rebalancing Investor and Host Country Interests” (2009) 1 Yearbook on International Investment Law and Policy 283Google Scholar; SPEARS, Suzanne, “The Quest for Policy Space in the New Generation of International Investment Agreements” (2010) 13 Journal of International Economic Law 1037 at 1038Google Scholar.

21. For various nuances on this debate, see Gus VAN HARTEN, Investment Treaty Arbitration and Public Law (Oxford/New York: Oxford University Press, 2007)Google Scholar; BOTTINI, Gabriel, “Protection of Essential Interests in the BIT era” in Todd WEILER with Ian LAIRD, Investment Treaty Arbitration (PLACE: Juris Publishing, 2008), 145Google Scholar; KARL, Joachim, “International Investment Arbitration: A Threat to State Sovereignty” in SHAN Wenhua, Penelope SIMONS, and Dalvinder SINGH, eds., Redefining Sovereignty in International Economic Law (Oxford: Hart Publishing, 2008), 225 at 231–238Google Scholar; PAULSSON, Jan“Indirect Expropriation: Is the Right to Regulate at Risk?” (2006) 3 Transnational Dispute Management 1Google Scholar; Kaushal, supra note 11; WAIBEL, Michael, KAUSHAL, Asha, Kyo-Hwa Chung, and Claire BALCHIN, eds., The Backlash Against Investment Arbitration (The Hague: Kluwer, 2010)Google Scholar, xxxvii–li; Newcombe and Paradell, supra note 4 at 394; Franck, supra note 14; SUBEDI, Surya P., “The Challenge of Reconciling the Competing Principles Within the Law of Foreign Investment with Special Reference to the Recent Trend in the Interpretation of the Term Expropriation” (2006) 40 International Lawyer 121Google Scholar; MUCHLINSKI, Peter, “Policy Issues” in Muchlinski et al., eds., supra note 4 at 1–44Google Scholar; MUCHLINSKI, Peter, “Trends in International Investment Agreements: Balancing Investors Right and the Right to Regulate: The Issue of National Security” (2009) 1 Yearbook of International Investment Law and Policy 35Google Scholar; RUGGIE, John G., Report of the SRSG, Business and Human Rights: Towards Operationalizing the “Protect, Respect and Remedy” Framework, UN Doc. A/HRC/11/13(2009), para. 30; Spears, supra note 20Google Scholar.

22. Ruggie, supra note 21.

23. ALVAREZ, Jośe E. and Kathryn KHAMSI, “The Argentine Crisis and Foreign Investors” (2009) 1 Yearbook of Investment Law and Policy 379 at 472–478Google Scholar; also see CLODFELTER, M.A., “The Adaptation of States to the Changing World of Investment Protection through Model BITs” (2009) 24 ICSID Review: Foreign Investment Law Journal 165CrossRefGoogle Scholar.

24. See van Harten, supra note 21, who has argued for the establishment of a world investment court in place of the existing ITA system; and Franck, supra note 14, who has argued for creating an appellate mechanism to hear appeals from ITA bodies.

25. SORNARAJAH, M., “The Retreat of Neo-Liberalism in Investment Treaty Arbitration” in Catherine A. ROGERS and Roger P. ALFORD, eds., The Future of Investment Arbitration (Oxford: Oxford University Press, 2009), 273 at 283–291Google Scholar. Also see Subedi, supra note 4 at 139–40; Subedi, supra note 21 at 128–30; and BROWER, Charles N. and SCHILL, Stephan W., “Is Arbitration a Threat or a Boon to the Legitimacy of International Investment Law?” (2009) 9 Chicago Journal of International Law 471Google Scholar(arguing that IIA provisions are not as abroad as some contend).

26. Sornarajah, supra note 25. Also see MILES, Kate, “International Investment Law: Origins, Imperialism and Conceptualizing the Environment” (2010) 21 Colorado Journal of International Environmental Law and Policy 1Google Scholar. For a general hegemonic critique of international law-making based on Marxist analysis, see CHIMNI, B.S., “International Institutions Today: An Empirical Global State in the Making” (2004) 15 European Journal of International Law 1CrossRefGoogle Scholar.

27. In this article, the phrase “NPM provision” refers to the provision in the treaty (IIA), whereas use of “NPMs” or “NPM” refers to the measures adopted under the NPM provision.

28. Salacuse, supra note 4 at 343. Also see NEWCOMBE, Andrew, “General Exceptions in International Investment Agreements” in Marie-Claire C. SEGGER, Markus W. GEHRING, and Andrew NEWCOMBE, eds., Sustainable Development in World Investment Law (The Hague: Kluwer, 2011), 355 at 356–357Google Scholar.

29. Vandevelde, supra note 4 at 178.

30. EECKHOUT, Piet, “The Scales of Trade: Reflections on the Growth and Functions of the WTO Adjudicative Branch” (2010) 13 Journal of International Economic Law 3 at 8Google Scholar; also see KAPTERIAN, Gisele, “A Critique of the WTO Jurisprudence on Necessity” (2010) 59 International and Comparative Law Quarterly 89 at 93–94CrossRefGoogle Scholar.

31. William BURKE-WHITE and Andreas VON STADEN, “Investment Protection in Extraordinary Times: The Interpretation and Application of Non-Precluded Measures Provisions in Bilateral Investment Treaties” (2008) 48 Virginia Journal of International Law 314Google Scholar. An IIA can also have other kinds of exceptions, which are specific to a particular provision, like Indian IIAs exempt taxation measures from the application of Most Favoured Nation (MFN). However, discussion on such provision-specific exceptions is outside the purview of this article.

32. For more on the Argentine economic crisis and subsequent IIA disputes, see Alvarez and Khamsi, supra note 23.

33. This article has looked at five Argentine cases and also at three annulment proceedings, see supra note 9.

34. Article XI of the Treaty Between United States of America and the Argentine Republic Concerning the Reciprocal Encouragement and Protection of Investment, Washington, DC, 14 November 1991, entered into force 20 October 1994 [US-Argentina IIA].

35. Article 25 of the International Law Commission, “Draft Articles on the Responsibility of States for Internationally Wrongful Acts with Commentaries”, UN Doc. A/56/10 (2001) [ILC Articles]. gives the customary defence of necessity. This defence can be invoked if the adopted measure is the “only way” for the state to safeguard an essential interest against a “grave and imminent peril” (25(1)(a)). Furthermore, this defence is subject to three more stringent conditions—first, the adopted measure does not impair the essential interest of the other state or of the international community as a whole (25(1)(b)); second, the international obligation in question does not exclude the possibility of invoking necessity (25(2)(a)); and third, the invoking state should not have contributed to the situation of necessity (25(2)(b)).

36. This restrictive interpretation of the customary law defence was confirmed by the ICJ in Case Concerning Gabcikovo-Nagymaros Project (Hungary/Slovakia) Judgment, [1997] I.C.J. Rep. 7. Also see UNCTAD, The Protection of National Security in IIAs (New York/Geneva: United Nations, 2009).

37. BJORKLUND, Andrea, “Emergency Exceptions: State of Necessity and Force Majeure” in Muchlinski et al., eds., supra note 4 at 494Google Scholar; BJORKLUND, Andrea, “Economic Security Defences in International Investment Law” (2009) 1 Yearbook of International Investment Law and Policy 479Google Scholar; Alvarez and Khamsi, supra note 23; UNCTAD, supra note 36 at 80–1; SCHILL, Stephan W., “International Investment Law and the Host State's Power to Handle Economic Crises: Comment on the ICSID Decision in LG&E v. Argentina” (2007) 24 Journal of International Arbitration 265Google Scholar; Newcombe and Paradell, supra note 4; GAZZINI, Tarcisio, “Necessity in International Investment Law: Some Critical Remarks on CMS v. Argentina” (2008) 26 Journal of Energy and Natural Resources Law 450CrossRefGoogle Scholar; REINISCH, August, “Necessity in International Investment Arbitration: An Unnecessary Split of Opinions in Recent ICSID Cases?” (2007) 8 Journal of World Investment and Trade 191Google Scholar; DESIERTO, Diane A., “Necessity and Supplementary Means of Interpretation For Non-Precluded Measures in Bilateral Investment Treaties” (2009) 31 University of Pennsylvania Journal of International Law 827Google Scholar; PARISH, Matthew, “On Necessity” (2010) 11 Journal of World Investment and Trade 169Google Scholar; Salacuse, supra note 4 at 342–9; Vandevelde, supra note 4 at 178–86.

38. Burke-White and von Staden, supra note 31; Jürgen KURTZ, “Adjudging the Exceptional at International Law: Security, Public Order and Financial Crisis” (2010) 59 International and Comparative Law Quarterly 325Google Scholar; Anne VAN AAKEN and Jürgen KURTZ, “Prudence or Discrimination? Emergency Measures, the Global Financial Crisis and International Economic Law”, (2009) 12 Journal of International Economic Law 859Google Scholar. Also see QURESHI, Asif, “The Economic Emergency Defence in Bilateral Investment Treaties: A Development Perspective” in Christina BINDER et al., eds., supra note 14 at 631Google Scholar; Newcombe, supra note 28.

39. For a debate on this issue, see Burke-White and von Staden, supra note 31, and Alvarez and Khamsi, supra note 23. Also see the discussion in Kurtz, supra note 38 at 351–2. In this regard, also see William BURKE-WHITE and Andreas VON STADEN, “Private Litigation in Public Law Sphere: The Standard of Review in Investor-State Arbitrations” (2010) 35 Yale Journal of International Law 283Google Scholar, which discusses different standards of reviews that investment treaty arbitration panels can adopt to interpret NPM provisions in view of the public law character of investor-state arbitration disputes.

40. Also see Siemens AG v. Argentina, Decision on Jurisdiction, 3 August 2004, para. 80, where the tribunal said that the IIA should neither be interpreted liberally or narrowly but according to the rules of interpretation given in the VCLT. Also see AES Corp. (US) v. Argentina ICSID Case No. ARB/02/17, Decision on Jurisdiction, 26 April 2005, para. 30; The Mox Plant (Ireland v. United Kingdom), 2001 ITLOS No. 10, 3 December 2001, para. 51, which stated that application of international law rules on interpretation of treaties to identical and similar provisions of different treaties may not yield the same results.

41. Vienna Convention on Law of Treaties, 23 May 1969, 1155 U.N.T.S. 331 (entered into force 27 January 1980), art. 31(3)(b) [VCLT].

42. For detailed discussion on Article 31(3)(c) of VCLT, see GARDINER, Richard, Treaty Interpretation (Oxford: Oxford University Press, 2008) at 251–280Google Scholar. On the use of Article 31(3)(c) of VCLT in interpreting IIAs, see Campbell McLACHLAN, “Investment Treaties and General International Law” (2008) 54 International and Comparative Law Quarterly 361Google Scholar.

43. United Nations, Treaty Collection (1 July 2011), online: 〈http://treaties.un.org〉.

44. Gardiner, supra note 42 at 16.

45. There is no precedent system in investment treaty arbitration. However, arbitral tribunals do refer to past arbitral decisions. In this context see the arguments for “jurisprudence constante” by Bjorklund, supra note 37.

46. Supra note 31.

47. This list of seventy-five IIAs include the India-Singapore and India-Korea CECA that contain a chapter on investment. See India's Bilateral Promotion and Protection of Investments, Vol. VII (New Delhi: Ministry of Finance, Government of India, 2009), 65–8.

48. Ibid.

49. India-Korea CECA (containing the chapter on investment) was signed in 2009 and it became effective from 1 January 2010. However, India also has an IIA with Korea signed in 1996. This IIA has not been repealed and hence as of now, both the IIAs (that is the BIT and the investment chapter of CECA) are in existence. This article has left out India-Korea IIA of 1996 and has included the investment chapter of CECA as the India-Korea IIA.

50. India already has an IIA with Malaysia.

51. “India, Japan Conclude CEPA Talks” Indian Express (26 October 2010).

52. India already has an IIA with Indonesia and Mauritius. Department of Commerce, Government of India online: 〈http://commerce.nic.in/trade/international_ta.asp?id=2&trade=i.〉

53. “FIPPA will Conclude Soon: Canadian Minister” MSN (15 September 2010).

54. “Negotiations on for India-US Investment Treaty: Pranab” NDTV Profit (8 November 2010).

55. “India-EU Hope to Conclude FTA Soon” Indian Express (15 October 2010).

56. See prefaces written by various Indian Finance Ministers in the Compendiums on BIPAs (New Delhi: Finance Ministry, India, 1996–2009).

57. Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, India “FDI in India Statistics” (March 2006), online: 〈http://dipp.nic.in/fdi_statistics/india_fdi_mar06.pdf〉.

58. Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, India “FDI in India Statistics” (March 2007), online: 〈http://dipp.nic.in/fdi_statistics/india_fdi_march2007.pdf〉.

59. Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, India “FDI in India Statistics” (March 2008), online: 〈http://dipp.nic.in/fdi_statistics/india_fdi_March2008.pdf〉.

60. Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, India “FDI in India Statistics” (March 2009), online: 〈http://dipp.nic.in/fdi_statistics/india_FDI_March2009.pdf〉.

61. This is up to 31 March 2010. In India the financial year is from 1 April to 31 March of the following year.

62. Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, India “FDI in India Statistics” (March 2010), online: 〈http://dipp.nic.in/fdi_statistics/india_FDI_March2010.pdf〉.

63. RANJAN, Prabhash, “Indian Investment Treaty Programme in Light of Global Experiences” (2010) 45 Economic and Political Weekly 68Google Scholar.

64. RANJAN, Prabhash, “ ‘Object and Purpose’ of Indian International Investment Agreements: Failing to Balance Investment Protection and Regulatory Power” in Vivienne Bath and Luke Nottage, eds., Foreign Investment and Dispute Resolution: Law and Practice in Asia (Routledge: London, 2011 forthcoming)Google Scholar.

65. Ibid.

66. McLachlan, supra note 42 at 371; also see Saluka Investments BV v. Czech Republic, UNCITRAL Arbitration, Partial Award, 17 March 2006, para. 300.

67. Gardiner, supra note 42 at 197.

68. For detailed facts of the case, see KUNDRA, Preeti, “Looking Beyond the Dabhol Debacle: Examining its Causes and Understanding its Lessons” (2008) 41 Vanderbilt Journal of Transnational Law 908Google Scholar.

69. Ibid.

70. Ibid.

71. “GE settles Dabhol Issue” Indian Express (3 July 2005).

72. GHOSH, Jayati, “Treacherous Treaties” Frontline (3 December 2010)Google Scholar.

73. GUPTA, R. and PETERSON, L.E., “India Sued by Foreign Investor For Investment Treaty Breach” Investment Arbitration Reporter (7 July 2011)Google Scholar.

74. Ibid.

75. Ibid.

76. “The Vodafone Tax Dispute: A Landmark Judgment of the Bombay High Court” (November 2010), online: 〈http://wwww.bcasonline.org/articles/artin.asp?961〉.

77. Vodafone International Holdings B.V. v. Union of India, [(2008) 175 Taxmann 399 (Bom. HC)], 3 December 2008.

78. For more on the problems related to the application of the Indian tax law on Vodafone BV, see SEN, Kumkum “Vodafone Ruling: A Step Back in Investor Relations” Business Standard (13 September 2010)Google Scholar.

79. BISOI, Dilip, “Posco Plans Hit Hurdle in Orissa High Court” Financial Express (15 July 2010)Google Scholar.

80. State of Orissa v. Geomin Minerals & Marketing (P) Ltd. & ORS, DC31957/2010 (pending in the Supreme Court of India).

81. “Cairn-Vedanta Deal Riders Upset Global Investors”, Business Standard (July 2011).

82. Ibid.

83. “Forcing Royalty on Cairn may Hit UK Ties” Economic Times (26 April 2011).

84. RAO, Sreenivasa, “Bilateral Investment Promotion Agreements: A Legal Framework for the Protection of Foreign Investments” (2000) 26 Commonwealth Law Bulletin 623CrossRefGoogle Scholar; KRISHAN, D., “India and International Investment Law” in Bimal N. PATEL, ed., India and International Law, Vol. 2 (Leiden/Boston: Martinus Nijhoff, 2008) 277Google Scholar; RANJAN, Prabhash, “International Investment Agreements and Regulatory Discretion: Case Study of India” (2008) 9 Journal of World Investment and Trade 209CrossRefGoogle Scholar; Ranjan, supra note 64.

85. Article 12(2) of the Indian Model Text of Bilateral Investment Promotion and Protection Agreement online 〈http://finmin.nic.in/the_ministry/dept_eco_affairs/icsection/Indian%20Model%20Text%20BIPA.asp〉 [Indian model IIA].

86. Article 12(1) of the Indian Model IIA, ibid., states: “Except as otherwise provided in this Agreement, all investment shall be governed by the laws in force in the territory of the Contracting Party in which such investments are made.” This provision is nothing but an obvious statement that the day-to-day affairs of the foreign investments will be governed by the domestic laws of India.

87. Article 11(2) of the Agreement Between the Government of the Republic of India and the Government of the State of Qatar for the Reciprocal Promotion and Protection of Investments, signed on 7 April 1999 and enforced on 15 December 1999 [India-Qatar IIA].

88. For example, Article 6(11) of the Comprehensive Economic Cooperation Agreement Between the Republic of India and the Republic of Singapore signed on 29 June 2005 and enforced from 1 August 2005 [India-Singapore IIA] gives the “General Exceptions” provision as follows: 1. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination against the other Party or its investors where like conditions prevail, or a disguised restriction on investments of investors of a Party in the territory of the other Party, nothing in this Chapter shall be construed to prevent the adoption or enforcement by a Party of measures: (a) necessary to protect public morals or to maintain public order; (b) necessary to protect human, animal or plant life or health; (c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Chapter including those relating to: (i) the prevention of deceptive and fraudulent practices to deal with the effects of a default on a contract; (ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; (iii) safety; (d) imposed for the protection of national treasures of artistic, historic or archaeological value; (e) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.

89. General Agreement on Tariffs and Trade, 30 October 1947, TIAS No 1700, 55 U.N.T.S. 194 (GATT). Article XXI allows member countries of the WTO to adopt measures to safeguard their essential security interests notwithstanding anything contained in the treaty.

90. Ranjan, supra note 84.

91. A good example of this is given in Plama Consortium Limited v. Republic of Bulgaria, ICISD Case No. ARB/03/24, Decision on Jurisdiction, 8 February 2005, para. 147.

92. Article 3 (3) of the Agreement Between the Government of the Russian Federation and the Government of the Republic of India For the Promotion and the Mutual Protection of Investments signed on 23 December 1995 and enforced on 5 August 1996 [India-Russia IIA].

93. India-Singapore, India-Korea, India-Italy, India-Czech Republic, India-France, India-Australia, India-Bosnia Herzegovina, and India-China IIAs. In the India-Mexico IIA, the provision is titled as “Security Exceptions”, thus limiting the scope of the NPM to only security-related matters. The source of all these IIAs is the seven volume compendium published by the Ministry of Finance, India, supra note 1.

94. India-Netherlands, India-Germany IIA, supra note 1.

95. In this regard, also see the arguments on Article XXI of GATT. E.g. SCHLOEMANN, Hannes and OHLHOFF, Stefan, “Constitutionalization and Dispute Settlement in the WTO: National Security as an Issue of Competence” (1999) 93 American Journal of International Law 424 at 445Google Scholar. Also see the arguments of one author, in the context of NPM provision of the US-Argentina IIA—that the gap created in Article XI of the US-Argentina IIA by not defining ESI can be filled by the notion of “grave and imminent peril” given in Article 25 of the ILC Article. See Gazzini (2009), supra note 37 at 18. The Enron and Sempra tribunals did the same though they equated the treaty defence with the customary law defence of necessity given in Article 25. See Enron, supra note 9, paras. 333–4; Sempra, supra note 9, paras. 375–6. Also see Desierto, supra note 37.

96. Enron, supra note 9, para. 306; Sempra, supra note 9, para. 347.

97. Also see LG&E, supra note 9, paras. 251–2 and Continental, supra note 9, para. 180.

98. See Continental, supra note 9, para. 180.

99. Newcombe and Paradell, supra note 4 at 497. Also see Gazzini (2009), supra note 37 at 15Google Scholar.

100. Continental, supra note 9, paras. 178, 180–1; LG&E, supra note 9, para. 238. Also see CMS, supra note 9, para. 359; Enron, supra note 9, para. 332; Sempra, supra note 9, para. 374.

101. Military and Paramilitary Activities (Nicaragua v. US) [1984] I.C.J. Rep. 14 at 116. For a different understanding of these judgments, see Alvarez and Khamsi, supra note 23 at 452–3.

102. Reinisch, supra note 37 at 209.

103. Alvarez and Khamsi, supra note 23 at 452.

104. AKANDE, Dapo and WILLIAMS, Sope, “International Adjudication on National Security Issues” (2003) 43 Virginia Journal of International Law 365 at 384–385Google Scholar.

105. In this context it has been argued that a wide range of legitimate ESIs are conceivable and in principle any policy interest of certain intensity may be legitimately protected under Article XXI. See Schloemann and Ohlhoff, supra note 95 at 444.

106. A similar argument was made by the Enron tribunal, supra note 9, para. 331, for NPM provision in the US-Argentina IIA, supra note 34. Also see Canfor Corporation v. USA and Terminal Forest Products Ltd v. USA, UNCITRAL Arbitration, Decision on Preliminary Question, 6 June 2006, para. 187 (holding that exceptions in international instruments should be construed narrowly).

107. Kurtz has argued against using ESI in Article XXI of GATT to interpret ESI in Article XI of the US-Argentina IIA (on file with author). Also see Kurtz, supra note 39, at 363–4 for using human rights law to interpret ESI in the US-Argentina IIA.

108. Burke-White and von Staden, supra note 39.

109. Article 10(18)(2) of the Comprehensive Economic Partnership Agreement Between Republic of India and Republic of Korea signed on 7 August 2009 and enforced from 1 January 2010 [India-Korea IIA] provides: Nothing in this Chapter shall be construed:(a) to require a Party to furnish any information, the disclosure of which it considers contrary to its essential security interests;(b) to prevent a Party from taking any actions which it considers necessary for the protection of its essential security interests;(i) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials or relating to the supply of services as carried on, directly or indirectly, for the purpose of supplying or provisioning a military establishment;(ii) taken in time of war or other emergency in international relations;(iii) relating to fissionable and fusionable materials or the materials from which they are derived; or(iv) to protect critical public infrastructures for communications, power and water supply from deliberate attempts intended to disable or degrade such infrastructures

110. Article 6(12)(1)(a)–(b) [chapeau] of the India-Singapore IIA, supra note 88 is same as Article 10(18)(2)(a)–(b) [chapeau] of India-Korea IIA, supra note 109 respectively, given above.

111. See Articles 10(18)(2)(b)(i)–(iv) of the India-Korea IIA, given above and Articles 6(12)(1)(b)(i)–(iv) of the India-Singapore IIA.

112. Burke-White and von Staden, supra note 31 at 369.

113. In this regard, also see the arguments on Article XXI of GATT by Akande and Williams, supra note 104 at 397.

114. See supra note 111.

115. See supra notes 111 and 112.

116. Also see Sornarajah, supra note 4 at 460, who has made this point with regard to the India-Singapore CECA.

117. Article 10(18)(3) provides: “Paragraph 2 shall be interpreted in accordance with the understanding of the Parties regarding Security Exceptions for Investment and Non-justiciability of Security Exceptions set out in Annexes 10-B and 10-C respectively, which shall form an integral part of this Agreement.”

118. Annex 10C of the India-Korea IIA, supra note 109.

119. Newcombe and Paradell, supra note 4 at 494–5.

120. Ibid., at 495. This point has been made specifically about the India-Singapore IIA, supra note 88, but will hold for the India-Korea IIA, supra note 109 as well, which contains a similar provision.

121. Burke-White and von Staden, supra note 31 at 367.

122. UNCTAD, supra note 36 at 77.

123. Burke-White and von Staden, supra note 39.

124. As cited in United States—Measures Affecting the Cross-Border Supply of Gambling and Betting Services [US—Gambling], WT/DS285/R, circulated on 10 November 2004, para. 6.463.

125. Ibid., para. 6.466.

126. In this regard, also see the arguments of Burke-White and von Staden that deference should be accorded to states in interpreting public order because such concepts are deeply rooted in domestic legal and political practices of different states; Burke-White and von Staden, supra note 31 at 360.

127. Continental, supra note 9, paras. 180–1.

128. Ibid., paras. 174, 180. On the other hand, it has also been argued that “maintenance of public order” is primarily related with civil unrest; see Reinisch, supra note 37 at 209.

129. United States—Measures Affecting the Cross Border Supply of Gambling and Betting Services, Report of the Appellate Body, WT/DS285/AB/R, adopted 20 April 2005 [US–Gambling Appellate Body Report].

130. United States–Gambling Panel Report, supra note 124, para. 6.461.

131. Ibid. Also see Burke-White and von Staden, supra note 31 at 360.

132. US–Gambling Appellate Body Report, supra note 129, paras. 296–9.

133. US–Gambling, Panel Report, supra note 124 para. 6.462.

134. Ibid, para. 6.467. Also see Kurtz, supra note 38 at 360–1; also see TREBILCOCK, Michael J. and Robert HOWSE, The Regulation of International Trade, 3rd ed. (London: Routledge, 2005) at 518Google Scholar.

135. ICTSD-UNCATD, Resource Book on TRIPS (Cambridge: Cambridge University Press, 2004)Google Scholar.

136. Ibid. 379.

137. Ibid.

138. Supdt., Central Prison v. Ram Manohar Lohia, AIR 1960 SC 633.

139. Ibid, para. 11.

140. BASU, Durga D., Shorter Constitution of India (New Delhi: Universal Publishing, 1996) at 1230Google Scholar.

141. SINGH, Mahendra P., V.N. Shukla's Constitution of India, 9th ed. (Lucknow: Eastern Book, 2008) at 135Google Scholar.

142. In this regard, see the WTO ruling in United States—Standards for Reformulated and Conventional Gasoline, WT/DS2 and 4, Appellate Body Report, 29 April 1996, 17–18.

143. CMS, supra note 9, paras. 304, 353–78; Enron, supra note 9, paras. 333–4, 339; also see the discussion in Newcombe and Paradell, supra note 4 at 494–5; Sempra, supra note 9, paras. 375–8.

144. Reinisch, supra note 37 at 208. Also see Kurtz, supra note 38 at 355–6 for criticism of the methodology adopted by the LG&E tribunal.

145. Sempra Annulment, supra note 9, para. 198; Continental, supra note 9, para. 167; CMS Annulment, supra note 9, para. 129.

146. See Bjorklund, supra note 37 at 493; Alvarez and Khamsi, supra note 23 for supporting the analysis of the CMS, Enron, and Sempra tribunals. For different views see Kurtz, supra note 38; Burke-White and von Staden, supra note 31; Dolzer and Schreuer, supra note 4; Gazzini, supra note 37; Bottini, supra note 21. Also see the discussion in Newcombe and Paradell, supra note 4, 494, 495; Subedi, supra note 4 at 189–91; Salacuse, supra note 4 at 342–8; Sornarajah, supra note 4 at 455–65.

147. Sempra Annulment, supra note 9, paras. 200–3. Also see Desierto, supra note 37.

148. Burke-White and von Staden, supra note 39 at 296.

149. Burke-White and von Staden, supra note 31 at 343.

150. BOWN, Chad and TRACHTMAN, Joel, “Brazil—Measures Affecting Imports of Retreaded Tyres: A Balancing Act” (2009) 8 World Trade Review 85 at 87Google Scholar.

151. In this regard also see the arguments of Burke-White and von Staden, supra note 39, who argue for a margin of appreciation test based on the jurisprudence of the European Court of Human Rights.

152. See the WTO jurisprudence on “necessary” in GATT Article XX and GATS Article XIV. E.g. Korea-Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS 161 and 169/AB/R, 11 December 2000; Dominican Republic—Measures Affecting the Importation and Internal Sale of Cigarettes [Dominican-Republic—Cigarettes], Appellate Body Report, WT/DS320/AB/R, adopted 25 April 2005; US—Gambling Appellate Body Report, supra note 129; Brazil—Measures Affecting Imports of Retreaded Tyres, Appellate Body Report, WT/DS332/AB/R, 17 December 2007.

153. DU, Michael M., “Autonomy in Setting Appropriate Level of Protection under the WTO Law: Rhetoric or Reality?” (2010) 13 Journal of International Economic Law 1077 at 1093Google Scholar.

154. Bown and Trachtman, supra note 150 at 85; REGAN, Donald, “The Meaning of ‘Necessary’ in GATT Article XX and GATS Article XIV: The Myth of Cost-Benefit Balancing” (2007) 6 World Trade Review 347 at 348Google Scholar; ORTINO, Federico, “From ‘Non-Discrimination’ to ‘Reasonableness’: A Paradigm Shift in International Economic Law”, Jean Monnet Working Paper No. 01/05 (2005), at 35–6; Kurtz, supra note 38 at 366–8Google Scholar. In the context of GATT Article XX, also see Eeckhout, supra note 30 at 18–20, who has argued that if intrusion in an importing country's sovereignty is the ground to oppose the “weighing and balancing” test, then even the “least restrictive test” is also intrusive because it involves complex questions such as whether a reasonable alternative measure is available that achieves the same level of benefit—which is difficult to quantify.

155. For more on the GATT Article XX test see Trebilcock and Howse, supra note 134 at 525–38; Eeckhout, supra note 30 at 3. MAVROIDIS, Peter, The General Agreement on Tariffs and Trade: A Commentary (New York/Oxford: Oxford University Press, 2005), 190–194Google Scholar. For more on the weighing and balancing, test see Kurtz, supra note 38 at 365–6. Also see Newcombe, supra note 28 at 363, who has supported the use of GATT Article XX jurisprudence to interpret general exception clauses in IIAs.

156. Continental, supra note 9, para. 196.

157. Ibid, para. 198.

158. Ibid, para. 197.

159. Ibid, paras. 200–19.

160. The only measure of Argentina that the Continental tribunal found as not satisfying the requirement of “necessity” was related to restructuring of the Treasury bills, see Continental, supra note 9, para. 221. The use of WTO jurisprudence by the Continental tribunal has attracted some criticism because the structure of Article XI of the US-Argentina IIA is different from Article XX of GATT. See BJORKLUND, Andrea and NAPPERT, Sophie, “Beyond Fragmentation” (2010) (on file with author); Desierto, supra note 37; José ALVAREZ and Tegan BRINK, Revisiting the Necessity Defence: Continental Casualty v. Argentina, IILJ Working Paper 2010/3 (2010)Google Scholar.

161. Kurtz, supra note 38 at 369.

162. A measure should be held to be reasonably available only if it is practically possible for the host country to adopt such a measure. See US—Gambling Appellate Body Report, supra note 129, para. 308.

163. Also see the argument made by Burke-White and von Staden, supra 39, for adopting “margin of appreciation” as the standard of review.

164. See Akande and Williams, supra note 104 at 389, 393–9; Schloemann and Ohlhoff, supra note 95 at 443–5Google Scholar.

165. Akande and Williams, supra note 104 at 389–90Google Scholar.

166. See Burke-White and von Staden, supra note 31 at 378, who argue for a residual “good faith” review; see also Vandevelde, supra note 44 at 176Google Scholar.

167. Burke-White and von Staden, supra note 31 at 342Google Scholar.

168. Trebilcock and Howse, supra note 134 at 532Google Scholar.

169. United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, 12 October 1998, paras. 135–42.

170. “India Needs Quantum Step in Investment” Financial Times (17 November 2010).

171. “India Attractive FDI Destination Despite Some Slowdown: Montek” Deccan Herald (9 February 2011).

172. Also see Burke-White and von Staden, supra note 31; and MUCHLINSKI, Peter, “General Exceptions in International Investment Agreements, Preface” in Segger et al., eds., supra note 28 at 352Google Scholar.

173. Paulsson, supra note 21; Methanex Corporation v. United States of America, UNCITRAL Ad Hoc Arbitration, Final Award, 9 August 2005; Tecmed v. Mexico, ICSID Case No. ARB/AF (00)/2, Award, 29 May 2003; Feldman v. Mexico, ICSID Case No ARB (AF)/99/1, Award, 16 December 2002; Also see Santa Elena v. Costa Rica, ICSID Case No ARB/96/1, Award, 17 February 2000; and ADC Affiliate Ltd v. Hungary ICSID Case No ARB/03/16, Award, 2 October 2006 which do not support this position.

174. See note 148.

175. ORTINO, Federico, “Non-Discriminatory Treatment in Investment Disputes” in Pierre-Marie DUPUY, Ernst-Ulrich PETERSMANN, and Francesco FRANCIONI, eds., Human Rights in International Investment Law and Arbitration (Oxford/New York: Oxford University Press, 2009)Google Scholar, 360. For more discussion on these cases see Salacuse, supra note 4 at 245–50; BJORKLUND, Andrea, “National Treatment” in August REINISCH, ed., Standards of Investment Protection (Oxford: Oxford University Press, 2008)Google Scholar, 29; DIMASCIO, Nicholas and PAUWELYN, Joost, “Non-discrimination in Trade and Investment Treaties: Worlds Apart or Two Sides of the Same Coin?” (2008) 102 American Journal of International Law 48Google Scholar.

176. Ortino, supra note 175.

177. Ibid., at 364.

178. Salacuse, supra note 4 at 251.

179. MOSTAFA, Ben“The Sole Effects Doctrine, Police Powers and Indirect Expropriation under International Law” (2008) 15 Australian International Law Journal 267 at 272Google Scholar, 273; FORTIER, Yves L. and DRYMER, Stephen L., “Indirect Expropriation in the Law of International Investment: I Know It When I See It, or Caveat Investor” (2004) 19 ICSID Review Foreign Investment Law Journal 293 at 299Google Scholar; also see Subedi, supra note 4 at 164–72; Saluka, supra note 66, para. 263.

180. LG&E, supra note 9, paras. 185–97, where paras. 191–6 discuss the “police power” argument.

181. Ibid., paras. 121–31.

182. Ibid., para. 132.

183. Ibid., para. 139.

184. Saluka, supra note 66, para. 264.

185. See Subedi, supra note 21 at 139, who has argued that “the business of developing law of foreign investment is too important an area to be left to some ad hoc tribunals established under ICSID or UNCITRAL”.

186. Also see Newcombe, supra note 28 at 369, who, in spite of questioning the usefulness of general exceptions in IIAs, concedes that they may provide useful guidance to arbitration tribunals.

187. In this regard also see Newcombe supra note 28; Spears, supra note 20 at 1063; Dimascio and Pauwelyn, supra note 175.

188. Subedi, supra note 4 at 185–7; Salacuse, supra note 4 at 341, 342; Spears, supra note 20 at 1059–62. Also see Muchlinski, supra note 20 at 37–45.

189. Newcombe, supra note 28 at 356.

190. For example, India's net outward FDI until 30 September 2009 stood at US$4.2 billion. “Developments in India's Balance of Payments during July-September 2009” RBI Bulletin (11 January 2010).

191. See Krishan, supra note 84 at 308, who argues for India having two model IIAs depending on capital exporting and importing status.

192. India's Economic Survey 2009–2010, Ministry of Finance, Government of India, online: 〈http://indiabudget.nic.in/es2009-10/chapt2010/chapter06.pdf〉.

193. BERA, S. and GUPTA, S., South-South FDI v. North-South FDI: A Comparative Analysis in the Context of India, ICRIER Working Paper 238, July 2009Google Scholar.

194. For example, there have been investor-state cases brought by investors from developing countries such as Argentina, Malaysia, Chile, Peru, and the Russian Federation; see Franck, supra note 14 at 28.

195. See particularly “The Public Statement on the International Investment Regime” (31 August 2010) (on file with author).

196. For more on this see VANDEVELDE, Kenneth, “The Shifting Ideology of the BITs” (1993) 11 International Tax and Business Lawyer 159 at 170Google Scholar; Gilbert GAGNE and Jean-Frédéric MORIN, “The Evolving American Policy on Investment Protection: Evidence from Recent FTAs and the 2004 Model BIT” (2006) 9 Journal of International Economic Law 357Google Scholar.