Tuesday, September 25, 2012

Vodafone and India: The Student Initiative to Promote Legal Awareness at NLS

The attraction of foreign investment to India has long been debated in economic circles. Questions of economic policy and incentives have dominated the discourse. However, with greater investment has come the need for transparent and equitable regulatory structures. This has led to a number of legal difficulties, primarily concerning bilateral investment treaties (BITs) between India and its trading
partners. Most BITs provide for a mechanism of international investment arbitration, which allow foreign investors to question the acts of the Indian Government in front of independent tribunals. This explosive notion of investment arbitration has recently engaged with Indian interests, with the White Industries award, and arbitration notices served by Sistema and Vodafone. These events remind us of the need to explore international investment law, in order to determine India’s obligations to foreign investors, and to develop a coherent regulatory scheme that balances local and international interests.

The Research Panel on International Investment Law and Policy, under the aegis of the Student Initiative to Promote Legal Awareness, at the National Law School, Bangalore has been working in this area to explore some of these issues.

Their first report concerns Vodafone’s notice of dispute under the India-Netherlands Bilateral Investment Treaty. Vodafone has questioned the validity of the retrospective amendment to the Income Tax Act, 1961, an amendment that has fuelled great political controversy. The lack of clarity on India’s obligations under the Bilateral Investment Treaty has led to great confusion in legal and business circles. This report operates to fill that void by providing a detailed account of possible claims in the arbitration, and their possible treatment by an arbitral tribunal.

The Student Initiative hope that this report contributes to greater discussion within the legal and business community, and helps contextualize this intriguing area of law; one that has come to be of great significance for India. They are also very keen for any comments/criticisms on their work, and may be reached at raag.yadava@gmail.com.

A Guest Post by Raag Yadava, who studies law at the National Law School of India University, Bengaluru
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