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Bilateral Investment Treaties

Understanding New Threats to Development in a Comparative Regional Perspective

By Biplove Choudhary

Fall 2006

This paper would attempt to understand the development concerns with reference to standard BIT provisions with special reference to the explosion in investment arbitration and dispute settlement systems in recent years. Subsequently, the manner in which BITs provisions have been sought to be applied by foreign investors in developing country settings would be analyzed in a comparative regional perspective with the help of two case studies: the case of Dabhol Power Corporation in India and the case of the Cochabamba water privatization in Bolivia. Both these cases attracted a lot of attention and raised a number of development concerns both in their respective countries and also globally highlighting a number of unanticipated consequences for the host country in signing on to BITs without adequate safeguards. In the sections to follow the International Institute for Sustainable Development’s Model International Agreement on Investment for Sustainable Development is compared with the India-Netherlands BITs. In the concluding section, some policy issues have been flagged.

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