Abstract

The investor-state arbitration system has been subjected to multiple criticisms. Important among these have been allegations that it privileges investors over core State interests in regulation and governance. Brazil is one of the jurisdictions that has conveyed its scepticism of investor-State arbitration by refusing to give effect to any traditional international investment agreements. Instead, it has formulated and adopted Agreements for Cooperation and Facilitation of Investment ["ACFI"] agreements that provide an alternative to the existing investor-state arbitration mechanism. The ACFIs introduce institutional governance structures, specifically Joint Committees chaired by government representatives and National Focal Points called Ombudsmen, for dispute prevention and negotiation of investment disputes. Upon the failure of these institutional structures, the ACFIs provide an opportunity for State-to-State arbitration as opposed to traditional investor-State arbitration. This alternative dispute resolution framework for investment disputes has been described as the Brazil Model of Investment Arbitration ["BRAMIA"].

In 2020, Brazil and India entered into a BIT modelled on the BRAMIA. In this paper, the author examines the feasibility of BRAMIA in the Indian context. The paper comprises of three parts. First, the author describes the provisions of the India-Brazil BIT while illustrating any differences it has from other ACFIs that Brazil has entered into. Second, the author evaluates the feasibility of the institutional governance mechanisms in preventing or resolving investment disputes in light of the return to diplomatic protection and implied threshold conditions. Third, the author analyses whether State-to-State arbitration can resolve India's persistent difficulties in recognising and enforcing investment treaty awards.

The author concludes that while the BRAMIA provides a promising alternative to investor-State arbitration, it leaves much to be desired in protecting investors' interests during the negotiation period and providing "enforceable" awards post the State-to-State arbitration.

This paper will be part of the TDM Special Issue on "Dispute Prevention in ISDS: Comparative Approaches, Institutional Innovations, and Digital Tools". More information here www.transnational-dispute-management.com/news.asp?key=2086