State governments in India are pre-occupied with creating a favourable environment for attracting investment. But before opening doors to investors, they ought to be equally engrossed with preparing themselves for situations when investors, whether Indian or foreign, raise disputes. The dispute settlement mechanism being pushed in free trade agreements (FTAs) and bilateral investment treaties (BITs) is a marked shift from traditional adjudication processes.
Governments at the Centre and in the States must urgently invest in building their own capacity to handle the new generation of international investment arbitration.
World Bank Support
International financial institutions (IFIs) play a role in advocating a certain kind of dispute settlement in…