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Bilateral Investment Protection Agreement
Bilateral Investment Protection Agreement
Bilateral Investment Protection Agreement
As with all the new reforms , the foreign investment policy of govt of India was also liberalised
in 1991 .
Negotiations undertaken with a number of countries to enter into Bilateral Investment Promotion
& Protection Agreement (BIPAs) in order to promote and protect on reciprocal basis investment
of the investors. Government of India have, so far, (as on July 2012) signed BIPAs with 82
countries out of which 72 BIPAs have already come into force and the remaining agreements are
in the process of being enforced.
BIPA applies to the investment made by an investor of one contracting party (the signing
country) in the territory of the other. BIPA benefits can be claimed by an investor who could be
a national of a signing country, or a legal person incorporated in that country. Further,
investments is widely defined to include everything that one expects in a multinationals
business movable or immovable property, shares and other securities, contractual rights,
intellectual property rights, concessions for prospecting, research and exploitation of natural
resources, and so on.
The agreement provides that each contracting party shall promote in its territory investments by
an investor of the other contracting party. Further, equitable treatment shall be provided to such
investments. BIPA provides for National and Most Favoured Nation (MFN) treatment. Thus a
contracting party should treat investors of the other party as favourably as it would treat its own,
or investors of any other country. Similar treatment is required for the returns on the
investments. This does not apply to benefits under certain obligations arising from other
international agreements or regional cooperation agreements. Similarly, matters pertaining to
taxation are excluded from National and MFN treatment
A detailed mechanism is available for settlement of disputes the Arbitral Tribunal for disputes
between the contracting parties; and the International Arbitration for disputes between an investor
and a contracting party. Recently, Vodafone considered arbitration under BIPA for its tax dispute
with Indian revenue authorities.
FDI Vs BIPA Vs CEPA
BIPA post establishment investment whereas FDI pre establishment investment agreement
Therefore FDI not covered under BIPA.
CEPA Pre and Post establishment commitments
As a result of a volatile economic or political environment or other reasons, investments by an
investor of one country in another may be adversely affected. Recent instances include GMR
losing an airport contract in Maldives, freezing bank accounts in Cyprus, and scrapping of
telecom licences among others. It may be possible to get some protection in some cases and,
accordingly, BIPA becomes relevant when investing in another country and thereafter. It is
understood that recently Etihads investment in Jet Airways was kept on hold as BIPA between
India and UAE was insisted upon.
Country
Date of Agreement
Date of Enforcement
1.
United Kingdom
2.
Russian Federation
3.
Germany
4.
Malaysia
5.
Denmark
6.
Turkmenistan
7.
Netherlands
8.
Italy
9.
Tajikistan
10.
Israel
11.
South Korea
12.
Poland
13.
Czech. Republic
14.
Kazakhstan
15.
Sri Lanka
16.
Vietnam
17.
Oman
18.
Switzerland
19.
Egypt
by Aruna S.
For an extended list visit http://finmin.nic.in/bipa/bipa_index.asp
References :
http://finmin.nic.in/bipa/bipa_index.asp
http://business.gov.in/legal_aspects/bipa.php
http://www.thehindu.com/business/Industry/fdi-in-multibrand-retail-wont-take-away-right-ofstates-centre/article3911785.ece
I would like to say http://pib.nic.in ,but it involves tedious search , @ pib information is
scattered here and there , like all govt websites.