WHITE INDUSTRIES V.

INDIA

On November 30th, 2011 the first publicly known arbitral award was awarded against
India.1 In White Industries v. India, an ISDS tribunal found that India had breached its
obligations under the India-Australia BIT. The award emboldened foreign investors
operating in India and opened a floodgate of ISDS notices being issued against India
for a wide range of alleged BIT violations.2

The essentials of the case were that White Industries Ltd., was developing a coal mine
in India and had entered into a commercial contract with an Indian public sector
company, Coal India, for the supply of equipment etc. The contract was governed by
Indian law and in case of any disputes an arbitration clause specifically referred to the
International Chamber of Commerce (ICC) Arbitration Rules. 3 Disputes between the
two parties eventually arose and an arbitration court in London ruled in favour of
White Industries on 27th of May 2002. Discontent with the ruling, Coal India
subsequently applied to the High Court of Calcutta to have the ICC award set aside.
Unaware of this, White Industries applied to the High Court of Delhi to have the ICC
award enforced. This set-in motion a time-consuming and complicated process
regarding jurisdiction, the enforcement of foreign awards and choice of law which
lasted for more than seven years. Fed up with the delay in the Indian courts, White
Industries eventually issued an ISDS claim against India under the India-Australia
BIT on December 10th, 2009.4White Industries argued that the delay in Indian courts
had violated the India-Australia BIT provisions on fair and equitable treatment (FET),
expropriation, most favoured nation (MFN) and the free transfer of funds. The ISDS-
tribunal dismissed all claims except the claim of India having violated the MFN
provision and ruled that the delay by Indian courts had been a breach of India’s
obligation to provide White Industries with an “effective means of asserting claims
and enforcing rights”. However, the India-Australia BIT did not contain such an
obligation, but the tribunal stated in its award that White Industries could, given the

1
White Industries Australia Limited v. Republic of India, UNCITRAL, Final Award (Nov. 30, 2011).
2
Ranjan, The 2016 Model Indian Bilateral Investment Treaty: A Critical Deconstruction, p. 13.
3
4 Kachwaha, The White Industries Australia Limited – India BIT Award: A Critical Assessment, p. 276.
4
Ibid., p. 279.
MFN provision, borrow the “effective means” provision found in the India-Kuwait
BIT, and consequently found that India had violated the India-Australia BIT.5

The White Industries award is a clear example of an international adjudicating

mechanism assuming mandate to decide on what constitutes effective investment
protection, a prerogative historically bestowed upon sovereign States and administered
by the principled obligation to act in good faith, see e.g. the Neer decision. In the
aftermath of the White Industries award foreign investors in India picked up the scent
of blood. From 2012 and onwards no less than 22 ISDS cases has been submitted
against India, challenging numerous regulatory measures like the imposition of
retrospective taxes, cancellation of spectrum licenses and revocation of telecom
licenses.6

5
6 Ranjan, The White Industries Arbitration: Implications for India’s Investment Treaty Program.
6
Ranjan, Singh, James & Singh, India’s Model Bilateral Investment Treaty: Is India too risk averse? p. 9.