Protection for tricky deals

Author: | Published: 17 Nov 2008

Around the world more than 180 countries have entered into more than 2400 Bilateral Investment Treaties (BITs) specifically designed to protect foreign investments. BITs provide a new and potentially very powerful sword and shield to foreign investors whose investments are negatively affected by the activities (or inactivity) of states and state organs or entities (including central, regional and municipal governments, government departments and ministries, local councils, industry regulators, courts and government authorities and institutions).

Definitions A BIT is a treaty entered into between two states providing for the promotion and protection of the investments of the nationals of each state in the territory of the other. They are usually entered into between capital-exporting nations and capital-importing nations as part of trade negotiations. The advent of international arbitration to resolve disputes under BITs in the last 15 years means that foreign investors can think beyond the dispute resolution options previously available to...