Boosting confidence: International arbitration can drive more investment

India must reform its judicial system to enable faster dispute resolutions. This will help improve overall investor confidence and ease of doing business

In a relief for investors from the United Arab Emirates (UAE), India has relaxed certain provisions in its bilateral investment treaty (BIT), which includes a reduction in the period for investors to exhaust local remedies for any dispute to three years from the usual five. This means that investors can now resort to international arbitration if the Indian judicial system is unable to resolve a dispute within this shortened period. This is a major departure from India’s model BIT, which has a five-year exhaustion of local remedies clause, and is clearly a step towards boosting investor confidence.