Demystifying Investment Treaty Arbitration: Consent without Privity, India’s Experience under Bilateral Investment Treaties and the Case for Bilateral Arbitration Treaties

Investment treaty arbitration, built on the device of a standing offer to arbitrate contained in bilateral investment treaties (BITs), has become the principal means of resolving disputes between foreign investors and host States. This paper examines how that mechanism operates, why it was preferred to the available alternatives, and where its design now strains, particularly in relation to jurisdictional and temporal gateways, legitimacy, consistency, cost and delay. It then turns to India, whose experience of investor–State arbitration, from White Industries to Cairn and Vodafone, prompted the termination of a large part of its treaty network, the adoption of a restrictive 2015 Model BIT and, more recently, a cautious recalibration in the India–UAE and India–Uzbekistan treaties of 2024. Against that background, the paper critically evaluates Gary Born’s proposal for bilateral arbitration treaties (BATs), and its multilateral extension, as a default dispute resolution architecture. It argues that the BIT was an efficacious and innovative device whose reliance on defined categories of ‘investor’, ‘investment’ and consenting State leaves a growing class of disputes outside its reach; that a BAT-type default mechanism could widen the forum available to cross-border parties; but that, as Born formulated it, a BAT is a procedural device for private commercial disputes and cannot replace the substantive protections that a BIT supplies. The paper concludes that BATs are best conceived as a complement to, rather than a substitute for, reformed investment treaties, and it identifies the safeguards that any investor–State adaptation of the proposal would require.