Application of the Indian Arbitration Act to Non-ICSID Investor-State Arbitrations

Non-ICSID investment arbitrations have been held by Delhi High Court to be outside the scope of the Indian Arbitration Act of 1996. They have been considered fundamentally different as their roots are in public international law, in addition to their non-commercial nature. However, the court escaped a proper analysis of the hybrid foundations of an investor-State relationship, the seat theory, and issues of applicable law - which persuasively establish the applicability of the 1996 Act. In other words, the issue at heart may be considered to be the nature of an investor's substantive rights under an investment treaty and how they accommodate with India's national law principles when an investor has invoked arbitration against the host-State, which both parties accept, is subject to the law governing at the seat of arbitration. Besides the ongoing cases, India is now potentially facing two enforcement proceedings as an award debtor in the near future that may arise from investment claims by Cairn Energy PLC and Cairn UK Holdings Limited (under the UK-India BIT) and by Vodafone Group PLC (under the Netherlands-India BIT). Thus, the question of the applicability of the 1996 Act in respect of these non-ICSID arbitrations is foreseeable and may be addressed by the Supreme Court of India finally in the near future.