NON PRECLUDED MEASURES IN BILATERAL INVESTMENT TREATIESANALYSING THE NORTH-SOUTH DIVIDE IN INTERNATIONAL INVESTMENT LAW A recent analysis1 of the Non Precluded Measures2 (NPM) clauses in India’s bilateral investment treaties (BIT) concludes that the present formulation of NPM clauses in such treaties is inadequate to permit the exercise of regulatory power by India for all its policy needs. Indeed the analysis finds that matters such as public health and public order are independent permissible objectives are found in only one and five agreements respectively. The aforementioned analysis does not scrutinize the NPM clauses in Indian international investment agreements from a comparative global vantage point. This makes it impossible to determine whether NPM clauses in Indian IIAs are in accordance with global practice or an exception to the rule. This lacunae renders any possible question of reform of Indian IIAs nugatory, since any ideas of reforming India’s regulatory powers over foreign investors cannot operate in isolation without any reference to general global practice. Using India as a platform to begin a comparative study, this proposed thesis aims to be a universal objective study of NPM provisions across a vast range of Bilateral Investment Treaties (BIT) as well as the decisions of tribunals interpreting these treaties with the objective of thoroughly studying the drafting of NPM clauses as well as investigating the factors, legal, social, economic and cultural- which influence the ways in which these clauses are drafted and interpreted. The comparative study of the trends and practices in the regulatory power of host states over foreign investors cannot be isolated. It is necessary to take into account certain important notions and conceptions in international law which would play a role in determining the outcome of this study. This proposed study aims to take two major factors in account, while determining the question of whether the NPM clauses in Indian IIAs are inadequately drafted. The first factor to be taken into account is the doctrine of Regulatory Chill” which is describes the phenomenon of states not undertaking regulatory measures which might result in the violation of a treaty because of the unaffordability of the quantum of awards which might be passed against them. Regulatory Chill is often viewed from a developed versus developing Nation perspective. Therefore, the question which arises here is whether the perceived inadequacy in the drafting of India’s NPM provisions is actually an example of regulatory chill. Secondly, it is important to take into account the fact that an increasing number of developing states are now being viewed as exporters of capital and technology. Therefore, another significant question which arises in light of this study is whether the traditional north-south divide in international investment law still exists? There have been numerous observations that developed nations are becoming more conservative in their investment approach and the revival of the Calvo 3doctrine signifies a change of direction in international investment law, neo-liberalism no longer dominates 1 Prabhash Ranjan, “Non Precluded Measures in Indian International Investment Agreements and India’s Regulatory Power as a Host Nation” (2012) 2: AJL 21 (Cambridge Journals). 2 A clause which allows cause for exceptions to a country’s liability in regard to matters such as public health , public order, environmental matters, essential security interests etc. 3The Doctrine essentially asserts “two concepts of non-intervention and absolute equality of foreigners with nationals, with emphasis placed on the rejection of the superiority or imperial prerogatives of powerful states and their nationals in Wenhua Shan, “From North-South Divide to Private-Public Debate: Revival of the Calvo Doctrine and the Changing Landscape in International Investment Law” (2007) 27:3 Nw. J. Int’l L. & Bus. 631. international investment law making , and more balanced, and perhaps also a more conservative and nationalistic approach, is gaining ground. 4 This gives rise to a second point of analysis-Does India’s standing as far as NPM clauses are concerned reflect a now outdated and inadequate developing country approach to international investment, from the point of view of attracting foreign capital and technology for the purposes of economic and social development. Both the questions raised above are interconnected and are related to the wider question of the viability and sustainability of Investor State Dispute Settlement (ISDS) mechanisms from the point of view of welfare of developing nations. The aforementioned proposed study which this thesis aims to undertake will take into account whether the drafting of NPM clauses and the interpretation of these NPM clauses by tribunals reflect and encourage the phenomenon of regulatory chill and secondly whether such drafting and interpretation reflects winds of change in the North-South divide in international investment law. It is reiterated that India is merely being used as a platform to begin this study, but the study does not aim to be India centric. This study endeavours to be a global analysis of the doctrine of regulatory chill and an analysis of the North-South Divide, which might lead the way for any possible reform in Indian policy, should the possibility arise. 4 Wenhua Shan, “From North-South Divide to Private-Public Debate: Revival of the Calvo Doctrine and the Changing Landscape in International Investment Law” (2007) 27:3 Nw. J. Int’l L. & Bus. 631.