NLIU LAW REVIEW

Synergizing Bilateral Investment Treaties (BITS) and Human Rights: Analysis, Implications, and Strategies For Harmonization

Neha Bhambhani & Astitva Singh

Bilateral Investment Treaty (hereafter called BIT), an international investment agreement between two nation-states, is recurrently accused of encompassing quasi-asymmetrical stipulations favouring the investor. This paper delves into BIT’s dissonance with human rights through a structured five-section approach: 1) conflict analysis, 2) motivations of host states, 3) BIT impacts, 4) harmonization justifications, and 5) strategies for alignment. The paper traces BIT’s history, highlighting the lack of a unified legal framework and it disconnect from human rights law, while considering the pressures on developing countries to attract foreign investment. It explores the reasons host states sign BITs, including economic development, global competitiveness, and political pressure from investor nations. The paper further analyses how BITs, exemplified by cases like Tecmed v. Mexico, limit the host state’s ability to regulate human rights, as well as the minimal involvement of affected communities in arbitral processes. It also addresses India’s dilemma between protecting citizens’ rights and adhering to BIT obligations. The tension between BITs and human rights treaties is explored when the host state is party to both. Finally, the paper advocates for harmonization of human rights with BITs, referencing the Vienna Convention on the Law of Treaties (VCLT) and support from the International Court of Justice (ICJ) and the International Law Commission (ILC). It proposes practical solutions, such as including human rights commitments in BIT preambles, appointing human rights expert arbitrators, offering tax incentives for human rights, and securing insurance to protect host state regulatory power.