Definition of Investment in Bilateral Investment Treaties of South Asian Countries and Regulatory Discretion

Due to the growing number of investor-state arbitrations and increasing number of Bilateral Investment Treaties (BITs) being signed, it has become important to understand the implications of BITs on host countries. In this light, this paper analyses the broad asset based definition of investment in the BITs signed by four South Asian countries, namely Bangladesh, Pakistan, India and Sri Lanka. This analysis also assumes importance because these four countries, put together, had signed 155 BITs by the end of 2007. Since the definition of investment is an important component of the investment treaties, this paper attempts to understand the implications of a broad asset based definition of investment on the regulatory discretion of these four countries. In this context, this paper also discusses the jurisprudence on the definition of investment that has emerged in the International Centre for Settlement of Investment Disputes (ICSID) cases and other international arbitration forums and its relationship with the broad asset based definition of investment which is found in most BITs