ENFORCING INVESTMENT PROTECTION IN INDIA- JUDICIAL INTERVENTION, VALUATION CONFLICTS AND THE EMERGING DEADLOCK IN CROSS-BORDER INVESTMENT ARBITRATION

Abstract

This paper examines the evolving role of Indian courts in investor-state dispute settlement, tracing India’s shift from a pro-arbitration posture to strategic judicial intervention. It argues that the enforcement of BIT awards is impeded by doctrinal uncertainty over jurisdiction, admissibility and the commercial character of treaty claims, as well as by the expanding use
of anti-arbitration injunctions and the Group of Companies doctrine to curb forum competition and vertical multiplicity. The paper further identifies a persistent compensation schism between international standards of full reparation, including fair market value and discounted cash flow valuation and India’s restrictive domestic valuation and repatriation regime under FEMA, RBI guidelines and SEBI-related controls. These inconsistencies, compounded by India’s non-membership in the ICSID Convention and divergent judicial treatment of foreign awards, generate an enforceability deadlock that undermines investor confidence and treaty credibility. The paper uses doctrinal analysis supported by secondary empirical material and evaluates leading Indian and foreign decisions and argues for institutional recalibration. It concludes that India requires a standalone investment dispute framework, specialized judicial benches, harmonized valuation standards and regulatory exceptions for treaty-based awards to align domestic law with international best practices, to restore predictability, reduce delay and preserve the efficacy of investor protection commitments.