Model Investment Treaty for a Developing Country

Clinic: National University of Singapore, Spring 2021

Executive Summary of a Confidential Project

This semester, the team from the National University of Singapore (“NUS”) had the opportunity of drafting a new model investment treaty for a developing country, with an accompanying commentary. This opportunity came about because many of the beneficiary's existing International Investment Agreements (“IIAs”) had been drafted in the traditional OECD style. Apart from articulating the host State’s treaty obligations with less detail than modern treaties might, the beneficiary’s treaties did not sufficiently safeguard the host State's discretion in regulating sectors of national importance. Additionally, provisions governing investor-State dispute settlement tended to be brief, providing disputing parties with limited guidance and protection. Collectively, these features left the beneficiary in an undesirable state of affairs, both in relation to its existing treaty relations and its long-term developmental objectives. As is the case for many other States, these concerns are of growing pertinence in recent years, given the increase in both the number and quantum of IIA claims.

The team thus embarked on a global survey of contemporary IIAs, identifying best practices and progressive innovations that could improve the balance between host State and investor interests. The IIAs and Model IIAs studied were of considerable geographical and developmental diversity, such as the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("CPTPP"), the 2016 Morocco-Nigeria Bilateral Investment Treaty, and the EU's Investment Protection Agreements with Vietnam and Singapore. In each case, the team sought to tailor contemporary practices and standards to suit the beneficiary's national objectives. ISDS cases and academic opinion were consulted to identify contentious issues in international investment law that might need to be addressed with appropriate drafting. The team also benefitted from the initiatives and thought leadership of bodies like the United Nations Commission on International Trade Law ("UNCITRAL"), United Nations Conference on Trade and Development ("UNCTAD") and the International Institute for Sustainable Development ("IISD").

Overall, every member of the NUS team found the experience to be highly rewarding. We developed a better appreciation of the complexities and nuances of treaty drafting - from the linguistic and normative choices involved in crafting individual treaty provisions, to the interaction of each provision with other provisions, the State's existing IIA portfolio, and past case law. This was an ambitious project, both in our aim to deliver a complete and comprehensive model treaty, and the need to coordinate across all eight members of the team. It was only made possible because of the guidance that all our mentors provided us. Moving forward, we hope that the beneficiary will find our model BIT to be of direct assistance in their future negotiations.