Delineating The Nexus: Sovereign Wealth Funds' Intersection With Investment Treaty Protection And Investor-State Dispute Settlement

Arjun Mallik, O.P Jindal Global University

ABSTRACT

This article explores the complex world of Sovereign Wealth Funds (SWFs) and how they interact with governance requirements, dispute resolution procedures, and international investment law. The article examines the investments made by SWFs in nations, their involvement in litigation, and the protections afforded by Multilateral Investment Treaties (MITs) and Bilateral Investment Treaties (BITs). An extensive examination of SWF participation in International Commercial Arbitration and Investor-State Dispute Settlement (ISDS) is provided, providing insight into the changing nature of foreign direct investments by SWFs.

The study argues that SWFs may be regarded as investors under Articles 25(1) and 25(2) of the International Centre for Settlement of Investment Disputes (ICSID) Convention, after examining the jurisdictional issues SWFs confront (b). Toto Costruzioni Generali S.p.A. v. The Republic of Lebanon is one example of a case law that explains the legal standing of SWFs as investors under international law.

The admission of SWFs as investors in bilateral investment treaties is further examined in the study, with a focus on the significance of precise wording to protect their interests. It examines how nations that rely significantly on SWFs—like Saudi Arabia and the United Arab Emirates—form treaties that acknowledge SWFs as investors.

An analysis is conducted on India's strategy for incorporating SWFs into its legal framework, emphasizing the importance of the 2020 CBDT Circular and self-attestation processes. The Santiago Principles, which provide a framework for moral SWF operations, and the International Forum for Sovereign Wealth Funds' function in promoting collaboration and conformity to global standards are covered in the paper's conclusion.