International Investment Treaties of the “New Generation” and BRICS States

The article examines the problem of the relationship between the “new generation” and “old generation” bilateral investment treaties among the BRICS member countries. It is noted that most of the bilateral agreements are so-called “old generation” agreements. Such agreements are generally unbalanced, that is, they impose obligations only on the state receiving the investment, and grant rights to foreign investors. Investment treaties often limit the regulatory powers of states, especially in areas such as health and environmental protection.

The “new generation” treaties provide for investors’ obligations in relation to business, human rights, environmental protection; protect the state’s right to exercise regulatory powers. Some treaties include a mechanism for settling investment disputes, but require, first of all, the exhaustion of local legal remedies before arbitration and strict deadlines for referring a dispute to arbitration. It is noted that Russia needs to reform its investment treaties by including in them, in particular, provisions to limit the use of the “umbrella clause”, a ban on the use of most-favored-nation treatment for the settlement of investment disputes; measures limiting the rights of foreign investors that the recipient state has the right to take when there is a threat to the security and sovereignty of the state, and which cannot be classified as illegal expropriation. 

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