Supreme Court,The Ultimate Arbiter Of Constitutional Disputes Involving Trade And Commerce: Justice Chandrachud

Former Chief Justice of India, Dr. Justice DY Chandrachud addressed the audience at the event to marks the eighth foundation day of the Centre for Trade and Investment Law (CTIL), the think-tank of the Ministry of Commerce. The evening also saw the launch of the book 'Bespoke Treaties or Standard Models?', authored by Prof. James J Nedumpara, Ms. Sunanda Tewari and Mr. Puskhar Reddy and the foreword for which was written by Mr. George Pothan Poothicote. The event was attended by the Commerce Secretary, senior bureaucrats, policy makers, think-tanks, lawyers and students.

The evening began with a welcome address Dr. James J. Nedumpara, the head of CTIL, who reflected on the centre's eight-year journey and its impact on international trade and investment law. He highlighted CTIL's dual mandate: providing expert advisory support to the Department of Commerce while simultaneously conducting rigorous academic research. Dr. Nedumpara noted that CTIL was established in 2016 to strategically build India's capacity in trade law and policy, a field where developed nations have long employed legal frameworks to advance their interests. He also acknowledged the current turbulence within international economic law, emphasizing the pivotal role of young professionals in navigating these evolving challenges.

Professor Rakesh Mohan Joshi, Vice Chancellor of the Indian Institute of Foreign Trade (IIFT), presented a compelling analysis of India's economic trajectory. He highlighted India's robust export growth, noting its outperformance relative to major global economies, including the United States and China. Professor Joshi underscored the significant structural transformation of India's export basket, particularly the remarkable expansion in smartphone exports. He attributed the nation's economic resilience to its demographic profile, a highly skilled and multilingual workforce, and prudent fiscal and monetary management. Furthermore, he emphasized India's recent diplomatic successes in international trade, citing the completion of Free Trade Agreements (FTAs) with the United Kingdom and the European Free Trade Association (EFTA), as well as ongoing negotiations with the European Union (EU). These agreements, he posited, are setting a new standard for mutual respect and balanced benefits in global trade. Professor Joshi concluded by expressing confidence that India is on a clear path to becoming a leading global economy by 2075.

Shri Sunil Barthwal, the Commerce Secretary, began his address by thanking Justice Chandrachud for accepting the invite and stated that he and the audiance were looking forward to hear and learn from the former Chief Justice. He also congratulated CTIL on its eighth anniversary, acknowledging its indispensable role in India's trade and investment landscape despite its relatively short existence. The Commerce Secretary particularly appreciated CTIL's competence in handling complex negotiations with smaller teams compared to many other nations. He stressed the importance of career progression for CTIL's researchers and lawyers to retain institutional expertise. The Secretary outlined the three institutional pillars of the Department of Commerce: IIFT for academic training, the Centre for WTO Studies for economic aspects, and CTIL for legal dimensions. He also dwelt on the growing complexity of FTAs, which now encompass broad regulatory and sectoral issues beyond tariffs, requiring negotiators to balance national sensitivities with global expectations. In this regard, the Secretary cited the India-UK FTA as a gold standard for its careful legal drafting and nuanced treatment of labor and environment related provisions. The Secretary commended CTIL members for their commitment to national interest over lucrative private opportunities and emphasized the need for continued capacity building across the country. He urged CTIL to see itself as central to India's trade diplomacy and expressed confidence in its vital role in future negotiations, including the India-EU FTA. He concluded by congratulating CTIL on its achievements and expressing optimism for its future.

Dr. Justice DY Chandrachud in his address mentioned anecdotes like his interaction with the then President of India over a cup o coffee on the Vodafone case, in which he gave the judgement of the Bombay High Court. He also mentioned about his interaction a government official when he was the ASG and was handling a trade dispute. He then went on to complement the talent and commitment of India's young trade negotiators, identifying them as a key national strength. Further, on the book he launched, “Bespoke Treaties or Standard Models?”, he described it as a foundational text for legal scholarship and policymaking. Justice Dr. Chandrachud meticulously outlined the inherent structural flaws within international investment law, particularly the fundamental tension between protecting investor interests and a state's duty to its citizenry. He provided a crucial historical perspective, noting India's significant shift from a period of aggressive treaty-making—culminating in 83 treaties by 2015—to a more cautious and deliberate strategy following high-profile arbitration awards against the nation in cases like Vodafone and Cairn Energy.

Justice Chandrachud underscored the progress in India's legal defense, attributing it to strategic capacity building and the growing synergy between Indian and global jurisprudence. Here he shared from his experience that while deciding or laying down the law in significant arbitration or commercial matters, it is important to study the practice in other jurisdictions. For example while deciding cases like arbitrator fees (ONGC v. Afcons), the group of companies' doctrine (Cox & Kings), arbitrator bias (CORE), and the ambit of the referral court in entering upon the stamping of arbitration agreements, the Supreme Court studied the global jurisprudence in these areas through cases from foreign jurisdictions, international journals and UNCITRAL case digests. He also mentioned that the Court had the travaux preparatoires of the UNCITRAL Model Law and the New York Convention before it. These he said, helped in furthering the international rule of law by imbibing the best practices from across the globe and furthering the harmonisation of law - all within the legislative framework, keeping in view our international obligations and intent of the legislation. In this regard, he also noted the contribution of George Pothan who wrote the foreword for the book that was released and Manisha Singh who was in the audience for their invaluable assistance to the court in these landmark cases.

He also went on to point out that, beyond drawing from global jurisprudence, India has also meaningfully contributed to it. A notable example in this regard being the Supreme Court's 2016 decision in Centrotrade Minerals v. Hindustan Copper, which upheld the validity of a two-tier arbitration mechanism. This mechanism recoganised by the landmark ruling is now under consideration by UNCITRAL Working Group III as a potential model for ISDS reform. This he described as an illustration of how Indian jurisprudence can inform international dispute settlement design.

He went on to add that, for those wondering how actions of State Courts can form the basis for investment treaty claims, we need not look further than the watershed moment in India's investment treaty journey – the White Industries case. Regarding the debate surrounding the correctness of the award, he described it as a debate for another day, but asked everyone to read the legendary Fali Nariman's Herbert Smith Freehills – Singapore Management University Asian Arbitration Lecture of 2014. Further on, he went on to add that, under international law, a State includes the executive, legislature and the judiciary and in today's world, along with international Courts, arbitral tribunals perform a crucial role in the enforcement of the “rule of law” within the community of nations. He went on to add that in a world which is infinitely more complex world than the one at the beginning of the 20th century, business and human rights' violations, environmental and climate change issues, are often inextricably intertwined with economic affairs, and such issues sometimes lead to investment disputes. Further stating that the outcome of these disputes has significant impacts on the global economic order and the sovereign concerns of host states.

He went on to point that out of the half a century of notices India has received, some disputes have been settled and until date in those where there has been an arbitral award, five have gone against India (White Industries, Devas, Deutsche Telekom, Vodafone, Cairn Energy) while six awards have been in favour of India (By-Cell, Astro, SAEHL, Llouis Dreyfus Armateurs, GPIX and RAKIA). He also went on to point that investment treaty arbitration jurisprudence in India is still developing, as the country has yet to host an India-seated investment treaty arbitration or enforce such awards domestically. In this regard, he mentioned how judgments in the Vodafone and Khaitan cases have highlighted challenges arising from India's commercial reservation and the Arbitration Act's traditional limitation to commercial disputes, excluding investment treaty disputes.

However, he stated that the 2015 Model Bilateral Investment Treaty (BIT) which clarifies that awards under investment treaties should be treated as commercial awards for enforcement under the New York Convention, aligning with similar provisions in earlier treaties with Austria, Sweden, and Kuwait, reflects the government's intent to harmonize India's arbitration regime with international standards, underscoring the need to interpret the term “commercial” disputes as contained in our arbitration framework broadly, as suggested in the UNCITRAL Model Law. This according to him should foster effective recognition and enforcement of investment treaty arbitration awards in India.

He also described the decision not to terminate the BIT with Bangladesh, given India's greater investment in Bangladesh than vice versa, reflecting the importance of informed decision-makers. In this regard, he noted that through capacity-building efforts, the MEA has made progress - engaging experts, establishing arbitration cells, and working closely with international bodies. He also noted that CTIL continues to lead in research and dialogue, significantly enhancing India's ability to craft informed, resilient investment strategies. This independent think-tank he said, should aspire to be the repository of India's investment treaty framework, FTAs, and related dispute knowledge.

Drawing on from the last budget speech of the Hon'ble Finance Minister where she stated that the 2015 Model BIT is due for a revamp, taking into account the number of treaties signed since 2015, and also projecting India as an investment destination, Justice Chandrachud suggested that CTIL should conduct a study and submit a report which could assist the Government.

He concluded his remarks by presenting nine specific takeaways.

1.Harmonize international trade law and domestic constitutional law.

2.Acknowledge shifting global power imbalances.

3.Explore innovative treaty provisions like open hearings.

4.Develop a new cadre of international law experts.

5.Expand experiential learning programs like CTIL's TradeLab.

6.Adopt bespoke treaties reflecting national priorities.

7.Invest in legal infrastructure.

8.Integrate investment promotion, job creation, and innovative dispute resolution.

9.Continue asserting India's voice in the Global South, backed by resilient domestic institutions.

The evening came to an end with the remarks by the publisher, LexisNexis who highlighted that “Bespoke Treaties or Standard Models?” represents a timely and critical contribution to the evolving global discourse on international investment treaties. The publisher underscored the fundamental shift from a historical reliance on standardized models to a modern approach that favours bespoke agreements, which are carefully crafted to reflect specific national interests and priorities. LexisNexis extended its profound gratitude to the distinguished authors, the Centre for Trade and Investment Law (CTIL), and all the dignitaries who contributed to the work's success. The publisher concluded by affirming the book's anticipated role as an authoritative and essential reference for legal professionals and policymakers worldwide.