Investment treaty practice in United Kingdom

Investment treaty practice

Does the state have a model BIT?

The UK government completed an update of the UK Model BIT in 2008. The UK Model BIT is available online at: http://investmentpolicyhub.unctad.org/Download/TreatyFile/2847.

Does the state have a central repository of treaty preparatory materials? Are such materials publicly available?

The United Kingdom has a central repository of treaty preparatory materials at the National Archives in Kew, London. The National Archives holds records of the UK’s overseas relations dating back to the late 12th century, including diplomatic reports, memoranda and correspondence, cabinet papers and parliamentary ratification records. The documents may be accessed on-site in physical form, or copies may be purchased online or by telephone.

More than 14,000 treaties applying to the United Kingdom are available electronically through the UK Treaties Online (UKTO) service at: www.gov.uk/uk-treaties#uk-treaties-online. The UKTO database enables users to research the existence of treaties and obtain key information (such as place of signature and date of entry into force). The UK government supplies treaty information to the British and Irish Legal Information Institute, an online database accessible at: www.bailii.org/uk/other/UKTS/.

The UK government also provides a treaty inquiry service that provides advice on treaties that involve the United Kingdom and its Crown dependencies and overseas territories. While treaty section staff are unable to provide an interpretation of a treaty, advice can generally be obtained on whether a treaty has entered into force, details of the signatories and contracting parties, together with dates of signature, ratification, approval, acceptance, accession, succession and withdrawal or denunciation. Reservations, declarations or objections and, where applicable, the depositary can usually be identified. Contact details for the treaty inquiry service are available at: www.gov.uk/uk-treaties.

What is the typical scope of coverage of investment treaties?

UK BITs tend to cover a broad range of investments (including movable and immovable property, shares, debt instruments, intellectual property rights and business concessions), and offer their protection to any foreign national or firm (typically defined by incorporation under the laws in any part of the home state) operating in the territory of the other country. As a rule, UK BITs stipulate that investments will need to be made in accordance with the host state’s laws. Failure to abide by this requirement may result in the loss of the investor’s ability to claim under the applicable BIT. However, once a foreign investor has established a lawful investment in the host state’s territory, it will enjoy the rights and protections set out in the relevant BIT.

What substantive protections are typically available?

While UK BITs share a core set of protections, there are variations depending on the counterparty to each treaty, as well as on timing. Broadly speaking, UK BITs provide investors with:

• compensation in the event of nationalisation, expropriation and equivalent measures;
• guarantee certain minimum standards such as entitlement to fair and equitable treatment and full protection and security;
• offer some protection against losses in the event of conflict or war;
• affirm the right to repatriate profits and other returns; and
• guarantee treatment in line with that accorded by the host state to investors of its most-favoured nation or to the host state’s own nationals.

What are the most commonly used dispute resolution options for investment disputes between foreign investors and your state?

No publicly available investment treaty award has been rendered against the United Kingdom. The only publicised claim by a foreign investor against the United Kingdom pursuant to an investment treaty is Ashok Sanchetti v United Kingdom, brought under the UK-India BIT and the United Nations Commission on International Trade Law 1976 (UNCITRAL) arbitration rules.

Nevertheless, at least 30 claims have been commenced by UK investors against foreign governments under UK BITs (www.italaw.com). In terms of the most frequently occurring dispute resolution options, most UK BITs provide for ICSID arbitration, while approximately 50 UK BITs provide for UNCITRAL arbitration, often in addition to, or as an alternative to, ICSID arbitration.

Does the state have an established practice of requiring confidentiality in investment arbitration?

The lack of public information on investment arbitrations involving the United Kingdom does not allow firm conclusions to be drawn regarding the United Kingdom’s policy on confidentiality, although there are indications that the United Kingdom favours confidentiality.

In the only publicised investment treaty arbitration brought against the United Kingdom, the government formally declined to release the notice of arbitration since it would probably ‘prejudice relations between the United Kingdom and an international organisation; UNCITRAL’, asserting that ‘the public interest in withholding the material outweighs the public interest in disclosure’ (see: www.gov.uk/government/uploads/system/uploads/attachment_data/file/351523/Bilateral_Investment_Treaties_and_arbitration_FOI_ref_0699-14.pdf).

Does the state have an investment insurance agency or programme?

The United Kingdom does not have a state insurance agency or programme. The United Kingdom is a member of the Multilateral Investment Guarantee Agency.