Investment treaty practice

Model BIT

Does the state have a model BIT?

No.

Preparatory materials

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

The UAE does not have a central depository of treaty materials.

Scope and coverage

What is the typical scope of coverage of investment treaties?

There is no set definition of investment that is applicable to all UAE BITs, although generally in each BIT investment, it is defined broadly. For example, the UK-UAE BIT defines investment as ‘every kind of asset owned or controlled by investors of either of the Contracting Parties’, which includes (though not exclusively):

  • movable and immovable property and property rights such as mortgages, liens or pledges;
  • shares in and stock and debentures of a company and any other form of participation in a company;
  • liquid assets, deposits and claims to money or to performance under a contract having financial value;
  • intellectual property rights, goodwill, technical processes and know-how; and
  • business concessions conferred by law or under contract, including concessions to exploit natural resources.
Protections

What substantive protections are typically available?

Not all UAE BITs contain the same substantive protections or express standards of treatment in the same way. However, below are some common provisions in most UAE BITs.

Fair and equitable treatment

Most UAE BITs have a broad clause, which provides that each contracting party ‘shall accord to investments by investors of the other Contracting State fair and equitable treatment’ (eg, the Austria-UAE BIT). However, other fair and equitable treatment clauses provide an express reference to fair and equitable treatment in accordance with the principles of international law (eg, the BITs with Armenia, France and Mongolia).

Unreasonable, arbitrary or discriminatory measures

Most UAE BITs prohibit government measures that are unreasonable, arbitrary or discriminatory and that impair or harm an investment.

Most-favoured-nation clauses

Many UAE BITs contain some form of most-favoured-nation (MFN) protection. Usually, the MFN clause provides that the contracting states shall accord to investments of investors of the other contracting party treatment not less favourable than the treatment that it accords to investments of its own investors or investors of any third state. However, some UAE MFN clauses provide that the MFN requirement does not require the contracting state to offer investors the same treatment as the state guarantees to members of free trade areas, customs and economic unions, and similar agreements (eg, the BITs with Armenia, Finland, Malaysia and Russia).

Expropriation

Each UAE BIT contains provisions on expropriation, although the exact formulations of the expropriation provisions vary. In general, expropriation is not prohibited, but it must be for a public purpose, be followed by fair compensation, and not be discriminatory. The BITs with Italy, Romania, Tajikistan, Turkmenistan and Ukraine also expressly prohibit expropriation in violation of a contractual provision regarding stabilisation.

Umbrella clauses

Not all UAE BITs contain an umbrella clause. The BITs with Armenia, Belarus, China, Malaysia, Mongolia, Pakistan, Switzerland and the United Kingdom contain umbrella clauses, although the formulation of the umbrella clause in each BIT is slightly different.

Dispute resolution

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

Some UAE BITs allow for immediate recourse to arbitration, while others require a claimant to first seek a remedy through negotiations or in the host state courts. However, most of the UAE BITs provide for arbitration under the UNICTRAL or ICSID rules.

Confidentiality

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

There is no express confidentiality practice and no express confidentiality provisions are included in the arbitration clauses in UAE BITs. Therefore, any arbitration involving the UAE is likely to adhere to the confidentiality provisions (if any) in the rules of the relevant arbitral institution.

Insurance

Does the state have an investment insurance agency or programme?

The United Arab Emirates is a member of the Islamic Corporation for the Insurance of Investment and Export Credit, which aims to facilitate trade and investment between member countries and the world through Sharia-compliant risk-mitigation tools. It is also a member of the Islamic Development Bank.