General Overview
Bilateral investment treaties (BITs) are concluded between two countries in order to encourage and to protect investments made by nationals of each signatory state in the other countries. The Republic of Turkey has signed BITs with 98 countries so far including Bahrain, Egypt, Jordan, Kuwait, Qatar, Saudi Arabia, Sultanate of Oman and the United Arab Emirates.
Scope of BITs
- Providing a national treatment standard by which host states are obliged to treat foreign investors and investments no less favorably than they treat their own national investors and investments;
- Guaranteeing “Full Protection and Security” and “Fair and Equitable Treatment” for foreign investments;
- Providing “Most Favored Nation Treatment” for foreign investors and their investments;
- Promote foreign direct investments in the contracting states;
- Protection against direct or indirect expropriation of foreign investments without compensation;
- Protection against losses due to internal disturbances;
- Guarantee of free transfer of returns & profits;
- Settlement of investment disputes between foreign investor and host state through international dispute settlement mechanisms.
What are the Advantages of Investment Arbitration Mechanism
In general, BITs include arbitration clauses, the framework of which are set out in the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention). Contrary to commercial arbitration, an ICSID award may not be set aside by the courts of any contracting state. In addition, enforcement procedure is not required for an ICSID award so that an ICSID award may directly be enforced by the execution offices of relevant countries.
Conclusion
BITs and ICSID Convention provide significant level of protection for foreign investors against arbitrary or unreasonable governmental conduct. Additionally, the Republic of Turkey commits the full protection and security as well as the fair and equitable treatment for the foreign investors who are nationals of the contracting states of BITs.
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