Lahore Herald
2 min readAug 5, 2021


Pakistan ends 23 bilateral investment treaties

Pakistan has decided to end 23 bilateral investment treaties (BITs) with other nations to avoid international arbitration on commercial contracts with foreign businesses.

Too far, foreign investors have filed as many as ten claims in various international arbitral venues, exposing the state of Pakistan to billions of dollars in compensation.

There are a total of nine bilateral investment treaties. These nine treaties, on the other hand, can be canceled or modified involving the relevant governments bilaterally.

Pakistan considered revising these nine treaties with the different governments following its new BIT policy.

There are 16 additional treaties that the government does not wish to ratify to minimize financial liability if foreign businesses file proceedings in international tribunals as a result of litigation in commercial relationships with Pakistan.

According to Section 9(m) of the Board of Investment Ordinance 2001, the Board of Investment (BOI) is required to negotiate and finalize agreements for the promotion and protection of investments/bilateral investment treaties with other nations. Pakistan has signed 53 bilateral trade treaties (BITs) with 48 nations to far.

The Bilateral Investment Treaty (BIT) was a key source for defining the rights and duties of member states and their investors. BITs were viewed as tools for encouraging foreign direct investment (FDI) by providing international investors with investment protection and convenience.

Pakistan was the forerunner of BITs, with the first BIT being signed in 1959 between Pakistan and Germany. However, due to an increase in Investor-State Dispute Settlement (ISDS) proceedings, the signing of new BITs was in the fall, while BIT terminations were on the rise.

The bulk of Pakistani BITs had typical clauses on expropriation, fair and equitable treatment (FET), national treatment, most favored nation (MFN), ISDS, and the restriction of performance requirements, limiting the government’s policy flexibility to implement any measure of public interest.

ISDS provisions have subjected the state to international arbitration. Pakistan was also a signatory to seven accords providing provisions for investment (TIPs). Four of these seven TIPs had ISDS clauses that acknowledged the authority of international arbitration venues.

Pakistan made promises to nearly 56 nations by signing only seven TIPs. Due to the high expense of BITs, the majority of developing nations were revising their BIT system. According to Pakistan Investment Policy 2013, provision 3.1.3, “the BOI will produce a model text with the aid of the Law & Justice Division, and that model BIT would replace the existing BIT template to the greatest degree feasible, while all-new BITs will be negotiated on the new template.”

As a result, BOI ceased negotiating BITs and created a new BIT template with the active support of the Law & Justice Division and the Head of International Investments Dispute Unit.

Published in Lahore Herald #BilateralInvestmentTreaties, #BilateralInvestmentTreatiesPakistan Published in Lahore Herald



Lahore Herald

Lahore Herald is a Pakistani internet media company based in Lahore,it began operations as a social news and entertainment company with a focus on digital media