The Government will soon come with a comprehensive model Bilateral Investment Treaty (BIT), which will form basis for fixing shortcomings in existing pacts and negotiations with different countries.
Government had decided to come out with a new framework after several multinational firms invoked bilateral investment protection agreements. The model text would be used for renegotiating the BITs and would form basis for new investment protection treaties.
As per the proposal, the model BIT may include provisions to limit power of tribunal to award monetary compensation to an aggrieved investor, sources said. The Finance Ministry will move a Cabinet note on the issue soon, they said. An aggrieved investor as per the proposal would have to exhaust all local remedies before initiating international arbitration.