Topic: Basics of Investment Arbitration: An Indian Context Investor State Dispute Mechanism (ISDS) is an International law mechanism through which foreign investors seek redressal of investment treaty rights violation by the host country. Bilateral Investment Treaty (BITs), with ISDS, are perceived to be important tools in encouraging the influx of foreign investment. BITs are agreement between two countries /states for reciprocal promotion and protection of investments in each other’s territories by individuals and companies situated in either state. Some of the essential clauses are: § Most favoured Nation (MFN) § Dispute settlement mechanisms, both between an investor and a state and between states (Investment State Dispute Resolution). The United Nations Conference on Trade and Development (UNCTAD) provides that BITs spur an increase in Foreign Direct Investment by providing investor security, in particular for developing countries like India. Under a BIT an investor can directly initiate arbitral proceedings against a state without approaching its own government. India not being a party to the ICSID, established by the Convention on the Settlement of Investment Disputes between States and Nationals of other states, which provides facilities for arbitration and conciliation of investment disputes between contracting states and nationals of other contract states. Though there is a possibility of having arbitration under the additional facility rules of ICSID, it still remains different from a proper ICSID Arbitration and a party will nevertheless have to enforce the award under the New York Convention. India adopted its first model BIT in 1993 which was revised in 2003 and further in 2016. The Indian Model BIT retains the ISDS mechanism to settle disputes with foreign investors though it adds a number of conditions that an investor needs to meet before accessing ISDS. It shows that India has rejected the extreme option to walk out of the system but to be a part with different terms of engagement. Consequently, India has changed the scope and content key provisions in the Model BITs to limit challenges to its actions.