Justice Ravindra Bhat, former Judge of the Supreme Court of India, delivered an insightful address during Dubai Arbitration Week, at a session organized by Synergy Lex. Speaking on the intersection between double taxation and bilateral investment treaty (BIT) arbitration, Justice Bhat explored the evolving legal frameworks that shape India–UAE economic cooperation and dispute resolution.
Expressing gratitude to Synergy Lex for the invitation, Justice Bhat remarked that the convergence between international taxation regimes and investment arbitration “is not new to India,” but remains “a topical issue of great practical importance in a rapidly globalising economy.”
Justice Bhat traced the long-standing trade and investment ties between India and the United Arab Emirates, noting that bilateral trade has grown from USD 180 million in the 1970s to over USD 100 billion in 2025, making the UAE India’s third-largest trading partner and second-largest export destination.
He emphasized that the India–UAE Bilateral Investment Treaty (BIT), signed in February 2024 and effective 31 August 2024, along with the existing Double Taxation Avoidance Agreement (DTAA), represents a robust legal framework to promote cross-border investment and economic stability.
Explaining the Mutual Agreement Procedure (MAP) mechanism under Article 27 of the DTAA, Justice Bhat described it as “a government-to-government negotiation process designed to prevent double taxation without resorting to prolonged litigation.”
He noted that India’s liberal approach allows taxpayers to pursue both domestic appeal and MAP proceedings simultaneously, with an average resolution timeframe of 24 months, reflecting India’s commitment to effective treaty implementation.
The India–UAE DTAA, he observed, ensures that corporations are not subject to income tax, wealth tax, or surcharge twice for the same income and provides a non-adversarial route to resolving tax disputes.
Turning to the 2024 India–UAE BIT, Justice Bhat highlighted its investor–state dispute settlement provisions under UNCITRAL Arbitration Rules, noting that while arbitration is excluded for taxation matters, it remains available for investment-related disputes.
He underscored India’s evolving experience in treaty-based arbitration from early cases like White Industries v. India to the Vodafone and Cairn Energy disputes which prompted significant reform in India’s BIT policy framework.
The 2024 BIT, Justice Bhat noted, reflects a balanced approach:
• It reduces the period for exhausting local remedies from five to three years before arbitration can commence.
• It upholds each state’s right to regulate in the public interest, while excluding investments linked to corruption, fraud, or money laundering.
• It restricts damages to actual losses, excluding speculative or consequential damages, and integrates environmental and community impact considerations.
Justice Bhat stressed that taxation remains a sovereign function but must coexist with international obligations under investment treaties. “The law continues to evolve as states and investors seek to reconcile fiscal sovereignty with legitimate investor expectations,” he observed.
He added that both treaties the DTAA and the BIT are designed to maximize trade, promote investment, and prevent double taxation, thereby fostering a stable environment for mutual economic growth.