Bilateral investment treaty

trade pacts. A nineteenth-century forerunner of the BIT is the "friendship, commerce and navigation treaty" (FCN). This kind of treaty came in to prominence after World Wars when the developed countries wanted to guard their investments in developing countries against expropriation.^[1]

countries in the world.^[6] and in recent years, the number of bilateral investment treaties and preferential trade agreements, in particular, has grown at a torrid pace; practically every country is a member of at least one.^[7] Influential capital exporting states^{[citation needed]} usually negotiate BITs on the basis of their own "model" texts (such as the Indian or U.S. model BIT).^[8][9] Environmental provisions have also become increasingly common in international investment agreements, like BITs.^[10]: 104 As part of the effort to reform substantive standards of investment protection, states have sought to introduce the right to regulate into their new BITs.^[11]

labour rights, social provisions or natural resources. Moreover, when such clauses are agreed upon, the formulation is legally very open-ended and often unpredictable.^[14] A counter-claim may be a way of rebalancing investment law, by allowing States to file claims against investors, as a means to sanction investor misconduct.^[15]