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Report No. 260

F. Article 13 - Home State Obligations

(i) Analysis and comment:

4.6.1 Article 13 recognizes the right of the Home State to take judicial action against anything done in the Home State in relation to an investment that lead to significant damage, personal injuries or loss of life in the Host State. The provision further compels the Home State to ensure that its legal system does not bar the bringing of such actions before its courts.

4.6.2 Article 13 is modelled on Article 17 of the SADC model BIT83 and Article 31 in the IISD model. This provision seeks to remove jurisdictional constraints, such as the forum non conveniens rule, that might restrict the hearing of such cases in the Home State on grounds that there is a more suitable forum to hear the case.84 Such a provision has come up in context of 'foreign direct liability cases' such as the Bhopal case filed in the United States and the Cape litigation in United Kingdom.85

According to the commentary on the IISD Mode, the provision seeks to reverse "one of the great asymmetries of international law today", i.e., that foreign investors have special rights under BITs but no liabilities as they are beyond the scope of Host State courts, as they operate through a separate enterprise set up in that State, and are also not subject to the jurisdiction of courts in Home States for damages occurring elsewhere.86

83 SADC Model, available at

84 IISD Model, available at

85 See Liesbeth Enneking, Foreign Direct Liability and Beyond: Exploring the role of tort law in promoting international corporate social responsibility and accountability, Eleven International Publishing, 2012, p. 92-100, available at:

86 IISD Model International Agreement on Investment for Sustainable Development for Sustainable Negotiators' Handbook Second Edition, available at:

4.6.3 The SADC drafting committee noted that while adopting such a provision, attention must be paid to the national implementation of this obligation. It may require adopting new laws to clarify the jurisdiction of domestic courts and specific training may also need to be provided to the concerned governments. The US Alien Tort Claims Act, 1789 is an example of such a law, which entitles US district courts to have original jurisdiction of civil action for torts committed by an alien in violation of the law of nations or a treaty of the United States.

4.6.4 Article 13.2 suggests that Home States may have to modify their substantive law to allow civil liability claims against investors investing abroad. However, this provision should focus on preventing jurisdictional bars in civil liability claims that would otherwise be maintainable in courts of the Host State if not for jurisdictional constraints.

Analysis of the 2015 Draft Model Indian Bilateral Investment Treaty Back

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