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Report No. 260

(ii) Suggested draft:

2.2.6 Option 1: In the 2015 Model, in order to retain the closed enterprise-based definition, Articles 1.2.2, 1.6 and 1.7(v) should be removed.

2.2.7 Option 2: As an alternative to a closed 'enterprise-based' definition, and in place of Articles 1.2, 1.6 and 1.7, the following closed 'asset-based' definition may be adopted:

"Investment" means every kind of asset invested by the investors of one Party in the territory of the other Party in accordance with the laws, and regulations of the Party in whose territory the Investment is made and in particular, in one of the following forms:

i) movable and immovable property and other property rights such as mortgages, liens or pledges;

ii) shares, stocks, bonds and debentures and any other similar forms of participation in a company;

iii) intellectual property rights;

iv) licenses, authorizations, permits, and similar rights conferred pursuant to domestic law;

v) rights under contracts, including turnkey, construction, management, production or revenue sharing contracts;

vi) business concessions required to conduct economic activities and having financial value conferred by law or under a contract, including any concessions to search, cultivate, extract or exploit natural resources; and

vii) any change of the form in which assets are invested or reinvested:

Provided that each of the kind of assets mentioned in (i) to (vii) shall satisfy the following conditions individually and collectively:

a. it has made a substantial and long term commitment of capital in the Host State;

b. it has engaged a substantial number of employees in the territory of the Host State;

c. it has assumed entrepreneurial risk;

d. it has made a substantial contribution to the development of the Host State through its operations alongwith transfer of technological knowhow, where applicable; and

e. it has carried out all its operations in accordance with the Law of the Host State.



Analysis of the 2015 Draft Model Indian Bilateral Investment Treaty Back




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