Asia’s Investment Treaty Landscape

In our article we review Asia’s Investment Treaty landscape, including the reasons for the recent increase in claims brought by APAC investors as well as claims against APAC states, signalling a shift in the significance of the region within the global investment landscape, and the impact of some APAC states terminating or re-negotiating their BITs.

Although some of the earliest investment treaty arbitrations were initiated against states in the Asia-Pacific (APAC) region in the 1980s, more than four decades later, the proportion of cases involving APAC states remains relatively low—accounting for only about 10% of all investment treaty disputes globally.

This is notable given that APAC states have entered into over 700 bilateral investment treaties (BITs) and numerous multilateral investment treaties and free trade agreements (FTAs), particularly through the Association of Southeast Asian Nations (ASEAN). ASEAN has established a network of multilateral investment agreements both within the region and with external partners. Many of these BITs and FTAs include provisions for the settlement of investor state disputes (ISDS) through international arbitration.

In recent years, however, there has been a marked increase in claims brought by APAC investors as well as claims against APAC states, signalling a shift in the significance of the region within the global investment landscape. At the same time, some APAC States, such as Indonesia and India, have terminated their BITs and sought to renegotiate new treaties with reduced investment protections and in some cases, no ISDS provisions. 

Slow growth of investment arbitrations in Asia

The first investment arbitration case in Asia was commenced by Amco Asia Corporation (US), Pan American Development Limited (British) and PT Amco Indonesia (Indonesian) against Indonesia in 1981 in relation to the construction and management of a hotel in Jakarta. The claim was brought under the Indonesian Foreign Capital Investment Law. 

The first investment arbitration brought under an investment treaty was brought by Asian Agricultural Products Limited (AAPL), a Hong Kong investor, against Sri Lanka following the destruction of AAPL’s shrimp farm by the Sri Lankan authorities.¹ The claim was brought under the BIT between Sri Lanka and the United Kingdom (Hong Kong being an overseas territory of the UK at the time).

During the 1990s and 2000s, however, there were not many investment treaty cases brought against APAC States as compared with other regions around the globe. This may have been for political, economic and/or culture reasons. It may have been fortunate for the countries involved in the Asian Financial Crisis in 1997 that the crisis occurred before the exponential increase in investment treaty cases. 

By 1996 there had only been 38 cases registered at ICSID. The first NAFTA cases started in 1998, but it was not really until the early 2000s that the growth in investment treaty cases accelerated. By 2011, there were 450 known cases, and by 2025, there have been more than 1,400 known investment treaty cases. Approximately 10% of these cases have been brought against States in the APAC region.

Following the Asian Financial Crisis, major economic reforms were implemented which contributed to the significant economic growth that has occurred in many APAC countries in more recent years. Whilst China and India have led the way, there has also been high economic growth in other countries, including Indonesia, Vietnam, Mongolia and the Philippines. Cultural differences may also have played a role, given that many Asian parties from countries such as Japan, Vietnam, Korea and China, have traditionally preferred to resolve conflicts through amicable settlement rather than to pursuing claims through court or arbitration proceedings. However, as those companies have been more involved in cross border projects, that mindset has shifted and there has been an increase in cross border arbitrations involving parties from these jurisdictions.

In more recent years, there has been a gradual increase in cases brought by investors against APAC States under BITs and FTAs, including the ASEAN FTAs, as considered further below. 

ASEAN Investment Treaties

ASEAN has played an active role in the APAC region to bring harmonisation and cooperation amongst the South East Asian countries. ASEAN comprises 11 member states: Singapore, Indonesia, Malaysia, Thailand, the Philippines, Laos, Cambodia, Brunei, Myanmar, Vietnam, and Timor-Leste.

The first ASEAN Investment Agreement was signed in 1987 and came into force in 1998. It was replaced with the ASEAN Comprehensive Investment Agreement, which was signed in 2009 and came into force in 2012.

Since the early 2000s, ASEAN has negotiated multilateral treaties, including FTAs, around the APAC region. ASEAN entered into cooperation or framework agreements with China (2002), India (2003), Korea (2005), the United States (2006) and Japan (2008). Many of these agreements had very basic investment protections for foreign investors but no ISDS provisions.

By the late 2000s, ASEAN negotiated new FTAs with a number of States, such as Australia and New Zealand. These FTAs, such as the ASEAN, Australia and New Zealand FTA (AANZFTA), include investment protections for foreign investors as well as ISDS provisions. In addition, these FTAs address some of the issues that had arisen in investment treaty cases.

For example, the AANZFTA, which was signed in 2009 and entered into force in 2010, includes the following provisions:

• Denial of benefits: Article 11 provides that a host State may deny benefits to a foreign investor if the investor does not have substantial business operations in the “home” state in which it is incorporated, or if the investor is owned or controlled by another party from the host State and the investor has no substantial business operations in the home state. This may prevent foreign investors from being able to bring an ISDS claim by incorporating a special purpose vehicle (SPV) in a State that is party to the AANZFTA in order to take advantage of the investment protections as the SPV must have substantial business activities in that State.
• Fair and equitable treatment: Article 6 provides for fair and equitable treatment and full protection and security and requires that States do not deny justice in any legal or administrative proceedings and that States to take such measures as may be reasonably necessary to ensure the protection and security of the investment. However, treatment is not in addition to or beyond that required in customary international law and does not create additional substantive rights, thereby limiting the potential application of this investment protection. It also provides that just because there is a breach of another provision does not mean there is a breach of this provision
• Expropriation: Article 9 expands on the meaning of expropriation by providing an explanation as to when an indirect expropriation may occur. It also excludes from expropriate measures taken by the State to achieve legitimate public welfare objectives, such as protection of public health, safety and the environment.
• ISDS: Articles 18 to 28 set out very detailed provisions on the resolution of disputes and the conduct of arbitration proceedings, such as:
  • the timing and use of consultations;
  • the timing of commencement of an arbitration;
  • time limitations for commencing a claim (this being 3 years of when known or should reasonably have known of a claim);
  • sending a notice of intention to submit the claim;
  • a written waiver of right to pursue claims in domestic forums;
  • expressly providing that there is no diplomatic protection;
  • the appointment of arbitrators and requirements for their selection such as experience in international law or international investment law;
  • the ability to consolidate related claims; 
  • the conduct of the arbitration such as hearing jurisdictional objections first;
  • the transparency of the arbitration proceedings;
  • the governing law (which was often overlooked in BITs); and
  • the requirements for the award.

These provisions go beyond the ISDS provisions that traditionally have been included in BITs.

Some of these provisions have been carried through to subsequent FTAs such as the FTAs with China (2009), Korea (2009), India (2014) and Hong Kong (2017).

The AANZFTA has been invoked in a number of cases brought by foreign investors who are nationals of one of the AANZFTA parties against a host State who is an AANZFTA party. For example, Zeph Investments Pte Ltd, a Singapore investor which is a member of the Mineralogy group ultimately owned by Clive Palmer, an Australian national, has brought four cases against Australia in relation to iron ore mining project in Western Australia and a coal mining project and a proposed coal fired power plant Queensland.² It has been reported that the first case has been rejected by the arbitral tribunal though the award is not yet available.³

Recent multilateral investment treaties in Asia

After many years of negotiation, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was signed in March 2018 and came into force in December 2018 between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The United Kingdom joined the CPTPP in December 2024.

CPTPP includes similar provisions to the ASEAN FTAs. In addition to the provisions in the ASEAN FTAs, the CPTPP also includes:

• Definition of investment which requires that every kind of investment must have the characteristics of an investment (which are essentially based on the Salini test)⁴ including:
  • commitment of capital or other resources;
  • the expectation of gain or profit;
  • the assumption of risk; and
  • not an order or judgment entered in a judicial or administrative action.
• Minimum Standard of Treatment: Article 9.6 is similar to Article 6 of AANZFTA in that treatment is to be in accordance with customary international law, including fair and equitable treatment and full protection and security. Article 9.6 also provides that relevant standard is limited to the customary international law minimum standard of treatment of aliens.
• Expropriation excludes regulatory measures: Article 9.16 provides that a State is not prevented from adopting, maintaining or enforcing any measure otherwise consistent with the Investment Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental, health or other regulatory objectives.
• ISDS: Articles 9.18 to 9.30 includes detailed provisions relating to the conduct of the arbitration, including provisions addressing consent of the Parties to the arbitration, the selection of arbitrators, transparency, the governing law and potential consolidation of arbitrations.

Three ICSID arbitrations have been commenced under the CPTPP. In December 2023, a Canadian investor commenced an arbitration against Mexico in relation to a mining project.⁵ In October 2024, a Canadian investor commenced an arbitration against Mexico in relation to a renewable energy project⁶ and in December 2024, an Australian investor commenced an arbitration against Canada in relation to a mining project.⁷

In November 2020, the Regional Comprehensive Economic Partnership (RCEP) was signed between ASEAN and other States, such as Australia, China, Japan, Korea and New Zealand. RCEP came into force on 1 January 2022. RCEP includes provisions to ensure fair and equitable treatment for investments (Article 10.5(1)) but does not include any ISDS provisions.

Similarly, the ASEAN Investment Facilitation Agreement, which was signed in 2021 but is not yet in force, does not include any investment provisions or ISDS provisions. However, it does seem to incorporate diplomatic protection as Article 5 provides that States are to assist investors in amicably resolving complaints or grievances to prevent the disputes from escalating.

Termination of BITs in Asia

There have been States in Asia, such as Indonesia and India, which similar to States in other regions, have terminated BITs. 

Indonesia

In March 2014, Indonesia announced that it would terminate all 67 BITs. This announcement was made soon after Indonesia lost on jurisdiction in the ICSID arbitrations brought by Churchill Mining and Planet Mining.⁸ Indonesia had argued that it had not consented to the jurisdiction of the ICSID Tribunal. This argument was rejected by the Tribunal.

Indonesia has only actually terminated BITs with 25 countries, these being Argentina, Australia, Belgium, Bulgaria, Cambodia, China, Denmark, Egypt, France, Germany, Hungary, India, Italy, Kyrgyzstan, Lao, Malaysia, Netherlands, Pakistan, Romania, Singapore, Slovakia, Spain, Switzerland, Turkey and Vietnam.

Indonesia has also continued to negotiate new treaties with a number of States, such as an FTA with Australia. However, the new treaties have addressed some key issues for Indonesia, such as consent by the State to the arbitration, the Tribunal being bound by the joint interpretation of the treaty by the States, which is included in the Australia-Indonesia FTA, and that investment cannot be established through illegal conduct such as fraudulent misrepresentation, concealment or corruption.

As a member of ASEAN, Indonesia is a party to the ASEAN Investment Agreements and FTAs. It is also a party to RCEP, which does not include ISDS. However, it is not a party to the CPTPP, which does include ISDS.

India

More than 30 investment arbitrations have been commenced against India since 2003. Whilst many of these have settled, there have also been a number of investment treaty cases which have resulted in awards ordering India to pay substantial amounts in damages, including cases brought by Devas Multimedia Private Limited,⁹ Deutsche Telekom,¹⁰ Vodafone,¹¹ Cairn Energy¹² and Vedanta Resources¹³. As a result of these cases, India revisited its BIT regime between 2012 and 2016. This resulted in the adoption of a new model BIT in December 2015 and the termination of many of the old BITs. 

In March 2023, India issued termination notices for 68 BITs that had been entered into between 1993 and 2003 and requested these States to enter into new negotiations using India’s 2015 Model BIT.

Since then India has negotiated a number of FTAs and other agreements, which include limited investment protections and often no ISDS provisions. For example, India has entered into the Comprehensive Economic Partnership Agreement with the UAE in May 2022, the India-Australia Economic Cooperation and Trade Agreement with Australia in December 2022, the Indo-Pacific Economic Framework for Prosperity Agreement relating to Supply Chain Resources in February 2024 and the Trade and Economic Partnership Agreement with the European Free Trade Association in March 2024.

Recent cases brought by APAC investors

Whilst there has been a gradual increase in the number of cases brought against APAC States, there has also been a growing number of cases brought by APAC investors. Investors from China, Indonesia, Malaysia, Japan, the Philippines and Korea have brought cases against States in and outside the APAC region.

There are currently nine pending ICSID arbitrations (or arbitrations being administered by ICSID) brought by Chinese investors against a diverse range of States including: Mexico relating to a mining concession¹⁴ and Trinidad and Tobago relating to a steel industry project¹⁵ in the Americas; Vietnam relating to a construction project,¹⁶ Lao relating to the gaming industry¹⁷ and Korea relating to a real estate project¹⁸ in Asia; Sweden relating to a telecommunications licence¹⁹ and Malta relating to a banking enterprise²⁰ in Europe; and Saudi Arabia relating to a telecommunications project²¹ in the Middle East. There are three pending cases brought by Malaysian investors these being a case against South Sudan relating to the oil and gas industries,²² Bahrain relating to banking and financial services²³ and Argentina relating to a toll concession²⁴. There is one case brought by a Japanese investor against Spain brought under the Energy Charter Treaty in relation to renewable energy which is pending annulment proceedings.²⁵

In 2024, an Australian investor brought a case against the Philippines under the Australia-Philippines BIT relating to paper production services project²⁶ and a Philippine investor commenced a claim against Honduras under the Honduras Investment Law in relation to a port concession.²⁷ Two cases have recently been commenced by Korean investors, one commenced in 2023 against Nigeria under the Korea-Nigeria BIT in relation to an oil and gas project²⁸ and one commenced in 2025 against Panama under the Central America-Korea FTA in relation to a mining concession.²⁹

In 2025, an Indonesian investor commenced a claim against Malaysia under the ASEAN Comprehensive Investment Agreement 2009 relating to a construction project³⁰. Also, in 2025, an Australian investor commenced a claim against Myanmar under AANZFTA relating to a mining concession.³¹ In addition, there are two pending cases brought by Australian investors against the Congo in relation to a lithium mining project, which has been suspended,³² and Gambia in relation to a farming project, where the award is subject to annulment proceedings³³. 

The recent increase in the number of claims brought by APAC investors indicates a growing awareness of ISDS as an avenue of recourse in the event that the host State interferes with a foreign investment and an applicable investment treaty is in place.

Future of ISDS in APAC

With the sustained high economic growth across many countries in APAC, we anticipate an increase in cross border investments by APAC investors. With rising awareness of ISDS as a mechanism for recourse, we anticipate seeing more potential investment claims and investment arbitration cases being brought by APAC investors where there has been interference, or a potential interference, with those investments by the host State and where there is an investment treaty available that provides relevant investment protections and ISDS provisions.

Footnotes:

1. Asian Agricultural Products Limited v Democratic Socialist Republic of Sri Lanka (1987) (ICSID Case No. ARB/87/3).
2. Zeph Investments Pte. Ltd. v. The Commonwealth of Australia (II) (PCA Case No. 2023-67); Zeph Investments Pte. Ltd. v. The Commonwealth of Australia (III) (PCA Case No. 2024-23); and Zeph Investments Pte. Ltd. v. The Commonwealth of Australia (IV) (PCA Case No. 2024-48).
3. Zeph Investments Pte. Ltd. v. The Commonwealth of Australia (I) (PCA Case No. 2023-40).
4. Salini Costrottori SPA v Kingdom of Morocco (ICSID Case No. ARB/00/4).
5. Caisse de dépôt et placement du Québec and CDP Groupe Infrastructures Inc. v. United Mexican States (ICSID Case No. ARB/23/53).
6. Almaden Minerals Ltd. and Almadex Minerals Ltd. v. United Mexican States (ICSID Case No. ARB/24/23).
7. Riversdale Resources Pty Ltd and Hancock Prospecting Pty Ltd v. Canada (ICSID Case No. ARB/24/50).
8. Churchill Mining Plc and Planet Mining Pty Ltd v Republic of Indonesia (ICSID Case No. ARB/12/14 and ICSID Case No. ARB/12/40).
9. CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited, and Telcom Devas Mauritius Limited v. Republic of India (I) (PCA Case No. 2013-09).
10. Deutsche Telekom AG v. The Republic of India (PCA Case No. 2014-10).
11. Vodafone International Holdings BV v. India (I) (PCA Case No. 2016-35).
12. Cairn Energy PLC and Cairn UK Holdings Limited v. The Republic of India (PCA Case No. 2016-7).
13. Vedanta Resources PLC v. The Republic of India (I) (PCA Case No. 2016-05).
14. Bacanora Lithium Limited, Sonora Lithium Ltd., and Ganfeng International Trading (Shanghai) Co. Ltd. v. United Mexican States (ICSID Case No. ARB/24/21).
15. China Machinery Engineering Corporation v. Republic of Trinidad and Tobago (ICSID Case No. ARB/23/8).
16. PowerChina HuaDong Engineering Corporation and China Railway 18th Bureau Group Company Ltd v. Socialist Republic of Viet Nam (ICSID Case No. ADM/23/1).
17. Sanum Investments Limited v. Lao People’s Democratic Republic (ICSID Case No. ADHOC/17/1).
18. Fengzhen Min v. Republic of Korea (ICSID Case No. ARB/20/26).
19. Huawei Technologies Co., Ltd. v. Kingdom of Sweden (ICSID Case No. ARB/22/2).
20. Alpene Ltd v. Republic of Malta (ICSID Case No. ARB/21/36).
21. PCCW Cascade (Middle East) Ltd. v. Kingdom of Saudi Arabia (ICSID Case No. ARB/22/20).
22. Petronas International Corporation Ltd v. Republic of South Sudan (ICSID Case No. ARB/24/36), this case is currently suspended.
23. Naftiran Intertrade Co. (NICO) Limited v. Kingdom of Bahrain (ICSID Case No. ARB/22/34).
24. IJM Corporation Berhad v. Argentine Republic (ICSID Case No. ARB/23/52).
25. ITOCHU Corporation v. Kingdom of Spain (ICSID Case No. ARB/18/25).
26. TMA Australia Pty Ltd and others v. Republic of the Philippines (ICSID Case No. ARB/24/41).
27. International Container Terminal Services Inc. v. Republic of Honduras (ICSID Case No. ARB/24/34).
28. Korea National Oil Corporation, KNOC Nigerian West Oil Company Limited, and KNOC Nigerian East Oil Company Limited v. Federal Republic of Nigeria (ICSID Case No. ARB/23/19).
29. Korea Mine Rehabilitation & Mineral Resources Corporation v. Republic of Panama (ICSID Case No. ARB/25/20).
30. Eka Tjandranegara v. Malaysia (ICSID Case No. ARB/25/27).
31. Bright Mountain Pty. Ltd. v. Republic of the Union of Myanmar (ICSID Case No. ARB(AF)/25/1).
32. AVZ International Pty Ltd., Dathcom Mining SA and Green Lithium Holdings Pte Ltd. v. Democratic Republic of the Congo (ICSID Case No. ARB/23/20).
33. West African Aquaculture Ltd, Kurt Lennart Hansson and Martje Bolt Hansson v. Republic of The Gambia (ICSID Case No. ARB/18/10).