This chapter examines the United Arab Emirates (UAE) investment treaties and the role the Ministry of Investment (MoI) can have in advancing investment treaty reforms. It analyses the main features of international investment agreements concluded by the UAE, including on sustainable investment, and provides policy considerations on transitioning older generation treaties into newer designs.
Investment Policy Perspectives in the United Arab Emirates
Abstract
International investment agreements (IIAs) form an integral part of the investment climate. They complement the domestic legal framework by providing an additional layer of security to covered foreign investors and can offer recourse to resolve investor state disputes (OECD, 2015[1]). The proliferation of bilateral and regional investment treaties and the multiplication of arbitral awards over the past years have nevertheless contributed to an increasingly complex global investment policy landscape. States are increasingly moving towards refining and modernising the structure and content of investment treaties including increasing clarity of core provisions such as the definition of investment, fair and equitable treatment, and the rules for settling investor-state disputes.1 Complementary measures can also help ensure that treaties are consistent with domestic priorities and reduce the risk of disputes leading to international arbitration, such as establishing robust co‑ordination mechanisms or by considering institutional dispute prevention mechanisms (OECD, 2015[1]).
The UAE’s investment treaty policy relies primarily on BITs. The UAE Model BIT reflects, to a considerable degree, recent global trends in treaty making, including with respect to key substantive provisions. In addition, the UAE recently began concluding Comprehensive Economic Partnerships Agreements (CEPA), which include a chapter dedicated to investment.
While most of the UAE’s BITs are relatively recent, the largest share of the UAE’s treaties in force features older designs, like many other countries, which continues to expose the UAE to substantial risks. In this context, the Ministry of Investment (MoI) can play a pivotal role in ensuring strategic and institutional coherence across the UAE’s treaty practice, safeguarding IIAs’ consistency with domestic priorities and reflecting emerging global standards.
This section examines the role that the MoI can play in advancing reforms to the UAE’s investment treaty practice.
Consider establishing an inter-ministerial committee to enhance the strategic coherence of the UAE’s investment treaty policy. Such committee, established by the MoI as per its mandate to drive strategies and regulations on foreign direct investment (FDI), would include, inter alia, representatives of the Ministry of Economy and Tourism (MoET); the Ministry of Finance (MoF) and the Ministry of Foreign Affairs (MoFA) and would support policy alignment across international commitments, national priorities and domestics policies. It would also provide the MoI a platform to advocate for necessary reforms, consistent with evolving global treaty-making practices and emerging standards in international investment governance, in accordance with its mandate to monitor and identify investment developments and risks, and regional and international trends.
Examine the possibility of terminating or updating older generation BITs still in force, including through joint interpretative statements or plurilateral modifying agreements, to reflect the UAE’s current treaty policy practice and to reduce exposure to ISDS. While the UAE’s current investment treaty policy (including its 2020 Model BIT) reflects new designs of key investment treaty obligations, the UAE could consider clarifying older generation treaties still in force to reduce exposure to potential ISDS claims. The MoI would be well positioned to advocate for and advance reforms in light of evolving treaty-making practices.
Assess the merits for including alternatives to Investor-State Dispute Settlement (ISDS) mechanisms in the UAE Model BIT and the need for more robust dispute prevention policies and mechanisms. While it has considerably reformed its approach to investor-state dispute resolution by incorporating procedural safeguards and enhancing transparency in its Model BIT, the UAE may wish to consider more robust frameworks for dispute prevention and formalised mechanisms to curb risks associated with ISDS.
Continue to actively participate in and follow closely inter-governmental and other initiatives on investment treaty reforms, including at the OECD and UNCITRAL. For instance, the OECD-hosted work programme on the Future of Investment Treaties, launched in March 2021, explores how the investment treaties of tomorrow could help address challenges and how to deal with existing agreements in a pragmatic way. The MoI’s active participation in such forums, in line with its mandate, would help ensure that the UAE’s treaty practice is aligned with recent global practices, including on issues of sustainable investment and development.
As a key institutional stakeholder for investment policy in the UAE, the MoI is well positioned to ensure that IIAs reflect national development priorities, are coherent with domestic practice and align with emerging global standards. Yet, to do so, a whole‑of-government approach to treaty-making is essential to ensure that all parts of government are aware of international commitments taken by the state and to help point out any potential inconsistencies between those commitments and domestic ones (OECD, 2015[1]). Effective collaboration amongst relevant authorities is therefore paramount and, as part of its mandate, the MoI could foster intergovernmental co‑ordination necessary to achieve such objective.
Federal Decree Law No. 27/2023 on the Establishment of the Ministry of Investment vests the new ministry with the authority to drive strategies and regulations on inward FDI and to negotiate and liaise with relevant authorities to conclude and sign multilateral IIAs and ensure their application. The MoI is also authorised to advise on the conclusion of CEPAs where relevant to its mandate. It is also mandated to represent the UAE in international and regional forums related to investment and to conduct studies and research in areas related to the MoI’s jurisdiction, including monitoring and identifying investment developments and risks, and regional and international trends.
Concurrently, Federal Decree Law No. 27/2023 on the Establishment of the Ministry of Investment amended the mandates of the MoET and the MoF with respect to negotiating and concluding IIAs. The negotiation and conclusion of BITs, which falls within the mandate of the MoF as per the aforementioned decree, is to be conducted in co‑ordination with the MoFA and the MoI. Similarly, as per the same decree, the MoET co‑ordinates with these and other relevant entities when concluding CEPAs, including with, the MoI, in drafting and negotiating CEPAs’ investment chapters.
While stakeholders reported that relevant authorities co‑ordinate to ensure consistency of IIAs with national policies, an institutionalised co‑ordination mechanism would ensure a more systematic and robust whole‑of-government approach towards investment treaty-making. As a central actor in investment treaty-making, the MoI would be well-positioned to establish an inter-ministerial co‑ordination committee aimed at enhancing the strategic coherence of the UAE investment treaty-policy. Such committee would include representatives of all relevant Ministries – including the MoET, the MoF and the MoFA – to facilitate structured dialogue on the negotiation and conclusion of new IIAs as well as investment chapters within broader agreements. This mechanism would support policy alignment across international commitments, while also providing the MoI a platform to advocate for necessary reforms, consistent with evolving global treaty-making practices and emerging standards in international investment governance, as seen below.
4.3.1. The UAE’s policies in concluding IIAs
The UAE has been among the most active investment treaty makers globally in the last years. While treatymaking activity dropped globally after the 1990s and early‑2000s – the heyday of investment treaties – the UAE markedly accelerated the conclusion of BITs in and after 2009. In the last two decades, the number of its investment treaty relationships tripled. By early-2025, the UAE had concluded over 120 BITs, of which 96 were in force at that time (see lists of BITs in force and concluded in Table A A.1).
The UAE’s investment treaty policy has relied – and still relies – primarily on BITs. The UAE has also signed two early-generation regional multilateral treaties – the Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organization of the Islamic Conference (1981) and the Unified Agreement for the Investment of Arab Capital in the Arab States (1982) – which were concluded when most of the foreign-invested assets in the country were likely held by regional investors.
Figure 4.1 documents the evolution of the UAE’s investment treaty engagements based on bilateral agreements concluded and in force from 1965 to 2025. Figure 4.1 also shows a growing discrepancy between the number of signed BITs and the number of BITs in force and the increasing time‑lag to bring concluded treaties into effect.
Bilateral investment treaties concluded and in force (1965-2025)
Note: Treaty relationships based on multilateral agreements – specifically the Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organization of the Islamic Conference (1981) and on the Unified Agreement for the Investment of Arab Capital in the Arab States (1982) – are not considered in the graph due to the lack of publicly available information on their signatories and parties for which they are in force. BITs signed and in force are listed in Table A A.1.
Source: OECD investment treaty database, Ministry of Investment (UAE).
The UAE’s investment treaty relationships have diversified since. Treaties in the 1990s and early 2000s were mainly concluded with MENA economies (e.g. Algeria, Egypt, Lebanon, Morocco, Tunisia) and European economies (e.g. Belgium/Luxembourg, Finland, France, Germany, Sweden, Switzerland, the United Kingdom). As of 2010, the UAE expanded geographically its treaty engagements, by concluding BITs with partners from South America (e.g. Argentina, Brazil, Colombia, Costa Rica, Mexico, Uruguay), Southeast Asia (e.g. Cambodia, Indonesia, Philippines, Thailand, Viet Nam) and Sub-Saharan Africa (e.g. Benin, Ethiopia, Guinea, Kenya, Mali, Nigeria, Senegal, Zambia).
The UAE’s active investment treaty-making and choice of treaty partners have resulted in a sizeable share of its inward and outward FDI stocks being under investment treaty coverage. The share of its outward FDI stock under treaty cover (about 80%) is nearly equal to that of its inward FDI stock. Figure 4.2 provides an overview of the approximate share of the UAE’s inward and outward FDI stocks covered by treaties that entered into force between 1965 and 2025.
Note: Inward and outward FDI stock data calculated for the entire period based on positions reported at end 2023 rather than historical values. Percentages are based on matching aggregate immediate bilateral FDI stock data and treaty relationships as of January 2026. For several reasons, reported FDI stock data is not a valid measure for assets that benefit from treaty protections and available data does not allow to determine ultimate ownership of assets (Pohl, 2018[2]). The proportions of FDI stock data may nonetheless serve as a rough approximation of stocks held by immediate investing countries to illustrate features and outcomes of the UAE’s investment treaty policy.
Source: OECD investment treaty database, FDI stock data from the OECD FDI statistics database and IMF Co‑ordinated Direct Investment Survey (CDIS).
The lion’s share of FDI stock under treaty cover is associated with few BITs which the UAE concluded with financial centres: the Switzerland-UAE BIT (1998), the Belgium/Luxembourg (BLEU)-UAE BIT (2004), and the Mauritius-UAE BIT (2015). Most of the many other UAE treaties, especially those concluded in the last decade, cover barely any FDI. This could suggest that the BITs cover mainly financial assets and interests transiting the UAE, rather than being invested in or originating in the UAE.
4.3.2. The UAE’s recent trend in concluding CEPAs
The UAE’s recent approach to investment within its CEPAs reflects a strategic focus on facilitation. While BITs remain the UAE’s primary legal instruments for investment protection, the investment chapters of its CEPAs prioritise co‑operation and the promotion of investment flows. As of April 2025, the UAE had signed 26 CEPAs, of which 14 are in force. The latter includes agreements with India, Israel, Indonesia, Türkiye, Cambodia, Georgia, Costa Rica, Mauritius, Jordan, Serbia, New Zealand, Australia, Malaysia and Chile – highlighting the UAE’s evolving investment treaty practice.
Across the implemented CEPAs, the UAE has opted to defer investment protection provisions to existing BITs, many of which are expressly reaffirmed in the CEPA. Meanwhile, CEPA investment chapters emphasise facilitation, primarily through the establishment of bilateral councils and committees tasked with monitoring investment flows and identifying opportunities. Such provisions feature, for example, in the UAE – India Technical Council on Investment, the UAE – Türkiye Investment Facilitation Committee, and similar bodies established under the CEPAs with Indonesia, Cambodia, Costa Rica, and Mauritius. CEPAs concluded with Cambodia and Türkiye include a specific sustainable investment focus that is not reflected in CEPAs concluded with other countries (Box 4.1).
All the while reaffirming the states’ commitment to already existing BITs, the CEPAs concluded with Cambodia and Türkiye go a step further by including international commitments with respect to sustainable investment considerations.
The UAE‑Cambodia CEPA: The investment chapter dedicates a specific section to responsible business conduct, pursuant to which each party shall, inter alia, encourage investors and enterprises to incorporate internationally recognised principles, standards and guidelines for responsible business conduct into their business practices and internal policies. It also includes provisions specific to non-derogation of health, safety and environmental measures, such as the obligation for the parties to refrain from encouraging investment through the relaxation of environmental measures, domestic measures relating to health, safety, the environment or other regulatory objectives. Importantly, the UAE‑Cambodia CEPA expressly reaffirms the states’ right to regulate within their territories to achieve legitimate policy objectives, such as with respect to the protection of the environment and addressing climate change.
The UAE‑Türkiye CEPA: The UAE‑Türkiye CEPA expressly recognises the states’ right to regulate and introduce new regulations in order to meet national policy objectives in a manner consistent with their obligations and commitments thereunder, with no further indication as to the scope of national policy objectives.
Source: OECD analysis of UAE‑Cambodia CEPA and the UAE‑Türkiye CEPA
The facilitation-focussed approach of CEPAs aims to foster a predictable and business-friendly environment while avoiding overlaps with substantive provisions of BITs. Consistently, investment chapters in the UAE’s CEPAs are excluded from the scope of the respective agreement’s dispute settlement mechanisms, reinforcing the role of BITs as the principal instruments for resolving investment-related disputes. This approach suggests a deliberate treaty design strategy, whereby substantive protections are maintained under BITs, while CEPAs serve as frameworks for policy dialogue, administrative co‑operation, and investment facilitation.
The structure and content of investment provisions across the UAE’s CEPAs align with its broader economic diversification goals. The geographic reach of its CEPA partners – including countries from Asia, Africa, Latin America, and Eastern Europe – indicates a diversification of investment relationships beyond the UAE’s traditional partners in the Middle East and North Africa (MENA) region and Europe. Additionally, the CEPA framework reveals a growing focus on the digitalisation of investment processes, increased involvement of sovereign wealth funds, and enhanced support for small and medium-sized enterprises (SMEs), particularly in the case of the UAE – Indonesia CEPA.
Overall, the UAE’s CEPA strategy complements its BIT network by emphasising facilitation, institutional co‑operation, and dynamic economic partnerships. This evolving treaty practice positions the UAE as a proactive actor seeking to integrate investment promotion within its wider trade and development agenda.
Historically, IIAs were seen as tools to safeguard investors and investments and to stimulate FDI by enhancing the predictability of the applicable legal framework and mitigating undue risks for investors. Common substantive protections afforded to investors through IIAs include safeguards against unlawful expropriation, and discrimination – including provisions of national treatment (NT) and most favoured nation (MFN) – and guarantees of fair and equitable treatment (FET) and full protection and security (FPS). Procedural protections often include investor-state dispute settlement (ISDS) mechanisms, allowing investors to bring claims against the host state before international arbitral tribunals in the event of an alleged breach of the IIA.
In recent years, doubts have emerged about the design of some of these IIAs, their interpretation, and the use of certain clauses (OECD, 2025[3]). One of these concerns pertains to the growing number of ISDS cases, often regarding public policy or regulatory measures, resulting in concerns about a potential chilling effect on regulations to avoid future disputes. Substantive provisions contained in early generation treaties are often broadly defined, allowing for extensive interpretation by arbitral tribunals. This trend has had negative consequences for states, as a recognition of breach of an IIA by the host state often leads to high amounts of compensation in damages and leaves states exposed to reputational damages.
Aware of the importance of aligning its treaty practice with emerging trends in international investment, while addressing concerns related to regulatory autonomy and investor obligations, the UAE updated its Model BIT in 2020 (Box 4.2). The UAE Model BIT aims to circumscribe substantive key provisions, further regulate dispute resolution mechanisms, and include considerations for sustainable development, showcasing evolution towards greater inclusivity and transparency in treaty provisions. However, while most of the UAE’s treaties are relatively recent, the largest share of the UAE’s treaties in force features older designs, which continues to expose the UAE to substantial financial and reputational risk. ISDS continues to be included in most BITs concluded by the UAE.
The MoI could act as a driver and advocate for necessary reforms in harmonising the UAE’s treaty practice and aligning it with most recent international trends and practices.
The UAE Model BIT broadly aligns with evolving trends in international treaty practice and incorporates modern formulations of key investment treaty standards.
In line with most recent practices in treaty making, the UAE Model BIT clearly defines key terms such as the terms investor and investment. Protected investments are defined as those made in accordance with the laws and regulations of the host state and have the inherent characteristics of an investment (i.e. contribution of capital or resources over a certain duration, expectation of gain or profit and the assumption of operational risk).
Substantive standards of protection are precisely articulated and circumscribed, reflecting new treaty designs for more legal certainty and predictability. This is especially valuable considering the increasing number of ISDS cases in recent years. Measures that may amount to a breach of the FET standard are defined through a closed list and the obligation to provide FPS is limited to the physical security of investors. The MFN provision excludes from its scope procedures for resolution of investment disputes. “Indirect expropriation” of investments is defined through a positive description, i.e. any measure equivalent to expropriation or nationalisation.
The UAE Model BIT provides for the possibility of ISDS under the auspices of the ICSID Convention or the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules or any other arbitration rules on which the parties to the dispute agree upon. A cooling off period of three months starting receipt of the notice of intent is required, during which the parties shall endeavour to settle the dispute through negotiations or resort to mediation of conciliation (in lieu of or in addition to the mandatory negotiation requirement). Interestingly, in order to resort to arbitration, investors are required to have consented in writing to arbitration – albeit with no indication as to whether the consent should be given prior to the crystallisation of the dispute. Recourse to ISDS is limited in time (three years since the date on which the investor acquires or should have acquired knowledge of either the breach itself or the subsequent loss or damage) and the investor must waive its right to initiate any other proceedings with respect to the measures in question. ISDS is highly regulated, via the inclusion of provisions on ethical duties of arbitrators, joint interpretation, consolidation and other procedural matters, reflecting a cautious and balanced approaches to ISDS.
With respect to sustainability considerations, the UAE Model BIT recognises in its preamble that the flow of mutual investment can be achieved without relaxing health, safety and environmental measures, or measures necessary to main public order and protect public morals but does not impose underlying obligations on the parties (be it the contracting states or the investors). The preamble also reaffirms the state’s right to regulate investment to meet national policy objectives – albeit without expressly recognising such right in the text of the BIT.
According to stakeholders, the UAE Model BIT is currently being reviewed to reflect emerging trends in international investment, such as incorporating sustainability consideration within the text of the BIT, transparency in ISDS, and addressing concerns related to regulatory autonomy and investor obligations.
Source: OECD analysis of UAE Model BIT
4.4.1. Modern design features of investor protection provisions in BITs
The designs of investment treaties and the framing of these standards of treatment have evolved over time, in particular since the early 2000s. Designs that were common in early-generation treaties concluded until and in the 1990s have progressively fallen out of fashion and have been broadly discontinued in recent investment treaties. New designs of key investment treaty obligations – FET, FPS, MFN or “indirect expropriation” – have replaced the older designs to frame contours and content of treaty obligations more precisely. A driver for this change was that older treaties that lack these specifications have been interpreted and applied in the context of investor-state disputes in ways that did not reflect treaty parties’ intent; this has sometimes led to unintended outcomes. (Box 4.3) sets out the characteristics of the new designs of these main clauses that circumscribe substantial obligations.
Fair and equitable treatment
Specification on the scope and content of FET obligations
Limitation of FET to the minimum standard of treatment (MST) under customary international law; and/or
Identification of FET obligations using a closed list.
Or non-inclusion of FET in treaty obligations (OECD, 2023[4])
Full protection and security (FPS)
Specification on the scope and content of FPS obligations
Limitation of FPS to minimum standard of treatment (MST) under customary international laws, and/or
Identification of FPS obligations to only physical or police protection of investments.
Or non-inclusion of FPS in treaty obligations (OECD, 2025[5])
Most-favoured-nation (MFN) treatment
Clarification that MFN treatment does not include dispute settlement arrangements
or non-inclusion of MFN in treaty obligations (OECD, 2022[6]),.
“Indirect expropriation” provisions
Specifications of obligations relating to “indirect expropriation”
Identification of assets that can be expropriated;
Positive description of the notion of “indirect expropriation” as a “measure or series of measures having an effect equivalent to direct expropriation”;
Definition of the methodology and criteria for the assessment of whether an action or a series of actions constitute an indirect expropriation;
Specifications on the extent to which non-discriminatory measures pursuing legitimate public welfare objectives do not constitute indirect expropriation.
Or non-inclusion of “indirect expropriation” from the scope of treaty protections (OECD, 2021[7])
Source: (OECD, 2023[4]), “‘Fair’ and ‘equitable’ treatment provisions in investment treaties: A large sample survey of treaty provisions”; (OECD, 2025[5]), “‘Full protection and security’ provisions in investment treaties: A large sample survey of treaty provisions”.;
(OECD, 2022[6]), “The interaction between most-favoured-nation clauses and dispute settlement arrangements in investment treaties”;
(OECD, 2021[7]), “The notion of 'indirect expropriation' in investment treaties concluded by 88 jurisdictions”.
The UAE has embraced the global evolution in the design of substantive treaty obligations in its own investment treaty practice in recent years and has included the modern framings of many key investment treaty standards in its latest treaties. Figure 4.3 provides a timeline of adoption of the modern designs in the UAE’s investment treaties between 1990 and 2024, identifying for each treaty the design model of substantive clauses, and highlighting the first use and the beginning of a consistent use of modern treaty designs.
Timeline of first use and consistent use of new FET, FPS, MFN and “indirect expropriation” designs
Note: Each dot represents an individual treaty. Only treaties in force for which a text is publicly available are considered. Tick marks in the horizontal axis represent 1 January of a given year. “IE” in the vertical left axis refers to “indirect expropriation” provisions. Blue dots represent the use of a modern design of the individual clauses (see Box 4.3 for details), grey dots indicate a now discontinued design of the clause. Passing time after first use is shaded in light blue, after the beginning of consistent use in dark blue.
Source: OECD investment treaty database.
The consistent use of many of these new designs is observed in treaties concluded by the UAE as of 2017, depending on the clause. Consistent use began shortly after the UAE first used the designs – except for MFN treatment clauses which the UAE started to use consistently only about a decade after the first use. The definitive shift in the UAE’s investment treaty policy towards modern designs is corroborated by the UAE’s model BIT of 2020 which reflects modern designs for each of these four provisions described here.
Despite the consistent use of modern treaty designs in the UAE’s latest treaties, Figure 4.3 reveals a broad heterogeneity in the country’s overall set of treaties in force. Although most of its treaties are relatively recent and were concluded after the early 2000s, when new designs first emerged in global treaty practice, the largest share of the UAE’s treaties in force feature older designs whose use the UAE has now discontinued. The treaties that feature older designs are also those that bear the most economic significance for the UAE, considering the aggregate shares of FDI stocks that they currently cover.
4.4.2. Rethinking recourse to ISDS under UAE’s investment treaties
Most of the UAE’s BITs – including its Model BIT – continue to provide for international arbitration as a means for foreign investors to challenge host state measures in breach of treaty obligations. The UAE has had several firsthand experiences with ISDS, to the extent that, as of April 2025, at least seven ISDS cases were lodged against the state,2 one of which is still ongoing.
While the UAE Model BIT regulates ISDS to an important extent, older generation treaties still in force continue to grant broad decision making powers to arbitral tribunals and therefore to expose the UAE to both financial and reputational risks.
In order to remedy growing concerns regarding the impact of ISDS, recent international treaty practice demonstrates a willingness from states to circumscribe the limits of such mechanisms, or even to categorically reject them in favor of other approaches.
Brazil has taken a distinct approach by rejecting traditional ISDS entirely in favor of a dispute resolution model centred on state‑to-state arbitration and robust dispute prevention. For instance, the Brazil – UAE Co‑operation and Facilitation Investment Agreement (CFIA) establishes a two‑tiered system that includes a joint committee responsible for dispute prevention and, if necessary, a state‑to-state arbitration mechanism. While the CFIA does not permit investors to bring direct claims, it allows their concerns to be raised and addressed through the Joint Committee’s proceedings, providing an avenue for engagement without recourse to ISDS.
Inspired from Nigeria’s practice in addressing investor-state disputes, the recent Morocco Model BIT also takes a reformative approach to resolving disputes, by establishing the principle of a joint committee, composed of representatives of both contracting parties, which role is to amicably resolve, prior to any legal action, investor-state problems and disputes. Subsequent access to ISDS is further limited in scope (e.g. ISDS excluded in case of breach by the investor of the agreement) and subject to multiple conditions (e.g. time limit, investment made in violations of specific laws, etc) (OCDE, 2024[8]).
The East African Community Model Investment Treaty explicitly discourages the inclusion of ISDS provisions and where ISDS is maintained, its use is subject to prior amicable dispute resolution mechanisms, exhaustion of local remedies, and a six‑month cooling-off period. Arbitration is further limited to a three‑year period from the date the investor became aware of the breach, and treaty-based ISDS provisions are overridden when investment contracts include separate dispute resolution clauses (OECD, 2024[9]).
While providing for ISDS as the dispute resolution mechanism, the UAE Model BIT reflects to a considerable degree some of the innovations mentioned above. Recourse to ISDS via BITs is available to investors only if expressly agreed upon in writing and such recourse is circumscribed within a time limit of three years since the date on which the investor acquired or should have acquired knowledge of either the breach itself or the subsequent loss or damage. Investors must waive their right to initiate any other proceedings with respect to the measures in question. Arbitral tribunals may request joint interpretations of any provision of the agreement and such interpretation would be made public and be binding on all arbitral tribunal established under the relevant BIT. The UAE Model BIT also introduces additional ethical duties for the members of the arbitral tribunal and their assistants. These innovations firmly reflect the UAE’s cautious and measured approach towards ISDS, limiting the risks associated with such mechanism.
Recent BITs concluded by the UAE also take innovative approaches towards the resolution of investor-state disputes. The Indonesia – UAE BIT (2019) establishes a multi-tiered dispute settlement framework that requires a six‑month consultation period, during which a joint committee – composed of senior officials from both parties – is tasked with mediating the dispute. If unresolved, investors may choose among several forums. This structure reflects a balance between investor protection and state sovereignty, offering multiple stages for dispute resolution before resorting to formal arbitration. In line with these trends, several other recent UAE BITs, such as the one concluded with Israel (2020), demonstrate a consistent preference for tiered dispute resolution mechanisms.
The UAE’s recent treaty practice reflects a broader trend toward strengthening domestic institutions, promoting amicable resolution, and encouraging institutional dialogue through joint committees and other consultative platforms. While it has considerably reformed its approach to investor-state dispute resolution by incorporating procedural safeguards and enhancing transparency in its Model BIT, the UAE may wish to consider more robust frameworks for dispute prevention policies and mechanisms to further curb risks associated with ISDS. As the representative of the UAE in regional and multilateral forums on investment related matters, the MoI could advocate such reforms, including based on recent international practices and the experiences of peer countries.
The UAE may wish to consider the merits of transitioning designs in its older treaties that it has now discontinued to reflect its current treaty policy practices. Many governments around the world are assessing several options to modernise their older treaties. Some governments have renegotiated individual agreements that feature designs that they no longer consider satisfactory or have replaced them with new agreements. Some governments have also exited older treaties – a policy option whose effect can be constricted by temporal validity arrangements in investment treaties.
Temporal validity arrangements in the UAE’s investment treaties constrain its possibility to terminate treaty engagements unilaterally. Many of the UAE’s investment treaties in force are currently in their initial validity periods or showcase designs that periodically renew their validity, further constricting exit opportunities. “Sunset” periods foreseen by these treaties would similarly extend their effects – in whole or in part – for significant periods of time (often of 15 to 20 years) following potential unilateral denunciation. Some of the UAE’s treaties would continue to impose enforceable obligations for almost half a century even if they were denounced in 2025 (Figure 4.4).
Note: Graph shows fictitious scenario of unilateral denunciation of all UAE treaties in early 2025. Black dots represent the share of treaties that would remain in force in a given year. While dots represent the share of treaties that would continue producing their effects in a given year.
Source: OECD investment treaty database.
Governments have also considered how they may update rather than terminate treaties to reflect newer designs. Some governments have used joint interpretative statements to guide treaty users on the interpretation and application of a given treaty, which allow governments to clarify the scope and content of their obligations, to the extent that the interpretation is in line with the ordinary meaning of the interpreted treaty text (OECD, 2025[10]).
Multilateral modifying arrangements are also currently being considered to adjust the rights and obligations contained in a large number of older treaties (OECD, 2025[11]). The Draft multilateral instrument on ISDS reform under negotiation at the UNCITRAL Working Group III follows such approach to reform dispute settlement provisions contained in existing investment treaties (UNCITRAL, 2024[12]). A plurilateral intervention could address a large stock of bilateral treaties using a single plurilateral instrument, rather than individual negotiations that can weigh significantly on governments’ resources.
Both options – joint interpretative statements and a plurilateral modifying agreement – are currently being assessed by over 100 governments to transition substantive provisions in their investment treaties in the context of the OECD work programme on the “Future of investment treaties” – Track 2. Track 2 is a government-led effort to consider among peers the merits and options for the transition of substantive clauses with outdated design in existing treaties in a pragmatic manner. One hundred and one jurisdictions are currently involved in this work programme. As the representative of the UAE in regional and multilateral forums on investment related matters, the MoI is encouraged to pursue its active engagement in these plurilateral exchanges to share its experience and improve the potential outcomes under its existing treaties that feature older designs.
Newer generation IIAs are increasingly incorporating provisions related to investor responsibility and seeking to support sustainable investment. Provisions seeking to support sustainable investment often go beyond procedural facilitation to address policy measures that can foster long-term, responsible investment flows. Such trends are evident in ongoing multilateral and regional efforts, including the negotiations of the WTO Investment Facilitation for Development (IFD) Agreement, the adoption of the Investment Protocol under the African Continental Free Trade Area (AfCFTA), and the conclusion of the Sustainable Investment Facilitation Agreement (SIFA) between the European Union and Angola (OECD, 2024[13]).
States have relied on different modalities to address sustainable investment considerations in IIAs. One such modality is to include substantive language on sustainable investment in IIAs, potentially resulting in the strengthening of existing treaty commitments, going beyond provisions seeking to protect the host state’s right to regulate in the public interest or establishing commitments not to relax health or environmental regulations to attract investment. Such new provisions on sustainable investment can address a wide range of matters, including promoting investment in sectors with relevance for sustainable development or setting out specific sustainability goals in the granting of investment incentives. The consideration of sustainable investment in IIAs is sometimes fostered through other approaches, such as excluding investments procured through corruption from treaty protection, recognising the role of investment in contributing to the host country’s economic development, or requiring investors to adhere to internationally recognised standards on corporate social responsibility. Another approach relies on parties’ co‑operation under the relevant IIAs, for example in the implementation of promotion or facilitation initiatives for sustainable investment. The choice of the relevant approach will depend on several elements, including the broader negotiating context, the choice of IIA to be negotiated, and the specific implementation needs of each party.
Whatever approach states take to harnessing sustainable investment through IIAs (if any), it is important to keep in mind that positive effects will not be automatic but will rather depend on effective implementation at the domestic level. Harnessing sustainable investment requires a whole‑of-government approach, focussing on the adoption of policies that contribute to improving the climate for investment (OECD, 2024[13]).
As it stands, the UAE Model BIT contains limited language with respect to sustainable development or sustainable investment considerations. While the preamble recognises the importance of maintaining health, safety, and environmental standards, these references are not reflected in the treaty’s operative provisions, which focus primarily on the protection of investments.
The overarching focus of the UAE Model BIT remains the promotion and legal protection of foreign investments, with the understanding that such protection operates within the domestic legal framework of the host contracting party. However, the absence of binding sustainability obligations or references to international responsible business conduct standards indicates that, as currently formulated, the UAE Model BIT places limited emphasis on integrating sustainable development objectives into its investment protection framework.
By contrast, the UAE’s more recent signed IIAs reflect a shift toward embedding sustainability, environmental protections, and corporate social responsibility principles more explicitly. Agreements with countries such as Brazil, Indonesia, India, and Hungary acknowledge sustainable development as a treaty objective and encourage investors to adhere to international standards of responsible business conduct. These IIAs also reinforce the right of states to regulate in pursuit of legitimate public policy goals – particularly in health, safety, labour, and environmental matters – without such regulation being construed as expropriation. Similarly, CEPAs concluded with Cambodia and Türkiye also integrate commitments for sustainable development, including on matters of responsible business conduct, environment, health and reaffirm the states’ right to regulate to align with legitimate policy objectives. This evolving practice illustrates a growing effort to balance investor protection with the host state’s right to regulate in the public interest, signalling a progressive divergence from the more traditional structure of the UAE Model BIT.
The question of whether investment treaties achieve their intended objectives is of particular importance in current investment treaty policy. Emerging issues such as the possible role of trade and investment treaties in promoting responsible business conduct, as well as ongoing discussions on treaties and sustainable investment deserve special attention. As the representative of the UAE in regional and multilateral forums on investment related matters, including those hosted by the OECD (Box 4.4), the MoI should continue to engage in such forums to ensure that the UAE’s treaty practice is aligned with sustainable development objectives.
The OECD plays an active role in global efforts to reform IIAs to ensure a greater alignment with sustainable development objectives. Investment treaties are an important component of the framework governing the conditions for foreign investment in many countries. About 2 500 such treaties are in force today, including investment provisions of trade agreements. Many of them were designed decades ago with a different global economy and concerns in mind.
The OECD-hosted work programme on the Future of Investment Treaties, launched in March 2021, explores how the investment treaties of tomorrow could help address these challenges and how to deal with existing agreements in a pragmatic way.
The programme comprises two tracks:
In Track 1, government and non-government participants have initiated the first major sustained multilateral effort to explore how investment treaties factor into climate action. Work under Track 1 focusses on how investment treaties can be drafted and implemented consistent with robust climate action, the Paris Agreement and net zero goals.
Track 2 considers merits and means to transition substantive clauses of older treaties with designs that are no longer used or are no longer considered satisfactory to newer designs where governments would wish to do so.
References
[8] OCDE (2024), Examen de l’OCDE des politiques de l’investissement : Maroc 2024, Examens de l’OCDE des politiques de l’investissement, Éditions OCDE, Paris, https://doi.org/10.1787/e5752331-fr.
[5] OECD (2025), “‘Full protection and security’ provisions in investment treaties: A large sample”, OECD Publishing, Paris, https://one.oecd.org/document/DAF/INV/TR2/WD(2025)1/REV1/en/pdf.
[10] OECD (2025), “Approaches available under international law to transition from older to more recent designs in investment treaties – “subsequent agreements”: the role of interpretive statements”, A scoping paper by the OECD Secretariat, https://one.oecd.org/document/DAF/INV/TR2/WD(2024)4/REV1/en/pdf.
[3] OECD (2025), Track 2 of the Future of Investment Treaties – Frequently asked Questions, https://one.oecd.org/document/DAF/INV/TR2/WD(2025)5/REV1/en/pdf.
[11] OECD (2025), “Treaty modification: legal framework and opportunities for investment treaties”, Note by the OECD Secretariat, https://one.oecd.org/document/DAF/INV/TR2/WD(2024)8/REV2/en/pdf.
[13] OECD (2024), Strengthening Sustainable Investment through International Investment Agreements, OECD Publishing, Paris, https://doi.org/10.1787/a8729c98-en.
[9] OECD (2024), Sustainable Investment Policy Perspectives of the East African Community, OECD Publishing, Paris, https://doi.org/10.1787/169f3378-en.
[4] OECD (2023), “‘Fair’ and ‘equitable’ treatment provisions in investment treaties: A large-sample survey of treaty provisions”, OECD Working Papers on International Investment, No. 2023/1, OECD Publishing, Paris, https://doi.org/10.1787/af86f128-en.
[6] OECD (2022), “The interaction between most-favoured-nation clauses and dispute settlement arrangements in investment treaties”, OECD Working Papers on International Investment, No. 2022/1, OECD Publishing, Paris, https://doi.org/10.1787/84a2b72d-en.
[7] OECD (2021), “The notion of ’indirect expropriation’ in investment treaties concluded by 88 jurisdictions: a large sample survey of treaty provisions”, https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/investment-treaties/oecd-future-investment-treaties-indirect-expropriation-meeting-background.pdf.
[1] OECD (2015), Policy Framework for Investment 2015 Edition, OECD Publishing.
[2] Pohl, J. (2018), “Societal benefits and costs of International Investment Agreements : A critical review of aspects and available empirical evidence”, OECD Working Papers on International Investment, No. 2018/1, OECD Publishing, Paris, https://doi.org/10.1787/e5f85c3d-en.
[12] UNCITRAL (2024), “Possible reform of investor-State dispute settlement (ISDS): Draft multilateral instrument on ISDS reform”, Note by the Secretariat, 8 July 2024, https://docs.un.org/en/A/CN.9/WG.III/WP.246.
Note: BITs listed in ante‑chronological order, from their date of entry into force. Date format: DD-MM-YYYY.
*This designation is without prejudice to positions on status, and is in line with United Nations Security Council Resolution 1 244/99 and the Advisory Opinion of the International Court of Justice on Kosovo’s declaration of independence.
Source: Information provided by the UAE’s Ministry of Investment (2025).
Note: BITs listed in chronological order, from their signature date. Date format: DD-MM-YYYY.
Source: UAE Ministry of Finance (List of BITs); OECD investment treaty database.
← 1. See the website of the OECD-hosted work programme on the Future of Investment Treaties, Track 2 on modernising investment treaties, available here Modernising investment treaties (Track 2) | OECD.
← 2. Spentech Engineering Limited v. United Arab Emirates, ICSID Case no. ARB/24/16. Qatar Airways Group Q.C.S.C. v. United Arab Emirates, Ad hoc arbitration; Amir Masood Taheri v. United Arab Emirates, ICSID Case No. ARB/21/19; Shokat Mohammed Dalal v. United Arab Emirates, ICSID Case No. ARB/19/10; BM Mühendislik ve İnşaat A.Ş. v. United Arab Emirates, ICSID Case No. ARB/17/20; Hussein Nuaman Soufraki v. United Arab Emirates, ICSID Case No. ARB/02/7; Impregilo, S.p.A and Rizzani De Eccher S.p.A v. United Arab Emirates, ICSID Case No. ARB/01/1.