The last two years have been a rough ride for the Indian government regarding the bilateral investment treaty (BIT) arbitration cases. First, India lost several high-profile BIT arbitration cases against Deutsche Telekom, CC/Devas, Vodafone and Cairn Energy. Subsequent to these awards, the Indian government has also been facing a tough time resisting the enforcement of the BIT arbitration awards. In particular, the cases of Vodafone and Cairn Energy, arising out of retrospective taxation laws of 2012 – a mistake committed by the UPA government, and perpetuated by the current government, have become a huge headache for India. Recently, a French court allowed Cairn Energy, to seize 20 Indian properties situated in France, consequent to a proceeding for the enforcement of the BIT arbitration award in Cairn Energy v. India, leading to embarrassment for India. Further, the approach of the Indian government in the case of Antrix-Devas dispute – ordering the winding up of Devas Multimedia Ltd., and non-enforcement of the ICC award, has also led to growing concern among the foreign investors. Overall, the position of the Indian government is precarious so far as BIT arbitrations are concerned. However, the introduction of the Taxation Laws (Amendment) Bill, 2021 in the Lok Sabha, comes as an indication that the Indian government has actually started heeding the calls of the critics. Also read: GST Has Increased India’s Reliance on Indirect Taxes, Hurting the PoorThe 2021 Taxation Bill In 2012, when the Indian parliament amended the Income Tax Act, 1961, retrospectively through the Finance Act, 2012, in order to circumvent the effect of the Supreme Court’s judgment in the Vodafone v. Union of India. The 2012 amendment clarified that the gains arising from sale of shares of a foreign company were taxable in India if such share, directly or indirectly, derived its value substantially from the assets located in India. Further, it also validated the demands under the Income Tax Act, with respect to cases relating to indirect transfer of assets situated in India. The 2021 Bill, inter alia, makes two important points. First, that no future tax demands will be made based on the retrospective amendment of 2012 with respect to indirect transfer of Indian assets; and second, that all the demands already raised regarding such transfers will be nullified, on the fulfilment of specified conditions. The conditions involve withdrawal of, or submission of an undertaking to withdraw any appeal before any appellate forum, or writ petition before any high courts or the Supreme Court. Most importantly, where any proceedings for arbitration, conciliation or mediation have been initiated under any BIT, or any other international agreement, or any other law, such claims have to be withdrawn, or an undertaking for such withdrawal has to be submitted. Further, the Bill also provides for the refund of any payments already made, but without the interest which may have accrued thereon.Also read: As Oil Taxes Pinch More Than Ever, Is the Economy Being Rewarded With Higher Spending?Turning the clock back and for goodOne cannot help but point, however, that neither the investors nor the government benefitted from this clearly avoidable and unnecessary legal battle over the course of almost a decade. The only beneficiaries from the BIT arbitrations in these cases have been the arbitrators and the lawyers. Investment treaty arbitration is a costly business, and the money at stake belongs to the taxpayers. A study by Professor Susan Franck points out that each party to a BIT arbitration spends on an average $1.5 million every year, and each party approximately pays $4-5 million for legal counsel. While the Indian government is correct in claiming that taxation is a sovereign right, it did cede a chip of that right away when it signed the older generation BITs with wide provisions, without excluding taxation or tax-related disputes from the jurisdiction of BIT arbitration tribunals. This is a fact clearly known to the government, and pointed out repeatedly by the critics. The expenses of the BIT arbitrations in three cases relating to retrospective taxation – Vodafone, Cairn Energy and Vedanta – could have been clearly avoided. The intention of the government behind this Bill is pretty clear. The statement of objects and reasons clearly point out that the retrospective clarificatory amendment of 2012 and the tax demands made in pursuance thereto in a few cases continue to be a sore point with potential investors. The recent 2021 Investment Climate Statement on India released by the US Department of State in the last month, specifically flagged the issue stating that retroactive taxation has been defended despite government assurances of not introducing new retroactive taxes. There is indeed no doubt that this Bill is a step in the right direction, as it will save thousands of crores of taxpayer money, which would have been paid as compensation to the foreign investors. It will help in plugging the uncertainties, and restoring investor confidence by ensuring predictability in the legal climate. The 2021 Bill might just be the end of BIT arbitration cases with Vodafone, Cairn and Vedanta, and for good. Pushkar Anand is assistant professor at Faculty of Law, University of Delhi.