ABSTRACT
A critical issue in ISDS that does not get much attention is the possibility of a foreign investor suing a State due to the actions of one of its sub-national governments. This issue is of extreme relevance to federal constitutional democracies like India. This chapter focusses on ISDS claims India faced due to the actions of India’s two State governments: Andhra Pradesh and Tamil Nadu. The award in one ISDS case, RAKIA v India, is unavailable. Therefore, the chapter focusses on the Nissan v India case. This case arose from commitments that the Tamil Nadu government made to the foreign investor and then retracted on it. In this chapter, we discuss the rules of attribution under international law and their application in the context of ISDS, the issues pertaining to the interpretation of the fork-in-the-road clause, and the determination of whether a regulatory measure amounts to a tax.
