An ICSID tribunal has ordered Türkiye to pay roughly $800 million to Akfel Commodities and I-Systems Global over the state’s 2016 seizure of Akfel Group, then Türkiye’s largest private gas importer, taken in the aftermath of the failed coup on allegations of Gülen-movement links. The tribunal adopted the claimants’ quantum methodology in full and rejected the state’s confiscation defence outright. Türkiye has since filed to annul.
The claim proceeded under the Singapore-Türkiye and Netherlands-Türkiye BITs, because that is where the claimant entities happened to be domiciled as passive holding structures, in each case, rather than operating businesses. Had the same underlying investment been held through an entity in a jurisdiction without an operative BIT, there would have been no tribunal to hear the confiscation claim at all. The $800 million figure is not really a measure of the wrong done. It is a measure of what an entity-domicile decision, made once, years before the coup, turned out to be worth.
India’s own treaty history makes this an imminent problem to be examined. Following the White Industries backlash, India terminated roughly 75 legacy-generation BITs between 2016 and 2017. Most carried a ten-year sunset clause preserving protection for investments made before termination. That timeline reaches its end in 2026 and 2027. Capital that entered India through Mauritius, Singapore, or Netherlands holding structures before the termination wave is now running out its survival window in real time, converting from protected to unprotected on a rolling basis over the next two years, with no replacement treaty behind most of it. Capital that entered after 2016 never had a sunset period to begin with and it has been sitting in the position Akfel’s claimants would have occupied without their BIT layer since the day it was invested.
The Indian Treaty Practice and Consequent Exposures
It gets better. India’s post-2016 treaty practice has moved to actively narrow investor-state recourse rather than restore it. The EFTA agreement and the UK and Oman treaties exclude investor-state arbitration outright, routing disputes to state-to-state mechanisms an individual investor cannot invoke directly. The India-Brazil BIT replaces arbitration with a national ombudsman. Where India has kept investor-state dispute settlement (the 2024 UAE BIT, or the India–Israel investment agreement that entered into force this month) access is conditioned on exhausting Indian domestic remedies first, typically for three to five years, before an international tribunal can be engaged at all.
There is a sharper irony underneath the structuring point Akfel illustrates. India’s 2016 Model BIT text replaces the old asset-based definition of investment with an enterprise-based one, requiring genuine business substance (local staff, autonomous local governance, real operational activity) before a holding entity qualifies for protection. The precise type of structure that won the Akfel claimants their award was a passive offshore holding layer, built for treaty access rather than commercial operation. India’s own newer agreements are specifically designed to exclude that type. The Akfel precedent and the current Indian treaty text are, in this narrow but important sense, arguing directly against each other.
And When Can It Happen
None of this requires a coup or a formal expropriation to matter. In a heavily regulated market, the equivalent of Akfel’s seizure is a regulatory circular. A sudden RBI tightening on digital wallets, a retrospective tax reclassification, a data-localisation mandate, or a state Discom unilaterally revisiting a solar power purchase agreement can erase equity value with the same finality as a physical seizure. An investor without current treaty coverage has exactly one recourse, the domestic court system of the state whose action is being challenged. Digital economy and fintech FDI, largely routed through Singapore, Dutch, and Mauritian layers over the past decade, sits directly in the path of exactly this kind of regulatory volatility. Infrastructure, renewable energy, and real estate carry the same exposure through a different trigger: long-dated, illiquid assets and state-level counterparties prone to unilateral contractual revision. Banking, financial services, and insurance carry it through a third: India’s newer treaties carve taxation measures out of protection entirely, closing the door on any Vodafone-style route back to arbitration over a tax reclassification.
The Akfel award will be read, correctly, as a treaty-law precedent. The more exact fact underneath it, for the India corridor specifically, is a set of dates: a sunset clock that started running in 2016 and closes in 2026 and 2027 for one population of investors, and a clock that was never set at all for everyone who arrived after it. Both populations are, right now, holding exactly the kind of structure the Akfel tribunal just confirmed is worth $800 million to get right, and exactly the kind that India’s own current treaty practice has made clear it no longer intends to protect.
Lawfinity Solutions advises international law firms on cross-border legal market positioning. If the India corridor is a live question for your firm, we would be interested in a conversation. Lawfinity works with one firm per jurisdiction. Engagements begin with a single conversation about your firm’s current position and where the corridor question is live for you. Write to Prachi Shrivastava
