Investor-State Arbitration In Esports: Potential For Protecting Game Publishers Against Abrupt Ban
- IJLLR Journal
- Jul 28
- 2 min read
Dhritiraj Paul Choudhury, Intellectual Property Counsel at Boudhik IP LLP;
LLM, National Law University Delhi; BAL.LB (H), Assam University (a central university) Silchar.
ABSTRACT
This paper evaluates whether intangible in-game assets can qualify as investments under international investment law and, in the presence of bilateral investment treaties (BITs), and whether abrupt government bans on games, such as India’s ban of PUBG Mobile in 2020, could breach treaty protections and trigger investor–state dispute settlement (ISDS) claims.
It clarifies that BITs typically define “investment” broadly (as “every kind of asset”) and often explicitly include intellectual property and other intangible rights, meaning a game’s IP, licenses, digital infrastructure or platforms, virtual in-game goods, and even its user base and data can all fall under treaty protection. Applying tests like the Salini criteria from ICSID jurisprudence, the analysis confirms that these digital assets exhibit the hallmarks of an investment demonstrating that even non-traditional, virtual assets meet international investment law’s thresholds.
Building on this foundation, the paper assesses the legal viability of potential BIT claims by a game publisher in the face of a ban, focusing on the doctrines of indirect expropriation and fair and equitable treatment (FET). An outright ban can be framed as an indirect expropriation if it substantially deprives the foreign investor of the game’s economic value and use without compensation.
Under BIT norms, expropriation is unlawful in absence of due compensation and a legitimate public purpose, so a ban that wipes out the investment’s value with no compensation would prima facie violate the treaty’s expropriation clause. Likewise, a sudden ban may breach the FET standard if it is imposed arbitrarily or in a discriminatory manner without due process, given that FET obliges states to act transparently and fairly towards investors. The investor could argue that the ban undermined its legitimate expectations of regulatory stability and fairness, especially if the game had been operating legally and the ban lacked clear evidence or notice.
