A
1 only
B
2 only
C
Both 1 and 2
D
Neither 1 nor 2
Correct answer: (a) 1 only
Explanation
Statement 1 is correct because the 2016 Model BIT mandates exhausting local remedies before international arbitration. Statement 2 is incorrect because the ISDS mechanism allows foreign investors (not domestic citizens) to bring arbitration claims against a host government.
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