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investor-state disputes | ISDS

Investor-state dispute settlement (ISDS) refers to a way of handling conflicts under international investment agreements whereby companies from one party are allowed to sue the government of another party. This means they can file a complaint and seek compensation for damages. Many BITs and investment chapters of FTAs allow for this if the investor’s expectation of a profit has been negatively affected by some action that the host government took, such as changing a policy. The dispute is normally handled not in a public court but through a private abritration panel. The usual venues where these proceedings take place are the International Centre for Settlement of Investment Disputes (World Bank), the International Chamber of Commerce, the United Nations Commission on International Trade Law or the International Court of Justice.

ISDS is a hot topic right now because it is being challenged very strongly by concerned citizens in the context of the EU-US TTIP negotiations, the TransPacific Partnership talks and the CETA deal between Canada and the EU.

US bid to exit Nafta arbitration panels draws ire from businesses
23-Aug-2017 WSJ
US trade officials are putting together a proposal to let the US withdraw from a corporate arbitration system at the heart of the North American Free Trade Agreement, upsetting big American companies that say the system protects their investments overseas.
Can foreign investors sue the UK over Brexit?
21-Aug-2017 Global Legal Post
Foreign investors may have a case against the UK government if profits suffer post-Brexit, says Bryan Cave’s Maria Gritsenko.
Trump’s penchant for deal-making evident in push to renegotiate KORUS
21-Aug-2017 Hankyoreh
The Moon administration needs to stand up to Trump with the confidence of a party ready to accept termination of the agreement, writes The Hankyoreh
What to do about corrupt arbitral tribunals?
16-Aug-2017 The Global Anticorruption Blog
That concern is a real and serious one, but there is also a more direct and crude problem: parties (or their lawyers) bribing, or making backdoor deals with, the arbitrators to secure a favorable outcome.
Duterte’s RCEP push at ASEAN, implications on Philippines economy & development
16-Aug-2017 IBON
The more far-reaching implication of RCEP is for Philippines’s sovereignty in regulating foreign investments
«Le moratoire de Québec était légitime», dit le Centre québécois en droit de l’environnement
12-Aug-2017 Le Devoir
Québec était en droit d’instituer un moratoire sur la fracturation hydraulique et Ottawa ne devrait pas compenser Lone Pine.
Business groups to the administration: Keep ISDS in NAFTA
10-Aug-2017 Politico
More than 100 U.S. business groups and associations are pushing the Trump administration to not only preserve investor-state dispute settlement and related provisions in an updated NAFTA agreement but to also strengthen them to further protect intellectual property and interests.
NAFTA renegotiation: ISDS reform objectives
8-Aug-2017 Lexology
ISDS reform is one of several “negotiating objectives” announced last month by the Office of the United States Trade Representative.
India may deviate from model BIT to meet Canada’s demands
4-Aug-2017 The Hindu
As talks with Canada began before model text was approved by Cabinet, deviations may be allowed.
Tell us who gains from RCEP: People’s Forum demands as RCEP talks end
28-Jul-2017 People’s Forum against FTAs and RCEP
“Tell us at least now who gains from RCEP,” People’s Forum challenges the Indian government as the 19th round of RCEP negotiations comes to an end
Why RCEP is more dangerous than bilateral investment treaties
28-Jul-2017 Jakarta Post
Crucial to RCEP’s investment protection chapter is the highly controversial Investor-State Dispute Settlement mechanism, a system of privatised justice characterised by international arbitration tribunals outside of the reach of domestic legal systems, explains Cecilia Olivet of TNI
Harsh sentencing of Aymara leader reveals the politics of criminalization in Peru
27-Jul-2017 Intercontinental Cry
This past month, eighteen Aymara community leaders endured the final stages of a trial that had them facing up to 28 years in prison and massive fines for their alleged roles in the 2011 ‘Aymarazo’ protests against the Santa Ana silver mine on the Peru-Bolivia border.
The king is dead, long live the king: the EU and the future of investor-state dispute settlement
26-Jul-2017 Volterra Fietta
The data lead to the inexorable conclusion that the European Commission’s declaration that “investment treaty arbitration is dead” is wrong by a ratio of over 1:3,000.
World Bank orders Argentina to pay $320 mln over seized airline
26-Jul-2017 Reuters
The World Bank’s arbitration tribunal has ordered Argentina to pay $320 million plus interest and legal fees to Spanish travel group Marsans for expropriating its airline Aerolineas Argentinas SA in 2008.
ASEAN Parliamentarians call for a focus on rights in regional trade talks
24-Jul-2017 Asian Tribune
Officials from ASEAN member states and other countries meeting in India this week for negotiations on the Regional Comprehensive Economic Partnership (RCEP) should take steps to ensure that the trade deal safeguards human rights, Southeast Asian lawmakers said today.
Argentina bonds for sale to pay money owed Total
24-Jul-2017 Nasdaq
Citigroup offered US$200m of Argentina bonds for sale as part of an arbitration agreement to help settle the sovereign’s obligations to French oil company Total.
Pakistan refuses $11.5 billion claim in Reko Diq case
17-Jul-2017 The Nation
Pakistan has rejected $11.5 billion damages claim made by the Tethyan Copper Company ltd (TCC) a joint venture between Antofagasta and Canada’s Barrick Gold Corporation in the Reko Diq case.
Canada blinks in face of US/Pharma pressure
14-Jul-2017 Info Justice
The cool reasoning of the Canadian Supreme Court does not acknowledge or reference “external” pressures or the Eli Lilly v. Canada ISDS case. However, courts do not decide cases in a vacuum. This case seems to have been decided in a pressure cooker.
No RCEP Campaign: Stop trading away human rights
13-Jul-2017 APWLD
The ’No RCEP’ campaign urges governments to consider the adverse impact of the mega free trade agreement
UN agrees to start work on multilateral reform of investment dispute settlement
12-Jul-2017 European Commission
The United Nations has agreed to initiate work on possible multilateral reform of investment dispute settlement including the possible establishment of a multilateral investment court.