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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.

Kimberly-Clark to sue Venezuela over 2016 expropriated factory
24-Apr-2018 Venezuelanalysis
US multinational Kimberly-Clark has filed a formal request to take Venezuela to court regarding the expropriation of its abandoned factory by the government of Nicolas Maduro in July 2016.
Taxpayers face Sh500bn loss in case against Canadian firm
24-Apr-2018 Daily Nation
The government risks losing up to Sh500 billion in an international arbitration case against mining firm, Cortec, after it failed to provide Sh100 million in the second mini-budget to pay a UK-based law firm representing it in the case.
Three Canadian mining companies lodge ISDS disputes over Colombian mining ban
23-Apr-2018 AFTINET
Colombia’s decision to ban mining activities in the Páramos, a range of environmentally sensitive wetlands that provide approximately 70% of the country’s water supply, has so far led to three treaty-based arbitration cases.
Petroleum ISDS cases pose major threat to climate action
23-Apr-2018 AFTINET
Research shows that mining and energy industries are the most frequent users of Investor-State Dispute Settlement mechanisms.
Lee-Chin seeks US$300m in arbitration fight over Dom Rep investment
20-Apr-2018 The Gleaner
A Jamaican investor served the government of the Dominican Republic with a notice of arbitration surrounding the state takeover of a recycling facility and waste-to-energy plant.
Canadian opposition to Nafta’s chapter 11 gives Trudeau leeway
19-Apr-2018 Bloomberg
Dislike of investor-state dispute mechanism appears widespread. Public consultation files detail what Trudeau team was told.
NAFTA: New protections for "too big to fail" banks
11-Apr-2018 IATP
The financial industry’s demands for a “modernized” financial services chapter of the North American Free Trade Agreement have been overlooked
Trump Organization pressures Varela
10-Apr-2018 La Prensa
A letter sent by the Trump Organization’s lawyers reminded President Varela of Panama’s obligations under a 1983 treaty that protects the rights of investors from the United States.
ISDS: The wild, wild west of international law and arbitration
5-Apr-2018 Curtis
I thought it would be both exciting and challenging to follow clients into this new area of investment claims practice. What I didn’t know was that I was entering the Wild Wild West of international practice.
New Zealand: Agreements with five countries exclude compulsory investor-state dispute settlement processes
28-Mar-2018 Library of Congress
On March 9, 2018, the New Zealand Minister for Trade and Export Growth, David Parker, announced that the government has signed “side letters” with five other countries that are also party to the TPP11 that exclude compulsory investor-state dispute settlement.
Negotiating directives for a Convention establishing a multilateral court for the settlement of investment disputes
25-Mar-2018 European Council
As released by the European Council
An example of regulatory chill
24-Mar-2018 Sold down the Yangtze
The case of Ethyl v. Canada.
Multilateral investment court: Council gives mandate to the Commission to open negotiations
20-Mar-2018 European Council
The Council adopted the negotiating directives authorising the Commission to negotiate, on behalf of the EU, a convention establishing a multilateral court for the settlement of investment disputes.
Al Amoudi lodges a complaint against Morocco in Washington, D.C.
19-Mar-2018 Morocco World News
Al Amoudi recently filed a complaint against Morocco at the World-bank affiliated ICSID thus ending a series verbal threats the Saudi investor has been brandishing since 2015 against Moroccan investment authorities.
Oil and gas leaders warn Trump he risks harming their industry
16-Mar-2018 Bloomberg
Trump disagrees with executives on Nafta arbitration language. Industry leaders say it provides an essential safety net.
EU-Mexico FTA: Draft investment chapter (Feb 2018)
14-Mar-2018
Letter: Gambia is about to pay half a million dollars at the International Settlement Investment Dispute Court
13-Mar-2018 Freedom Newspaper
Shocking information from insiders tells us that the authorities are about to make a payment to the International Settlement of Investment Disputes of nearly US dollars 500,000 as a prepay for the three litigations.
Fears tobacco giants will use TPP to sue Australia over plain packaging as secrecy shrouds legal costs in Philip Morris case
12-Mar-2018 South China Morning Post
Political party says the newly signed Trans-Pacific Partnership trade pact, which contains similar clauses to the Hong Kong deal, could prompt more costly challenges in The Hague
Slovakia payment to Dutch company overturned
7-Mar-2018 The Slovak Spectator
Slovakia will no longer have to compensate Achmea B.V., the shareholder of Union ZP health insurer, for €22 million in damage.
Canada didn’t violate trade agreement in B.C. pulp mill case, NAFTA tribunal rules
7-Mar-2018 The Globe and Mail
A NAFTA tribunal rejects $250-million claim by Mercer International Inc. against the Canadian government.