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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.

EU quietly asks Canada to rework trade deal’s thorny investment clause
22-Jan-2016 CBC
Both sides admit surprise as deal risks losing ratification vote thanks to anti-American sentiment.
India’s new BIT and arbitration law send mixed signals to foreign investors
21-Jan-2016 Lexology
India’s new model BIT text follows the trend of divergent approaches to investment treaty-making by focusing on a more defensive-minded strategy than in its prior treaties.
South America forms alternative to free trade kangaroo courts
21-Jan-2016 Tele Sur
Experts from UNASUR met in the Uruguayan capital Montevideo in order to finalize and sign agreements regarding the proposed center for investigation of international settlement dispute cases.
Canadian mining company reorganizes to seek damages from Costa Rica
21-Jan-2016 Tico Times
Infinito announced that it has secured funding from a lender to continue pursuing damages stemming from Costa Rica’s cancellation of the firm’s gold mining concession in 2011.
Lametti on CETA: ’We’ll get this deal to work’
21-Jan-2016 Embassy
CETA, China, softwood lumber among government’s top trade priorities for 2016. Canada’s government is willing to address ISDS concerns.
More than 500 civil society organisations from Myanmar express their concerns about the Investment Protection Agreement with the EU
14-Jan-2016 TNI
Letter from civil society organizations in Myanmar to EC Commissioner Malmström.
Canada-India free trade agreement talks delayed
14-Jan-2016 The Hindu
Canada asks officials to focus on TPP ratification instead; wants India to first ink bilateral investment pact.
Global economy moved one step forward, one step back in 2015
14-Jan-2016 Market Watch
The problem of TPP is with the “investment” chapter, which severely constrains environmental, health, and safety regulation, and even financial regulations with significant macroeconomic impacts.
Rafael Correa announces that Ecuador will assume Oxy’s “liabilities”
13-Jan-2016 El Universo
President Rafael Correa announced that Ecuador has reached a payment plan with the US oil company, Occidental (Oxy)
Who has benefited financially from investment treaty arbitration?
13-Jan-2016 SSRN
The beneficiaries of ISDS have overwhelmingly been companies with more than USD1 billion in annual revenue and individuals with more than USD100 million in net wealth.
Ecuador is paying Occidental $980M to settle its lawsuit
12-Jan-2016 Seeking Alpha
Ecuador paid $100M on Dec. 21; will pay another $100M on Jan. 15; $100M on Jan. 31; $200M on Feb. 29; $300M on March 31; and the remainder on April 29.
Karuturi challenges Ethiopia decision to cancel farm project
11-Jan-2016 Bloomberg
Karuturi Global Ltd., one of the largest investors in Ethiopia’s farm industry, is challenging the termination of its project, claiming the government broke the terms of its agreement with the company.
Bauxite mining moratorium could land Malaysia in trouble under TPP, says law professor
11-Jan-2016 The Malaysian Insider
The Malaysian government could be sued by foreign corporations if it intervened in their business activities under the Trans-Pacific Partnership (TPP) agreement.
TransCanada, this is what democracy looks like
11-Jan-2016 Huffington Post
Canadian company TransCanada’s announcement that it will sue the American people for $15 billion perfectly illustrates how today’s corporate-empowering trade policies threaten the way democracy is supposed to work.
This NAFTA lawsuit over Keystone XL proves ‘free trade’ deals kill democracy
8-Jan-2016 eNews Park Forest
‘The idea that some trade agreement should force us to overheat the planet’s atmosphere is, quite simply, insane.’
Oil giants punish Venezuela through Dutch treaty
8-Jan-2016 Eurasia Review
Venezuela doesn’t want investment treaties anymore if they give investors the right to drag the country before a commercial court. “The system has been set up to break down the nation-state.”
Libre-échange contre climat : la plainte de TransCanada contre l’État fédéral américain confirme les craintes des mouvements citoyens
7-Jan-2016 Collectif Stop Tafta
La cohabitation entre le régime international de commerce et d’investissement actuel et l’ambition prétendue de lutter contre le changement climatique est impossible.
Keystone XL rejection leads TransCanada to sue Obama administration
7-Jan-2016 CBC
Calgary-based company alleges U.S. president exceeded his constitutional powers
RCEP: India to propose mechanism to resolve non-tariff measures
6-Jan-2016 Financial Express
India is set to propose a non-legal and non-adversarial mechanism to resolve trade-impeding non-tariff measures among the 16 Regional Comprehensive Economic Partnership (RCEP) countries.
Will the TPP set back this campaign to stop a proposed coal mine on Montana tribal land?
6-Jan-2016 Yes
The TPP makes the rights of companies sacrosanct, and that includes the right to mine. But what about the rights of people who live in the way of proposed mining sites?