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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 report presented today: Consultation on investment protection in EU-US trade talks
13-Jan-2015 EU Commission
Today, the European Commission published its analysis of the almost 150,000 replies to its online consultation on investment protection and investor-to-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP).
EU-US FTA (TTIP) - draft on dispute settlement (March 2014)
7-Jan-2015 European Commission
As published by the European Commission
Fixing BIPPA
25-Dec-2014 Financial Express
The definition of investment that the govt of India had agreed to while entering into BIPPAs is particularly problematic, writes Biswajit Dhar
Elizabeth Warren: Obama trade deal could undermine Wall Street reform
19-Dec-2014 Huffington Post
US Senator Elizabeth Warren on Wednesday warned that a major trade deal being negotiated by the Obama administration could hamstring Wall Street reform efforts.
Why is govt in a hurry to pay TCC for Reko Diq?
18-Dec-2014
The Nawaz Sharif government is in an unnecessary haste to settle and pay millions, possibly billions, of dollars as compensation for the Reko Diq gold and copper mines to a discredited and ousted Canadian-Chilean mining consortium, a decision if made may resemble the infamous circular debt payment of Rs500 billion in the early days of the PML-N government.
Investor-State Dispute Settlement: The TTIP’s Achilles heel?
18-Dec-2014 BEUC
A high level panel discussion on TTIP organised by BEUC, FOEE and AK Europa (video)
New bilateral investment treaties will help India avoid arbitration
17-Dec-2014 Economic Times
Bilateral investment treaties that the government of India will enter into from now on will have a provision preventing foreign investors to drag India to arbitration on any issues that have been settled by a judicial authority.
Analyst: ISDS model is Australia, not Canada
16-Dec-2014 EurActiv
Gus Van Harten tells EurActiv that the EU should explore the option of an international arbitration court and use Australia, not Canada as a benchmark.
TTIP and the architecture of impunity
16-Dec-2014 La Marea
The legal principles on which the TTIP is based form part of the legal suit of arms that limits the exercise of democracy and people’sovereignty.
Investor state dispute settlement and financial crises
12-Dec-2014 WEED
The film explains how the settlement works and why it endangers necessary governmental rescue measures in financial crises as occurred in Greece, Cypress and Argentina.
ISDS cannot be fixed
12-Dec-2014 Public Citizen
The European Commission’s claim that threats posed by the investor-state dispute settlement system can be fixed by “improving” ISDS provisions in trade pacts has already been proved false, says Public Citizen
ISDS clause: a gateway to future trade deals
9-Dec-2014 EurActiv
Trade officials negotiating the ISDS arbitration clause within the EU-US trade agreement have half an eye on their next deals, since the wording is likely to shape other key trade treaties on the table.
Seven things you should know about EU-Singapore ISDS
7-Dec-2014 FFII
Lock-in, no institutional safeguards for independence, perverse incentives, no separation of powers, automatic consent, ripe for exploitation, sovereign debt instruments included, open to the world, and a strategic mistake. Former trade commissioner De Gucht left us a Gordian Knot, writes Ante Wessels.
CETA: The French Parliament votes against the ISDS
4-Dec-2014 AITEC
At the end of November, both chambers of parliament rejected integrating the investor-state dispute resolution mechanism into CETA.
Revealed: How taxpayers are footing bill for Europe’s trade deals
4-Dec-2014 FOEE
New research today reveals that European governments have already paid at least €3.5 billion to private investors due to a clause in international trade deals.
Congressional Financial Services Committee leaders: Exclude ISDS from US-EU deal
4-Dec-2014 Public Citizen
US congressional leaders have just sent a letter to the Obama administration warning against TAFTA/TTIP provisions that could restrict Congress’ ability to prevent another financial crisis.
The increasing appeal and novel use of bilateral investment treaties
3-Dec-2014 Skadden
State measures that reduce or nullify existing creditor rights, such as the Argentine “Lock Law” or similar moratoria on repayment, may violate BIT rights and supply investors and creditors in other jurisdictions, particularly in the eurozone, with a basis for challenging similar measures.
Investor-state dispute settlement in Europe
3-Dec-2014 IR Blog
If it is left in TTIP, a great deal more of global FDI flows will suddenly be covered by ISDS.
CETA’s fate may hinge on outcome of EU-Singapore trade ratification
2-Dec-2014 Globe and Mail
The fate of Canada’s landmark trade agreement with the European Union, known as CETA, may hinge on an obscure case due to come before the European Court of Justice that relates to a similar deal the EU recently struck with Singapore.
Sigmar Gabriel: ‘Germany will approve CETA’
28-Nov-2014 EurActiv
German Minister of Economic Affairs Sigmar Gabriel is clashing with his own party over the EU’s planned free trade agreement with Canada (CETA), calling on Bundestag members to approve the deal despite the controversial investor protection provision.