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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.

Water wars: Indigenous Ecuadorians vs. corporations
29-Mar-2012 Policymic
Ecuadorian communities learned from the way that Chevron’s operations flouted environmental law in the 1990’s, that once entrusted to foreign businesses their natural resources are usually squandered.
Obama says to suspend trade benefits for Argentina
26-Mar-2012
U.S. President Barack Obama said on Monday he was suspending trade benefits for Argentina because of the South American country’s failure to pay more than $300 million in compensation awards in two disputes involving American investors.
US eyes suspending trade benefits for Argentina
21-Mar-2012
The United States could soon suspend trade benefits for Argentina because of that country’s failure to pay awards in two long-running investment disputes with U.S. companies, a U.S. trade official said on Monday.
Africa: Coming Back to Bite
10-Mar-2012
African governments once rushed into signing bilateral investment treaties to encourage FDI. Lawyers are now calling for new models.
Labor standing firm on Pacific trade deal
5-Mar-2012 Sydney Morning Herald
The federal government is standing firm against Australian and US business demands that it allow controversial dispute settlement clauses into an ambitious new Pacific free trade deal.
Chevron’s secret arbitration violates human rights
17-Feb-2012 Amazon Defense Council
The Andean Commission of Jurists and five prestigious international law experts from around the world have joined a growing chorus of criticism targeting Chevron’s attempt to use a secret investor arbitration as part of its campaign to evade an $18 billion environmental judgment in Ecuador, according to letters released today.
Come and get me: Argentina is putting international arbitration to the test
17-Feb-2012 The Economist
Argentina has never threatened to quit ICSID. Its government insists it is open to honouring the awards. The only delay, it says, is that the claimants have not brought their rulings to a local court for collection.
India loses arbitration case against Oz firm
9-Feb-2012
In a stinging indictment of the slow speed with which the higher judiciary decides cases and lackadaisical manner in which the government deals with disputes involving foreign companies doing business in India, a three-member international arbitration panel has decided a case against the Government of India and a PSU.
Facing devastating setbacks, Chevron now seeks taxpayer bailout from $18 billion Ecuador judgment
1-Feb-2012 Amazon Defense Coalition
On February 11, Chevron will ask a panel of three private lawyers named as "arbitrators" under the BIT to nullify the entire nine-year Ecuadorian court process that recently found the company liable for $18 billion in clean-up costs.
India may exclude clause on lawsuits from trade pacts
30-Jan-2012 Livemint
The department of industrial policy and promotion has in principle decided not to include in bilateral trade pacts a clause that permits a foreign investor to sue the host country at an international dispute settlement agency.
Investment terror
13-Jan-2012 DTE
Since the 1990s developing nations have been on a treaty spree, signing a vast number of bilateral and regional investment treaties to attract funds for development. But as the figure of investment treaties has shot up so have the claims for damages from investor companies, which are seeking billions of dollars in compensation on account of regulatory laws.
Unearthed documents illustrate pitfalls of ISD clause
3-Jan-2012 The Hankyoreh
The experiences of former judge Abner Mikva, an arbitrator in a NAFTA dispute, demonstrate how he was pressured to favor the interests of the American establishment
Philip Morris Limited files high court challenge against the Australian government over plain packaging
20-Dec-2011 Philip Morris Ltd
"We believe plain packaging violates the Australian Constitution because the Government is seeking to acquire our property without paying compensation," the company states
Labor, environmental activists to protest World Bank’s CAFTA tribunal
15-Dec-2011 AFL-CIO
Tomorrow, the AFL-CIO will join the Institute for Policy Studies (IPS) and activists from a range of labor and environmental groups to converge on the World Bank headquarters in Washington, D.C., for a noon protest in opposition to a CAFTA case being brought against the Salvadoran government by Pacific Rim.
US Congress and courts well aware of ISD’s danger
6-Dec-2011
Canadian company, the Loewen Group has found itself embroiled in a legal battle after investing in a U.S. funeral home project. Loewen was charged by the Mississippi state court with violating its contract.
Judges debate KORUS FTA task force
4-Dec-2011
Judges are currently involved in a heated online and in-person debate over comments about the South Korea-U.S. Free Trade Agreement made by Incheon District Court Senior Judge Kim Ha-neul.
Korea`s next problem after FTA ratification: trade lawyers
26-Nov-2011
Korea’s Office of the Minister for Trade recently attempted to recruit lawyers specializing in international trade before the effectuation of the free trade agreement with the European Union.
Air of intrigue in move against plain packaging
25-Nov-2011 Canberra Times
Despite the compelling rationale that the public has a stake, Philip Morris’ claims will not be heard in an Australian court by respected judges, but by an ad-hoc tribunal that will meet in Singapore or another foreign country.
As confrontation looms, GNP calls for ISD clarification from DP
22-Nov-2011
The ruling Grand National Party (GNP) placed pressure on the Democratic Party on Monday to state how it would respond if a written agreement for investor-state dispute (ISD) provision renegotiations for the South Korea-U.S. Free Trade Agreement (KORUS FTA) were received from the South Korean and U.S. trade officials.
Cigarette plain packaging laws pass Parliament
21-Nov-2011
The Federal Government’s plain packaging laws for cigarettes have now passed both houses of Parliament but are facing their first legal challenge.