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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.

How colonialism shaped free trade agreements: the imposition of Western legal regimes (part 2/3)
25-May-2023 bilaterals.org
Colonialism resulted in the imposition of a legal trade and investment regime favourable to European colonial states and companies, which is still felt today.
Dutch bilateral investment treaties: 60 years of protecting multinationals
23-May-2023 Both Ends
Nowadays, the Netherlands has 75 bilateral investment treaties with countries all over the world, which mainly give multinationals a powerful instrument that has far-reaching consequences for people and the environment worldwide.
Catch-22: Canada’s attempts to phase out fossil fuel might result in it paying the polluters
23-May-2023 The Conversation
US$20 billion: That’s how much American investors think Canadian taxpayers should fork over to compensate them for their failed bid to develop a liquefied natural gas facility in Québec.
Investors sue Costa Rica over hydroelectric plant’s expropriation
22-May-2023 The Tico Times
Three German investors have filed an investment arbitration claim against Costa Rica for the expropriation of their land for the construction of a hydroelectric power plant.
AfCFTA protocol on investment (final draft, Jan 2023)
17-May-2023
Would the drafters of the AfCFTA investment protocol kowtow to the interests of only investors?
17-May-2023 bilaterals.org
The recently leaked investment protocol of the African Continental Free Trade Area shows the investor-state dispute resolution will be set out after the adoption of the protocol.
Clive Palmer’s company plans to sue Australia in fresh claim, budget papers reveal
12-May-2023 The Guardian
Palmer’s Zeph Investments could receive compensation if successful in second and potential third dispute beyond existing $296bn case.
Credit Suisse’s Japan bondholders seek arbitration over AT1 wipeout
11-May-2023 Nikkei Asia
Japanese investors will soon file a request for arbitration regarding Credit Suisse’s Additional Tier 1 bonds, under the economic partnership agreement between Japan and Switzerland.
Int’l tribunal reduces damages S. Korea owes to Lone Star by 600 mln won: ministry
9-May-2023 Yonhap
An international tribunal has accepted the South Korean government’s request and reduced the damages it has to pay to the U.S. private equity firm Lone Star Funds by about US$450 million, the justice ministry said
EU mulls partial exit from energy treaty over climate concerns
9-May-2023 Reuters
The European Union is considering a proposal to quit an international energy treaty that has become mired in climate change concerns, but leave an option for individual countries to stay in an updated version of the accord, a document showed.
33 Democrats urge ban on investor-state dispute provisions in all US trade deals
4-May-2023 Reuters
Democratic U.S. lawmakers on Wednesday urged the U.S. Trade Representative and State Department to eliminate investor-state dispute settlement provisions from current and future trade deals
The ‘climate killing’ clauses helping companies sue governments for climate action
3-May-2023 Yorkshire Bylines
If you’ve never heard of ISDS (investor-state dispute settlement) that’s not surprising. ISDS operates in the shadows. It’s a mechanism for solving disputes between parties in cases of foreign direct investment while offering legal protections for the investor. The investment is typically provided by a private company to a foreign ‘host state’.
Uncitral Working Group III reaches notable milestones in recent New York meeting
2-May-2023 Mondaq
United Nations Commission on International Trade Law ("UNCITRAL" or "Commission") Working Group III finalized provisions on the use of mediation in ISDS.
A US fund declares Spain in “technical default” and claims almost 1,000 million government bonds
28-Apr-2023 Time.News
The US fund Blasket Renewable Investments has activated the “default” clause that declares Spain at “technical impact” after the Government has not yet paid the pending awards for the cuts in the premiums for renewables.
Spain tells World Bank it will not pay €2-billion ICSID awards for renewable energy debts
28-Apr-2023 Capital Madrid
The World Bank has sent a de­vas­ta­ting letter to the Spanish go­vern­ment to de­mand pay­ment of the awards that con­demn our country to com­pen­sate the in­ves­tors af­fected by the re­tro­ac­tive with­drawal of the pre­miums granted to re­ne­wable ener­gies.
Albania moves to establish local arbitration court to replace ICSID
21-Apr-2023 Balkan Insight
Despite warnings that it could deter investment, Albania is pushing ahead with plans to establish a local commercial court to replace the World Bank-funded international arbitration body.
Public services in the crosshairs
19-Apr-2023 TNI
The impacts of investment protection regimes on the public services sector in Latin America and the Caribbean.
Air Tanzania aircraft may be seized over $100 million mining compensation claim
18-Apr-2023 Simple Flying
Australian-based exploration company Indiana Resources has threatened to attach one of Air Tanzania’s aircraft to force the Tanzanian government to pay nearly $100 million as compensation for a failed nickel project.
Mexican firm seeks $380 million from Honduras over blocked unit
17-Apr-2023 Reuters
Mexican investment firm JLL Capital, whose Honduran operation has been blocked since 2018 in a local dispute, is seeking some $380 million from the Central American country in arbitration proceedings.
Albanian PM threatens to quit international arbitration body
14-Apr-2023 Balkan Insight
Premier Edi Rama reacted angrily to a decision by a World Bank-funded international arbitration body to grant around 110 million euros in compensation to an Italian businessman who claimed he was politically persecuted in Albania.