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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.

Huge lawsuits loom over gas market intervention
14-Nov-2022 The Australian Financial Review
Massive compensation claims loom over the Australian government’s gas market intervention, with lawyers warning price caps and windfall profit taxes could lead to legal action under trade agreements.
Notice of intent to submit claims to arbitration pursuant to article 10.16 of the CAFTA-DR
10-Nov-2022 Prospera
In accordance with the Dominican Republic–Central America–United States Free Trade Agreement, Honduras Próspera Inc. and its affiliates submit to the Republic of Honduras this written notice of their intention to submit claims to arbitration.
Brussels pleads with countries to stay in the Energy Charter Treaty
4-Nov-2022 Energy Monitor
EU countries are voting with their feet, quitting the investor protection pact despite the EU’s efforts to reform it – but the European Commission warns it will be worse to be outside than in.
US pressuring new left-wing Honduras government over privatized cities
3-Nov-2022 The Real News Network
US senators argue that abolishing special economic zones known as ZEDEs would violate the provisions of CAFTA-DR, including the provision ensuring “fair and equitable treatment and full protection and security.”
EU States start exiting the Energy Charter Treaty whilst African signatories increase
26-Oct-2022 African Climate News
African countries are increasingly becoming signatories to the ECT potentially tying the hands of government to freely design their climate policies.
Belgian environment minister supports withdrawal from Energy Charter Treaty
26-Oct-2022 Euractiv
Climate, Environment, Sustainable Development, and Green Deal Minister Zakia Khattabi reiterated her support for Belgium’s withdrawal from the Energy Charter Treaty during the EU’s Environmental Council meeting.
Slovenia ‘very likely’ to withdraw from Energy Charter Treaty
26-Oct-2022 Euractiv
Slovenia will follow the lead of countries such as the Netherlands, Spain and France and very likely withdraw from the Energy Charter Treaty, Infrastructure Minister Bojan Kumer announced.
European exodus from Energy Charter Treaty raises climate questions
26-Oct-2022 Climate Change News
France, Germany and Spain plan to leave the controversial investment pact, putting a whole system of dirty energy protections into play.
Romania loses arbitration versus investors in solar power
26-Oct-2022 Balkan Green Energy News
A tribunal operating under the World Bank has ruled in favor of ten companies that initiated arbitration with the argument that Romania violated the Energy Charter Treaty by lowering incentives for their solar power plants.
France becomes latest country to leave controversial energy charter treaty
24-Oct-2022 The Guardian
Quitting the ECT, which protects fossil fuel investors from policy changes that might threaten their profits, was ‘coherent’ with Paris climate deal, Macron said.
CSOs warn Nigeria against acceding to the Energy Charter Treaty
21-Oct-2022 Extractive360
Signing the ECT would give the transnational companies in the energy sector a weapon to re-colonise Nigeria, as it would also be incompatible with Nigeria’s economic diversification aspirations.
Dutch to leave Energy Charter Treaty because of climate change conflict
19-Oct-2022 DutchNews
The Netherlands is leaving a controversial energy treaty because it conflicts with Paris climate accord commitments, energy minister Rob Jetten said
Free trade agreements: Mexico. How to get out of corporate submission?
17-Oct-2022 GRAIN
We have produced a detailed study/story of NAFTA, with its eternal wake of treatises and agreements, its effects, and the tools to analyse and organise resistance against the impacts of FTAs.
Spain to follow Italy and Poland and leave the Energy Charter
13-Oct-2022 The Corner
Spain has initiated proceedings to withdraw from the Energy Charter Treaty, signed by 53 countries and in force since 1998, designed to protect foreign investment in energy infrastructure.
UK firms using legal muscle to facilitate human rights and climate abuses – report
12-Oct-2022 The Guardian
Transform Trade charity says British-based companies are among main bringers of cases based on bilateral investment treaties.
BITs with EC, South Asia to continue
11-Oct-2022 The Express Tribune
Pakistani government decides to avoid future investment treaties and cancels agreements posing legal risks.
Lone Star, other investor-state disputes cost Korea W68.5b
10-Oct-2022 Korea Herald
South Korea has spent nearly 68.5 billion won ($48.1 million) in total to fight and settle investor-state dispute settlements since 2013,#including its battle with US-based private equity firm Lone Star, data showed.
The false makeup for the TPP-11: the “side letters”
4-Oct-2022 América Latina Mejor Sin TLC
The impacts that TPP-11 will have then must be analyzed in an integral way, not by chapters. For years now, from various academic and social sectors, we have been explaining that agreements such as the TPP-11 are negative in their entirety.
No to TPP-11! Chile’s battle for sovereignty
3-Oct-2022 Pressenza
The recent experience of the countries that have already ratified the TPP-11 and begun to operate, has demonstrated the character of this treaty and its pro-business tribunals, which is nothing more than an insurance for large corporations on their profits and markets.
Decade-long ISDS lawsuit vs Lone Star costs S. Korean gov’t $40 mn
3-Oct-2022 Pulse
The South Korean government is found to have spent nearly $40 million in litigation expenses for its decade-long legal dispute against US private equity firm Lone Star Funds.