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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.

France puts EU withdrawal from Energy Charter Treaty on the table
4-Feb-2021 Euractiv
The European Union and its member states should draw the consequences of the current stalemate in multilateral talks aimed at reforming the Energy Charter Treaty and consider a coordinated withdrawal, Paris has said
German energy giant RWE uses the Energy Charter Treaty to attack Dutch climate action
4-Feb-2021 CAN Europe
RWE has filed an arbitration claim against the Netherlands, seeking compensation for the Dutch decision to phase-out electricity production from coal by 2030.
Banks agree to end action against Croatia in loan conversion dispute
3-Feb-2021 Reuters
Six banks have agreed not to take legal action against Croatia over its conversion of Swiss franc loans into euros in 2015 at the lenders’ expense.
EU-Canada FTA (CETA): investment court texts (Jan 2021)
1-Feb-2021 European Commission
The EU and Canada adopt rules putting in place the CETA investment court
1-Feb-2021 European Commission
The EU and Canada adopted four decisions putting in place the Investment Court System provisions agreed in the EU-Canada Comprehensive Economic and Trade Agreement (CETA).
India may offer Cairn oilfield against $1.4 billion arbitration award
1-Feb-2021 Business Today
For a government struggling to find revenue to boost a COVID-19 battered economy, options of appeal against the arbitration award are limited and it may not have the financial bandwidth for such a payout.
Table of foreign investor-state cases and claims under NAFTA and other US “trade deals”
28-Jan-2021 Public Citizen
ISDS tribunals have ordered governments to pay corporations more than $989 million in compensation after ISDS attacks launched just under U.S. agreements.
The status of investor-state arbitration in Latin America in 2021
28-Jan-2021 Lexology
Last year saw a wave of cases against Latin American states, driven in particular, but not exclusively, by a large number of claims filed against Peru, Colombia and Mexico. This wave is likely to continue in 2021.
VI court freezes assets in $6b case
27-Jan-2021 The BVI Beacon
A Virgin Islands court has frozen shares in two hotels belonging to Pakistan’s national airline to enforce a $6 billion award levied through the World Bank’s ICSID.
Cairn threatens Indian asset seizures abroad in tax case
27-Jan-2021 The Hindu
UK-based Cairn Energy Plc has threatened that it may be forced to begin attaching Indian assets including bank accounts in different world capitals, unless the government resolves the issue.
Keystone XL legal risks highlight dangers of putting investors before climate change
26-Jan-2021 The Conversation
The owner of Keystone XL — TC Energy (previously TransCanada) — used NAFTA to launch a US$15 billion lawsuit in 2016 after President Barack Obama cancelled the project.
Against DCF valuation in ISDS: on the inflation of awards and the need to rethink the calculation of compensation for the loss of future profits
26-Jan-2021 EJIL: Talk!
One of the most noticeable facts in recent ISDS is the spectacular inflation of compensation awarded to investors. The most important factor is probably the widespread use by tribunals of the DCF (discounted cash flows) valuation method.
Cairn Energy’s major investors ask India to honour arbitration
25-Jan-2021 Live Mint
Investors have written to the Indian government as well as the governments of the US and UK seeking adherence to the award of a tribunal at the Permanent Court of Arbitration in The Hague
French controllers of Nuevo Pudahuel, operator of the Santiago airport, initiate ICSID proceedings against Chile
22-Jan-2021 Memesita
Nuevo Pudahuel had asked the Ministry of Public Works to extend the term of the concession contract as a result of the pandemic, but the MOP was closed to changes in the contract.
Analysis: How rich oil firms are using secretive court to fight capital gains tax in developing world
21-Jan-2021 Finance Uncovered
The battle between ConocoPhillips and Vietnam result could mark a significant shift in the way huge multinationals fight off the threat of taxes from desperate revenue authorities in developing countries.
Canada scrambles to salvage Keystone XL as Biden prepares to kill troubled pipeline project
19-Jan-2021 Reuters
Alberta believes there was a “very solid” legal basis to seek damages under international free trade agreements if the pipeline is effectively killed, said Alberta Premier
Mining operations – Submission of request for international arbitration to Chinese government
18-Jan-2021 AsiaPhos
AsiaPhos has been in discussion with the Chinese Government (since November 2017) for a settlement in relation to the cessation of the mining activities because of the Panda Park.
TNCs reviving TPP Frankenstein
18-Jan-2021 Financial Express Bangladesh
Corporate globalisation and Covid-19 should also have taught developing countries that they must reject FTAs strengthening IPRs, ISDS and TNCs in order to secure policy space to ’build back better’.
Investment protection in the EU-UK trade and cooperation agreement
11-Jan-2021 Kluwer Arbitration Blog
The EU-UK agreement contains limited protections for investors and no investor-state enforcement mechanism. Its dispute resolution mechanism is limited to a “WTO-like” state-to-state arbitration.
Will Pakistan lose New York’s Roosevelt Hotel?
11-Jan-2021 TRT
The Investor-State Dispute Settlement process has gone against developing countries for far too long.