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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.


South Korean government likely to reject Lone Star’s offer
Lone Star Funds, which is in litigation against the South Korean government at the International Centre for Settlement of Investment Disputes, suggested US$870 million as a concession.
OPL245 scandal: Coalition urges World Bank group not to protect oil giants
The groups said they are concerned about the ICSID’s long-standing failure to promulgate clear rules for addressing cases where corruption has been alleged.
Egypt wins international arbitration against two Spanish companies demanding €236m compensation
The ICSID has turned down a lawsuit filed by Spanish companies Cementos La Union and Aridos Jativa against the Egyptian State, demanding a compensation of more than €236 million.
Reko Diq Case: NAB unearths corruption to the tune of billions
National Accountability Bureau (NAB) Balochistan has collected irrefutable evidence revealing that billions of rupees have been lost to the national exchequer in the Reko Diq project after the bureau scrutinized its 30-year record.
Pakistan seeks to reform int’l investment regime
Prime Minister Imran Khan has approved the formation of a working group of experts for reforming Pakistan’s international investment regime.
Lupaka submits request for arbitration claim against the Republic of Peru
The dispute stems from the Community of Parán’s actions, which invaded Lupaka’s project held through Invicta Mining Corp.
EU tries to stop fossil fuel companies suing states over climate action
Brussels’ proposed green reforms to the Energy Charter Treaty face resistance from Japan, yet do not go far enough for environmental campaigners.
Investor-State Dispute Settlement reform: the multilateral investment court was never the answer
The problem with the ISDS is not the format of the dispute settlement. The problem is that it is designed to give corporations power to go after government policies.
Vodafone arbitration award: Centre to challenge telco’s Rs 22,100 crore tax case win
Solicitor General Tushar Mehta has advised the government that the decision of an arbitration tribunal cannot contradict the law passed by a sovereign parliament.
Another Australian miner sues another poor country, this time Barrick’s Porgera in PNG
Australian mining companies are increasingly using ISDS processes and are being awarded billions based on dubious calculations of potential lost profits by unaccountable international tribunals.
Jersey’s BIT with the UAE and reflections on investment treaty practice in non-sovereign autonomous regions
Most recently, Jersey has joined Hong Kong as another non-sovereign entity that negotiates its own BITs. Jersey is set to sign its first BIT with the UAE later this year.
Why India should challenge the Vodafone-India BIT award
The scope of consent to arbitration is an important issue that needs to be finally settled - not least because it could have multi-billion dollar implications for India in respect of other cases involving challenges to India’s taxation measures by foreign investors.
What next for ISDS Reform at UNCITRAL Working Group III?
Meaningful reform aligned with sustainable development seems less likely
MEPs urge EU to be ready to dump disputed energy treaty
Cross-party MEPs called on the European Commission to be prepared to withdraw from the controversial Energy Charter Treaty, if negotiations for its modernisation fail.
Expropriating democracy: on the right and legitimacy of not ratifying CETA
Why retain ISDS, this neo-colonial vestige that is not supported by consistent evidence that it contributes to advancing development or the rule of law?
Stop corporations profiting from the pandemic. Stop ISDS.
Our call to suspend all ISDS cases during and beyond the COVID-19 crisis.
Hungary’s OTP sues Croatia for loan conversion damages
OTP Bank has sued the Croatian government to recover about $34.60 million it lost during a mandatory conversion of Swiss franc-denominated loans to euro-based loans in 2015.
French-Colombian investment treaty comes into force to boost virus-battered economies
The agreement for the reciprocal promotion and protection of investments between France and Colombia has entered into force, at the time of the pandemic-related economic crisis.
The secret tribunal
Expert Marcos Orellana walks us through the shadowy arbitration system, the Chevron case in particular, and what it all means for global climate action.
OPL 245: Nigeria must resist Eni’s legal bullying, says group
The Human and Environmental Development Agenda, Re:Common, Global Witness, and Corner House, have called on the Nigerian government to stand against Eni’s legal move over the oil processing license (OPL) 245.