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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.


Europeans don’t want investor state dispute settlement in trade agreements
An overwhelming majority of Europeans has spoken out against ISDS in the Transatlantic Trade and Investment Partnership
Europe: The fear of arbitral tribunals
The consultation on investor arbitration that the European Commission launched in Spring 2014 delivered an unambiguous verdict: today, public opinion does not want it.
EU report presented today: Consultation on investment protection in EU-US trade talks
Today, the European Commission published its analysis of the almost 150,000 replies to its online consultation on investment protection and investor-to-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP).
EU-US FTA (TTIP) - draft on dispute settlement (March 2014)
As published by the European Commission
Fixing BIPPA
The definition of investment that the govt of India had agreed to while entering into BIPPAs is particularly problematic, writes Biswajit Dhar
Elizabeth Warren: Obama trade deal could undermine Wall Street reform
US Senator Elizabeth Warren on Wednesday warned that a major trade deal being negotiated by the Obama administration could hamstring Wall Street reform efforts.
Why is govt in a hurry to pay TCC for Reko Diq?
The Nawaz Sharif government is in an unnecessary haste to settle and pay millions, possibly billions, of dollars as compensation for the Reko Diq gold and copper mines to a discredited and ousted Canadian-Chilean mining consortium, a decision if made may resemble the infamous circular debt payment of Rs500 billion in the early days of the PML-N government.
Investor-State Dispute Settlement: The TTIP’s Achilles heel?
A high level panel discussion on TTIP organised by BEUC, FOEE and AK Europa (video)
New bilateral investment treaties will help India avoid arbitration
Bilateral investment treaties that the government of India will enter into from now on will have a provision preventing foreign investors to drag India to arbitration on any issues that have been settled by a judicial authority.
Analyst: ISDS model is Australia, not Canada
Gus Van Harten tells EurActiv that the EU should explore the option of an international arbitration court and use Australia, not Canada as a benchmark.
TTIP and the architecture of impunity
The legal principles on which the TTIP is based form part of the legal suit of arms that limits the exercise of democracy and people’sovereignty.
Investor state dispute settlement and financial crises
The film explains how the settlement works and why it endangers necessary governmental rescue measures in financial crises as occurred in Greece, Cypress and Argentina.
ISDS cannot be fixed
The European Commission’s claim that threats posed by the investor-state dispute settlement system can be fixed by “improving” ISDS provisions in trade pacts has already been proved false, says Public Citizen
ISDS clause: a gateway to future trade deals
Trade officials negotiating the ISDS arbitration clause within the EU-US trade agreement have half an eye on their next deals, since the wording is likely to shape other key trade treaties on the table.
Seven things you should know about EU-Singapore ISDS
Lock-in, no institutional safeguards for independence, perverse incentives, no separation of powers, automatic consent, ripe for exploitation, sovereign debt instruments included, open to the world, and a strategic mistake. Former trade commissioner De Gucht left us a Gordian Knot, writes Ante Wessels.
CETA: The French Parliament votes against the ISDS
At the end of November, both chambers of parliament rejected integrating the investor-state dispute resolution mechanism into CETA.
Revealed: How taxpayers are footing bill for Europe’s trade deals
New research today reveals that European governments have already paid at least €3.5 billion to private investors due to a clause in international trade deals.
Congressional Financial Services Committee leaders: Exclude ISDS from US-EU deal
US congressional leaders have just sent a letter to the Obama administration warning against TAFTA/TTIP provisions that could restrict Congress’ ability to prevent another financial crisis.
The increasing appeal and novel use of bilateral investment treaties
State measures that reduce or nullify existing creditor rights, such as the Argentine “Lock Law” or similar moratoria on repayment, may violate BIT rights and supply investors and creditors in other jurisdictions, particularly in the eurozone, with a basis for challenging similar measures.
Investor-state dispute settlement in Europe
If it is left in TTIP, a great deal more of global FDI flows will suddenly be covered by ISDS.