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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.


Intra-EU bilateral investment treaties: A test for European solidarity
Corporations in Western Europe are suing Central and Eastern European countries at international arbitration tribunals through a vast web of intra-EU Bilateral Investment Treaties (BITs).
Why can corporate interests trump sovereign rights?
Real News Network interviews Chakravarthi Raghavan on how companies can sue countries under trade and investment agreements
Hearings to start in Uruguay anti-smoking
Uruguay faces its first hearings in the French capital this week in a lawsuit filed by US tobacco giant Philip Morris International against its anti-smoking laws, an official said on Monday.
Profiting from injustice: challenging the investment arbitration industry
Corporations have been granted the exclusive right to sue states (states cannot sue corporations) at secretive international tribunals for action deemed to unfairly affect investors’ profits
Reko Diq: the other side
Earlier last month, a three-member bench of the Supreme Court headed by Chief Justice Iftikhar Chaudhry declared null and void the Reko Diq gold and copper mine agreement, the Chagai Hills Exploration Joint Venture Agreement (CHEJVA), with Tethyan Copper Company (TCC).
The Reko Diq Saga
The Supreme Court recently declared void and illegal a mining deal for the Reko Diq copper project signed 20 years ago between the Balochistan government and international mining companies.
Korea-Belgium investment agreement, a hole for investor lawsuits
The Korean government is fighting a ISD suit by US based private equity fund Lone Star. The ISD suit was established through Lone Star’s paper company in Belgium and initiated through an investment treaty between Belgium and South Korea.
Lone Star’s arbitration claim was possible because of a deficient agreement
The article discusses a blunder in the Korean government in failing to include an anti-paper company clause that is now allowing companies to use the Belgium investment treaty as a backdoor for ISD suits.
ICSID: Ruling favours Venezuela and raises doubts for Costa Rica
A few days ago, ICSID published an award rendered last December 12, 2012 ruling on a claim filed by a Canadian mining company, Vanessa Ventures against Venezuela in 2004.
BIPA talks put on hold
In a significant development, the Government of India has ordered a freeze of all Bilateral Investment Protection Agreements (BIPA) negotiations till a review of the model text of BIPA is carried out and completed. This follows a spate of show cause notices on the Government by foreign companies seeking to recover their investments under the agreement.
Lone Star files investor state dispute lawsuit against S. Korea
The finance ministry said that the South Korean government rejects Lone Star’s accusations regarding this dispute, noting that the government has been preparing for trial. It added that the government will pay full attention to the arbitration proceedings and will aggressively defend its self against Lone Star’s unjust accusations.
Supreme Court trashes Reko Diq agreement
It is wonderful that the stance of the government of Balochistan has been upheld by the Supreme Court (SC) of Pakistan. Decision given on 7th January, 2013 by the SC has declared the agreement on Reko Diq signed on July 23, 1993 as void and in conflict with the laws of the country. Tethyan Copper Company Pvt Limited (TCC) also lost its case in the International Centre for Settlement of Investment Disputes (ICSID) on December 13, 2012.
Red Electrica seeks arbitration over Bolivia nationalisation
Spanish power grid operator Red Electrica said on Tuesday it had begun to seek World Bank arbitration over Bolivia’s expropriation of its transmission business TDE.
Need to align bilateral investment treaty regime with global reality
The changing dynamic of the global economy has led to a transformation in the role of developing countries as both capital importing and exporting States. There is an urgent need to redefine the global BIT regime to reflect this changing paradigm.
Zimbabwe admits Word Bank ruling on farm invasions
After 3 years and 8 months, Zimbabwe has admitted financial liability on illegal farm invasions and forthwith issued a statement that they are ceasing all farm invasions on properties protected by bilateral investment treaties.
Investment protection clause: India can’t do a Maldives without paying a price
Recent disputes, including the GMR-Maldives government row and the clash between foreign telecom firms Telenor, Sistema, Etisalat and Vodafone and the Indian government, have exposed India’s vulnerable position in investment agreements. While the foreign telecom companies can use a potent weapon - the ’investment protection’ clause in bilateral treaties - against India, GMR cannot do the same with Maldives.
ICSID: Ecuador Unlawfully Seized U.S. Firm’s Oil Investments
The World Bank’s International Center for the Settlement of Investment Disputes has handed down a ruling against the Ecuadorian government, finding that it “unlawfully expropriated” U.S. firm Burlington Resources’ investments in two oil blocks.
Will the Pacific trade deal protect workers?
Al Jazeera ask if the Trans-Pacific Partnership Agreement negotiations have rendered democratic decision-making irrelevant.
Hazards in Bilateral Investment Treaties (BITs): Investors’ rights v. public health
Developing countries that have signed BITs should start a process of review and eventual renegotiation or denunciation, writes Carlos Correa
The evils of bilateral investment treaties – Analysis
While multinational corporations such as Philip Morris dispose of the financial means to pay for elite law advice, developing countries don’t.