bilaterals.org logo
bilaterals.org logo

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.


A Bolivian nationalisation too far? Rurelec gets its day in court
How did UK-based power company Rurelec manage to get Bolivia to go to the Permanent Court of Arbitration in The Hague over the nationalisation of the assets of its local subsidiary, Guaracachi, almost three years ago?
See you in court: Russians may sue over Cyprus losses
Russian businesses and banks that face losses from the European Union’s bailout of Cyprus are considering legal action but may have a hard time making a case, say lawyers who are combing through treaties find strategies to recover funds.
How NAFTA, FIPA and other investment deals put democracy and the environment at risk
A US-funded energy firm, Lone Pine Resources, is using investor rights provisions in the North American Free Trade Agreement (NAFTA) to challenge Quebec’s 2011 moratorium on hydraulic fracturing for natural gas.
Multinational firms look for tax shields in bilateral pacts
The aggressive push by India’s tax department to increase revenue has prompted several multinational companies to informally seek the views of lawyers and consultants about invoking bilateral investment promotion and protection agreements to resist the government’s demands for more money.
Cargill settles NAFTA dispute with Mexico
Cargill has reached a settlement with Mexico in a dispute that resulted in a $77 million arbitration award for the US agribusiness company
Reko Diq saga: Balochistan wins again
Amidst continuing violence plaguing Balochistan, there is now a cause of joy for the Baloch people and the government.
Investors running wild on land: the threats posed by international investment agreements
A recent briefing note by Traidcraft discusses the threats posed by current regulation of foreign investment in land highlighting that food security and other human rights concerns often come at the cost of excessive protection of foreign investors’ rights.
Plain packaging for cigarettes a legal minefield
Lawsuits are seen as the inevitable next step if plain packaging of cigarettes is brought in. The government will announce a decision on the matter in the next few days.
CETA Investor-State Dispute Settlement process “anti-democratic, unnecessary and unfair,” says NFU
The National Farmers Union is among the labour, environmental, Indigenous, women’s, academic, health sector and fair trade organizations representing over 65 million people from both sides of the Atlantic that have signed a joint statement demanding that Canada and the EU stop negotiating an excessive and controversial investor rights chapter in the proposed Comprehensive Economic and Trade Agreement (CETA).
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.