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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.


Kazakhstan wins the arbitration proceeding versus Caratube company
On 5 June 2012 the arbitral tribunal of the International Centre for Settlement of Investment Disputes (ICSID) adopted the decision on the case initiated by Caratube International Oil Company LLP (CIOC) against the Republic of Kazakhstan.
Lone Star is back in town, armed with the investor-state dispute system

In a May 31 press release, the US private equity fund Lone Star said it was planning to request investor state dispute (ISD) arbitration for losses suffered due to "unlawful" interference by the South Korean government.

Canadian miner’s complaint can proceed under El Salvador law
Canadian company Pacific Rim can move forward under El Salvador law with a case against that country’s government for blocking a gold mining project, but cannot file suit under a regional trade agreement, a World Bank arbitration panel ruled.
Churchill Mining files international arbitration against Indonesia
Churchill Mining (LON:CHL) said it has now filed for international arbitration in its dispute regarding the East Kutai coal project (EKCP) in Indonesia, 75 per cent owned by Churchill.
Plain packaging risks lawsuits
Smoking is bad for our health. Smoking is detrimental to our economic well-being - smoking-related conditions and diseases cost the health service in this country millions and millions of dollars each year. But moves to reduce or stop smoking in this country could cost us just as much if not more.
Leading US official rules out renegotiation of free trade pact
Assistant U.S. Trade Representative Wendy Cutler ruled out renegotiation of the Korea-U.S. free trade agreement on Thursday, saying the deal had been in effect for just six weeks. Her comments foreshadowed a tough time for the Korean government’s efforts to revise the investor-state dispute settlement system under the accord.
Supreme Court recommends renegotiation of ISD clause
Controversial KORUS FTA clause could lead to ‘legal chaos’, says Korea’s top legal body
Treaties that gave away the store
As India grapples with the Vodafone and 2G fallout, the Bilateral Investment Treaties it signed a few years ago are coming back to haunt it.
EU’s De Gucht: Argentina Risks Jeopardizing Trade Ties
The European Union has warned Argentina that it risks jeopardizing trade ties over Buenos Aires’ plans to expropriate a unit of Spanish oil company Repsol YPF SA (REP.MC) and impose a series of import restrictions and that Brussels stands ready to take retaliatory action.
Study investment provisions before an FTA says advocacy group
The country should carefully study investment provisions before entering into foreign trade agreements (FTAs) as these may infringe on government’s regulatory power on foreign firms, an advocacy group on Friday said.
Case note: How Chevron v. Ecuador is pushing the boundaries of arbitral authority
The arbitral tribunal in Chevron v. Ecuador has taken a series of steps in recent months suggesting that it has a broad view of its authority.
India plans to abolish ISD clause in FTAs
India plans to abolish the investor-state dispute system and renegotiate FTAs with South Korea, Singapore, and other countries, an Indian newspaper reported.
’We can’t even manage to send a lemon to the US,’ CFK
President Cristina Fernández de Kirchner questioned US president Barack Obama’s recent decision to suspend trade benefits for Argentina, while complaining that “we can’t even manage to get one of our lemons to enter the US market.”
India to oppose Vodafone’s move to invoke BIPA pact
The Indian government is likely to oppose any move by Vodafone Plc to invoke the India-Netherlands Bilateral Investment Promotion and Protection Agreement (BIPA) if it is forced to cough up Rs 12,000 crore in taxes on the grounds that the investment was routed through several step down firms based in different countries and that the treaty does not cover tax disputes.
Voda seeks Netherlands treaty to snub govt, will others follow?
Fearing the Indian government will use new tax laws to trap it back around Rs 12,000 crore in taxes, the world’s largest mobile operator, Vodafone, may invoke a bilateral investment treaty between India and the Netherlands to avoid doing so.
2G: Telenor plans to invoke India-Singapore treaty
Norway’s Telenor will seek ’compensation for all investment, guarantees and damages’ if the Indian government fails to sort out issues related to its licence cancellation within the next six months, the company said.
US suspends Argentina from trade preference scheme
Trade frictions are on the rise between Washington and Buenos Aires, after US President Barack Obama announced that the US would be suspending Argentina from its Generalised System of Preferences programme for failure to pay arbitration awards in two disputes involving US investors.
Water wars: Indigenous Ecuadorians vs. corporations
Ecuadorian communities learned from the way that Chevron’s operations flouted environmental law in the 1990’s, that once entrusted to foreign businesses their natural resources are usually squandered.
Obama says to suspend trade benefits for Argentina
U.S. President Barack Obama said on Monday he was suspending trade benefits for Argentina because of the South American country’s failure to pay more than $300 million in compensation awards in two disputes involving American investors.
US eyes suspending trade benefits for Argentina
The United States could soon suspend trade benefits for Argentina because of that country’s failure to pay awards in two long-running investment disputes with U.S. companies, a U.S. trade official said on Monday.