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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.


Interview: Argentina seeks diplomatic exit from ICSID suits
Facing a flood of unfavorable arbitration rulings, Argentina is shifting from a legal strategy to a diplomatic one in a bid to dismiss billions of dollars in foreign investor claims arising from its 2002 financial crisis.
Sempra Energy awarded $172 million in Argentine arbitration
The International Centre for Settlement of Investment Disputes in Washington DC has awarded Sempra Energy approximately $172 million, including interest, to settle a 2002 dispute involving the company’s 43-percent ownership in two Argentine natural gas holding companies, Sodigas Pampeana and Sodigas Sur.
Pakistan, US enhance cooperation: Teams formed to finalise trade, economic issues
Pakistan and United States on Wednesday constituted sub-groups of high officials from both the countries to pave the way for early finalisation of issues regarding trade and economic cooperation
Permanent Court of Arbitration to set up facility in Singapore
With rapid growth in the Asian economies, it is inevitable that legal issues and disputes to matters like investment treaties will arise as more and more parties enter into cross-border contracts and agreements.
Vivendi wins decade-long Argentina legal battle
French media and telecoms group Vivendi said on Tuesday it had been awarded $105 million in compensation at the end of a decade-long dispute with Argentinian authorities about a former water concession.
WB junks Fraport’s Naia 3 claim
The World Bank has dismissed the claim for compensation from the Philippine government over the Naia Terminal 3 project of Germany’s Frankfurt Airport Services Worldwide (Fraport)
The water margin
Tanzania was glad to secure the services of a British-led consortium to run the newly privatised water system in its capital Dar es Salaam. But then the price of water started to rise
Investor-state dispute settlement rewritten to favor US
With Seoul and Washington concluding their renegotiation of the Korea-US free trade agreement (FTA), it has been confirmed there were some ‘‘unfair parts’’ added to the economic deal under which investors of both sides are not treated equally in their respective countries.
Bias seen in int’l dispute arbiters
A little known entity closely affiliated with the World Bank that mediates disputes between sovereign nations and foreign investors appears to be skewed toward corporations in Northern countries, according to an IPS review of pending cases and other independent analyses of the tribunals.
NAFTA claim dismissed, dicey clause remains
A seven-year legal battle by the US postal carrier United Parcel Service of America (UPS) against Canada, brought under a controversial free trade agreement, has been dismissed, but advocacy groups say a provision that allows corporations to sue for lost profits should be permanently dropped.
Canada Post NAFTA win sets precedent
A landmark NAFTA decision this week dismissing allegations that Canada Post is competing unfairly has significantly restricted the rights of foreign investors to elbow their way into markets served by Crown corporations and other government enterprises.
Ecuador pursues trade-preference extension but faces critics in Congress
Ecuador is furiously lobbying members of Congress to extend trade preferences, set to run out at the end of the month, that are intended to counter narcotics trafficking.
NAFTA Chapter 11 investor-state disputes
Table of all disputes and their status as of 1 March 2007
The ultimate risks of water privatization
MNCs can always refer to Bilateral Investment Treaty (BIT) to which Indonesia is a party and use the "umbrella clause" in the BIT to transform a problem that was originally a contractual dispute into an international investment dispute.
Torched accord
A recently spawned legal battle between Slovakia and Madeta, the Czech Republic’s largest dairy processor, has led to a discovery that, for the past 10 years, Slovakia has not honored a trade agreement signed between the countries during the Velvet Divorce.
Bolivia notifies World Bank of withdrawal from ICSID, pursues BIT revisions
Investment Treaty News has learned that Bolivia has sent a formal notice to the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID) declaring its withdrawal from the ICSID convention.
Challenging corporate investor rule
How the World Bank’s investment court, free trade agreements, and bilateral investment treaties have unleashed a new era of corporate power and what to do about tt
Foreign investors gone wild
When Bolivian President Evo Morales took office in January 2006, he pledged to follow through on his campaign pledge to increase Bolivians’ share of revenues from their major source of foreign income, natural gas. International gas companies, however, threatened to sue. Previous Bolivian governments had signed a flurry of bilateral investment treaties that gave foreign investors the right to bypass domestic courts and file such lawsuits through international tribunals. Morales complained that these rules made him feel like a “prisoner” in the presidential palace.
Latin leftists mull quitting World Bank arbitrator
Bolivia and Venezuela, both nationalizing huge swathes of their economies, should quit a World Bank body that arbitrates between foreign investors and states, Bolivia’s president said on Sunday.
Weaving webs of influence: The United States, free trade agreements and dispute resolution
Peter Drahos looks at the issue of dispute settlement in the gowing web of US bilateral free trade agreements, how this relates to the WTO’s dispute settlement system and the implications for developing countries.