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.
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.
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.
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.
Global Gold mining company submitted its claim to the International Center for Settlement of Investment Disputes (ICSID), a body adjunct to the World Bank, against the Government of the Republic of Armenia (ROA). The Company is trying to protect its investment rights in arbitration court.
Pittsburgh-based Railroad Development Corporation (RDC) has hired former US trade agreement negotiator, Regina Vargo, and filed suit against the Guatemalan government under the investor-state provisions within Chapter 10 of CAFTA.
Finstone Ltd SA, a foreign mining company based in Luxembourg, is suing the South African government for an alleged expropriation of its mineral rights. Finstone is a holding company in control of three South African granite producing operations i.e. Marlin, Red Graniti and Kelgran. The real challenge posed by this legal action is that the abovementioned investors find the black economic empowerment programme is in violation of the bilateral treaties signed with South Africa by both Luxembourg and Italy.
A US company mining gold in Armenia has initiated an international arbitration of its bitter dispute with Environment Minister Vartan Ayvazian whom it accuses of corruption and other violations of the law.
Foreign energy investors said on Friday that they warned the Dominican Republic it had to mend its crippled power sector months before filing a US$680 million (euro510 million) lawsuit against the country for lost electricity revenue.
Dutch investment company Saba Fakes, who claim to hold the biggest part of shares of Turkey’s second big GSM operator Telsim, is preparing to file an arbitration case at International Arbitration amounting to 19 billion dollars in reparations.
On the morning of Tuesday, March 13, Railroad Development Corporation (RDC) filed its Notice of Intent to Submit Claims to international arbitration against the Republic of Guatemala under the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA).
A foreign mining company is suing the South African government over alleged expropriation of its mineral rights in a move that has huge implications for the country’s new mining dispensation.
The investment rules in the Colombia and Peru trade pacts with the US deserve special scrutiny. They grant protections for private foreign investors that are virtually identical to those in NAFTA, CAFTA and myriad bilateral investment treaties signed over the past two decades. And yet these countries are being pulled on board at a time of a dramatic awakening about these rules’ potential for harm.
A number of African governments have made efforts to encourage investment in the continent by entering into bilateral investment treaties and adopting arbitration legislation.
US-based Occidental Petroleum Corporation (OXY) has dropped a compensation claim against Ecuador’s state oil company Petroecuador in a move that analysts said may strengthen the oil firm’s case against the government.
One of the issues that has recently started
to influence the negotiations for new investment agreements involves the question of the status of IP
rights and the impact of investment agreements on the rights, obligations and regulatory discretions of
countries under the Agreement on Trade-Related Aspect of Intellectual Property Rights (TRIPS) of the
World Trade Organization (WTO).
The International Centre for Settlement of Investment Disputes (ICSID) has ruled in favor of the State of Hungary in a case brought against it by Norwegian telco Telenor, business daily Világgazdaság reported on Monday.
Mining company Oxus Gold PLC said it is seeking an arbitration order to protect its investments in Kyrgyzstan, following the government-sponsored seizure of premises owned by Talas Gold Mining Co, Oxus’ joint venture company at Jerooy. Oxus said that representatives of Jerooyaltyn, a recently created joint venture between Kyrgyzaltyn and Global G.o.l.d, and local police forcibly took possession of the building on Thursday in direct contravention of the UK-Kyrgyz Bilateral Investment Treaty and Kyrgyz law.
Ecuadorian President Alfredo Palacio has rejected arbitration against his nation for annulling in May the contract with US Oxy oil company that operated there.
Proposals tabled by the Vienna-based UNCITRAL Secretariat could make it more difficult for observers to discover and monitor international arbitrations taking place under the UNCITRAL rules.
The Philippines and Japan have agreed to settle all disputes domestically under the proposed Economic Partnership Agreement unless the Secretaries of Trade of both countries agree to bring the dispute to an international arbitration court.