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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.


New legal threat over Yukos sale
The Kremlin will face yet another legal headache on Tuesday over its role in the break-up of Yukos after US attorneys began an arbitration proceeding in Spain on behalf of Spanish investors who were allegedly hurt by the Yukos affair.
Will recent nationalisations in Bolivia give rise to claims under political risk insurance policies?
It may be advantageous for foreign investors to pursue a claim under a Political Risk insurance policy and allow the insurers to recover subsequently under any applicable investment treaty by way of subrogation.
Ecuador: Government gears up for Oxy fallout
Showing the door to Occidental Petroleum (Oxy) and scuttling US free trade negotiations have long been agenda priorities for Ecuadorian social movements and political sectors. But following government steps that have all but made these goals a reality, the atmosphere seems more anxious than celebratory.
Ecuador to oppose arbitration claim filed by Occidental Petroleum
Ecuador will oppose an arbitration suit filed last week by Occidental Petroleum Corp (OXY) with the World Bank’s International Center for Investment Disputes in Washington, DC, said Ecuadorean Attorney General Jose Maria Borja.
US oil firm files arbitration claim against Ecuador for ’expropriation’
The US-based Occidental Petroleum Company has filed an arbitration claim against Quito for canceling its exploration rights, a move that resulted in a suspension of free trade talks with Washington.
Occidental files BIT claim against Ecuador at ICSID
US-based Occidental Petroleum has responded swiftly to a move by the Ecuadorian Government to kick the company out of Ecuador. The firm filed a request for arbitration with the Washington-based International Centre for Settlement of Investment Disputes (ICSID) yesterday. The company’s claim is expected to be for at least $1 Billion (US) in damages.
JPEPA: Arbitration framework readied
The Philippines and Japan are moving towards adopting arbitration procedures in settling disputes to avoid lengthy and expensive court battles in protecting investments from both sides as they finalize their proposed bilateral free trade pact.
Clashes lead to chaos in Ecuador
Students and police have clashed again in Ecuador, as protests against a possible rise in bus fares entered a second week. The students also want the government to cancel its contract with the Occidental Petroleum Corporation and for it to refuse to join the proposed Free Trade Agreement of the Americas.
Bechtel, Bolivia resolve dispute
San Francisco-based Bechtel Corp. has dropped a $25 million dispute against the Bolivian government for canceling a water contract, after major street demonstrations forced a Bechtel-owned subsidiary to withdraw from Bolivia’s third-largest city.
OSG asks SC to reverse NAIA 3 ruling
The Office of the Solicitor General (OSG) yesterday asked the Supreme Court to reconsider its decision allowing the government to take over Terminal 3 of the Ninoy Aquino International Airport (NAIA) only after payment of an initial P3.002 billion to the Philippine International Air Terminals Co. (PIATCO) representing the proffered value of the facilities.
Pakistan, US to hold final round of BIT talks
A high powered US delegation is arriving here on 18 of this month to hold talks with the Pakistani authorities to finalise the BIT, in the absence of which, Washington was unprepared to sign Free Trade Agreement (FTA) with Pakistan.
Ecuador atty general expects Occidental dispute ruling in March
Ecuador’s attorney general Thursday said he expects a U.K court to rule in March on a dispute between the government and U.S. oil firm Occidental Petroleum Company (OXY).
CRS Report for Congress: Andean-US FTA negotiations
Given that CAFTA-DR passed only by a small margin, it is unclear how much support the U.S.-Andean FTA will have.
Bilateral investment treaties dangerous traps: experts
Experts have cautioned that bilateral investment treaties with the rich countries will ultimately lead the developing and least developed countries towards dangerous traps at the cost of their national interests.
Romanian lawyers won an USD 353m international arbitration case against an US investor
Romania has won at the International Court of Arbitration in Washington, the case brought by the American company Noble Ventures that contested the Romanian state actions in the privatization process of Resita Steel Plant (CSR).
The global governance of foreign direct investment: madly off in all directions
Notwithstanding substantial doubts that increased FDI and economic growth are not automatically linked and that investments agreements may be less important in attracting FDI than other economic and socio-political framework conditions, the proliferation of bilateral investments agreements (BITs) goes ahead unrestrained.
WIR 2005: Transnational corporations and the internationalization of R&D
World Investment Report 2005, by UNCTAD, presents the latest trends in foreign direct investment and explores the internationalization of research and development by transnational corporations along with the development implications of this phenomenon.
Recent trends in international investment agreements: new UNCTAD research note
The past year saw a further proliferation of international investment agreements (IIAs) at the bilateral, regional, inter-regional, and plurilateral levels. On average, more than three such agreements were signed per week.
Mittal Steel to launch Netherlands vs. Czech Republic arbitration
Netherlands-based Mittal Steel, disqualified from the Vítkovice Steel privatization, says that in late September it will launch international arbitration against the Czech state.
Pakistan-US differences over BIT persists
Pakistan has asked the United States to sign the proposed Bilateral Investment Treaty (BIT) by dropping its demand that in case of an arbitration only the Washington based International Centre for Settlement of Disputes (ICSID) should be approached for a decision.