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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.


Calls to ditch ’ecocide treaty’ after failed reform efforts
Environmentalists and energy experts have been warning for years over an obscure trade deal that could lock Europe into decades of fossil fuel use.
Pakistan evades $11b Reko Diq penalty
In 2019, the ICSID tribunal had given an award over $6 billion against Pakistan to the TCC. At the same time, the London Court of Arbitration also imposed another $4 billion fine on Pakistan.
Zim/UAE deal now in force
The agreement between Zimbabwe and the United Arab Emirates on promotion and protection of investments has come into force.
AFTINET raises alarm on risk of UK companies suing the Australian Government through the CPTPP
AFTINET has raised the alarm over the possibility that British corporations will gain the right to sue the Australian Government if the UK is granted membership in the CPTPP.
Riches for Australian miner equals misery for Thai villagers
The gold mine was closed by the Thai government, but an obscure clause in a “free trade” agreement has allowed the lucrative mine in Central Thailand to reopen.
Energy Charter Treaty (ECT) reform: Why it has failed to deliver on the EU’s own objectives
From a climate perspective, the expected reform outcome is a failure. No Contracting Party will end investment protection for fossil fuels in a timeline that is necessary to align with the Paris Agreement.
Guatemalan water defenders celebrate 10 years of resistance
An attempted assassination, criminalization, and violent eviction in 2014 didn’t stop the Peaceful Resistance of La Puya in Guatemala, which won legal action suspending harmful mining activities.
A sea of trouble: Seabed mining and international arbitration in Mexico
In the Gulf of Ulloa, a US treasure-hunting company turned seabed mining outfit poses a dire risk to the environment.
Corporate courts can be beaten. It’s essential for climate justice
It is perfectly possible to withdraw from trade deals containing corporate courts, as former South African trade minister Rob Davies explains.
Briefers on Investor-State Dispute Settlement (ISDS) vs Women’s Human Rights
APWLD is launching new Investor-State Dispute Settlement (ISDS) vs Women’s Human Rights briefers which elaborate on how ISDS is incompatible with human rights principles.
An energy investment treaty has been holding Nord Stream 2 hostage
The German government has been worried about being sued by the fossil fuel companies behind the Russian gas pipeline under the Energy Charter Treaty.
India pays back Cairn Rs 7,900 crore to settle over 7-year-old retro tax dispute
The company, which is now known as Capricorn Energy PLC, in a statement said it has received "net proceeds of $1.06 billion", of which nearly 70 per cent will be returned to the shareholders.
Monterra Energy to seek $667 mln in damages from Mexico for port closure
Monterra Energy plans to pursue legal action against Mexico and seek damages of about $667 million for the "unlawful" closure of its Tuxpan fuel imports terminal in the Mexican state of Veracruz for five months.
A Koched-up NAFTA lawsuit
Koch claims that Ontario’s abrupt cancellation of its cap-and-trade system in 2018 violated the NAFTA Chapter 11 minimum standard of treatment and expropriation clauses.
Toxic mine to re-open after Australian gold miner sues Thai Government
Environmental defenders in Thailand have slammed a decision by the Thai Government to reinstate formerly revoked mining licenses following a lengthy legal battle in an international arbitration tribunal.
Qatar faces $6 billion arbitration claim linked to ruling family member
The Qatari government is facing a $6 billion international arbitration claim stemming from a case against a member of the country’s ruling family.
Canada’s Alberta province files trade challenge over scrapped Keystone XL pipeline
The Canadian province of Alberta formally initiated a trade challenge to recover its investment in the Keystone XL oil pipeline, which was scrapped in 2021 after the United States cancelled a key permit.
UAE signs agreement on mutual promotion and protection of investments with Mozambique
The agreement protects both nations’ investments from all non-commercial risks, covers transfer of profits and revenues, and facilitates resolving disputes.
Thai Prime Minister under fire over reopening of Australian gold mine
The mine was shut amid accusations of villagers being poisoned by leaking toxic waste. Kingsgate, whose Thai subsidiary Akara Resources had operated the mine since 2001, filed an international arbitration lawsuit.
Primer on international investment treaties and investor-state dispute settlement
While reforms are being discussed, investors will continue to bring, and states will continue to defend, claims in an ISDS system now widely recognized as suffering from perceived and actual concerns going to its very legitimacy.