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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.

Bahrain loses case against Iran banks
1-Dec-2021 Financial Tribune
Bahrain has been ordered by the Permanent Court of Arbitration in The Hague to pay over €200 million in damages plus costs to two Iranian banks for the unlawful moves against their operations.
The World Bank can’t be trusted to stand up to big fossil fuel companies
24-Nov-2021 Counter Punch
Extractive companies are the most frequent users of the investor-state dispute settlement system (ISDS), making up 29 percent of all ICSID claims in fiscal year 2021.
India’s BITs recalibration is paying off
23-Nov-2021 Lawyer Monthly
India’s steps to better protect itself hasn’t curbed the appetite of foreign investors, suggesting that the perceived correlation between FDI and robust investor protection is overstated.
Keystone pipeline developers seek $15 billion from US for cancellation
23-Nov-2021 BNN
Developers of Keystone XL are seeking to recoup more than $15 billion in damages connected to President Joe Biden’s decision to yank a permit for the border-crossing oil pipeline even after construction began.
Angola ratifies the ICSID Convention: good news for inbound foreign investment
23-Nov-2021 ICLG
On 1 September 2021, Angola’s National Assembly ratified the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID).
Landmark ruling reveals misuse of Energy Charter Treaty
18-Nov-2021 EU Observer
The Belgian Appeal Court delivered a landmark ruling in what Kazakhstan’s legal representatives described as "one of the biggest frauds in the history of international arbitration."
Governments risk ’trillions’ in fossil fuel climate litigation
16-Nov-2021 France 24
Governments which enact climate legislation risk being sued for trillions of dollars by fossil fuel companies seeking compensation for lost revenue and stranded assets.
Campaign win: Australia cuts ties with Energy Charter Treaty (ECT)
8-Nov-2021 AFTINET
In a significant step forward in the campaign against Investor-State Dispute Settlements (ISDS), Australia has announced its withdrawal from its signatory status to the Energy Charter Treaty.
Secretive court system poses threat to Paris climate deal, says whistleblower
4-Nov-2021 The Guardian
Treaty allows energy corporations to sue governments for billions over policies that could hurt their profits.
Cairn Energy moves to settle $1 billion tax dispute with India
4-Nov-2021 Mint
The settlement is under the Taxation Laws (Amendment) Act, introduced this year to put an end to 17 tax disputes India has with multinational companies like Cairn and Vodafone Plc.
Missing from the climate talks: Corporate powers to sue governments over extractives policies
2-Nov-2021 Inequality.org
Allowing oil, mining, and gas companies to continue to file expensive lawsuits over environmental regulations could undermine whatever agreements might be reached in the COP26 in Glasgow.
Big Coal tapping obscure treaty could chill green revolution
29-Oct-2021 Bloomberg
Coal plant owners are using this little-known mechanism to try and recoup billions from governments who are forcing them to shut down polluting plants
Fossil fuel companies claiming 18bn against government climate action in secret courts
28-Oct-2021 Global Justice Now
Courts allow big polluters to sue governments into “a state of climate paralysis”, campaigners say.
Reality check on curbing climate change — trade agreements
28-Oct-2021 The Nelson Daily
Rules accepted under various trade and investment agreements often benefit destructive, extractive industries to the detriment of national and international climate goals and ambitions.
Summary to empower BoI for renegotiating BITs gathering dust
25-Oct-2021 Business Recorder
Under the new template, federal government would not be liable for private investor disputes. Mediation would be made compulsory, while foreign arbitrators would be decided in advance through consensus.
‘Pakistan to renegotiate all bilateral investment treaties’
22-Oct-2021 Dawn
Pakistan will renegotiate all bilateral investment treaties (BITs) on the basis of new BIT template being finalised by the government, a top official of the Board of Investment said.
Making sense of Sudan’s move against Petronas
20-Oct-2021 New Straits Times
Sudan’s government confiscated Petronas’s assets on the grounds that they were acquired "through illegal means" during Omar al-Bashir’s regime. Some argue that Sudan is turning on its allies "under the pretext of fighting corruption".
Devas Multimedia eyeing foreign assets of Indian govt to enforce $1.3 bn arbitral award
19-Oct-2021 The Economic Times
Devas Multimedia’s investors are eyeing several properties owned by the Indian government across the world, as they seek to enforce a $1.3 billion arbitral award the satellite company won against Antri.
Another Turkish firm moves ICSID against Pakistan
18-Oct-2021 The Express Tribune
Turkish construction company Bayindir filed a claim under the 1995 Turkey-Pakistan bilateral investment treaty at the ICSID on October 12.
States must stop prioritizing investment over human rights – UN experts
15-Oct-2021 OHCHR
UN experts today called on States to ensure that international investment agreements do not provide a “safe harbour” for investors to abuse the human rights of individuals and communities.