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.
The overreach on display in the aggressive use of ISDS lawsuits by multinational corporations is just one part of a broader trend in recent decades in which the ability of states to regulate their economies in their own interests.
Pakistan has reportedly decided to scrap most of its existing Bilateral Investment Treaties as these pacts are shrinking the government’s policy space with respect to adopting measures of public interest.
The company has appointed a leading international law firm to advise the company of its legal options, and in particular, the Australian Bilateral Investment Treaty.
The British company pursues its investment treaty claim under the UK-Slovenia bilateral investment treaty and the Energy Charter Treaty.
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India is believed to have challenged in a court in The Hague an arbitration tribunal verdict that overturned its demand for ₹10,247 crore in back taxes from Cairn Energy Plc — the second time in three months that it has refused to accept an international award against retrospective tax.
The Egyptian Ministry of Petroleum and Mineral Resources announced the entry into force of the agreement related to the Damietta Liquefaction Plant, and the settlement of all claims.
India has time till mid-April to file an appeal against an international arbitration tribunal ordering it to repay UK’s Cairn Energy Plc USD 1.2 billion-plus interest and cost, but the challenge can only be on limited grounds such as procedure not being followed.
Only 21% of cases administered by ICSID involve African investors, however, this may change with the introduction of AfCFTA, and we may begin to see more disputes involving African investors and African states.
How investment treaties and investor-to-state dispute settlement grant foreign investors greater rights than Dutch and EU law.
Besides protection and dispute settlement, the BIT also includes several key changes in terms of application and restriction.
To realise a future beyond fossil fuels, it is imperative to look at how to disentangle the legal shackles that enable companies to frustrate climate policy and shift the burden of their stranded assets onto the shoulders of taxpayers through arbitration claims.
Netherlands-based United Group claims that Serbia has violated several obligations related to incentives and mutual protection of investments between the two countries.
India will be filing an appeal at The Hague this week against the $1.4-billion arbitration award against British oil firm Cairn Energy.
Vattenfall will get 1.606 billion euros and agreed to end pursuing a separate damages claim in the World Bank’s ICSID arbitration tribunal.
Free-trade agreements enable companies to sue governments if they interfere with profit-making activities, no matter how destructive. These trade deals put us in an antidemocratic straitjacket — it’s time we got rid of them.
Most international investment agreements do not exclude taxation from their scope, which means that a wide range of tax-related measures are covered by them.
Canadian mining company First Majestic Silver Corp submitted a request for arbitration based on NAFTA, due to the tax debt and its differences with the Mexican government.
Kuwaiti logistics company Agility’s claim to recover more than $380 million it said it lost in Iraq has been rejected by an international tribunal.