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.
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).
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.
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.
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.
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 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.
The United States, such a paragon and champion of free trade when it comes to exporting its own products and services, evidently considers itself free unilaterally to ignore the rules when the umpire comes down against it.
Another international arbitral tribunal has weighed in on the question as to whether “Most-Favored Nation” treatment offers foreign investors access to more favorable dispute resolution options found in other treaties.
Criticism of the Central American Free Trade Agreement (CAFTA) currently being considered by the U.S. Congress has focused heavily on concerns that the treaty would devastate Central American farmers who would be forced to compete with heavily subsidized U.S. agribusiness.
Bolivia faces an impending lawsuit for cancelling the water contract with Aguas del Illimani, the private consortium controlled by majority shareholder Suez. Thanks to a bilateral investment treaty signed between France and Bolivia, Suez has the right to sue the Bolivian government for breach of contract.
The Indian government and Bechtel have reached an agreement on ‘‘all issues’’ related to the Dabhol project. The settlement agreement between the two was signed on Tuesday thereby completing the entire settlement process with both stakeholders - GE and Bechtel - in the Dabhol power venture.
The Dabhol settlement process is almost complete with US-based Bechtel Corp finally informing the Indian side that it’s willing to settle and not proceed with international arbitration.
About 1 500 commercial farmers who have had their land forcibly and sometimes violently seized by Robert Mugabe’s government have taken their case to international arbitration.
The Argentine government said it will try to annul a ruling by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in favour of US company CMS Energy Corp.
The Thai government must become more efficient and enact more ironclad laws in order to avoid unnecessary legal disputes with US investors once the Thailand-US free trade area (FTA) agreement takes effect, says a local researcher.
Romania’s past treatment of foreign investors may soon come back to haunt its new government and an economic plan agreed with Brussels ahead of membership of the European Union. A World Bank arbitration panel, the Icsid, is expected to rule in coming weeks on a lawsuit seeking $350m (€270m, £180m) from the state brought by Noble Ventures, an American investment group.
Scotiabank has filed a $600 million US compensation claim against Argentina, claiming that "discriminatory" actions taken by Argentine authorities led to the total loss of its investment in its Scotiabank Quilmes subsidiary in 2002.
The minerals and energy department is engaged in talks with Italian companies operating in SA over possible breaches of the SA-Italy bilateral investment treaty in the implementation of the Mineral and Petroleum Resources Development Act.
Examines how bilateral investment treaties and free trade agreements which contain specific investment provisions reflect geopolitical concerns and redefine rights and privileges for transnational corporations, including with respect to commercial control over biodiversity through intellectual property rights.
A new study by Public Citizen’s Global Trade Watch analyzes 42 NAFTA investor-state challenges and illustrates how the proposed CAFTA would extend the threat.