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.
Investment treaties with ISDS provisions make it hard to tax foreign firms and worsen human rights and labor practices.
As released by the Goverrnment of India
The EU has proposed to reform the investor-state-dispute-settlement system, a move that could further complicate negotiations with China over a bilateral investment agreement, as well as their dialogue on the Belt and Road Initiative’s implementation in Europe.
Investment funds backing a slew of big-dollar corporate lawsuits has boomed over the past decade, fueled by favorable court rulings and investors seeking juicy returns.
Westmoreland Coal is suing Canada because it did not receive a transition payment following Alberta’s coal phaseout plan. For the province, coal mining companies have no role to play in the energy transition.
Interview with Javier Echaide, lawyer and member of Attac Argentina
While promising economic growth, large-scale land investment deals have caused increased inequality, widespread displacement of people, and destruction of natural resources.
Global corporations should not have special legal rights to undermine the policies of democratically elected governments.
Westwater Resources, an energy materials development company, announced the filing of a request for arbitration against the Republic of Turkey for the taking of its Temrezli and Şefaatli uranium projects in June 2018.
International investment agreements, specifically bilateral investment treaties and the investment chapters in free trade agreements, have come under the spotlight for what are seen as skewed provisions that grant excessive rights to foreign investors.
Bangladesh has about 30 BITs of which those with international arbitration provisions tilt to protect corporate interests more than the national interest of Bangladesh as reflected in the Saipem, Chevron, and Niko arbitrations.
The ICSID has rejected Zimbabwe’s application to annul an US$195 million award to a German family whose property was expropriated under the controversial land reform programme.
Venezuela made an partial payment of a settlement designed to resolve a $1.2 billion arbitration award to a bankrupt Canadian gold miner that’s laying claim to the assets of the parent of refiner Citgo Holding Inc. if it’s not paid in full.
The Hague-based Permanent Court of Arbitration has awarded South American Silver $18.7 million for amounts invested and another $9 million in interest for its Malku Khota concession, which the Bolivian government revoked in 2012.
A US coal miner is launching a NAFTA suit against Alberta over its policy to phase out coal in the electricity system by 2030.
Multinational corporations are suing countries for using generic versions of life saving medicines.
The net award for Athena Investments amounts to approx. EUR 11M.
Certain ISDS (Investor-state dispute settlement) cases against India led it to review its stand on investment treaties.
The German Supreme Court dismissed the original arbitration decision against Slovakia concerning the ban on health-insurance companies’ profits.
Many SEZs have been associated with compressions of land, labour and human rights. Investment treaties protect investments against adverse regulatory change, including in SEZs. To date, investors have brought at least 20 arbitrations to challenge diverse aspects of SEZ regimes.