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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.


Corporate lawyers hijack UN meeting, while civil society is sidelined
The takeaway from the UNCITRAL’s process for its so-called "reform" discussions is that lawyers making millions in ISDS cases are welcomed, while the voices of the millions of people whose lives are harmed by ISDS cases brought by multinational corporations are barely an afterthought.
Bolivia ordered to make US$49mn award to Chile’s Quiborax
After a 14-year dispute between Quiborax and the Bolivian government, the International Centre for Settlement of Investment Disputes (ICSID) rejected Bolivia’s application to annul a US$48.6mn award in favor of the Chilean mining company.
Miner planning US$300mn Guatemala arbitration
Exmingua is planning to launch arbitration proceedings against Guatemala following the suspension of its Tambor gold project.
Airbus withdraws arbitration demand over $3.7 billion helicopter deal
The Polish General Counsel has announced that Airbus Helicopters has withdrawn its application for international arbitration over its dispute with Poland.
Spain loses its third millionaire arbitration award for the reduction of renewables
ICSID imposes a fine of 64.5 million euros for a claim by a fund of the state of Abu Dhabi.
Canada backs foreign investor rights to protect mining sector: Book
Canada’s controversial mining sector may be the driving force behind the country’s insistence on protecting foreign investors’ rights over laws that guard its own citizens and environmental values.
New Zealand signs side letters with five CPTPP members to exclude compulsory investor state dispute settlement
New Zealand has recently signed "side letters" to exclude compulsory Investor State Dispute Settlement with five members of the CPTPP – Brunei Darussalam, Malaysia, Peru, Viet Nam and Australia.
Draft Council conclusions on the negotiation and conclusion of EU trade agreements
EU member states approved the Commission plans to keep investment protection provisions seperate from trade agreements so that they can be approved without the ratification of national or regional parliaments.
Maine state legislators endorse removing ISDS from NAFTA
The Maine Citizen Trade Policy Commission, a legislator-run, bipartisan governmental body, recently sent a letter to U.S. Trade Representative calling for ISDS to be removed in its entirety from NAFTA.
Elliott seeks $670 mil. compensation from gov’t over Samsung C&T merger
Elliott Associates is demanding more than $670 million in compensation from the government for losses and damages it claims to have suffered regarding the merger of Samsung C&T and Cheil Industries in 2015.
Germany says Vattenfall has no grounds to seek arbitration over nuclear phase-out
Swedish utility Vattenfall has no legal grounds to ask a US arbitration court if it can claim 4.7 billion euros from Berlin for forcing it to halt nuclear production, the German government has said.
Telefonica Mexico withdraws EUR 850 mln arbitration request - report
Telefonica Mexico has withdrawn its arbitration claim against the Mexican government in which it had requested compensation amounting to around EUR 850 million after reaching an agreement with the country.
Ratifying CETA after ’Achmea scandal’ is anti-European
Keeping the European project alive requires EU members to abide by the principle of loyalty to European institutions.
International Trade Committee launches probe into UK investment policy as Brexit approaches
The International Trade Committee launches an inquiry concerning the UK’s investment policy, which will examine the Government’s performance in promoting and facilitating inward and outward investment and its approach, upon UK exit from the EU, to negotiating agreements that liberalise and protect foreign investment.
Canada loses bid to overturn NAFTA ruling on rebuffed N.S. quarry
New Jersey company behind quarry proposal in Digby Neck claims damages of $443M US in lost profits.
EU’s new trade deal with Mexico promotes CETA-style investors’ rights while ignoring human rights violations by multinationals
A key feature of the “modernisation” process is the inclusion of a controversial investment protection chapter with the same characteristics as the one recently included in the Canada-EU trade agreement.
Invenergy files international arbitration suit against Poland over wind projects
The Invenergy group has submitted a notice of arbitration against Poland citing violations of Invenergy’s rights as a foreign investor and clear breaches of Poland’s obligations under the United States-Poland bilateral investment treaty.
Kimberly-Clark to sue Venezuela over 2016 expropriated factory
US multinational Kimberly-Clark has filed a formal request to take Venezuela to court regarding the expropriation of its abandoned factory by the government of Nicolas Maduro in July 2016.
Taxpayers face Sh500bn loss in case against Canadian firm
The government risks losing up to Sh500 billion in an international arbitration case against mining firm, Cortec, after it failed to provide Sh100 million in the second mini-budget to pay a UK-based law firm representing it in the case.
Three Canadian mining companies lodge ISDS disputes over Colombian mining ban
Colombia’s decision to ban mining activities in the Páramos, a range of environmentally sensitive wetlands that provide approximately 70% of the country’s water supply, has so far led to three treaty-based arbitration cases.