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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.


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Telefonica Mexico has withdrawn its arbitration claim against the Mexican government in which it had requested compensation amounting to around EUR 850 million after reaching an agreement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.
Petroleum ISDS cases pose major threat to climate action
Research shows that mining and energy industries are the most frequent users of Investor-State Dispute Settlement mechanisms.
Lee-Chin seeks US$300m in arbitration fight over Dom Rep investment
A Jamaican investor served the government of the Dominican Republic with a notice of arbitration surrounding the state takeover of a recycling facility and waste-to-energy plant.
Canadian opposition to Nafta’s chapter 11 gives Trudeau leeway
Dislike of investor-state dispute mechanism appears widespread. Public consultation files detail what Trudeau team was told.
NAFTA: New protections for "too big to fail" banks
The financial industry’s demands for a “modernized” financial services chapter of the North American Free Trade Agreement have been overlooked
Trump Organization pressures Varela
A letter sent by the Trump Organization’s lawyers reminded President Varela of Panama’s obligations under a 1983 treaty that protects the rights of investors from the United States.
ISDS: The wild, wild west of international law and arbitration
I thought it would be both exciting and challenging to follow clients into this new area of investment claims practice. What I didn’t know was that I was entering the Wild Wild West of international practice.
New Zealand: Agreements with five countries exclude compulsory investor-state dispute settlement processes
On March 9, 2018, the New Zealand Minister for Trade and Export Growth, David Parker, announced that the government has signed “side letters” with five other countries that are also party to the TPP11 that exclude compulsory investor-state dispute settlement.
An example of regulatory chill
The case of Ethyl v. Canada.
Multilateral investment court: Council gives mandate to the Commission to open negotiations
The Council adopted the negotiating directives authorising the Commission to negotiate, on behalf of the EU, a convention establishing a multilateral court for the settlement of investment disputes.
Al Amoudi lodges a complaint against Morocco in Washington, D.C.
Al Amoudi recently filed a complaint against Morocco at the World-bank affiliated ICSID thus ending a series verbal threats the Saudi investor has been brandishing since 2015 against Moroccan investment authorities.