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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.

International litigator imposes $700m fine on Pakistan in rental power plants case
21-Sep-2017 Daily Pakistan
Financially-strapped Pakistan has been imposed with a staggering $700 million in a damages suit by the International Centre for Settlement of Investment Disputes (ICSID) regarding rental power plants case.
EU court adviser says arbitration clause in investment treaty is legal
19-Sep-2017 Reuters
An arbitration clause in an investment treaty between the Netherlands and Slovakia does not violate EU law, an adviser to the EU’s top court said.
Russian energy firm Inter RAO demands $175m from Government of Georgia
18-Sep-2017 Agenda
Inter RAO structures claim $175 million loss was due to a refusal to raise energy tariffs when the Georgian national currency Lari was devaluated.
Sanofi Aventis Ukraine seeks to file claim to international court to protect investment in Ukraine
18-Sep-2017 Interfax
Sanofi Aventis Ukraine LLC, part of Sanofi global pharmaceutical company, seeks to file a claim against Ukraine to the International Investment Arbitration.
Multi-million dollar payment hangs over Zimbabwe
15-Sep-2017 ALB
Zimbabwe is in breach of two arbitral awards totalling USD 240 million, after it missed a deadline to pay investors whose land was seized as part of the government’s racially motivated land reforms.
Canada pushing to revamp NAFTA lawsuit provision
14-Sep-2017 The Globe and Mail
The goal of Foreign Affairs Minister Chrystia Freeland is to revamp Chapter 11 so it more closely mirrors the investor-state dispute-resolution mechanism that forms part of the 2016 Canada-European Union trade deal.
Recommendation for a Council decision authorising the opening of negotiations for a Convention establishing a multilateral court for the settlement of investment disputes
14-Sep-2017 European Commission
The inclusion of Investor-State Dispute Settlement (ISDS) in trade and investment agreements has become subject to increased public scrutiny and questioning.
Foreign patent owners can challenge domestic judgments under international investment arbitration
12-Sep-2017 Forbes India
The first ever final award on patents in international investment arbitration by ICSID in the case of Eli Lilly v. Canada has effectively cleared the way for raising future disputes by foreign IPR owners against domestic institutions which can result in stronger and robust IP protection regime.
The MERCOSUR Protocol on Investment Cooperation and Facilitation: regionalizing an innovative approach to investment agreements
12-Sep-2017 EJIL: Talk!
The Protocol draws significantly on the Brazilian model investment agreement, which stands out for departing from the traditional design of Bilateral Investment Treaties, particularly by excluding the possibility of investor-State dispute settlement (ISDS).
THAAD reprisals undermine China FTA
11-Sep-2017 Korea Herald
China has shown no hesitation in disregarding its obligations under the free trade agreement with South Korea to take retaliatory measures against the deployment of a US missile defense system in the peninsula, say Korean media
Poland looks to block part of EU, Canada trade deal
7-Sep-2017 Undercurrent News
Poland is looking to block part of the Comprehensive Economic and Trade Agreement (Ceta) between the EU and Canada, over concerns for a planned mechanism for resolving disputes.
CSOs challenge PH trade negotiators: Take Philippines out of RCEP!
7-Sep-2017 People over Profit
Philippine civil society groups and social movements stand together to oppose RCEP
Belgium asks European Court on legality of investment protection in CETA
6-Sep-2017 FOEE
Belgium has requested an opinion from the European Court of Justice on the ’Investment Court System’ included in the EU-Canada trade deal, to determine if the ICS is compatible with the European Treaties
Singapore court sets aside award against Lesotho
6-Sep-2017 African Law Business
The Singapore High Court has set aside an investor-state arbitral award on the merits against the Kingdom of Lesotho. The case is an important one, as it concerns whether investors can use arbitration to resolve cases that were pending before the SADC Tribunal when it was dissolved by the SADC Summit in 2014.
Would Vodafone comply with Delhi high court order?
4-Sep-2017 Live Mint
The Delhi high court has passed an ex-parte order restraining Vodafone Group Plc. from proceeding with arbitration under the India-UK Bilateral Investment Protection Agreement (India-UK BIPA). However, it remains to be seen whether Vodafone would comply with this order of the court.
Romanian Unesco site proposal may be halted to allow gold mining
1-Sep-2017 The Guardian
Romania’s prime minister has suggested his government will withdraw an application to have the Roman gold-mining area of Roșia Montană declared a Unesco world heritage site, potentially reviving controversial plans to resume mining.
Govt will lose gold mine dispute due to Article 44 use: academics
1-Sep-2017 The Nation
FTA Watch warns that Thailand would most certainly lose an arbitral tribunal process regarding allegations that it violated the Thailand-Australia Free Trade Agreement, exposing the country to huge losses due to claims for compensation.
Foreign investors may take Korea’s mobile fee cut to ISD settlement
30-Aug-2017 The Investor
Foreign investors are making increasing inquiries about possible losses to their investment in South Korean telecom companies, three days before the carriers are to decide on whether to file a lawsuit against the government’s fee cut plan, industry sources said on Aug. 28.
Canada says ’hard no’ on changing NAFTA dispute resolution
30-Aug-2017 Washington Examiner
Canada will oppose any effort to change the investor-state dispute resolution system in the North American Free Trade Agreement, sources tell the Washington Examiner
Trump move on settling trade disputes splits NAFTA fans and critics
29-Aug-2017 Washington Examiner
The Trump administration’s proposal to revamp NAFTA’s system for settling disputes between governments and private companies splits both the opposition to and the advocates for ISDS