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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.

CETA leak: Crucial questions unanswered
29-Aug-2014 The Tyee
Latest version of trade deal leaves too much up to non-existent commission, lawyers say.
Trade treaties expose Australia to costly litigation, experts warn
29-Aug-2014 WA Today
Australia risks getting swept up in a wave of litigation by foreign corporations wishing to sue over unfavourable domestic laws, experts warn, after the government rejected a bill to ban controversial trade agreements.
Inquiry rejects ban on ISDS clauses in free trade agreements
29-Aug-2014 Computer World
A Senate inquiry has recommended against passing a bill that would bar Australia from entering into trade agreements that include so-called ’investor-state dispute settlement’ clauses.
European lawmakers threaten to scupper Canada trade deal
28-Aug-2014 Reuters
EU lawmakers are threatening to block a multibillion-dollar trade pact between Canada and the European Union – a blueprint for a much bigger EU-US deal – because it would allow firms to sue governments if they breach the treaty.
Newmont withdraws mining arbitration case against Indonesia
28-Aug-2014 Reuters
Newmont Mining Corp has withdrawn an international arbitration filing against the Indonesian government, government and company officials said on Tuesday, indicating a possible breakthrough in a seven-month dispute that halted exports.
EU agrees rules to manage investor-state disputes
28-Aug-2014 European Commission
The European Union today took an important step towards creating a comprehensive EU investment policy, with the publication of a Regulation setting out a new set of rules to manage disputes under the EU’s investment agreements with its trading partners.
The “anti-ISDS bill” before the Australian Senate
28-Aug-2014 Kluwer Arbitration Blog
Indonesia is not the only Asia-Pacific nation that is reassessing investment treaties containing provisions on Investor-State Dispute Settlement (ISDS, especially arbitration).
Indonesia 1, Newmont 0
28-Aug-2014 Jakarta Globe
US firm Newmont Mining has withdrawn its arbitration claim against Indonesia
S&D Group president Gianni Pittella: "We oppose ISDS mechanism in EU-Canada trade deal"
27-Aug-2014 S&D Group in the EP
The Socialist & Democrat Group in the European Parliament has always opposed the inclusion of the investor-state dispute settlement mechanism in CETA, says their president G. Pitella, and it will be up to the Parliament to decide whether or not to ratify the agreement.
CAFTA investor rights undermining democracy and the environment: Pacific Rim mining case
23-Aug-2014 Public Citizen
Pacific Rim Mining Corp., a Canadian-based multinational firm, sought to establish a massive gold mine using water-intensive cyanide ore processing in the basin of El Salvador’s largest river, Rio Lempa.
Indonesia’s termination of the Netherlands–Indonesia BIT: Broader implications in the Asia-Pacific?
23-Aug-2014 Kluwer
While Indonesia intends to renegotiate its BITs to provide greater capacity to regulate in the public interest, the current Australian government has indicated it will consider the inclusion of ISDS on a case-by-case basis.
CETA: What the leaked version reveals
17-Aug-2014 Le Monde
The most controversial provisions include the investor state dispute resolution mechanism (ISDS), an arbitral tribunal meant to settle disputes between governments and corporations.
EU-Canada trade deal leak ‘ridicules’ TTIP consultation, campaigners say
15-Aug-2014 EurActiv
The leaked EU-Canada trade agreement contains a controversial chapter on investor-state disputes settlement that is substantially unchanged from previous drafts that were used as a basis for the EU’s recently held public consultation.
AFTINET on ISDS
13-Aug-2014 AFTINET
Australia Fair Trade and Invesment Network’s Convener, Dr Patricia Ranald, gave evidence to the Senate Committee for Foreign Affairs Defense & Trade on the 6th August 2014 about the dangers of investor-state dispute settlement (ISDS) in trade agreements.
Bear Creek announces its intent to commence an arbitration against Peru - Santa Ana dispute
12-Aug-2014 PR Newswire
Canadian company Bear Creek Mining announces that it intends to commence an arbitration proceeding against the government of Peru under the Canada-Peru FTA.
Two-third of voters in Tory marginals want NHS exempt from US trade pact
8-Aug-2014 The Guardian
More than two-thirds of voters in 13 battleground constituencies want to see the NHS safeguarded from a new trade deal that critics say threatens to make the privatisation of UK health services permanent.
Why developing host countries sign increasingly strict investment agreements
5-Aug-2014 Vox.eu
Despite the failure of the OECD’s MAI negotiations and the lack of agreement to put investment on the WTO’s negotiating agenda, the major source countries of FDI will eventually get close to their objective of a comprehensive web of investment agreements with increasingly stricter investment provisions with those developing countries that compete with each other as hosts of their FDI.
US-Africa Summit - Are we up for a new deal?
4-Aug-2014 ECDPM
The US Trade Representative Michael Froman argues for comprehensive trade and investment strategy – read possibly in the future, negotiate reciprocal trade agreements, à la EU-Africa Economic Partnership Agreements (EPAs) but with more binding investment clauses to protect the interests of US businessmen.
Geist: How a 20-year-old patent application could upend Canada’s biggest trade deal
4-Aug-2014 The Star
From a Canadian perspective, the Eli Lilly case has provided a powerful reminder that the risks associated with ISDS may outweigh the benefits with legal cases that can take decades to resolve.
The UK-Colombia Bilateral Investment Treaty
1-Aug-2014 ABColombia
The UK-Colombia Bilateral Investment Treaty that was ratified by the House of Commons on 10 July 2014 poses grave risks to the achievement of human rights and the successful implementation of agreements currently being made in the peace dialogues between the FARC guerrilla and the Colombian Government in Havana.