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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.

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.
The era of mega-arbitration: International court rules against Russia in $50 billion decision
30-Jul-2014 Madhyam
On 28 July 2014, an international arbitration tribunal announced that Russia must pay $50.02 billion in damages to former shareholders of the now defunct oil giant, Yukos Oil Company. Analysis by Kavaljit Singh.
Germany insists it hasn’t scuttled CETA: report
29-Jul-2014 iPolitics
The German ministry of the economy has clarified its position on the Canada-EU trade agreement (CETA), saying it will “meticulously” examine the agreement as soon as it’s on the table, Agence France Presse reported Monday.
Germany to reject EU-Canada trade deal - Sueddeutsche newspaper
26-Jul-2014 Reuters
Germany is to reject a multi-billion free trade deal between the European Union and Canada which is widely seen as a template for a bigger agreement with the United States, a leading German paper reported on Saturday.
Commission swamped by 150,000 replies to TTIP consultation
24-Jul-2014 EurActiv
About 150,000 people have responded to the European Commission’s online consultation on the controversial investor-state dispute settlement (ISDS) clause in the Transatlantic Trade and Investment Partnership (TTIP).
CETA ‘should be initialed by September 25′: EU Trade Commissioner
23-Jul-2014 iPolitics
The end of the Canada-EU trade agreement (CETA) technical negotiations are “in sight” and the deal should be initialed in time for a late September bilateral summit in Ottawa, EU Trade Commissioner Karel De Gucht said Tuesday.
TDM Special Issue on "Arbitration in the Middle East - Expectations and Challenges for the Future"
22-Jul-2014 TDM Special Issue on "Arbitration in the Middle East - Expectations and Challenges for the Future"
The volume of international business either in the Middle East or with a Middle Eastern element is increasing and many of the contracts being used provide for arbitration. While arbitration ("tahkim" in Arabic) has long-standing religious and cultural roots in the Middle East, there are a number of differences and tensions between the Western perception of arbitration and certain Islamic legal principles.
121 scholars speak out against planned investor-state arbitration provisions in the US-EU TTIP, modeled on the Canada-EU CETA
16-Jul-2014
A group of 121 academic experts has spoken out against planned provisions on investor-state arbitration in the Transatlantic Trade and Investment Partnership.
Supporters of investment arbitration launch EU think tank
11-Jul-2014 Global Arbitration Review
Corporate counsel and practitioners in Europe have formed a non-profit association to promote the benefits of investor-state arbitration and influence EU policy on investment protection.