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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.

UE suspende parcialmente negociaciones de libre comercio con EEUU
21-Jan-2014 Reuters
La Comisión Europea suspendió hoy en parte las negociaciones de libre comercio con Estados Unidos, según anunció el comisario de Comercio, Karel de Gucht, que explicó que en los próximos tres meses habrá que realizar una consulta sobre unas polémicas cláusulas para proteger las inversiones de las empresas.
Proposed changes to the investment dispute-resolution system: A South American perspective
21-Jan-2014 ITN
Perhaps because so many countries in the region have faced multiple international investment arbitrations based on multi-million dollar claims for compensations, a number of alternatives to the current system of investment dispute resolution have been drawn up.
Smart move: Argentina to leave the ICSID
21-Jan-2014 CILJ
Given the substantial problems with the current ICSID framework and the large number of cases currently pending against Argentina, denouncing the SID Convention and leaving the ICSID is the best course for the country.
S2B analysis on ISDS and CETA
21-Jan-2014 S2B
Seattle to Brussels Network analysis of the European Commission’s note on “Investment Provisions in the EU-Canada free trade agreement”
Sovereignty fears lead to EU-US trade rethink
21-Jan-2014 The Independent
The European Commission is to rethink its approach to a controversial US trade deal which campaign groups in the UK have warned would fundamentally erode Britain’s sovereignty.
US firm’s FTA plan to keep mine
17-Jan-2014 The Australian
An American investor plans to invoke the US-Australia Free Trade Agreement to prevent the NSW government cancelling a coal exploration licence that the Independent Commission Against Corruption said is tainted by corruption and should be expunged.
The global fight against corporate rule
15-Jan-2014 The Nation
Activists are challenging rules that grant corporations the right to sue governments.
Born’s BAT gets set to fly
15-Jan-2014 Mondaq
A proposal for a new form of international arbitration, with states abandoning sovereign rights to commercial dispute litigation in favor of resolution by arbitration, has provoked wide public interest and is now being drafted into an international model treaty.
Philip Morris, Australia and the fate of Europe’s trade talks
13-Jan-2014 Inside Story
Australia’s clash with Philip Morris over plain packaging has disrupted trade talks between the United States and Europe, reports James Panichi in Brussels
Protecting foreign investments in Sub-Saharan Africa: The SADC and its protocol on finance and investment
9-Jan-2014 Mondaq
The SADC protocol on investment provides rights to investors, including investor-state dispute settlement provisions, in southern Africa no matter what country they hail from. Thus, it goes way beyond typical bilateral investment treaties (BITs) while protecting foreign companies operating in SADC countries without BIT coverage.
Explaining ISDS
8-Jan-2014 FTA Watch
A five-minute video from FTA Watch (Thailand)
A Canadian court is allowing Ecuadorians to pursue their long-running pollution suit against Chevron
4-Jan-2014 Public Radio International
Last month, a judge ruled that the Ecuadorians can pursue their case against Chevron in Canada.
Tribunal pushes back Ecuador, Chevron hearing
4-Jan-2014 Wall St Journal
An international arbitration tribunal in The Hague hearing a claim from Chevron Corp. against Ecuador pushed back a scheduled hearing to Feb. 7 from Jan. 20 and called on both parties to meet in Washington on Jan. 20 instead.
Investment deal? Just watch it
2-Jan-2014 The Hindu Business Line
In the last couple of years, South Africa has become the unlikely champion of the anti-BIT movement.
LPG firm’s investor seeks compensation
28-Dec-2013
A shareholder from the United Kingdom of the company Progas Pakistan has initiated international arbitration proceedings of $573 million against Pakistan for alleged expropriation of its LPG infrastructure in Karachi and the government has decided to vigorously contest the case.
Indigenous groups win right to seize Chevron’s Canadian sssets over $18 billion in Amazon pollution
28-Dec-2013 Democracy Now
A court in Canada has ruled Ecuadorean farmers and fishermen can try to seize the assets of oil giant Chevron based on a 2011 decision in an Ecuadorean court found it liable for nearly three decades of soil and water pollution near oil wells, and said it had ruined the health and livelihoods of people living in nearby areas of the Amazon rainforest.
Open letter of civil society against investor privileges in TTIP
27-Dec-2013 Tlaxcala
Over 100 civil society groups and social movements from Europe and the USA have signed on an open letter that was sent to the chief negotiators of the Transatlantic Trade and Investment Partnership to voice one joint demand: to exclude any Investor-state Dispute Settlement mechanism from the TTIP
Romania loses major arbitration case
19-Dec-2013 Global Legal Post
In a victory which may have major ramifications for international law, US law firm King & Spalding has won a $250 million arbitration case for Romanian company Micula against the Republic of Romania.
India-UAE BIPPA: Government builds safeguards to protect itself
18-Dec-2013 Economic Times
India has introduced provisions in the just-concluded bilateral investment protection and promotion agreement (BIPPA) with the United Arab Emirates to ensure that only executive decisions can be challenged and that too within a stipulated period.
Is ICSID really good for the Canadian taxpayer?
26-Nov-2013
Most trade lawyers across the country are lauding Canada’s ratification of the International Centre for Settlement of Investment Disputes Convention. But they glaze over the serious and far-reaching effects for Canadian public policy.