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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.

Study investment provisions before an FTA says advocacy group
20-Apr-2012
The country should carefully study investment provisions before entering into foreign trade agreements (FTAs) as these may infringe on government’s regulatory power on foreign firms, an advocacy group on Friday said.
Case note: How Chevron v. Ecuador is pushing the boundaries of arbitral authority
13-Apr-2012 IISD
The arbitral tribunal in Chevron v. Ecuador has taken a series of steps in recent months suggesting that it has a broad view of its authority.
India plans to abolish ISD clause in FTAs
6-Apr-2012
India plans to abolish the investor-state dispute system and renegotiate FTAs with South Korea, Singapore, and other countries, an Indian newspaper reported.
’We can’t even manage to send a lemon to the US,’ CFK
1-Apr-2012
President Cristina Fernández de Kirchner questioned US president Barack Obama’s recent decision to suspend trade benefits for Argentina, while complaining that “we can’t even manage to get one of our lemons to enter the US market.”
India to oppose Vodafone’s move to invoke BIPA pact
31-Mar-2012 Economic Times
The Indian government is likely to oppose any move by Vodafone Plc to invoke the India-Netherlands Bilateral Investment Promotion and Protection Agreement (BIPA) if it is forced to cough up Rs 12,000 crore in taxes on the grounds that the investment was routed through several step down firms based in different countries and that the treaty does not cover tax disputes.
Voda seeks Netherlands treaty to snub govt, will others follow?
30-Mar-2012 First Post
Fearing the Indian government will use new tax laws to trap it back around Rs 12,000 crore in taxes, the world’s largest mobile operator, Vodafone, may invoke a bilateral investment treaty between India and the Netherlands to avoid doing so.
2G: Telenor plans to invoke India-Singapore treaty
29-Mar-2012 Economic Times
Norway’s Telenor will seek ’compensation for all investment, guarantees and damages’ if the Indian government fails to sort out issues related to its licence cancellation within the next six months, the company said.
US suspends Argentina from trade preference scheme
29-Mar-2012 ICTSD
Trade frictions are on the rise between Washington and Buenos Aires, after US President Barack Obama announced that the US would be suspending Argentina from its Generalised System of Preferences programme for failure to pay arbitration awards in two disputes involving US investors.
Water wars: Indigenous Ecuadorians vs. corporations
29-Mar-2012 Policymic
Ecuadorian communities learned from the way that Chevron’s operations flouted environmental law in the 1990’s, that once entrusted to foreign businesses their natural resources are usually squandered.
Obama says to suspend trade benefits for Argentina
26-Mar-2012
U.S. President Barack Obama said on Monday he was suspending trade benefits for Argentina because of the South American country’s failure to pay more than $300 million in compensation awards in two disputes involving American investors.
US eyes suspending trade benefits for Argentina
21-Mar-2012
The United States could soon suspend trade benefits for Argentina because of that country’s failure to pay awards in two long-running investment disputes with U.S. companies, a U.S. trade official said on Monday.
Africa: Coming Back to Bite
10-Mar-2012
African governments once rushed into signing bilateral investment treaties to encourage FDI. Lawyers are now calling for new models.
Labor standing firm on Pacific trade deal
5-Mar-2012 Sydney Morning Herald
The federal government is standing firm against Australian and US business demands that it allow controversial dispute settlement clauses into an ambitious new Pacific free trade deal.
Chevron’s secret arbitration violates human rights
17-Feb-2012 Amazon Defense Council
The Andean Commission of Jurists and five prestigious international law experts from around the world have joined a growing chorus of criticism targeting Chevron’s attempt to use a secret investor arbitration as part of its campaign to evade an $18 billion environmental judgment in Ecuador, according to letters released today.
Come and get me: Argentina is putting international arbitration to the test
17-Feb-2012 The Economist
Argentina has never threatened to quit ICSID. Its government insists it is open to honouring the awards. The only delay, it says, is that the claimants have not brought their rulings to a local court for collection.
India loses arbitration case against Oz firm
9-Feb-2012
In a stinging indictment of the slow speed with which the higher judiciary decides cases and lackadaisical manner in which the government deals with disputes involving foreign companies doing business in India, a three-member international arbitration panel has decided a case against the Government of India and a PSU.
Facing devastating setbacks, Chevron now seeks taxpayer bailout from $18 billion Ecuador judgment
1-Feb-2012 Amazon Defense Coalition
On February 11, Chevron will ask a panel of three private lawyers named as "arbitrators" under the BIT to nullify the entire nine-year Ecuadorian court process that recently found the company liable for $18 billion in clean-up costs.
India may exclude clause on lawsuits from trade pacts
30-Jan-2012 Livemint
The department of industrial policy and promotion has in principle decided not to include in bilateral trade pacts a clause that permits a foreign investor to sue the host country at an international dispute settlement agency.
Investment terror
13-Jan-2012 DTE
Since the 1990s developing nations have been on a treaty spree, signing a vast number of bilateral and regional investment treaties to attract funds for development. But as the figure of investment treaties has shot up so have the claims for damages from investor companies, which are seeking billions of dollars in compensation on account of regulatory laws.
Unearthed documents illustrate pitfalls of ISD clause
3-Jan-2012 The Hankyoreh
The experiences of former judge Abner Mikva, an arbitrator in a NAFTA dispute, demonstrate how he was pressured to favor the interests of the American establishment