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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.

Bilateral investment treaties dangerous traps: experts
9-Dec-2005 New Age
Experts have cautioned that bilateral investment treaties with the rich countries will ultimately lead the developing and least developed countries towards dangerous traps at the cost of their national interests.
Romanian lawyers won an USD 353m international arbitration case against an US investor
19-Oct-2005
Romania has won at the International Court of Arbitration in Washington, the case brought by the American company Noble Ventures that contested the Romanian state actions in the privatization process of Resita Steel Plant (CSR).
The global governance of foreign direct investment: madly off in all directions
19-Oct-2005 GURN
Notwithstanding substantial doubts that increased FDI and economic growth are not automatically linked and that investments agreements may be less important in attracting FDI than other economic and socio-political framework conditions, the proliferation of bilateral investments agreements (BITs) goes ahead unrestrained.
WIR 2005: Transnational corporations and the internationalization of R&D
30-Sep-2005 UNCTAD
World Investment Report 2005, by UNCTAD, presents the latest trends in foreign direct investment and explores the internationalization of research and development by transnational corporations along with the development implications of this phenomenon.
Recent trends in international investment agreements: new UNCTAD research note
26-Sep-2005 UNCTAD
The past year saw a further proliferation of international investment agreements (IIAs) at the bilateral, regional, inter-regional, and plurilateral levels. On average, more than three such agreements were signed per week.
Mittal Steel to launch Netherlands vs. Czech Republic arbitration
5-Sep-2005
Netherlands-based Mittal Steel, disqualified from the Vítkovice Steel privatization, says that in late September it will launch international arbitration against the Czech state.
Pakistan-US differences over BIT persists
24-Aug-2005 Dawn
Pakistan has asked the United States to sign the proposed Bilateral Investment Treaty (BIT) by dropping its demand that in case of an arbitration only the Washington based International Centre for Settlement of Disputes (ICSID) should be approached for a decision.
United States tears up free-trade rule book
13-Aug-2005 Montreal Gazette
The United States, such a paragon and champion of free trade when it comes to exporting its own products and services, evidently considers itself free unilaterally to ignore the rules when the umpire comes down against it.
Tribunal OKs treaty-shopping for better arbitration options in Gas Natural case
5-Aug-2005 http://ita.law.uvic.ca/alphabetical...
Another international arbitral tribunal has weighed in on the question as to whether “Most-Favored Nation” treatment offers foreign investors access to more favorable dispute resolution options found in other treaties.
CAFTA’s debt trap
20-Jul-2005
Criticism of the Central American Free Trade Agreement (CAFTA) currently being considered by the U.S. Congress has focused heavily on concerns that the treaty would devastate Central American farmers who would be forced to compete with heavily subsidized U.S. agribusiness.
Suez strikes back in Bolivia
16-Jul-2005 Znet
Bolivia faces an impending lawsuit for cancelling the water contract with Aguas del Illimani, the private consortium controlled by majority shareholder Suez. Thanks to a bilateral investment treaty signed between France and Bolivia, Suez has the right to sue the Bolivian government for breach of contract.
Govt, Bechtel ink Dabhol deal
15-Jul-2005 Indian Express
The Indian government and Bechtel have reached an agreement on ‘‘all issues’’ related to the Dabhol project. The settlement agreement between the two was signed on Tuesday thereby completing the entire settlement process with both stakeholders - GE and Bechtel - in the Dabhol power venture.
Dabhol deal on track, Bechtel says it’s willing to settle
8-Jul-2005 Newind Press
The Dabhol settlement process is almost complete with US-based Bechtel Corp finally informing the Indian side that it’s willing to settle and not proceed with international arbitration.
Land grab to go to arbitration
16-May-2005 The Zimbabwean
About 1 500 commercial farmers who have had their land forcibly and sometimes violently seized by Robert Mugabe’s government have taken their case to international arbitration.
Argentina to seek annulment of ICSID ruling in favour of CMS Energy
13-May-2005 Forbes
The Argentine government said it will try to annul a ruling by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in favour of US company CMS Energy Corp.
Steps needed to avoid legal disputes with US
6-May-2005 Bangkok Post
The Thai government must become more efficient and enact more ironclad laws in order to avoid unnecessary legal disputes with US investors once the Thailand-US free trade area (FTA) agreement takes effect, says a local researcher.
Spectre of lawsuit losses hangs over Bucharest
19-Apr-2005 Financial Times
Romania’s past treatment of foreign investors may soon come back to haunt its new government and an economic plan agreed with Brussels ahead of membership of the European Union. A World Bank arbitration panel, the Icsid, is expected to rule in coming weeks on a lawsuit seeking $350m (€270m, £180m) from the state brought by Noble Ventures, an American investment group.
Scotiabank files $600M US claim against Argentina
7-Apr-2005
Scotiabank has filed a $600 million US compensation claim against Argentina, claiming that "discriminatory" actions taken by Argentine authorities led to the total loss of its investment in its Scotiabank Quilmes subsidiary in 2002.
Italy claims SA in breach of treaty
23-Mar-2005 Business Day
The minerals and energy department is engaged in talks with Italian companies operating in SA over possible breaches of the SA-Italy bilateral investment treaty in the implementation of the Mineral and Petroleum Resources Development Act.
Corporate conquest, global geopolitics: Intellectual property rights and bilateral investment treaties
17-Mar-2005 Seedling
Examines how bilateral investment treaties and free trade agreements which contain specific investment provisions reflect geopolitical concerns and redefine rights and privileges for transnational corporations, including with respect to commercial control over biodiversity through intellectual property rights.