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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.

Latest Wikileaks dump raises concerns for regulation in Australia
4-Jun-2015
A new dump of leaked secretive trade deal documents on WikiLeaks reveals an international agreement could prevent future Australian governments from introducing regulations around licensing, qualifications and technical standards, the Sydney Morning Herald reports.
Matthias Fekl: ‘The EU should have its own arbitration court’
3-Jun-2015 EurActiv
France’s Minister of State for Foreign Trade, Matthias Fekl, delivered a proposal for TTIP arbitration reform in Brussels yesterday, in which he recommended the creation of a European court to settle trade disputes.
EU arts policies could lead to ISDS lawsuits, admits German government
3-Jun-2015 Ars Technica UK
The German federal government has admitted that an EU country’s arts policies could lead to it being sued by foreign corporations before investor tribunals under trade agreements being negotiated with Canada and the US.
UN experts voice concern over adverse impact of free trade and investment agreements on human rights
3-Jun-2015 OHCHR
A group of UN experts have issued the following statement to express concern about the secret nature of drawing up and negotiating many of these free trade and investment agreements, such as TPP and TTIP, and the potential adverse impact of these agreements on human rights.
Matiza warns Zanu PF Bippa farm invaders
2-Jun-2015 Newsday
A governernment official has warned Zanu PF supporters against invading commercial farms covered under Bilateral Investment Promotion and Protection Agreements (Bippas) with foreign governments
The EESC opposes ISDS in TTIP and CETA and calls for an International Investment Court
29-May-2015 EESC
The European Economic and Social Committee, in its opinion adopted on 27 May, opposes the inclusion of Investor-State Dispute Settlement (ISDS) provisions in the Transatlantic Trade and Investment Partnership (TTIP) or in the Comprehensive Economic Trade Agreement (CETA), as it believes such a system has the potential to derail both agreements.
International Investment Agreements (IIAs): Frequently Asked Questions
28-May-2015 Congressional Research Service
This report for US Congress answers frequently asked questions about US international investment agreements including provisions for investor-state dispute settlement.
MEPs take initial position on TTIP negotiations
28-May-2015 BBC
The resolution supported by the committee does not explicitly call for a ban on controversial investor-to-state dispute mechanisms (ISDS), instead calling for the jurisdiction of national courts to be "respected" in the deal.
Action: Call on MEPs to firmly reject special rights for foreign investors!
25-May-2015 NO 2 ISDS!
Join this e-action on the European Parliament, asking MEPs to pledge that they will reject ISDS in TTIP. The action is going to run until the vote in the plenary on 10 June and is available in 9 languages.
Korean government criticized for lack of transparency on ISDS suit
25-May-2015 Korea Herald
While the South Korean government is facing its second international arbitration under the investor-state dispute settlement system, civic groups are demanding that the details should be made public as they could cost several billion dollars of taxpayers’ money.
Stopping the corporate power grab — it’s not all just about TTIP
25-May-2015 The Ecologist
In the rush to oppose TTIP we mustn’t lose sight of the context in which the deal is being negotiated — the hundreds of bilateral treaties that give corporations the right to sue in secret ’trade courts’.
Renegotiating the bite of our BITs
18-May-2015 Jakarta Post
Apart from its network of BITs, Indonesia is also a party to a number of multilateral and regional investment agreements such as the ASEAN Comprehensive Investment Agreement which also contain an ISDS clause, including recourse to ICSID arbitration.
Canada just threw a grenade into Elizabeth Warren’s trade fight with Obama
17-May-2015 Huffington Post
Last week, Canadian Finance Minister Joe Oliver gave a speech in New York arguing that the Volcker Rule — a key tenet of the US’ 2010 banking law — violates the North American Free Trade Agreement. This underscores Senator Warren’s warning that such deals, including the Trans-Pacific Partnership that Obama is currently negotiating, jeopardize financial reform.
Reject TPP dispute settlement: ALP
15-May-2015
Labor has called on the federal government to follow the example of the Howard years and oppose the inclusion of a controversial dispute-settlement provision in trade talks with the US.
Singapore breaks new ground as arbitration hub
15-May-2015
The International Centre for Settlement of Investment Disputes hears its first case outside of US, France
First hearing opens over Lone Star asset sell-offs in Korea
15-May-2015
An international tribunal began hearing a multi-billion dollar case Friday that the US private equity firm Lone Star filed against South Korea’s government over tax and other disputes surrounding its asset sell-offs in Korea.
Against the Trans-Pacific Partnership
15-May-2015 Jacobin Magazine
Opponents of the trade deal being secretly negotiated between the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam have moved the discussion beyond its putative impact on jobs and growth and closer to the agreement’s broader ramifications, writes the IUF’s Peter Rossman.
UN blasts EU for backing global deal for ISDS, but not for country bailouts
14-May-2015 EurActiv
Richard Kozul-Wright, director at the United Nations Conference on Trade and Development (UNCTAD), said support for investor-state dispute settlement (ISDS) but not for state-investor was “incongruous”.
Hearing to begin this week in multi-billion-dollar battle between S. Korea, Lone Star
14-May-2015 Yonhap
An international tribunal will begin hearing a multi-billion dollar case this week that the US private equity firm Lone Star filed against South Korea’s government over tax and other disputes surrounding its asset sell-offs in Korea.
Leading scholars, former judges sign letter opposing Investor-State Dispute Settlement
13-May-2015 AFJ
A group of legal and economic luminaries have signed a letter to Congressional leaders urging them to oppose Investor-State Dispute Settlement (ISDS) provisions in proposed trade deals.