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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.

In for messy litigation
3-Mar-2014
Several local newspapers misread the recent decision by the Washington-based International Center for Settlement of Investment Disputes (ICSID) as a verdict forcing the Indonesian government to pay over US$1 billion in compensation to the plaintiff, London-listed Churchill Mining Plc, in regard to its coal mining concessions in East Kalimantan.
Repsol in $5 billion settlement with Argentina
25-Feb-2014 New York Times
Repsol, the Spanish oil company agreed to a $5 billion compensation deal with Argentina for the seizure of the company’s operations in that country, ending a bitter two-year dispute.
Churchill Mining announces tribunal rejection of Indonesia challenge
25-Feb-2014 Alliance News
The thermal coal producer said the International Centre for Settlement of Investment Disputes rejected Indonesia’s jurisdictional challenges and it can now pursue claims for damages under the respective Bilateral Investment Treaties Indonesia entered into with the United Kingdom and Australia.
Text of Korea-Australia FTA released – ISDS provisions revealed
25-Feb-2014 Lexology
The text of the Korea-Australia Free Trade Agreement (KAFTA) was released on 17 February 2014, following the conclusion of negotiations on 5 December 2013.
ISDS: the devil in KAFTA’s detail
24-Feb-2014 Farm Weekly
The Korea-Australia Free Trade Agreement (KAFTA) opens up the potential for Korean-domiciled corporations to sue Australian governments - federal, State and local - over decisions that a company believes to have unfairly affected investments they have made in Australia.
Karkey files another $2.1b damages claim against Pakistan
11-Feb-2014
Karkey Karadeniz Electricity Production Corporation (Karkey) has filed a memorial to the World Bank’s International Centre for Investment Disputes (ICSID) claiming $2.1 billion damages against government of Pakistan.
EU-Canada free trade deal ‘opens door to environmental lawsuits’
11-Feb-2014 EurActiv
Multinationals will have wide-ranging powers to sue EU states that enact health or environmental laws breaching their "legitimate expectations" of profit, according to a leaked ‘investment chapter’ from the Canada-EU free trade agreement. A separate ‘nature and scope’ document for EU-US free trade talks, which EurActiv has seen, makes clear that similar parameters are foreseen for TTIP.
Investor-state dispute settlement under TTIP - a risk for environmental regulation?
6-Feb-2014 HBF
New report from the Heinrich Boell Foundation reviews the implications of an investor-state dispute settlement provision in TTIP for environmental policies and standards
Stir over end to trade deals fades
5-Feb-2014 Business Day
A stir greeted last year’s announcement by the South African government that it would not be renegotiating bilateral investment agreements with major trading partners such as the EU. However, it now seems as if a lot of dust has settled around the Promotion and Protection of Investment Bill, which is set to replace the agreements.
Rurelec wins historic Bolivian compensation award
4-Feb-2014 Stock Market Wire
UK power generator Rurelec has won an historic Bolivian compensation award worth $35.5m, the first granted by an international court against Bolivia.
Investor corruption, bilateral investment treaties and international arbitration: Bribery at centre of failed investor claim
2-Feb-2014 Fraud Intelligence
By losing its rights under a bilateral investment treaty against a sovereign due to corruptly securing its investment, Metal-Tech marks a seemingly growing trend of bribery playing a critical role in international investment arbitration disputes.
NAFTA & environmental laws: Ethyl Corp. v. Government of Canada
30-Jan-2014 Global Policy Forum
Chemical firm uses trade pact to contest Environmental Law
Critics score against extreme corporate rights in TTIP, but must not be fooled by the Commission’s tricks
25-Jan-2014 CEO
This week, the European Commission announced a freeze in negotiations over dangerous corporate rights in the proposed EU-US trade deal (Transatlantic Trade and Investment Partnership, TTIP) and that it would conduct a public consultation on the issue.
The global fight against corporate rule
25-Jan-2014 The Nation
Activists are challenging rules that grant corporations the right to sue governments, write Robin Broad and John Cavanagh
US, EU negotiators say obstacles won’t delay trade accord
24-Jan-2014 WSJ
The chief trade negotiators of the US and the European Union admitted obstacles to a trans-Atlantic free trade agreement, but said a European decision to open public consultations over proposed procedures to settle investment disputes wouldn’t delay the accord.
Reform of investor-state dispute settlement: In search of a roadmap
24-Jan-2014 TDM
Transnational Dispute Management examines various proposals for the reform of ISDS.
Ecuador: International support crucial in battle with Chevron
23-Jan-2014 EFE
Ecuador’s hopes of winning a legal struggle against US oil supermajor Chevron Corp. pertaining to a multi-billion-dollar pollution judgment rest on the degree of "global solidarity" with the Andean nation, Foreign Minister Ricardo Patiño said Wednesday.
A BIT of a secret
22-Jan-2014 Indian Express
India’s bilateral investment treaty arbitration must be made more transparent.
Brussels seeks to curb investor litigation under trade deals
22-Jan-2014 FT
EU trade commissioner Karel de Gucht pledged to release a proposed negotiating text of the investment chapter of any deal in March.
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.