US BITs

The United States is party to over 100 bilateral investment treaties (BIT), in addition to the main comprehensive trade deals such as CAFTA, NAFTA, TPP or the proposed TTIP.

The investor-state dispute settlement (ISDS) mechanism is specified in most of these treaties. US investors abroad have extensively used ISDS to challenge national laws and decisions.

US investors have initiated the majority of ISDS disputes, about 130 registered cases as of end of 2014, corresponding to over 20% of all known cases. The US has only been challenged once based on a bilateral investment agreement (Jamaica-United States BIT). The US has never lost an ISDS dispute.

The most well-known cases include:

• Chevron (US) vs. Ecuador: in 2013, an arbitration court ordered Ecuador to pay Chevron US$106 for breach of contract (Ecuador-United States BIT invoked). Meanwhile in a separate case, Ecuador’s highest court fined the oil giant US$9.5 billion for dumping billions of gallons of toxic waste into the rainforest. Both cases are unresolved.

• Occidental Petroleum Corporation “Oxy” (US) vs. Ecuador: in 2012 Ecuador was ordered to pay US$1.77 billion to the investor, an oil exploration and production company, for breach of contract. Sentence was reduced to US$1 billion in November 2015 (Ecuador-United States BIT invoked).

• AIG Capital Partners (US) vs. Kazakhstan: US$3.5 million awarded in 2003 to the investor, an insurance and financial services corporation (Kazakhstan-United States BIT invoked).

(November 2015)