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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.


Sánchez, Doggett call for Biden Administration to reform the CAFTA-DR trade agreement
Congresswoman Linda T. Sánchez and Congressman Lloyd Doggett led 45 of their colleagues in calling on the Biden Administration to work to remove the Investor-State Dispute Settlement mechanism from the Central America – Dominican Republic Free Trade Agreement.
Commission presents parliament with Energy Charter Treaty exit plan
The European Commission’s plan to withdraw the bloc from the Energy Charter Treaty while allowing member states the right to remain if they choose was presented to Parliament.
Panama update
Orla Mining is exploring all legal remedies available to protect its investments in respect of the Cerro Quema Project. The company intends file a notice of intent to arbitrate under the Panama-Canada Free Trade Agreement.
Honduras ratchets up battle with crypto-libertarian investors, rejects World Bank court
After the Honduran president repealed a law granting unfettered authority to outside investors, the cryptoquistadors took the dispute to a World Bank arbitration court.
Economists: "The era of corporate supremacy in the international trade system is coming to an end"
85 leading economists “commend” Honduras’ decision to quit international court that prioritises “corporate profit” over “sustainable development”.
New Pacific trade deal carries few benefits for the UK
Given the breadth of the policy areas that CPTPP accession will impact upon, how can UK membership have been subject to so little public debate? The answer is that the structures via which trade deals are negotiated and ratified are opaque and undemocratic.
Almaden provides corporate update
Almaden delivered to Mexico written notice of its intention to submit a claim to arbitration against Mexico under the CPTPP.
Sign the petition to stop investors like Clive Palmer from suing our government for billions over climate change policies
Some international trade agreements allow foreign investors to sue the Australian government if a change in law or policy reduces their profits, even if the change protects public health or the environment.
Investor–state dispute settlement and fossil fuels: What role for a carveout?
The proposal of a carveout emerges as a targeted damage control measure to address the recognized and urgent problem that ISDS poses to climate action.
Ecuador’s "shock doctrine" referendum on ISDS
The Ecuadorian President is using the cover of internal conflict to bring investor-state dispute settlement back to Ecuador, in what a former Constitutional Court member calls a "democratic disaster."
Romania wins legal battle against a Canadian miner over failed plans to open a gold mine
The Romanian government has won a years long legal dispute with a Canadian mining company seeking damages over failed plans to open a gold and silver mine in the Eastern European country.
Klesch Group’s legal paradox
Oil Refiner Klesch sues EU, Germany and Denmark over windfall profit tax while making record profits due to Ukraine invasion.
EU countries to exit energy treaty over climate concerns, officials say
European Union countries agreed to jointly quit an international energy treaty over concerns that it undermines efforts to fight climate change, officials said.
Invested in whiteness: Zimbabwe, the von Pezold arbitration, and the question of race in international law
Using the 2015 arbitral award in von Pezold v. Zimbabwe as its starting point, this piece reflects on the relationship between racial capitalism and international law.
Trade deal could put corporate profits over people, say groups
A proposed Canada-Ecuador free trade agreement could put corporate interests above citizens’ rights, say several concerned organizations.
EU breaks deadlock on the ECT, announces exit
Today marks a significant turning point as the Belgian EU Presidency brokered a deal with the European Commission and member states on the withdrawal from the Energy Charter Treaty.
Honduras Denounces the ICSID Convention
On February 24, 2024, the World Bank received a written notice of denunciation of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) from the Republic of Honduras.
How people power forced the UK to leave the Energy Charter Treaty
On 22 February 2024 the UK announced it will leave the climate-wrecking Energy Charter Treaty.
Billion-dollar exposure: Investor-state dispute settlement in Mozambique’s fossil fuel sector
Mozambique faces a substantial economic risk due to its exposure to investor-state dispute settlement (ISDS) claims by foreign investors in its coal, oil, and gas sectors. The investment protections in the country’s international investment agreements and contracts, combined with ISDS, expose Mozambique to multi-billion-dollar financial liabilities.
ISDS regime could choke climate action in emerging economies, experts say
The investor-state dispute settlement (ISDS) system could be putting climate action at risk in emerging and developing economies as investors in fossil fuel projects angle for compensation, experts say.