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.
Arbitration cases due to COVID emergency measures would exacerbate the challenges that public budgets are already facing due to the need for stimulus measures and the difficulty in collecting government revenue.
Joining the Energy Charter Treaty could cost developing countries money that is urgently needed to fight Covid-19 and a loaming economic crisis. The Energy Charter Treaty has become increasingly controversial.
On 5 February 2020, Australia and Indonesia signed an exchange of letters agreeing to the termination of the Aus-Indo BIT and its sunset clause.
We call for a moratorium on investor-state arbitration cases and clarity of legal principles to ensure that governments have the policy space to protect their citizenry and combat the epidemic.
The EU Commission has launched a public consultation calling for comments on its initiative to improve the protection of intra-EU investment. This initiative could lead to the adoption of new rules enhancing investors’ rights vis-à-vis EU Member States and to the creation of new enforcement mechanisms for investors within the EU.
Ecuagoldmining’s estimated $20 million investment so far could turn into a $469 million award, should it emerge victorious in an arbitration proceeding.
US private equity firm Lone Star Funds suggested it was open to “amicable and sensible” out-of-court option to settle the longstanding dispute with the Korean government.
A number of noteworthy decisions by the Paris Court of Appeal and French Supreme Court have come to refine on the now well-established French case law on international arbitration.
On the basis of the Energy Charter Treaty, companies are suing countries for damages when the latter decide to phase out or limit the use of fossil fuels.
Wealthy corporations may use trade courts to keep public health measures from cutting into their profits.
The UK Department for International Trade has been blasted for its claims that the UK has enough trading clout to assert itself in US trade talks, amid concerns.
As part of the settlement, the Japanese automaker is expected to receive between $185 million and $238 million, two sources aware of the matter said.
Indigenous communities call for international solidarity to support for the vindication of rights of the comunities and peoples affected by corporate impunity and their struggle for a dignified life.
Governments worldwide need the policy space now to issue economic support packages and protect their public health systems, without worrying that their budgets could face even more strain from an all-consuming wave of arbitration.
Cyprus-based offshore EP Wind Project (Rom) Six Ltd claims that Romania has breached the Energy Charter Treaty.
The dispute with Crystallex follows a ruling by the International Centre for Settlement of Investment Disputes (Icsid), an international arbitration institution set up by the World Bank.
The COVID-19 pandemic has led States to adopt various public health measures that adversely affect foreign investors and exacerbate broader economic issues. In this climate, there is significant potential for disputes under the ECT.
Investors nonetheless may be well advised to consider restructuring intra-EU investments through third countries to ensure treaty protection for the future.
Uniper is using a controversial investor dispute system to claim up to €1 billion compensation for being forced to close a coal power station early.