bilaterals.org logo
bilaterals.org logo

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.


Countries serious about climate change should leave the Energy Charter Treaty, says former ECT official
Interview with Yamina Saheb, former head of unit in the Energy Charter Treaty Secretariat .
Prairie Mining secures litigation funding to sue Poland
The claims had arisen out of certain measures taken by Poland, allegedly in breach of the Energy Charter Treaty and the Australia-Poland Bilateral Investment Treaty.
First annulment of investment arbitration award by Supreme Court
In a recently published decision, the Supreme Court – for the first time – partially annulled an arbitral award issued in an investment arbitration brought by Clorox España SL against Venezuela.
Why do states consent to arbitration in national investment laws?
Of the 65 states that have received investment law advice from World Bank’s FIAS, 30 subsequently included arbitration in their law.
Morocco’s new model BIT: Innovative features and policy considerations
In the face of the increasing number of claims brought by investors against host states on the basis of BITs and the exorbitant amounts awarded to investors, Morocco has undertaken a review of its model BIT using a flexible and rational approach.
Eiser Infrastructure Limited and Energia Solar Luxembourg S.à.r.l. v. Kingdom of Spain
On June 11, 2020, an ICSID ad hoc committee issued a unanimous decision to annul a €128 million award against Spain in its entirety.
Potential ISDS problems post Covid-19
The Transpacific Partnership Agreement involves investor - state dispute settlement clauses, which large companies may use ISDS to sue governments for actions they took to stop the spread of the virus.
What is Dubrovnik today?
A golf course, free-trade agreements, and the fight for the soul of a city
Open letter to governments on ISDS and COVID-19
We urge you to take immediate action to ensure that the duty of governments to regulate in the public interest is safeguarded and put beyond the scope of ISDS claims.
Is Korea caught in Lone Star’s trap?
The government is apparently baffled by Lone Star Fund’s attempts to use Korean news outlets as a means of putting itself in a dominant position in its $4.68 billion legal battle against Seoul.
Netherlands Supreme Court accepts Russia’s appeal of $57 billion verdict in favor of ex-Yukos shareholders
The Supreme Court of the Netherlands has agreed to consider Russia’s appeal against a lower court ruling, which awarded multi-billion-dollar compensation to former shareholders of the defunct Russian oil giant, Yukos.
Foreign investment, knowledge and international arbitration: inside a research trip
International investment law and investor dispute arbitration too often fail to notice the concerns of local actors. Governance of these international mechanisms needs to take a more holistic, development-based view of the issues.
NextEra wins millionaire renewables lawsuit against Spain
The ICSID has lifted the suspension on the execution of the €290 million award NextEra obtained a year ago.
Ray of hope for Reko Diq penalty being nixed
Pakistan’s chances of having its $6 billion penalty in the Reko Diq case annulled have received a boost with a committee of the International Centre for Settlement of Investment Disputes (ICSID).
Preparing for the COVID aftermath
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.
Africa should resist acceding to the Energy Charter Treaty
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.
Survival clause under Aus-Indo bit will not survive the implementation of IA-CEPA
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.
Why we need a moratorium on investment disputes during COVID-19
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.
EU Commission launches public consultation on protection of intra-EU investment
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 v Ecuador: Mining, the environment, and international arbitration
Ecuagoldmining’s estimated $20 million investment so far could turn into a $469 million award, should it emerge victorious in an arbitration proceeding.