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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.


Vodafone wins international arbitration against India in $2 billion tax case
Vodafone won an international arbitration case against the Indian government, ending one of the most high-profile disputes in the country involving a $2 billion tax claim.
Ukraine renewables feed-in tariff reduction could lead to investor action
Investors in renewable energy projects in Ukraine are considering legal action after feed-in tariffs for solar and onshore wind power plants were reduced retroactively to 2015, according to an expert.
PPPs and ISDS: A risky combination
It appears that investors are using investment treaties in ways that can significantly frustrate government efforts to effectively and adequately regulate public private partnerships in the public interest.
ICSID grants Pakistan six months stay order in Reko Diq case
The World Bank’s ICSID has granted Pakistan a stay order of six months in the Reko Diq case in which Islamabad was awarded with a whopping $6 billion fine.
Japan backs ISDS in fierce debate at Energy Charter Treaty review
A written submission from Japan published by the ECT secretariat rejected language on the “right to regulate” and changes to the investor-state dispute resolution mechanism.
Hague court rules in favor of Chevron in dispute with Republic of Ecuador
The District Court of The Hague ruled in favor of Chevron in its dispute with the Republic of Ecuador, upholding a 2018 arbitral award rendered by an international tribunal administered by the Permanent Court of Arbitration.
Shaping future UK trade policy: investment protection provisions
As the UK regains full responsibility for its trade and investment policy post-Brexit, it must seriously consider its approach to international investment protection.
Energy companies keep right to sue states in private courts, as treaty reforms blocked
Negotiators have ruled out an overhaul of private courts that allow energy companies to sue national governments when climate change policies hurt their profits.
COVID-19 and the risk of foreign investor challenges
Tensions are likely to surface between the public-policy directions of governments managing a challenging economic climate and foreign investors’ private interests.
Sovereign rights to natural resources as a basis for denouncing international adjudication of investment disputes: A reflection on the Tanzanian approach
Tanzania’s reforms show that the claim that African states should regard ISDS mechanism as the preferred method for resolving investment disputes is not only very contested, but that there are legitimate grounds for those contestations.
The red carpet investments in the middle of a pandemic result in crisis of people’s sovereignty
Indonesian CSOs assesses the national economic recovery strategy by strengthening policies economic liberalization focusing only on investment and exports will only be increasingly open space for corporate monopoly on economic resources.
Fracking company sues Slovenia over ‘unreasonable’ environmental protections
A British oil and gas company is using a controversial energy treaty to sue Slovenia, after being required to carry out an environmental impact assessment
Australian mining firm launches arbitration proceedings against Poland
Australian mining firm Prairie Mining has launched international arbitration proceedings against Poland, claiming damages for the alleged hindering of the development of its two coal mines located in the country.
Hegemony 101 in international investment law
The hegemon aspirants in international investment law have already, and perhaps unwittingly, revealed their three step manual: Disguise, dismiss, divert.
Pakistan seeking relief from $5.8B fine over mining lease
Pakistan is seeking the reversal of a $5.8 billion penalty imposed by an international tribunal for denying a mining lease to an Australian company, saying that paying the fine would hinder its handling of the coronavirus pandemic.
‘Obsolete’ Energy Charter Treaty must be reformed or ditched, lawmakers say
The 1991 Energy Charter Treaty must be profoundly overhauled in order to remove all “obsolete” provisions protecting fossil fuel investments and hindering climate action, lawmakers from across Europe said.
Japan blocks green reform of major energy investment treaty
The Japanese government is blocking reform of a treaty that allows energy companies to sue nation states when climate policies affect their profits.
How the little-known Energy Charter Treaty is holding environmental policy hostage
Is it possible to take urgently needed action on climate change while simultaneously protecting the fossil fuel industry, the very cause of climate imbalance?
Investor-state claims in era of COVID-19 pandemic
With state measures in response to COVID-19 being compounded by an already difficult economic environment for investors, they may have little choice but to challenge those measures.
Mining companies dominate ISDS treaty-shopping claims from Australian companies
Australia, with its many Bilateral Investment Treaties and FTAs, contributes to a system of treaty shopping by mining companies looking to sue governments over unfavourable decisions.