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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.


Hungary held liable for expropriating the investment of a British investor and ordered to pay EUR 7 million in compensation for damages
Magyar and Inicia filed for arbitration against Hungary claiming expropriation of their leasehold rights to the land, following an agricultural sector reform to promote family farms over farming companies.
Mexico: Investors need to protect foreign investments in times of changing treaty protections
Because of changing attitudes with regard to "expansive" investor protections contained in current treaties, investors need to think ahead and negotiate for the necessary protections to be included in investment contracts.
Win for Mauritius in world heritage development dispute
The government of Mauritius triumphed in an investor-state arbitration against a group of United Kingdom property developers who wanted to develop property at a UNESCO World Heritage site on the island.
Risky business: Uniper’s potential investor-state dispute against the Dutch coal ban
While policies aiming to phase out coal are necessary to tackle climate change, they may give rise to legal claims from companies whose investments are adversely affected by the low-carbon energy transition.
Antofagasta : 2019 preliminary results
ICSID appointed a committee to consider Pakistan’s annulment application which is expected to reach a conclusion in the next one to two years.
2019 annual results
Gabriel has provided notice to Romania of a dispute with regard to Romania’s application to UNESCO in relation to Roşia Montană and has reserved its right to commence a further arbitration.
The Energy Charter Treaty threatens the European Green Deal, NGOs denounce
Civil society activists and scientific experts denounce the unsustainable practice of investment disputes under the Energy Charter Treaty.
Zimbabwe offers land as compensation for 800 seized farms
The dispossessed farmers covered in the land compensation scheme are citizens of countries that have bilateral investment agreements with Zimbabwe.
Investor–State Dispute Settlement using the ECOWAS Court of Justice: An analysis and some proposals
Given the present widespread dissatisfaction with investor–State dispute settlement, the ECOWAS Court can provide an alternative to arbitration that is already up and running.
The ISDS reform process: The missing development agenda
For developing countries, governing foreign direct investment through IIAs and ISDS corresponds to a policy model discredited by years of social and economic failures.
ICSID Tribunal dismisses claims against the Democratic Socialist Republic of Sri Lanka
The tribunal dismissed the claimants’ invocation of the UK-Sri Lanka BIT on jurisdictional grounds.
Romania wins €2.36bn lawsuit against spirits producer
Romania has won the second lawsuit filed against it by brothers Ioan and Viorel Micula, who accused Romania of allowing the development of a black market for the sale of alcohol.
’Corporate courts’ and post-Brexit trade deals
An alliance of civil society groups has delivered nearly 70,000 signatures calling on the UK government to commit to keeping controversial ‘corporate courts’ out of post-Brexit trade deals.
Regional MPs call for greater transparency of RCEP negotiations
As ministers of the member countries of the RCEP meet for final negotiations over the trade agreement this week, regional lawmakers today expressed concern about the lack of parliamentary and public oversight of the deal, as well as its potential human rights impacts.
Cerro Verde to open ICSID case against Peru
Cerro Verde, a partnership between Freeport McMoran and Buenaventura, is to bring a case against Peru related to a taxation dispute at the ICSID under a US-Peru trade agreement.
US-UK trade deal: Four things you might have missed, from food standards to climate commitments
The government has not ruled out imports of US agricultural products made to lower standards than in the UK.
Nepal’s bilateral investment treaties
Nepal has signed six bilateral investment treaties that can be described as first generation i.e. a template of BITs that were championed by inves­tor-friendly Western European countries
Naturgy leaves Egypt, ending its alliance with ENI in Unión Fenosa after almost 8 years of disputes
Naturgy has agreed with Eni and Egypt to end their dispute over Unión Fenosa (UFG), in which the Spanish and Italian firms own 50% each.
Appeal in ISDS: Appealing for the host state?
The basis of a claim in ISDS is always the applicable international investment agreement. There would always be differences and inconsistencies with an appellate mechanism.
Efforts under way to get Reko Diq case penalty cancelled: AG Khalid Jawed Khan
Attorney General Khalid Jawed Khan has said that Pakistan’s foremost effort in the Reko Diq mining case is to secure annulment of the $5.9 billion penalty.