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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.


Ecuador to oppose arbitration claim filed by Occidental Petroleum
Ecuador will oppose an arbitration suit filed last week by Occidental Petroleum Corp (OXY) with the World Bank’s International Center for Investment Disputes in Washington, DC, said Ecuadorean Attorney General Jose Maria Borja.
US oil firm files arbitration claim against Ecuador for ’expropriation’
The US-based Occidental Petroleum Company has filed an arbitration claim against Quito for canceling its exploration rights, a move that resulted in a suspension of free trade talks with Washington.
Occidental files BIT claim against Ecuador at ICSID
US-based Occidental Petroleum has responded swiftly to a move by the Ecuadorian Government to kick the company out of Ecuador. The firm filed a request for arbitration with the Washington-based International Centre for Settlement of Investment Disputes (ICSID) yesterday. The company’s claim is expected to be for at least $1 Billion (US) in damages.
JPEPA: Arbitration framework readied
The Philippines and Japan are moving towards adopting arbitration procedures in settling disputes to avoid lengthy and expensive court battles in protecting investments from both sides as they finalize their proposed bilateral free trade pact.
Clashes lead to chaos in Ecuador
Students and police have clashed again in Ecuador, as protests against a possible rise in bus fares entered a second week. The students also want the government to cancel its contract with the Occidental Petroleum Corporation and for it to refuse to join the proposed Free Trade Agreement of the Americas.
Bechtel, Bolivia resolve dispute
San Francisco-based Bechtel Corp. has dropped a $25 million dispute against the Bolivian government for canceling a water contract, after major street demonstrations forced a Bechtel-owned subsidiary to withdraw from Bolivia’s third-largest city.
OSG asks SC to reverse NAIA 3 ruling
The Office of the Solicitor General (OSG) yesterday asked the Supreme Court to reconsider its decision allowing the government to take over Terminal 3 of the Ninoy Aquino International Airport (NAIA) only after payment of an initial P3.002 billion to the Philippine International Air Terminals Co. (PIATCO) representing the proffered value of the facilities.
Pakistan, US to hold final round of BIT talks
A high powered US delegation is arriving here on 18 of this month to hold talks with the Pakistani authorities to finalise the BIT, in the absence of which, Washington was unprepared to sign Free Trade Agreement (FTA) with Pakistan.
Ecuador atty general expects Occidental dispute ruling in March
Ecuador’s attorney general Thursday said he expects a U.K court to rule in March on a dispute between the government and U.S. oil firm Occidental Petroleum Company (OXY).
CRS Report for Congress: Andean-US FTA negotiations
Given that CAFTA-DR passed only by a small margin, it is unclear how much support the U.S.-Andean FTA will have.
Bilateral investment treaties dangerous traps: experts
Experts have cautioned that bilateral investment treaties with the rich countries will ultimately lead the developing and least developed countries towards dangerous traps at the cost of their national interests.
Romanian lawyers won an USD 353m international arbitration case against an US investor
Romania has won at the International Court of Arbitration in Washington, the case brought by the American company Noble Ventures that contested the Romanian state actions in the privatization process of Resita Steel Plant (CSR).
The global governance of foreign direct investment: madly off in all directions
Notwithstanding substantial doubts that increased FDI and economic growth are not automatically linked and that investments agreements may be less important in attracting FDI than other economic and socio-political framework conditions, the proliferation of bilateral investments agreements (BITs) goes ahead unrestrained.
WIR 2005: Transnational corporations and the internationalization of R&D
World Investment Report 2005, by UNCTAD, presents the latest trends in foreign direct investment and explores the internationalization of research and development by transnational corporations along with the development implications of this phenomenon.
Recent trends in international investment agreements: new UNCTAD research note
The past year saw a further proliferation of international investment agreements (IIAs) at the bilateral, regional, inter-regional, and plurilateral levels. On average, more than three such agreements were signed per week.
Mittal Steel to launch Netherlands vs. Czech Republic arbitration
Netherlands-based Mittal Steel, disqualified from the Vítkovice Steel privatization, says that in late September it will launch international arbitration against the Czech state.
Pakistan-US differences over BIT persists
Pakistan has asked the United States to sign the proposed Bilateral Investment Treaty (BIT) by dropping its demand that in case of an arbitration only the Washington based International Centre for Settlement of Disputes (ICSID) should be approached for a decision.
United States tears up free-trade rule book
The United States, such a paragon and champion of free trade when it comes to exporting its own products and services, evidently considers itself free unilaterally to ignore the rules when the umpire comes down against it.
Tribunal OKs treaty-shopping for better arbitration options in Gas Natural case
Another international arbitral tribunal has weighed in on the question as to whether “Most-Favored Nation” treatment offers foreign investors access to more favorable dispute resolution options found in other treaties.
CAFTA’s debt trap
Criticism of the Central American Free Trade Agreement (CAFTA) currently being considered by the U.S. Congress has focused heavily on concerns that the treaty would devastate Central American farmers who would be forced to compete with heavily subsidized U.S. agribusiness.