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.
Some governments have said the bloc should consider quitting the agreement because the treaty could threaten climate goals.
According to ICSID, there were 58 new cases registered with it last year, up from the previous record high of 56 in 2018 and the 39 recorded in 2019.
Categorical claims about the impact of trade deals on FDI are not supported by the evidence, which paints a nuanced and sometimes contradictory picture.
SK Innovation is considering initiating international arbitration proceedings against the Peruvian government for blocking the company’s exit from Camisea Gas Project in Peru.
US Optima Ventures intend to file a lawsuit against the United States seeking compensation of $23 million in response to two civil forfeiture actions targeting their assets in Louisville.
Google’s Singapore subsidiary could use a controversial ISDS provision in the Singapore-Australia Free Trade Agreement to demand millions in compensation over proposed Australian regulation for payment of news content.
Alberta’s Premier said that the Canadian province, which has an equity in the now-canceled Keystone XL pipeline, may seek compensation under investor-protection provisions still in effect under NAFTA
Sources said that the government will have its own template for a BIT, which will replace the existing treaties with different countries.
Google and Facebook could sue the government for billions of dollars over a proposed law to force the digital giants to pay publishers for displaying news content, by seizing on investment clauses in the Australia-Singapore trade agreement.
The European Union and its member states should draw the consequences of the current stalemate in multilateral talks aimed at reforming the Energy Charter Treaty and consider a coordinated withdrawal, Paris has said
RWE has filed an arbitration claim against the Netherlands, seeking compensation for the Dutch decision to phase-out electricity production from coal by 2030.
Six banks have agreed not to take legal action against Croatia over its conversion of Swiss franc loans into euros in 2015 at the lenders’ expense.
The EU and Canada adopted four decisions putting in place the Investment Court System provisions agreed in the EU-Canada Comprehensive Economic and Trade Agreement (CETA).
For a government struggling to find revenue to boost a COVID-19 battered economy, options of appeal against the arbitration award are limited and it may not have the financial bandwidth for such a payout.
ISDS tribunals have ordered governments to pay corporations more than $989 million in compensation after ISDS attacks launched just under U.S. agreements.
Last year saw a wave of cases against Latin American states, driven in particular, but not exclusively, by a large number of claims filed against Peru, Colombia and Mexico. This wave is likely to continue in 2021.
A Virgin Islands court has frozen shares in two hotels belonging to Pakistan’s national airline to enforce a $6 billion award levied through the World Bank’s ICSID.
UK-based Cairn Energy Plc has threatened that it may be forced to begin attaching Indian assets including bank accounts in different world capitals, unless the government resolves the issue.
The owner of Keystone XL — TC Energy (previously TransCanada) — used NAFTA to launch a US$15 billion lawsuit in 2016 after President Barack Obama cancelled the project.