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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.

Chevron’s "fight it out on the ice" strategy for Ecuador case is slipping, fast
28-Mar-2015 Huffington Post
In Chevron’s massive international arbitration directly against the government of Ecuador, it has gotten everything it has asked for from the panel of arbitrators — until last week.
Leaked Pacific trade pact draft shows investment carve-outs sought
27-Mar-2015 Reuters
Australia’s medicine subsidies, Canadian films and culture, and capital controls in Chile would be carved out from investment protection rules being negotiated in a Pacific trade pact, according to a draft text released by Wikileaks on Wednesday.
Secret Trans-Pacific Partnership Agreement (TPP) - Investment Chapter
26-Mar-2015 WikiLeaks
WikiLeaks annonces its release of the "Investment Chapter" from the secret negotiations of the TPP (Trans-Pacific Partnership) agreement.
Cairn Energy seeks compensation from India on tax demand; Cairn India stock gains
25-Mar-2015 Economic Times
Cairn Plc is seeking compensation from the government of India for the steep fall in the value of its shares in Vedanta-controlled Cairn India, which it is not allowed to sell until it settles a controversial retrospective tax demand of $1.60 billion, under the UK-India Bilateral Investment Treaty.
NAFTA ruling in Nova Scotia quarry case sparks fears for future settlements
25-Mar-2015 Globe & Mail
A NAFTA arbitration panel has ruled against Canada in a claim by a US company that wanted to develop a quarry in Nova Scotia, although a dissenting member of the panel warned that the decision will be seen as a “remarkable step backwards” in environmental protection.
UK: MPs denounce government TTIP plans amid fears for NHS and public services
25-Mar-2015 The Guardian
A future government must be allowed to expand the NHS without facing legal challenge under a proposed new EU-US trade deal, according to a sharply critical report from an all-party committee of MPs.
"Investor-State Dispute Settlement promotes American values"
25-Mar-2015 Washington International Trade Association
Former US judge, arbitrator and president of the International Court of Justice says the ISDS system, currently under attack, reflects US law and enforces US leadership and therefore should be preserved.
Debunking USTR Public Affairs’ Memo on Investor-State Dispute Resolution
23-Mar-2015 Public Citizen
Questions and answers on investor-state dispute settlement (ISDS) that pertain to incorrect claims being made by the Office of the US Trade Representative.
Germany pledges to stand firm in US-EU TTIP trade talks
23-Mar-2015 Deutsche Welle
German Economy Minister Sigmar Gabriel has pledged to prevent any clauses in a US-EU trade deal that go against the ideals of his party, the Social Democrats - including protection clauses called for by the US.
Trans-Pacific Partnership: Trade deal could force Australian Government to spend millions to subsidise medicines, expert warns
19-Mar-2015 Australia Broadcasting Corporation
Australia’s primary negotiator on medicines for the US-Australia FTA, Dr Ruth Lopert, warns that the TPP could force the Australian Government to spend hundreds of millions of dollars to subsidise medicines.
Transparency in investor-state arbitration
18-Mar-2015 Lexology
The UN Convention on Transparency in Treaty-Based Investor-State Arbitration has been opened for signature.
Africa steps up dispute resolution
16-Mar-2015 The Southern Times
With increased levels of investment into Africa, the number of legal disputes in the continent is also on the rise.
New bilateral investment treaty model
13-Mar-2015 Dawn
The Board of Investment is working on Pakistan’s own template of a bilateral investment treaty, which will replace the existing treaties with different countries. And all the future ones will be negotiated on the new template.
Oil giants win $17M from Ottawa under NAFTA
13-Mar-2015 The Star
ExxonMobil and Murphy Oil awarded $17.3 million in damages from Canada in investor-rights dispute over research and training funding in Newfoundland and Labrador.
Pakistan rejects US draft of investment treaty
13-Mar-2015 Express Tribune
Pakistan has rejected the United States’ proposed draft of a Bilateral Investment Treaty (BIT) between the two countries, saying the acceptance of the US template would carry ‘dangerous obligations’ for the country.
Push against investment rules in US trade deals picks up
12-Mar-2015 Reuters
Law professors from across the United States urged lawmakers to keep rules to protect foreign investors out of trade pacts on Wednesday, warning they would give big companies too much power.
TTIP must not allow companies to sue EU countries for environmental laws, say MPs
10-Mar-2015 The Guardian
A major free trade deal should not allow US companies to sue European nations when they pass environmental laws that hurt their profits, MPs in the UK said on Tuesday.
Hungary will not back any EU-US trade deal that impairs court authority: PM
6-Mar-2015 Reuters
Hungary will not support any trade agreement between the United States and the European Union that impairs the jurisdiction of Hungarian courts in trade disputes, Prime Minister Viktor Orban said on Friday.
Creative accounting and the sales pitch for ISDS
6-Mar-2015 EurActiv
Studies that promote investor-state dispute settlement (ISDS) have generated misleading numbers and dubious recommendations. Legislators should approach all studies with caution, warns Gus Van Harten.
EP: Socialists and Democrats restate objection to private tribunals in trade deals
4-Mar-2015 S&DGroup
Today the Socialist and Democrats Group in the European Parliament adopted a very strong position paper on Investor-State Dispute Settlements, opposing the inclusion of the controversial mechanism in trade deals with both the US and Canada.