bilaterals.org logo
bilaterals.org logo

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.


First Quantum Seeks $20 Billion From Panama in Free Trade Case
First Quantum Minerals Ltd. is seeking $20 billion from Panama in a free trade arbitration case after the Central American nation shut down the company’s flagship copper mine late last year.
UK Lawmakers Slam ‘Lack of Clarity’ on Major Trade Deal Benefits
British lawmakers said the benefits of the UK’s accession to a major trans-Pacific trading bloc are unclear
‘Litigation terrorism’: the obscure tool that corporations are using against green laws
Investor-State Dispute Settlements are legal, huge and often hush-hush – and fossil fuel firms and others are using them to hold the planet to ransom.
Kuwait’s Agility gets favourable verdict on $380m Iraq funds
The Kuwaiti company Agility gets another opportunity to reclaim its legacy investment in an Iraqi telecom firm. The charges brought by Agility relate to more than $380 million in diverted funds.
Tanzania’s attempt to strike out Indiana’s compensation fails to score
Indiana Resources is closer to recovering its historical sunk investment for the unlawful expropriation of the Ntaka Hill nickel sulphide project after the ICSID struck out most of Tanzania’s grounds for requesting the annulment of the award.
EU announces new ‘interpretation’ of Canada trade deal in bid to ensure ratification
The European Commission and Canada have agreed on the “interpretation” of parts of their trade agreement that relate to investor protection from environmental regulation, in a push by Brussels to persuade member states to ratify the bilateral multibillion-euro deal.
Neocolonial ISDS, abused, biased, costly, and grossly unfair
Investor-State Dispute Settlement (ISDS) provisions in international trade and investment agreements – long abused by opportunists with means – are slowly being rejected by cautious governments.
International Chamber of Commerce former arbitrator says ISDS has “lost battle of public opinion” and “legitimacy”
To maintain the system, he proposes that business should shift away from ISDS in state-to state trade and investment agreements, and instead move to ISDS in contracts between individual investors and states.
How a US mining firm sued Mexico for billions – for trying to protect its own seabed
Local fishers helped halt underwater mining off Baja California’s coast in 2018. But then an obscure international legal process was put into motion.
Zim govt pays heavily for seizing timber company’s land
A London court has ordered Zimbabwe to pay US$125 million to two timber firms whose land was seized by the government, rejecting its claim of state immunity in a case that tests the enforcement of international arbitration awards.
Explainer: The different types of investor-state dispute settlement
What type of ISDS arbitration has been the most used by corporations? Why is it important to understand the different forms of ISDS?
Their mines ruined communities. Now they want compensation
In Colombia, lawsuits by foreign corporations are obstructing a fossil fuel phase-out at the expense of the indigenous Wayúu community.
Pakistan agrees to new ISDS provisions, despite previous policy to terminate ISDS agreements
Pakistan’s previous policy, initiated in 2021, sought to terminate its bilateral investment treaties to avoid further ISDS cases by international investors.
Nexo initiates international arbitration case against Bulgaria
Cryptocurrency-based financial services company Nexo has filed a case against Bulgaria in an international arbitration court in the USA.
Islamabad accepts Riyadh-Doha term to allow international arbitration incase of dispute
Pakistan has negotiated to include a graduated approach for settlement of investment disputes between the state and investors.
Hong Kong investors plan AT1 action against Switzerland
Investors in Hong Kong are preparing to file a request for arbitration against the Swiss government for writing off the AT1 bonds issued by Credit Suisse, claiming the move was at odds with a bilateral investment treaty between the jurisdictions.
European Commission publishes model BIT clauses between EU member states and third countries
In September 2023, the European Commission has unveiled a non-paper presenting model clauses for BITs between EU member states and third countries.
How wealthy corporations use investment agreements to extract millions from developing countries
When Ecuador placed a windfall tax on foreign oil operations, French and U.S. companies filed claims—and were awarded more than $800 million.
Tribunal reject first ICSID claim brought against Norway
Peteris Pildegovics and SIA North Star argued that Norway had violated the BIT between Latvia and Norway in relation to alleged investments of the claimants in snow crab harvesting licenses and harvesting vessels.
Deadlock as member states disagree over withdrawal from Energy Charter Treaty
Decision on whether to part from treaty remains in limbo, with some EU countries wanting to stay and others having already departed.