Services

Utility corporations have used investor-state dispute settlement (ISDS) provisions found in trade and investment agreements to challenge state attempts to regulate privatized public services such as water, social security or other services.

In response to several governments which have tried to lower public services rates for poorer populations or in face of a significant economic crisis, foreign companies have initiated ISDS disputes, claiming they were treated “unfairly”, due to their loss of profits.

Potentially, any significant reforms of standards in relation to major infrastructure or utilities and associated services could be the target of ISDS.

As of end of 2019, about 2/3 of all ISDS disputes concerned the services sector at large, including public services but also financial services, telecommunications, transport, construction, etc.

Most well-known disputes include:

• Azurix (US) v. Argentina: US$165 million awarded in 2006 to the investor, a water company. The dispute arose from the contamination of a reservoir, which made the water undrinkable in the area. The firm claimed the government had expropriated its investment and denied the firm “fair and equitable treatment” by not allowing rate increases and not investing sufficient public funds in the water infrastructure (Argentina-US BIT invoked).

• Tampa Electric Company “TECO” (US) vs. Guatemala: the US-based energy company challenged Guatemala’s decision to lower the electricity rates that a private utility could charge. TECO was awarded US$25 million in 2013 (CAFTA invoked).

• TCW (US) vs. Dominican Republic: the US investment management corporation that jointly owned with the government one of the Dominican Republic’s three electricity distribution firms, sued the government for failing to raise electricity rates and to prevent electricity theft by poor residents. Case settled in 2009 for US$26.5 million paid to the investor (CAFTA invoked).

Photo: Aqua Mechanical / CC BY 2.0

(March 2020)

Egypt Today | 16-Nov-2021
The arbitral tribunal rejected the requesting company’s request to compensate it in the amount of $29.3 million in addition to the accrued interests.
The Hindu BusinessLine | 4-Nov-2021
Seen as a step for seizure of assets of Indian PSUs abroad.
The Economic Times | 19-Oct-2021
Devas Multimedia’s investors are eyeing several properties owned by the Indian government across the world, as they seek to enforce a $1.3 billion arbitral award the satellite company won against Antri.
The Express Tribune | 18-Oct-2021
Turkish construction company Bayindir filed a claim under the 1995 Turkey-Pakistan bilateral investment treaty at the ICSID on October 12.
Lawyer Monthly | 18-Oct-2021
Air Canada was awarded $20,790,574 million as repatriation, an amount to which it was entitled after set off against sums that were also owed to Venezuela.
Médias24 | 11-Oct-2021
Finetis lance un arbitrage contre le Maroc pour "violation du traité bilatéral" signé par le Maroc et la France en 1996. Le nom de cette société avait été cité dans une affaire de détournement de trafic de télécommunications.
MercoPress | 27-Aug-2021
The investment fund Titan Consortium has taken legal steps after the expropriation of Aerolineas Argentinas in 2008, which resulted in an arbitration award against Argentina.
Bloomberg | 13-Aug-2021
Draft law, regulator pose risks to Discovery’s unit in Poland but Polish watchdog says treaty exempts broadcast investments.
CIAR Global | 19-Jul-2021
La controversia se relaciona con la cancelación por parte del Gobierno local de la isla de Hainan (China) de la segunda edición de un festival internacional de jazz programada para 2014.
The Indian Express | 30-Jun-2021
The Mauritius investors is seeking to get Air India declared an alter ego of India in order to pursue assets of the national carrier as a strategy to enforce arbitration awards against the government.

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