Financial stability

Investor-state dispute settlement (ISDS) is one of the greatest threats to the re-regulation of finance. ISDS empowers the very firms that financial regulation seeks to govern. These firms can bypass host country domestic courts and directly challenge domestic policies in a parallel system of justice.

Financial and non-financial firms have increasingly used ISDS provisions in trade agreements to challenge financial regulations and emergency financial stability measures.

Most well-known cases include:

• Investors vs. Argentina: When the country froze its utility rates and devaluated its currency in response to its 2001-2002 financial crisis, it was hit by over 40 lawsuits from investors, including Suez, Vivendi (France) and Anglian Water (UK). By January 2014, Argentina had been ordered to pay a total of US$980 million (various BITs invoked).

• Poštová Banka (Slovakia) & Istrokapital (Cyprus) vs. Greece: the Slovak bank and its Cypriot investor sued Greece on account of the restructuring of the country’s sovereign debt, after having bought Greek government bonds at a knockdown value. The investors lost the case. (Greece-Slovakia & Cyprus-Greece BITs invoked).

• Saluka (Netherlands) vs. Czech Republic: the Dutch investment corporation filed an ISDS dispute against the Czech government for not bailing out a private bank, in which the company had a stake, in the same way that the government bailed out banks in which the government had a major stake. The bailouts came in response to a widespread bank debt crisis. The investor was awarded US$236 million (Czech Republic-Netherlands BIT invoked).

Photo: Maalokki / CC BY 2.0

(March 2020)

IISD | 6-Jul-2022
Un tribunal a accordé à Bank Melli Iran et Bank Saderat Iran la somme de 243 millions EUR dans leur recours investisseur-État contre le Royaume du Bahreïn.
IISD | 6-Jul-2022
A tribunal awarded a sum of EUR 243 million plus interest to Bank Melli Iran and Bank Saderat Iran in their investor–state dispute against the Kingdom of Bahrain.
Yonhap | 29-Jun-2022
An international tribunal declared an end to all proceedings in a multi-billion dollar suit the US private equity firm Lone Star filed against South Korea’s government 10 years ago.
KBS | 29-Jun-2022
Le verdict du procès international opposant le fonds de pension Lone Star au gouvernement sud-coréen va enfin tomber d’ici trois mois au plus tard.
Nawaat | 10-Jun-2022
Le CIRDI a repris la procédure arbitrale qu’il avait suspendue pour donner une chance à la Tunisie et la société ABCI de trouver une solution à l’amiable au litige qui les oppose depuis quarante ans au sujet de la BFT.
Tunisie Numérique | 20-May-2022
La Tunisie a omis de régler son dernier paiement au tribunal arbitral de la Banque mondiale, devant lequel elle risque d’être condamnée à verser plusieurs centaines de millions de dollars de dédommagement à ABCI.
Reuters | 13-May-2022
Russia’s top lender Sberbank initiated investment arbitration proceedings against Ukraine after its parliament approved a presidential decree allowing for the forced seizure of Sberbank-owned assets in the country.
Arab News | 8-Mar-2022
Le Centre international pour le règlement des différends relatifs aux investissements annonce que «l’arbitrage a repris» dans l’affaire de la BFT.
The Times of India | 25-Feb-2022
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Mint | 26-Jan-2022
As part of the settlement reached with the Indian government over the levy of back taxes, the company has withdrawn all cases that were brought to collect the tax refund ordered by an international arbitration tribunal.

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