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)

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Mint | 7-Sep-2021
Cairn Energy will drop litigations to seize Indian properties in countries ranging from France to the US, within a couple of days of getting a $1 billion refund resulting from the scrapping of a retrospective tax law.
elsalvador.com | 19-Aug-2021
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Reuters | 19-Aug-2021
HSBC Holdings said the banking group has initiated legal proceedings against El Salvador for what the company called a breach of the nation’s investment treaty with the UK.
Le Figaro | 6-Aug-2021
Le gouvernement indien a publié une proposition de loi fiscale visant à mettre fin à une bataille judiciaire de plusieurs milliards de dollars l’opposant à des compagnies étrangères.
Reuters | 6-Aug-2021
India proposed scrapping a controversial law that taxed companies retrospectively, a move that could potentially settle its multi-billion-dollar tax cases with Cairn Energy and Vodafone.
Mint | 28-Jul-2021
The government confirmed that a French court has ordered the freezing of certain Indian assets on a petition by Britain’s Cairn Energy, which is seeking to recover USD 1.72 billion arbitration award.
Le Figaro | 8-Jul-2021
Cairn Energy a affirmé avoir obtenu le droit de «geler» des biens immobiliers appartenant à l’Inde et situés à Paris, dans sa dernière tentative de récupérer 1,7 milliard de dollars qu’elle estime lui être dus par New Delhi.
The Tribune | 8-Jul-2021
The centrally located properties mostly comprise flats, valued at more than EUR 20 million, used by the Indian government establishment in France.
Total Croatia News | 6-Jul-2021
Four arbitration cases brought by banks against Croatia before the ICSID connected with the conversion of CHF-denominated loans were suspended on 30 June.

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