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)

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.
NDTV | 31-May-2021
The arbitral award has condoned the tax avoidance scheme adopted by Cairn Energy.
The Leaflet | 28-May-2021
The perverse interplay of BITs with double taxation avoidance agreements has been bleeding India from the much-needed tax revenues.
Lexology | 28-May-2021
The Paris Court of Appeal has set aside a $1.1 billion award against Russia for the expropriation of the Crimean branch of Ukrainian state-owned bank Oschadbank.
The Leaflet | 27-Apr-2021
The international economic law regime has stripped India of over $3.8 billion in taxes due by Vodafone and Cairn Energy, as the country is battling the Covid19 crisis.
Business Standard | 12-Apr-2021
Cairn Energy has offered to invest the entire award money in India, which includes the principal amount of $1.2 billion and interest of $500 million if the government agrees to enforce the award.
IISD | 9-Apr-2021
Un tribunal de la CPA desestimó las objeciones jurisdiccionales presentadas por India y concluyó que dicho país incumplió con el estándar de TJE bajo el TBI entre India y el Reino Unido. El caso fue iniciado por Cairn Energy.

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