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)

Africa Intelligence | 7-Oct-2020
Le premier ministre tunisien a accepté une médiation avec ABCI Investments, qui réclame un milliard de dollars devant le tribunal arbitral Cirdi. Mais il a presque aussitôt fait marche arrière.
Greek City Times | 5-Oct-2020
Greek investors who were affected by the Cyprus bail-in have sought legal resort and now seem to stand a fair chance to have their case tried and possibly recuperate a portion of their losses in a mass arbitration to be held before the ICSID.
Deccan Herald | 1-Oct-2020
The Indian government plans to contest the judgement on the Vodafone arbitration award in Hague.
Live Mint | 30-Sep-2020
Cairn is seeking full restitution for losses resulting from the expropriation of its investments in India in 2014.
New Indian Express | 30-Sep-2020
India will try and keep its taxation laws out of the ambit of all Bilateral Investment Treaties (BITs) and comprehensive economic pacts that it negotiates.
livemint | 28-Sep-2020
Vodafone Group Plc’s big win against the Indian government could set a precedent for similar arbitration cases, including the one initiated by Cairn Energy Plc.
Reuters | 25-Sep-2020
Vodafone won an international arbitration case against the Indian government, ending one of the most high-profile disputes in the country involving a $2 billion tax claim.
Lexology | 3-Sep-2020
For the first time, an ISDS tribunal has qualified project finance as a foreign investment protected under an investment treaty.
SSRN | 20-Aug-2020
Recent jurisdictional decisions suggest that sovereign debt will be subject to bilateral investment treaties for the foreseeable future.
Webmanagercenter | 5-Aug-2020
Deux nouvelles réunions viennent d’être programmées avec le Centre international pour le règlement des différends relatifs aux investissements, afin de poursuivre l’examen de l’affaire de la Banque Franco-tunisienne.

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