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)

Business Wire | 5-Jul-2022
Tan Tao Investment & Industry Corporation launched a billion-dollar arbitration proceeding against Vietnam under the agreement between the United States and the Socialist Republic of Vietnam.
The Express Tribune | 23-Jun-2022
Two Turkish waste management companies have filed a complaint in the International Centre for Settlement of Investment Disputes (ICSID) seeking a $230 million award against Pakistan | 17-Jun-2022
La société immobilière espagnole, Marina d’Or, qui a construit les célèbres complexes touristiques et résidentiels dans les années 90, réclame 407 millions d’euros au Maroc.
La Diaria | 28-Apr-2022
Montecon inició el proceso previo a la demanda contra el Estado uruguayo ante un arbitraje internacional, al activar los mecanismos de solución de controversias previstos en tratados de promoción y protección de inversiones. | 28-Apr-2022
After years of dispute, the ICSID ruled last November that the province of Salta must pay an eight-figure sum as compensation. Argentina has only now decided to appeal the decision.
Kluwer Arbitration Blog | 21-Apr-2022
ISDS in Latin America is here to stay. While disputes in sectors such as pensions and telecoms are becoming more common in the region, we expect to see a ripening of COVID-related, tech and energy disputes.
CIAR Global | 19-Apr-2022
La operadora portuaria chileno-canadiense Montecon, propiedad de la chilena Ultramar y de la canadiense ATCO, recurrirá a arbitraje contra Uruguay por las pérdidas que ha sufrido ante la concesión otorgada a la compañía Katoen Natie.
The Hindu BusinessLine | 31-Mar-2022
The US District Court of Colombia has decided to grant a temporary stay over the confirmation of $111-million award won by Devas’ Mauritius shareholders against India.
Razón Pública | 28-Mar-2022
Con la venta del 20 % del proyecto de oro Soto Norte a la multinacional Aris Gold, renace la tensión sobre las licencias ambientales en el páramo de Santurbán. Este es el problema de fondo, y esta es la solución que debe darle el gobierno.
Romania-Insider | 21-Mar-2022
The ICSID arbitral tribunal on March 16 this year admitted it had no jurisdiction concerning the applicant Germen and rejected as inadmissible Alverley’s application.

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