Asia

Asian countries have signed over 1100 international investments agreements, most of which include the investor-state dispute settlement (ISDS) mechanism.

The Association of South-East Asian Nations or ASEAN (formed of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam) also provides investor protection under the ASEAN Comprehensive Investment Agreement (ACIA) which was adopted in 2009.

In addition, new trade deals with ISDS provisions currently concern the region: the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).

The TPP was sealed in October 2015 between Australia, Canada, Chile, Mexico, New Zealand, Peru, the United States and five Asian countries: Brunei, Japan, Malaysia, Singapore and Vietnam. Indonesia and Taiwan have claimed their intention to join in. The treaty has yet to be ratified.

The investment chapter has revealed the deal includes the investor-state dispute settlement (ISDS) mechanism that would give foreign investors the right to bypass national courts and resort to a parallel system of justice specifically made for them.

RCEP is currently being negotiated between the Asian states of Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, the Philippines, Singapore, South Korea, Thailand and Vietnam with Australia and New Zealand.

Although still under negotiations, RCEP has been reported to include ISDS provisions. Korea and Japan have submitted proposals likely to be similar to those in their own bilateral agreements and in the TPP text. India should table a different offer.

The Indian government has been considering a revised comprehensive model of bilateral investment treaty (BIT) that would reduce investor rights, compared to other versions of ISDS. An investor would have to exhaust all local remedies before initiating international arbitration. The model BIT is expected to exclude matters relating to government procurement, taxation, subsidies, compulsory licenses and national security.

India has been the most targeted country in the region, with about 15 disputes - the vast majority of which were initiated by West European countries.

End of 2014, Sri Lanka also announced its intention to move away from traditional models of BIT. It quoted thin relationship between BITs and foreign direct investment, past ISDS disputes and the tendency for BITs to constrain domestic policy space as reasons. Sri Lanka favours the enactment of appropriate domestic legislation to protect foreign investment.

In early 2014, Indonesia announced plans to terminate 67 of its BITs, former president Yudhoyono arguing he did not want multinational companies to pressure developing countries. Indonesia is now in the final stage of finalizing a new model of BIT. The country is currently facing a billion-dollar dispute from UK-listed Churchill Mining and a new US$600 million claim from the Indian mining investor India Metals & Ferro Alloys.

(November 2015)

AP | 14-Dec-2018
Westwater Resources, an energy materials development company, announced the filing of a request for arbitration against the Republic of Turkey for the taking of its Temrezli and Şefaatli uranium projects in June 2018.
The Express Tribune | 11-Dec-2018
Pakistan’s assets abroad are at risk of being taken over as a security to implement the international arbitration court’s ruling.
The Daily Star | 5-Dec-2018
Bangladesh has about 30 BITs of which those with international arbitration provisions tilt to protect corporate interests more than the national interest of Bangladesh as reflected in the Saipem, Chevron, and Niko arbitrations.
BusinessLine | 15-Nov-2018
Certain ISDS (Investor-state dispute settlement) cases against India led it to review its stand on investment treaties.
Australian Financial Review | 2-Nov-2018
Businesses in the mining sector and beyond insist protection for Australian investors in Indonesia is required in a free trade deal.
Colombo Page | 29-Oct-2018
KLS Energy Lanka, the local subsidiary of Malaysian renewable energy producer Energy Sdn Bhd of Malaysia has initiated ICSID arbitration under the Sri Lanka-Malaysia BIT
Natural Gas World | 24-Oct-2018
South Korean utility Korea Western Power Company (Kowepo) has begun arbitration proceedings against India for not honoring a fuel supply commitment to a gas-based power plant that it part-owns in western India
Korea Herald | 15-Oct-2018
Swiss elevator maker, Schindler Group, has officially filed for an investor state dispute settlement against the Korean government seeking US$300 million in compensation for losses over its approval of paid-in capital increase of Hyundai Elevator
Business Times | 11-Oct-2018
Singapore and Indonesia signed an agreement to promote and protect investments, with the treaty promising Singapore companies operating in Indonesia protection and access to international arbitration in the event of investment disputes.
Korea Times | 26-Sep-2018
The Moon Jae-in administration’s campaign to "root out archaic irregularities" appears to have backfired as global private equity funds are rushing to file investor-state dispute settlements.

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