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)

Bloomberg | 15-Nov-2017
An international arbitration tribunal in February will begin trial on Vodafone’s challenge to India using a retrospective legislation to seek Rs 22,100 crore in taxes.
Government of India | 13-Nov-2017
The Union Cabinet has given its approval for signing the Joint Interpretative Declaration between India and Colombia regarding the existing Agreement for the Promotion and Protection of Investments.
The Express Tribune | 13-Nov-2017
Pakistan has successfully gotten a stay order from the International Centre for Settlement of Investment Disputes (ICSID) over the execution of an $800 million award to Karkey Karadeniz Elektrik Uretim (Karkey).
Irasia | 10-Nov-2017
The purpose of this release is to introduce the team, and to briefly describe the two claims and the processes to be followed in prosecuting each claim.
Digital Journal | 9-Nov-2017
To date, the Republic has not complied with the order and the Company is considering various options for enforcement of the award.
Mining | 4-Nov-2017
Chatree mine’s operator, Australia’s Kingsgate Consolidated said that it would commence arbitration under the Thailand-Australia Free Trade Agreement
The Hindu | 30-Oct-2017
Hit by disputes with Vodafone and Cairn Energy, India welcomes plan for a World Court but flags legal, practical challenges.
New Indian Express | 27-Oct-2017
The Delhi High Court today allowed Vodafone Group representatives to participate in the process of appointing a presiding arbitrator in its international arbitration process against India in connection with a tax demand of Rs 11,000 crore.
Minister of Trade, Industry and Energy of Korea | 25-Oct-2017
First ISDS case against South Korea under Korea-US FTA.
Lexology | 20-Oct-2017
The key issue in the case concerned the proper interpretation of the dispute resolution provision in the 2003 Investment Law, which was the basis for jurisdiction.

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