Asia

Asian countries have signed almost 2000 international investment agreements, most of which include the investor-state dispute settlement (ISDS) mechanism that gives foreign investors the right to bypass national courts and resort to a parallel system of justice specifically made for them.

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 which was adopted in 2009.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP for short) includes ISDS provisions with a carve-out for tobacco control measures.
TPP was signed on 7 March 2018 between 11 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It went into force on 30 December 2018 among the members who have ratified it. The US withdrew from it in January 2017.

The Regional Comprehensive Economic Partnership (RCEP) is a proposed mega regional trade deal. It is currently being negotiated between the Asian states of Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, the Philippines, Singapore, South Korea, Thailand and Vietnam with Australia and New Zealand. India pulled out of RCEP in December 2019.

RCEP originally included ISDS, but following opposition from civil society groups and some governments, negotiators agreed to exclude it in September 2019. However the negotiating states said they will look into it again at a later stage and assess whether or not to include it.

India has been the most targeted country in the region, with 25 known disputes - the majority of which were initiated by West European countries. Turkey has been the most frequent home state for investors, with 35 cases.

In July 2019, Pakistan was ordered to pay over US$5 billion to Chilean and Canadian investors (Antofagasta and Barrick) which had brought an ISDS claim against the country using the Australia-Pakistan bilateral investment treaty. The case involved a gold and copper mine, for which an exploration permit had been denied. The mining companies had only invested about US$200 million.

Several governments in the region have said they would reform the mechanism. At the end of 2014, Sri Lanka announced its intention to move away from traditional models of BIT. It cited the 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 that it would terminate 67 of its BITs. Former president Yudhoyono argued that he did not want multinational companies to pressure developing countries. 21 BITs were terminated in 2015. Indonesia has drafted a new model of BIT, but it hasn’t been adopted yet.

In December 2015, India released a revised model BIT which, for instance, requires investors to exhaust domestic remedies (Indian courts) before turning to international arbitration and leaves out “fair and equitable treatment” provisions. Consequently India sent notices to 58 countries terminating or not renewing BITs that had expired. In January 2020, it signed a BIT with Brazil that excludes ISDS and favours dispute prevention as well as state-to-state dispute settlement.

(April 2020)

Money Control | 24-Jan-2018
Cairn commenced international arbitration proceedings against India under the UK—India Bilateral Investment Treaty in 2015.
Reuters | 24-Jan-2018
The assets held by the fund’s custodian were frozen last October after a lawsuit by Moldovan businessman Anatolie Stati who seeks to enforce a $500 million arbitration ruling against the Astana government.
Express Tribune | 22-Jan-2018
The TCC tribunal failure did not reflect an internal failure on the part of Pakistan’s state apparatus as much as it did the hegemonic nature of the global BIT regime that developing countries have been subjected to by the West.
Economic Times | 19-Jan-2018
The government has opposed Vodafone Group’s proposal to merge its two arbitration cases against India, and sought an injunction from Delhi High Court to stop the telco from proceeding with the second arbitration filed in the UK, saying it was an "abusive action".
Yonhap | 15-Jan-2018
A bumpy road lies ahead for the renegotiation of the free trade deal between South Korea and the United States, a Korean senior trade official said.
Korea Times | 10-Jan-2018
Lone Star was embroiled in two lawsuits at that time, and it was found guilty in one of them, he claims.
Reuters | 9-Jan-2018
Moldovan businessman Anatolie Stati will ask bailiffs to sell a $5.2 billion stake in the Kashagan oil field owned by a Kazakh sovereign wealth fund if Astana refuses to pay a $500 million arbitration award.
Korea Times | 9-Jan-2018
Lawyers for a Democratic Society sent a letter to the International Center for Settlement of Investment Disputes, demanding a speedy settlement of the dispute between the Korean government and the U.S. buyout fund Lone Star Funds.
Economic Times | 9-Jan-2018
Vodafone Group has said it would agree to consolidate its two international arbitrations initiated against India in connection with a tax demand of ₹11,000 crore, if the country were to agree as well.
Cision | 8-Jan-2018
The Dutch court held that Kazakhstan is and will remain the sole shareholder of Samruk and that Samruk’s board is controlled by Kazakhstan.