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)

Basta | 15-Feb-2019
D’un côté, la justice européenne estime que les tribunaux privés d’arbitrage sont illégaux au sein de l’espace européen. De l’autre, le Parlement européen vient d’adouber l’accord de libre-échange avec Singapour, champion en matière d’opacité financière.
No al TTIP | 13-Feb-2019
Las organizaciones europeas que son parte de la campaña “Derechos para las personas, obligaciones para las multinacionales” expresan su decepción por la aprobación en el Parlamento Europeo de los tratados tanto de comercio como el de inversión entre UE-Singapur (EUSIPA) con 436 votos a favor y 203 votos en contra.
Le Monde | 12-Feb-2019
27 associations, syndicats et ONG appellent les députés européens à rejeter un projet d’accord commercial entre l’UE et Singapour, comparable au très contesté CETA.
SOMO | 11-Feb-2019
An analysis of its impact on managing government bonds and capital flows.
Stop ISDS | 11-Feb-2019
The most worrying thing about the EU-Singapore deal is not the risk that Singapore firms themselves pose, but the fact that the agreement looks set to be used as a model for reinvigorating ISDS.
Express Tribune | 8-Feb-2019
Pakistan said to have gathered fresh ‘evidence of corruption’ in the procurement of a rental power project (RPP) contract by the Turkish company.
Express Tribune | 29-Jan-2019
Pakistan is making a last-ditch effort for an out-of-court settlement in the Reko Diq mining case, wherein the complainant company whose contract was terminated is claiming $11.43 billion in damages in an international tribunal.
Asia Times | 23-Jan-2019
Pakistan may have to pay a damages claim worth $11 billion after losing the infamous Reko Diq case to an Australian mining company.
Business Recorder | 17-Jan-2019
The federal cabinet is expected to approve supplementary grant of $ 1.37 million on to contest cases filed by M/s Karkey in courts of different countries as Pakistan’s assets abroad are facing "attachment" threat.
Daily Star | 15-Jan-2019
The very operational narratives of ICSID arbitrators inculcate an inherent bias towards foreign investors, who are overwhelmingly from European and North America.