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)

Live Mint | 19-Mar-2013
The aggressive push by India’s tax department to increase revenue has prompted several multinational companies to informally seek the views of lawyers and consultants about invoking bilateral investment promotion and protection agreements to resist the government’s demands for more money.
| 20-Feb-2013
Amidst continuing violence plaguing Balochistan, there is now a cause of joy for the Baloch people and the government.
| 5-Feb-2013
Earlier last month, a three-member bench of the Supreme Court headed by Chief Justice Iftikhar Chaudhry declared null and void the Reko Diq gold and copper mine agreement, the Chagai Hills Exploration Joint Venture Agreement (CHEJVA), with Tethyan Copper Company (TCC).
| 5-Feb-2013
The Supreme Court recently declared void and illegal a mining deal for the Reko Diq copper project signed 20 years ago between the Balochistan government and international mining companies.
Kyunghyang Shimun | 1-Feb-2013
The Korean government is fighting a ISD suit by US based private equity fund Lone Star. The ISD suit was established through Lone Star’s paper company in Belgium and initiated through an investment treaty between Belgium and South Korea.
Kyunghyang Shimun | 1-Feb-2013
The article discusses a blunder in the Korean government in failing to include an anti-paper company clause that is now allowing companies to use the Belgium investment treaty as a backdoor for ISD suits.
The Hindu | 22-Jan-2013
In a significant development, the Government of India has ordered a freeze of all Bilateral Investment Protection Agreements (BIPA) negotiations till a review of the model text of BIPA is carried out and completed. This follows a spate of show cause notices on the Government by foreign companies seeking to recover their investments under the agreement.
Xinhua | 21-Jan-2013
The finance ministry said that the South Korean government rejects Lone Star’s accusations regarding this dispute, noting that the government has been preparing for trial. It added that the government will pay full attention to the arbitration proceedings and will aggressively defend its self against Lone Star’s unjust accusations.
| 16-Jan-2013
It is wonderful that the stance of the government of Balochistan has been upheld by the Supreme Court (SC) of Pakistan. Decision given on 7th January, 2013 by the SC has declared the agreement on Reko Diq signed on July 23, 1993 as void and in conflict with the laws of the country. Tethyan Copper Company Pvt Limited (TCC) also lost its case in the International Centre for Settlement of Investment Disputes (ICSID) on December 13, 2012.
The Hindu | 8-Jan-2013
The changing dynamic of the global economy has led to a transformation in the role of developing countries as both capital importing and exporting States. There is an urgent need to redefine the global BIT regime to reflect this changing paradigm.

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