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)

| 24-Dec-2012
Recent disputes, including the GMR-Maldives government row and the clash between foreign telecom firms Telenor, Sistema, Etisalat and Vodafone and the Indian government, have exposed India’s vulnerable position in investment agreements. While the foreign telecom companies can use a potent weapon - the ’investment protection’ clause in bilateral treaties - against India, GMR cannot do the same with Maldives.
| 26-Nov-2012
The Ministry of Petroleum and Natural Resources (MoPNR) has written a letter to Prime Minister Raja Pervez Ashraf to persuade the Balochistan government to settle the Reko Diq issue out of court, fearing a penalty of Rs39 billion by the International Centre for Settlement Investment Disputes (ICSID).
Economic Times | 26-Jul-2012
Malaysia headquartered Axiata Group, which holds about 20% stake in Idea Cellular has threatened claim damages and drag the Indian government to international arbitration under bilateral investment protection pacts (BIPA), making it the sixth international investor in the telecoms space to serve notice under bilateral trade agreements.
Express Tribune | 9-Jul-2012
Amid calls to make public the draft of bilateral investment treaty, the government claims that it has gained much and lost nothing to the United States as Washington has agreed to first taking any business dispute to Pakistani courts for settlement.
| 2-Jul-2012
President Susilo Bambang Yu-dhoyono is telling his ministers to prepare for the worst after the government recently entered into arbitration with an international mining company.
| 11-Jun-2012
On 5 June 2012 the arbitral tribunal of the International Centre for Settlement of Investment Disputes (ICSID) adopted the decision on the case initiated by Caratube International Oil Company LLP (CIOC) against the Republic of Kazakhstan.
| 5-Jun-2012
In a May 31 press release, the US private equity fund Lone Star said it was planning to request investor state dispute (ISD) arbitration for losses suffered due to "unlawful" interference by the South Korean government.

| 24-May-2012
Churchill Mining (LON:CHL) said it has now filed for international arbitration in its dispute regarding the East Kutai coal project (EKCP) in Indonesia, 75 per cent owned by Churchill.
| 4-May-2012
Assistant U.S. Trade Representative Wendy Cutler ruled out renegotiation of the Korea-U.S. free trade agreement on Thursday, saying the deal had been in effect for just six weeks. Her comments foreshadowed a tough time for the Korean government’s efforts to revise the investor-state dispute settlement system under the accord.
The Hankyoreh | 30-Apr-2012
Controversial KORUS FTA clause could lead to ‘legal chaos’, says Korea’s top legal body

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