Financial stability

Investor-state dispute settlement (ISDS) is one of the greatest threats to the re-regulation of finance. ISDS empowers the very firms that financial regulation seeks to govern. These firms can bypass host country domestic courts and directly challenge domestic policies in a parallel system of justice.

Financial and non-financial firms have increasingly used ISDS provisions in trade agreements to challenge financial regulations and emergency financial stability measures.

As of end of 2014, 7% of all ICSID cases concerned the financial sector.

Most well-known cases include:

• Investors vs. Argentina: When the country froze its utility rates and devaluated its currency in response to its 2001-2002 financial crisis, it was hit by over 40 lawsuits from investors, including Suez, Vivendi (France) and Anglian Water (UK). By January 2014, Argentina had been ordered to pay a total of US$980 million (various BITs invoked).

• Poštová Banka (Slovakia) & Istrokapital (Cyprus) vs. Greece: the Slovak bank and its Cypriot investor are currently suing Greece on account of the restructuring of the country’s sovereign debt, after having bought Greek government bonds at a knockdown value (Greece-Slovakia & Cyprus-Greece BITs invoked).

• Saluka (Netherlands) vs. Czech Republic: the Dutch investment corporation filed an ISDS dispute against the Czech government for not bailing out a private bank, in which the company had a stake, in the same way that the government bailed out banks in which the government had a major stake. The bailouts came in response to a widespread bank debt crisis. The investor was awarded US$236 million (Czech Republic-Netherlands BIT invoked).

(November 2015)

Dhaka Tribune | 17-Jan-2020
Now that the February 23 deadline for the court directive to pay Tk2,000 crore audit dues to the telecom regulator looms, Telenor hopes that the ongoing audit dispute can be settled without resorting to international arbitration.
Developing Telecoms | 8-Jan-2020
The ICSID has issued an interim order preventing Nepal’s government from collecting capital gains tax on Axiata’s acquisition of Ncell.
Himalayan Times | 2-Jan-2020
The ICSID had issued an interim order directing the government not to take any steps to enforce its decision to collect the outstanding capital gains tax.
Himalayan Times | 20-Dec-2019
A US-based international court issues interim order directing the Nepal government not to impose capital gains tax on Ncell buyout deal for the time being.
Réalités | 25-Nov-2019
Le tribunal arbitral ordonne à l’Etat tunisien de remettre les états financiers de la banque à ABCI.
BusinessLine | 28-Oct-2019
The tax department had sought ₹10,247 crore in taxes on alleged capital gains made by the company in the internal reorganisation
Reuters | 22-Oct-2019
Barrick Gold Corp said it had reached a deal to settle a long-running tax dispute between Tanzania and mining group Acacia.
Gibson Dunn | 18-Oct-2019
Argentina introduced a number of new restrictions on foreign currency transactions, reversing its four-year-old policy that had eliminated such controls, which may give rise to investment treaty claims by foreign investors.
ilBoursa | 10-Oct-2019
La saisie conservatoire sur les actifs de la STB au sein de la TFBank, opérée par le groupe néerlandais ABCI Investment dans le cadre de l’affaire de la Banque Franco-Tunisienne, devient sans effet.
The Daily Herald | 7-Oct-2019
Bank of Orinoco has initiated an international arbitration against the Netherlands over alleged discriminatory and irrational measures by the government of Curaçao.

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