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)

East African | 30-Jul-2018
Civil society organisations are pushing for a review of the BIT between Tanzania and The Netherlands which they say does not serve the best interests of Tanzania.
The East African | 24-Jul-2018
Tanzania risks a legal suit at international tribunals over its recent investment and tax policies, which parties to Bilateral Investment Treaty (BIT) deem to be anti-business.
Business Standard | 23-May-2018
India may not accept international arbitration orders annulling tax demands on British firms Vodafone Plc and Cairn Energy.
Indian Express | 21-May-2018
The tribunal, headed by Sir Franklin Berman, will hear the government’s objection to tax matters being covered under the Netherlands-India Bilateral Investment Treaty.
The Wire | 9-May-2018
In the order, Justice Manmohan, however, noted that the Centre could approach the UK arbitration tribunal under the BIPA for its grievances.
Defi Media | 26-Apr-2018
Quantum Global menace de recourir à un arbitrage international si le contentieux avec les autorités locales n’est pas résolu dans un délai de six mois.
Reuters | 20-Apr-2018
Investors holding billions of dollars in defaulted Venezuelan bonds have formed at least one bondholder committee, which could signal an eventual legal dispute similar to the dispute with Argentina after it defaulted on its sovereign debt in early 2002.
IATP | 11-Apr-2018
The financial industry’s demands for a “modernized” financial services chapter of the North American Free Trade Agreement have been overlooked
Defi Media | 9-Apr-2018
La double nationalité de Dawood Rawat lui prive de l’opportunité de saisir le tribunal de la Cour permanente d’arbitrage pour réclamer des dommages d’un milliard de dollars américains à l’état mauricien.
Kluwer Arbitration Blog | 3-Apr-2018
The Swiss Federal Supreme Court confirmed its statutory restraint in reviewing arbitral awards and rejected the host state’s request to set aside the award for violating substantive public policy.

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