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)

Lexology | 9-Jun-2017
Allegations of corruption and criminal activity have been used increasingly in recent years in French courts to argue for the setting aside of arbitral awards on the grounds of a breach of international public policy.
ET Telecom | 17-May-2017
Vodafone Group Plc has served its second notice on the Indian government to formally commence the​second ​arbitration in the high profile Rs 22,000 crore tax matter.
Live Mint | 27-Apr-2017
An international arbitration panel has rejected India’s demand for a stay on an arbitration initiated by Cairn Energy against Rs10,247 crore retrospective tax notice.
Bloomberg BNA | 13-Apr-2017
The Indian government nudges Cairn to accept the terms of its tax dispute settlement scheme instead of pursuing the international arbitration route.
London South East | 22-Mar-2017
Ukranian authorities have now applied to the UK High Court asking to set aside the recent UNCITRAL arbitration award against Ukraine and in favour of JKX.
Interfax | 13-Mar-2017
Russia must bear responsibility for protecting Ukrainian investors in Crimea after its annexation under the Russian-Ukrainian bilateral investment treaty.
The Hindu | 10-Mar-2017
The tax dispute between the Indian government and Cairn Plc has been the subject of international arbitration from 2014.
The Hindu | 8-Mar-2017
The tax demand was challenged by Cairn Energy through an international arbitration where it also made a case against the dividend freeze
In Cyprus | 25-Feb-2017
Greek investors claim that they were discriminated against and lost millions in the bail-in of Cypriot bank deposits some four years and have launched legal action against Cyprus.
Akipress | 22-Feb-2017
The Paris Appeals Court annuled $16.5 million award for Latvian businessman Valeri Belokon and reinstated the evidence that Manas Bank employees were engaged in money laundering.

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