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)

Web Manager Center | 30-Jun-2017
La partie tunisienne ne veut pas d’un règlement amiable avec l’actionnaire majoritaire ABCI, même dans une phase ultérieure.
Manila Standard | 27-Jun-2017
The ICSID designated the team that will hear Shell Philippines Exploration B.V.’s arbitration case against the Philippine government on Malampaya gas project’s corporate income tax issue.
Kapitalis | 21-Jun-2017
L’Etat tunisiens a intérêt à négocier et à accepter une solution à l’amiable de son litige avec l’ABCI à propos de la BFT. Car le verdict du Cirdi risque d’être financièrement douloureux.
PTI | 19-Jun-2017
The Income Tax Department has ordered coercive action against Cairn Energy of UK, including taking away over Rs 2,000 crore dividend and tax refund, to recover part of the Rs 10,247 crore retrospective tax.
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.

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