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.

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 sued Greece on account of the restructuring of the country’s sovereign debt, after having bought Greek government bonds at a knockdown value. The investors lost the case. (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).

(March 2020)

Jeune Afrique | 12-Sep-2016
Selon des sources financières, le FMI a demandé à l’État tunisien de préparer une provision de 400 millions de dinars au titre d’une première tranche d’indemnités que celui-ci pourrait être amené à verser à ABCI Investments.
BuzzFeed | 1-Sep-2016
Financial companies have figured out how to turn a controversial global legal system to their own very profitable advantage.
Rappler | 22-Jul-2016
Shell Philippines Exploration BV has raised its tax dispute with the Philippine government before the International Centre for Settlement of Investment Disputes
GGR Asia | 18-Jul-2016
Sanum Investments Ltd and its parent company, Lao Holdings NV, say they filed the latest move in a legal battle concerning the Savan Vegas Hotel and Entertainment Complex – a casino hotel in Savannakhet, Laos.
Reuters | 5-Jul-2016
French oil major Total has filed a request for arbitration against Algeria for changing profit-sharing terms on oil and gas contracts in the mid-2000s
Le Monde | 4-Jul-2016
Total vient, en toute discrétion, d’engager un contentieux contre l’Algérie et sa compagnie pétrolière d’Etat, la Sonatrach.
Jeune Afrique | 4-Jul-2016
Symbole extravagant du clientélisme et des passe-droits en vigueur sous le régime de Ben Ali, la Banque franco-tunisienne est au cœur d’un imbroglio judiciaire international depuis vingt-sept ans.
PR Newswire | 23-Jun-2016
Iskandar Safa, co-owner of the Privinvest Group, a global player in the shipbuilding industry, which took control of Hellenic Shipyards SA, submitted a request for arbitration against the Hellenic Republic at the World Bank’s ICSID.
Le Défi Média | 30-May-2016
Le gouvernement mauricien a entamé la préparation de sa défense dans l’affaire qui l’oppose à Rawat qui estime avoir été « illégalement » exproprié de ses biens.
Common Dreams | 30-May-2016
Emails obtained through Freedom of Information Act (FOIA) show U.S. Trade Rep. Michael Froman discussing TPP with Goldman Sachs lobbyists

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