• Yukos (Isle of Man) vs. Russia
Yukos was a Russian oil and gas company. It was acquired from the Russian government during the controversial “loans for shares” auctions of the mid 1990s, whereby some of the largest state industrial assets were leased (in effect privatized) through auctions for money lent by commercial banks to the government. The auctions were rigged and lacked competition, and effectively became a form of selling for a very low price. In 2003, Yukos CEO was arrested on charges of fraud and tax evasion and the following year Yukos’ assets were frozen or confiscated. In 2007 the Yukos’ former shareholders filed a claim for over $100 billion, seeking compensation for their expropriation. The dispute resulted in 2014 in the arbitrators awarding the majority shareholders over US$50 billion in damages. In 2016, a Dutch court overturned the ruling, since Russia had never ratified the Energy Charter Treaty that had been invoked. But a Swiss court ruled that Russia was bound by the provisional application of the treaty. Meanwhile, since 2015, the former Yukos shareholders have tried to seize Russian assets in several European countries. The saga continues. (Energy Charter Treaty invoked)
• Vattenfall (Sweden) vs. Germany (1)
In 2007 the Swedish energy corporation was granted a provisional permit to build a coal-fired power plant near the city of Hamburg. In an effort to protect the Elbe river from the waste waters dumped from the plant, environmental restrictions were added before the final approval of its construction. The investor initiated a dispute, arguing it would make the project unviable. The case was ultimately settled in 2011, with the city of Hamburg agreeing to the lowering of environmental standards (ECT invoked).
Energy, environment, human rights
• Bechtel (Mauritius) vs. India
The dispute concerned the Dabhol project, a gas-powered electricity plant run by Enron, Bechtel and General Electric, which was part of the Indian government’s efforts to liberalise the energy sector in the early 1990s. The project was mired in controversy from its inception, with allegations of corruption surrounding the contract arrangements between the investors and local Indian authorities, as well as public opposition due to human rights violations. In 2000, following a review of the project, which recommended it be abandoned, the local government of Maharashtra cancelled its payments that were deemed overpriced. Consequently, nine international arbitration lawsuits were launched against India by different companies that had invested in the project, including the Mauritius subsidiary of US-based Bechtel. In July 2015, the case was settled for US$160 million in compensation in favour of Bechtel. (India-Mauritius BIT invoked)
• Ethyl (US) vs. Canada
Ethyl, a US chemical company, launched an ISDS dispute over the Canadian ban of MMT, a toxic gasoline additive containing a known human neurotoxin. Canadian legislators banned MMT over public health and environmental concerns. The additive was already banned by the US Environmental Protection Agency. The case was settled in 1998 for US$13 million paid to Ethyl. The settlement also required Canada to lift the ban and post advertising saying MMT was safe (NAFTA invoked).
• Bilcon (US) vs. Canada
The US industry challenged in 2008 Canadian environmental requirements affecting their plans to open a basalt quarry and a marine terminal in Nova Scotia. The investors planned to blast, extract and ship out large quantities of basalt from the proposed 152-hectare project, located in a key habitat for several endangered species, including one of the world’s most endangered large whale species. A government-convened expert review panel concluded that the project would threaten the local communities. On these recommendations, the government of Canada rejected the project. In 2015 the ISDS tribunal decided that the government’s decision hindered the investors’ expectations. Bilcon won – damages still pending (NAFTA invoked).
• Renco (US) vs. Peru
In April 2011, US-based mining company Renco initiated an arbitration claim against Peru, accusing it of failing to clean the area around the La Oroya smelting plant, one of the 10 most polluted places in the world. When it acquired the plant in 1997, Renco had committed to modernising the project but failed to comply with environmental regulations, which led to bankruptcy proceedings and loss of ownership. In July 2016, the arbitral tribunal ruled that Renco’s claims must be rejected due to a lack of jurisdiction. Renco reportedly refiled the claim. Peru was denied recovery of legal costs. (US-Peru FTA invoked)
• Investors vs. Argentina
When the country froze its utility rates in response to its 2001-2002 financial crisis, it was hit by over 40 lawsuits from investors, including Suez & Vivendi (France), Sociedad General de Aguas de Barcelona S.A (Spain) and Anglian Water (UK). The ISDS tribunal concluded that Argentina had breached the investors’ right to fair and equitable treatment. By 2014, the country had been ordered to pay a total of US$980 million (various BITs invoked).
• Cargill (US) vs. Mexico
In 2009 US$90.7 million was awarded to the agribusiness producer of high fructose corn syrup (HFCS) – a derived sweetener linked to obesity. The investor successfully challenged a government tax levied on beverages sweetened with HFCS. The tax helped safeguard the Mexican cane sugar industry, consisting of hundreds of thousands of jobs, from the post-NAFTA influx of US-subsidized HFCS that threatened those jobs. Mexico also argued that the tax was legitimate as a counter to the US refusal to open its market to Mexican cane sugar as stipulated by NAFTA. The ISDS tribunal ruled that the tax was a violation of Cargill’s right to fair and equitable treatment (NAFTA invoked).
• Eli Lilly (US) vs. Canada
in 2013 the pharmaceutical corporation challenged Canada’s patent standards after Canadian courts invalidated the company’s supplementary patents for Strattera and Zyprexa, claiming the drugs were not sufficiently innovative. The courts ruled that Eli Lilly had failed to demonstrate or soundly predict that the drugs would provide the benefits that the company promised when applying for the patents’ monopoly protection rights. The resulting invalidations of the patents paved the way for Canadian drug producers to produce less expensive, generic versions of the drugs. Eli Lilly’s notice argued that Canada’s entire legal basis for determining a patent’s validity – that a pharmaceutical corporation should be required to verify its promises of a drug’s utility in order to obtain a patent – is “arbitrary, unfair, unjust, and discriminatory.” The investor claimed C$500 million. In March 2017, the arbitral tribunal ruled against the pharmaceutical giant. Canada’s rejection of the two disputed patents was considered lawful. Yet Eli Lilly imposed a heavy and costly legal process on the country. (NAFTA invoked).
• Philip Morris Asia (Hong Kong) vs. Australia
When Australia introduced plain packaging for all tobacco products in 2011, Philip Morris sued Australia before an arbitral tribunal. Since Philip Morris Australia was owned by Philip Morris International (based in Switzerland) and Australia did not have an investment treaty with Switzerland, Philip Morris Asia purchased shares in Australia specifically to take advantage of the ISDS mechanism included in the Australia-Hong Kong investment treaty. In its December 2015 decision, the tribunal confirmed that the main reason that Philip Morris Asia acquired assets in 2011 was to bring a legal claim, using a Hong Kong-based entity. It also rejected the company’s claim that plain packaging was not reasonably foreseeable. Therefore the case was dismissed, albeit on legal grounds only. The costs of the arbitration for Australia reportedly amounted to A$50 million, which is disputed by Philip Morris. As a consequence of this case, countries ranging from Namibia, Togo to New Zealand decided to wait to introduce their own plain packaging for tobacco products. (Australia-Hong Kong BIT invoked)
• Véolia (France) vs. Egypt
In 2012, the multinational utility corporation launched a dispute against Egypt, demanding US$110 million following changes to Egypt’s labour laws leading to an increase in minimum wage. Case pending (Egypt-France BIT invoked).
• Churchill (Australia, United Kingdom) vs. Indonesia
In 2012, Churchill Mining and its Australian subsidiary Planet Mining initiated an arbitration claim against Indonesia over the revocation of mining licences that were deemed forged by the country. The companies demanded US$1.3 billion in compensation although they had only invested US$40 million. In December 2016, the tribunal confirmed that the documents presented by the company were forged. In April 2017, Churchill called for the annulment of the decision (which is still pending). The costs of the arbitration are estimated to have reached over US$10 million. (Australia-Indonesia and Indonesia-UK BITs invoked)
• Eureko (Netherland) vs. Poland
In 1999 the Polish Government published an invitation to sell 30% of the shares capital of the state-owned insurance company PZU. Eureko and Big Bank Gdanski S.A. were selected as the buyers. Eureko then planned to increase its share holdings using the initial public offering from 30% to 51%. The dispute emerged following Poland’s refusal to complete PZU’s privatization – which would have allowed Eureko to obtain a majority shareholder in the company. The claimant contended that Poland backtracked on their earlier commitments. Poland argued that Eureko’s claims were predicated on contractual claims under a share purchase agreement making them inadmissible. The tribunal concluded that the Government breached Poland’s obligations under the Netherlands-Poland BIT. The case was settled in 2005 for about €2 billion in favour of the investor (Netherland-Poland BIT invoked).
Main sources: CEO, Friends of the Earth, Public Citizen