Latin America

Latin American and Caribbean countries have signed almost 700 investment agreements. They have been targeted in almost 300 investor-state disputes.

Argentina has faced almost 62 ISDS cases, about 6% of all cases, making it the world’s most targeted state. Venezuela and Mexico have been among the ten most frequent respondents in the world, with 51 and 33 cases, respectively.

Many key cases such as Renco vs. Peru, Chevron vs. Ecuador or Pac Rim vs. El Salvador have originated in significant environmental damages caused by corporations. Philip Morris took an ISDS case against Uruguay over its anti-tobacco law.

Chile, Mexico and Peru are also party to the Trans-Pacific Partnership (TPP) with eight other Pacific Rim states. The TPP includes an investor-state dispute mechanism that undermines public-interest ‘safeguards’.

The most well-known cases ISDS cases in the region include:

Chevron (US) vs. Ecuador: For 26 years, Texaco, later acquired by Chevron, performed oil operations in Ecuador. Ecuadorian courts found that during that period the company dumped billions of gallons of toxic water and dug hundreds of open-air oil sludge pits in Ecuador’s Amazon, poisoning the communities of some 30,000 Amazon residents. After a legal battle spanning two decades, in November 2013, Ecuador’s highest court ordered the corporation to pay $9.5 billion to provide desperately needed clean-up and health care to afflicted indigenous communities. Chevron challenged the decisions produced by Ecuador’s domestic legal system before an ISDS tribunal. In 2018, the arbitration tribunal held that the $9.5 billion judgment was fraudulent, violated international public policy and should not be recognised or enforced by the courts of other States. The amount of the award has not been established yet. (Ecuador-United States BIT invoked)

Occidental Petroleum Corporation “Oxy” (US) vs. Ecuador: in 2012 Ecuador was ordered to pay US$1.77 billion to the investor, an oil exploration and production company, for breach of contract. Sentence was reduced to US$1 billion in November 2015 (Ecuador-United States BIT invoked).

Investors vs. Argentina: When Argentina 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).

Photo: Sairen42 / CC BY-SA 3.0

(April 2020)

Kluwer Arbitration Blog | 30-Apr-2018
Since 1973, the sovereign islands of the Caribbean Sea, have concluded over 140 international investment agreements. The ICSID Convention is in force in all islands except Antigua & Barbuda, Cuba, Dominica, and the Dominican Republic.
Reuters | 27-Apr-2018
Tribunal de arbitraje condena a PDVSA por violación de contratos al expropiar activos de esa firma estadounidense.
CDE | 27-Apr-2018
Dans procédure parallèle à celle engagée devant la Banque mondiale, ConocoPhillips a indiqué avoir obtenu gain de cause contre la société pétrolière d’Etat vénézuélienne PDVSA.
Reuters | 26-Apr-2018
In a separate arbitration claim from the ICSID case, the International Chamber of Commerce has ordered Venezuela’s state-run oil company PDVSA to pay ConocoPhillips $2.04 billion for early dissolution of two joint ventures for producing oil.
La República | 25-Apr-2018
El Centro Internacional de Arreglo de Indemnización de Inversiones (Ciadi), publicó la solicitud que formuló la compañía y que está pendiente de ser procesada, pero no ofreció más detalles ni las cantidades de dinero involucradas.
TNI | 25-Apr-2018
A key feature of the “modernisation” process is the inclusion of a controversial investment protection chapter with the same characteristics as the one recently included in the Canada-EU trade agreement.
Revista Pueblos | 24-Apr-2018
Uno de los principales elementos de la modernización del TLC UE-México pasa por incorporar al texto un polémico capítulo relativo a la protección de las inversiones, que tendría las mismas características que el que se incluyó recientemente en el CETA.
Venezuelanalysis | 24-Apr-2018
US multinational Kimberly-Clark has filed a formal request to take Venezuela to court regarding the expropriation of its abandoned factory by the government of Nicolas Maduro in July 2016.
El Economista | 24-Apr-2018
Uno de los principales cambios en el acuerdo comercial es que se remplaza el arbitraje de diferencias Estado-inversor con el nuevo Sistema de Juicios de Inversión, esto para asegurar la transparencia.
AFTINET | 23-Apr-2018
Colombia’s decision to ban mining activities in the Páramos, a range of environmentally sensitive wetlands that provide approximately 70% of the country’s water supply, has so far led to three treaty-based arbitration cases.