Utility corporations have used investor-state dispute settlement (ISDS) provisions found in trade and investment agreements to challenge state attempts to regulate privatized public services such as water, social security or other services.

In response to several governments which have tried to lower public services rates for poorer populations or in face of a significant economic crisis, foreign companies have initiated ISDS disputes, claiming they were treated “unfairly”, due to their loss of profits.

Potentially, any significant reforms of standards in relation to major infrastructure or utilities and associated services could be the target of ISDS.

As of end of 2019, about 2/3 of all ISDS disputes concerned the services sector at large, including public services but also financial services, telecommunications, transport, construction, etc.

Most well-known disputes include:

• Azurix (US) v. Argentina: US$165 million awarded in 2006 to the investor, a water company. The dispute arose from the contamination of a reservoir, which made the water undrinkable in the area. The firm claimed the government had expropriated its investment and denied the firm “fair and equitable treatment” by not allowing rate increases and not investing sufficient public funds in the water infrastructure (Argentina-US BIT invoked).

• Tampa Electric Company “TECO” (US) vs. Guatemala: the US-based energy company challenged Guatemala’s decision to lower the electricity rates that a private utility could charge. TECO was awarded US$25 million in 2013 (CAFTA invoked).

• TCW (US) vs. Dominican Republic: the US investment management corporation that jointly owned with the government one of the Dominican Republic’s three electricity distribution firms, sued the government for failing to raise electricity rates and to prevent electricity theft by poor residents. Case settled in 2009 for US$26.5 million paid to the investor (CAFTA invoked).

(March 2020)

Buenos Aires Times | 26-Apr-2019
French water and waste management company receives compensation from the government, settling one of its legal disputes with country dating back to Néstor Kirchner’s presidency.
TV Maghreb | 22-Mar-2019
Le groupe SAUR et sa filiale STEREAU ont fait appel au CIRDI contre l’Algérie concernant un litige sur une station d’épuration des eaux, en vertu de l’accord d’investissement avec la France.
Clifford Chance | 11-Mar-2019
UK investors could seek to move their investments to jurisdiction such as Singapore and Hong Kong where they can take advantage of investment treaty protection, if a potential new Labour govenment were to nationalise public services.
| 1-Mar-2019
La empresa francesa de servicios públicos podría embargar bienes del país para asegurar el pago de parte de los millones en daños y perjuicios adeudados por el gobierno.
Le Figaro | 28-Feb-2019
Suez met la pression sur l’Argentine pour récupérer les 630 millions de dollars de réparation décidés par un arbitrage rendu en 2015 et a fait le premier pas vers une possible saisie d’actifs argentins.
Swiss Info | 28-Feb-2019
Suez amenazó con ceder a "fondos especializados" la deuda que Argentina tiene con al empresa francesa, si el gobierno argentino no acelera el pago de los 630 millones de dólares arbitrados por el CIADI.
Buenos Aires Times | 27-Feb-2019
French waste and water group Suez SA has contacted "specialised funds" about possibly selling its debt claims to Argentina, the group announced.
Zone Bourse | 5-Feb-2019
Le CIRDI a décidé que la Hongrie devrait verser une indemnité de 73 millions d’euros hors intérêts à Sodexo.
Globe Newswire | 5-Feb-2019
Hungarian State has been ordered to pay Sodexo an award of about 73 million euro, before interest.
SanLuis24 | 15-Jan-2019
El acuerdo comercial entre Argentina y Chile ya fue avalado sin debate por el Senado del vecino país. El Congreso argentino lo había aprobado a fines de año pasado.

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