Services

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)

Rabble | 10-Mar-2016
More than 2,000 people marched in Lima, Peru in opposition to the government’s plan to privatize public water services.
EurActiv | 9-Mar-2016
Paris would like to “copy-paste” key passages from the EU-Canada free trade agreement, concluded this week, particularly those relating to the arbitration court that is such a controversial issue in Europe.
EurActiv | 8-Mar-2016
Paris souhaiterait « copier-coller » certains passages clés de l’accord de libre-échange conclu cette semaine entre l’Union européenne et le Canada, notamment ceux relatifs à la cour d’arbitrage tant décriée en Europe.
América Economía | 8-Feb-2016
El CIADI publicó un fallo en su página web ratificando una decisión emitida a mediados de 2012, que había sido apelada por Argentina.
América Economía | 8-Feb-2016
The ICSID, the World Bank’s international arbitration tribunal, ordered Argentina to pay 136.1 million dollars plus interest to the companies, EDF International, Saur International and León Participaciones Argentinas for breach of contract.
Libération | 28-Jan-2016
Le groupe français Veolia a annoncé avoir demandé un arbitrage international contre la Lituanie, à laquelle il réclame plus de 100 millions d’euros d’indemnisation au titre d’un «traitement injuste et l’expropriation» de ses filiales.
The Baltic Course | 28-Jan-2016
France’s Veolia, which owns district heat supply companies in Lithuania, filed a suit worth a preliminary 100 million euros against Lithuania.
The Independent | 5-Dec-2015
The Airbus sits abandoned on the edge of an airport in south-west France, while a legal battle rages over its ownership.
Le Monde | 30-Nov-2015
L’A340 ultra luxueux de l’ex-dictateur libyen Mouammar Kadhafi croupit à l’aéroport de Perpignan et se retrouve au cœur d’une épique bataille judiciaire pour définir le nom de son prochain propriétaire.
ISDS Corporate Attacks | 29-Nov-2015
Eureko v. Poland. Case settled (investor obtained $1.6 billion).

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