Asia

Asian countries have signed over 1100 international investments agreements, most of which include the investor-state dispute settlement (ISDS) mechanism.

The Association of South-East Asian Nations or ASEAN (formed of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam) also provides investor protection under the ASEAN Comprehensive Investment Agreement (ACIA) which was adopted in 2009.

In addition, new trade deals with ISDS provisions currently concern the region: the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).

The TPP was sealed in October 2015 between Australia, Canada, Chile, Mexico, New Zealand, Peru, the United States and five Asian countries: Brunei, Japan, Malaysia, Singapore and Vietnam. Indonesia and Taiwan have claimed their intention to join in. The treaty has yet to be ratified.

The investment chapter has revealed the deal includes the investor-state dispute settlement (ISDS) mechanism that would give foreign investors the right to bypass national courts and resort to a parallel system of justice specifically made for them.

RCEP is currently being negotiated between the Asian states of Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, the Philippines, Singapore, South Korea, Thailand and Vietnam with Australia and New Zealand.

Although still under negotiations, RCEP has been reported to include ISDS provisions. Korea and Japan have submitted proposals likely to be similar to those in their own bilateral agreements and in the TPP text. India should table a different offer.

The Indian government has been considering a revised comprehensive model of bilateral investment treaty (BIT) that would reduce investor rights, compared to other versions of ISDS. An investor would have to exhaust all local remedies before initiating international arbitration. The model BIT is expected to exclude matters relating to government procurement, taxation, subsidies, compulsory licenses and national security.

India has been the most targeted country in the region, with about 15 disputes - the vast majority of which were initiated by West European countries.

End of 2014, Sri Lanka also announced its intention to move away from traditional models of BIT. It quoted thin relationship between BITs and foreign direct investment, past ISDS disputes and the tendency for BITs to constrain domestic policy space as reasons. Sri Lanka favours the enactment of appropriate domestic legislation to protect foreign investment.

In early 2014, Indonesia announced plans to terminate 67 of its BITs, former president Yudhoyono arguing he did not want multinational companies to pressure developing countries. Indonesia is now in the final stage of finalizing a new model of BIT. The country is currently facing a billion-dollar dispute from UK-listed Churchill Mining and a new US$600 million claim from the Indian mining investor India Metals & Ferro Alloys.

(November 2015)

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The very operational narratives of ICSID arbitrators inculcate an inherent bias towards foreign investors, who are overwhelmingly from European and North America.
Business Wire | 3-Jan-2019
At issue is Turkey’s taking of Westwater’s Temrezli and Şefaatli uranium projects in June 2018.
Ministry of External Affairs, Goverrnment of India | 3-Jan-2019
As released by the Goverrnment of India
MENAFN | 2-Jan-2019
The EU has proposed to reform the investor-state-dispute-settlement system, a move that could further complicate negotiations with China over a bilateral investment agreement, as well as their dialogue on the Belt and Road Initiative’s implementation in Europe.
The Wire | 17-Dec-2018
India may have to pay hundreds of millions of dollars in damages to Deutsche Telekom over the manner in which it cancelled a satellite communications contract in 2011.
AP | 14-Dec-2018
Westwater Resources, an energy materials development company, announced the filing of a request for arbitration against the Republic of Turkey for the taking of its Temrezli and Şefaatli uranium projects in June 2018.
The Express Tribune | 11-Dec-2018
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The Daily Star | 5-Dec-2018
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BusinessLine | 15-Nov-2018
Certain ISDS (Investor-state dispute settlement) cases against India led it to review its stand on investment treaties.
Australian Financial Review | 2-Nov-2018
Businesses in the mining sector and beyond insist protection for Australian investors in Indonesia is required in a free trade deal.

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