Financial stability

Investor-state dispute settlement (ISDS) is one of the greatest threats to the re-regulation of finance. ISDS empowers the very firms that financial regulation seeks to govern. These firms can bypass host country domestic courts and directly challenge domestic policies in a parallel system of justice.

Financial and non-financial firms have increasingly used ISDS provisions in trade agreements to challenge financial regulations and emergency financial stability measures.

Most well-known cases include:

• Investors vs. Argentina: When the country froze its utility rates and devaluated its currency in response to its 2001-2002 financial crisis, it was hit by over 40 lawsuits from investors, including Suez, Vivendi (France) and Anglian Water (UK). By January 2014, Argentina had been ordered to pay a total of US$980 million (various BITs invoked).

• Poštová Banka (Slovakia) & Istrokapital (Cyprus) vs. Greece: the Slovak bank and its Cypriot investor sued Greece on account of the restructuring of the country’s sovereign debt, after having bought Greek government bonds at a knockdown value. The investors lost the case. (Greece-Slovakia & Cyprus-Greece BITs invoked).

• Saluka (Netherlands) vs. Czech Republic: the Dutch investment corporation filed an ISDS dispute against the Czech government for not bailing out a private bank, in which the company had a stake, in the same way that the government bailed out banks in which the government had a major stake. The bailouts came in response to a widespread bank debt crisis. The investor was awarded US$236 million (Czech Republic-Netherlands BIT invoked).

(March 2020)

Business Korea | 24-Nov-2020
Lone Star Funds, which is in litigation against the South Korean government at the International Centre for Settlement of Investment Disputes, suggested US$870 million as a concession.
Business Today | 27-Oct-2020
Solicitor General Tushar Mehta has advised the government that the decision of an arbitration tribunal cannot contradict the law passed by a sovereign parliament.
Bar and Bench | 26-Oct-2020
The scope of consent to arbitration is an important issue that needs to be finally settled - not least because it could have multi-billion dollar implications for India in respect of other cases involving challenges to India’s taxation measures by foreign investors.
Le Temps | 23-Oct-2020
Le Pérou, le Mexique et l’Argentine sont menacés de plaintes par des multinationales pour des mesures adoptées pendant la crise. Le Chili aussi, où un référendum pour une nouvelle constitution a lieu le 25 octobre
Kapitalis | 23-Oct-2020
Le Cirdi avait émis, en juillet 2017, un verdict rendant l’Etat tunisien responsable. Une compensation pouvant dépasser plus d’un milliard de dollars est évoquée.
Reuters | 20-Oct-2020
OTP Bank has sued the Croatian government to recover about $34.60 million it lost during a mandatory conversion of Swiss franc-denominated loans to euro-based loans in 2015.
Africa Intelligence | 7-Oct-2020
Le premier ministre tunisien a accepté une médiation avec ABCI Investments, qui réclame un milliard de dollars devant le tribunal arbitral Cirdi. Mais il a presque aussitôt fait marche arrière.
Greek City Times | 5-Oct-2020
Greek investors who were affected by the Cyprus bail-in have sought legal resort and now seem to stand a fair chance to have their case tried and possibly recuperate a portion of their losses in a mass arbitration to be held before the ICSID.
Deccan Herald | 1-Oct-2020
The Indian government plans to contest the judgement on the Vodafone arbitration award in Hague.
Live Mint | 30-Sep-2020
Cairn is seeking full restitution for losses resulting from the expropriation of its investments in India in 2014.

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