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 are currently suing Greece on account of the restructuring of the country’s sovereign debt, after having bought Greek government bonds at a knockdown value (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)

GAR | 31-Mar-2020
Emergency measures to prevent the spread of the coronavirus and protect the economy could lead to claims under bilateral investment treaties.
Mining Journal | 4-Mar-2020
Cerro Verde, a partnership between Freeport McMoran and Buenaventura, is to bring a case against Peru related to a taxation dispute at the ICSID under a US-Peru trade agreement.
Infobae | 2-Mar-2020
La minera Cerro Verde, controlada por la estadounidense Freeport-McMoRan, inició un procedimiento internacional de arbitraje contra Perú por una disputa sobre el pago de millonarias regalías.
Al Wihda | 22-Feb-2020
Une société de services financiers, basée aux États-Unis, a saisi le CIRDI au sujet d’un différend avec le Cameroun lié à une série de plateformes numériques.
Lexology | 21-Feb-2020
This is far from the end of the Micula story. Enforcement proceedings continue in the United States, France, Belgium, Luxembourg and Sweden, and there are questions before the CJEU.
Live Mint | 10-Feb-2020
Vodafone’s dispute relates to its $11 billion acquisition of a 67% stake in the mobile-phone business owned by Hutchison Whampoa. Cairn Energy is contesting a big tax bill that Indian government raised for a 2006 transaction.
Finance Uncovered | 27-Jan-2020
When Vietnam signalled it would claim the tax due, oil giant ConocoPhillips issued a pre-emptive legal strike using an arbitration process under the UK-Vietnam bilateral investment treaty.
Dhaka Tribune | 17-Jan-2020
Now that the February 23 deadline for the court directive to pay Tk2,000 crore audit dues to the telecom regulator looms, Telenor hopes that the ongoing audit dispute can be settled without resorting to international arbitration.
Developing Telecoms | 8-Jan-2020
The ICSID has issued an interim order preventing Nepal’s government from collecting capital gains tax on Axiata’s acquisition of Ncell.
Himalayan Times | 2-Jan-2020
The ICSID had issued an interim order directing the government not to take any steps to enforce its decision to collect the outstanding capital gains tax.

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