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.

As of end of 2014, 7% of all ICSID cases concerned the financial sector.

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).

(November 2015)

Indian Express | 19-Mar-2018
The Madras High Court was told that the Tamil Nadu government was holding “talks” with Japanese automaker Nissan, predictably for an amicable settlement.
Lexology | 16-Mar-2018
The English High Court has set aside parts of an award concerning claims brought by Griffin against Poland; Poland has reserved the right to argue the compatibility of the BIT with EU law.
Live Mint | 14-Mar-2018
Under international arbitration proceedings the final hearing of Cairn’s claim under the UK-India Bilateral Investment Treaty is scheduled for August 2018 in The Hague.
Webmanagercenter | 5-Mar-2018
L’Etat tunisien doit dire officiellement s’il choisit le règlement amiable ou la solution arbitrale par le CIRDI.
Energy Voice | 1-Mar-2018
The tribunal found that Novenergia’s investments were achieving a reasonable rate of return. However, the tribunal held that it was sufficient for the claim to succeed that Novenergia could show “quantifiable prejudice” compared with its position when it initially made its investment.
Lexology | 1-Mar-2018
On 26 December 2017, the Commission published its decision that attacked the ECT claims brought by investors against Spain (and other EU states).
Mondaq | 1-Mar-2018
One tribunal could interpret the effect of legislative provisions differently to another. So while Eiser opens up the prospect of more claims, Blusun may narrow the basis for claims.
Clyde & Co | 1-Mar-2018
With the global financial crisis, solar power incentives schemes became unbearably costly and Spain repealed those incentives. Consequently, many investors brought arbitration claims under the Energy Charter Treaty.
South Centre | 19-Feb-2018
Inconsistencies and even contradictions have emerged in dispute settlement decisions, sometimes at the expense of public good, sovereignty and financial and economic stability.
Business Day | 7-Feb-2018
International mining companies, which include Randgold, Glencore and China Molybdenum, have said they will challenge the new law through international arbitration, and are lobbying Kabila not to sign it.

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