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)

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Telecompaper | 15-Oct-2020
Orange Group has instituted legal proceedings against Iraq in an attempt to claw back more than USD 400 million in investments it alleges were expropriated by the country’s regulator.
IISD | 14-Oct-2020
Le tribunal a rejeté les recours de l’investisseur fondés sur l’expropriation, la violation de la norme de traitement juste et équitable, la violation de la norme de protection et sécurité intégrales et sur l’adoption de mesures arbitraires ou discriminatoires.
IISD | 14-Oct-2020
The tribunal rejected the investor’s claims of expropriation, breach of standard of FET, breach of standard of full protection and security, and breach of standard of non-arbitrary or discriminatory measures.
IISD | 14-Oct-2020
Le tribunal rejeta tous ces recours sur le fond, à l’exception d’un recours fondé sur le traitement national, qui, d’après le tribunal, ne relevait pas de sa compétence.
IISD | 14-Oct-2020
The tribunal dismissed all claims on merits, apart from the claim under national treatment, which was considered outside the tribunal’s jurisdiction.
The Africa Report | 7-Oct-2020
Algeria has won the final round of a battle that pitted it against Egyptian billionaire Naguib Sawiris’s holding company. We take a look back on this more than 10-year-long judicial saga.

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