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)

IIED | 22-Jun-2020
International investment law and investor dispute arbitration too often fail to notice the concerns of local actors. Governance of these international mechanisms needs to take a more holistic, development-based view of the issues.
Chile Mejor sin TLC | 19-Jun-2020
Quieren transformarse en víctimas y denunciar al Estado de Chile para no asumir los costos y que se les compense por supuestas pérdidas económicas, esto es posible por los TLCs y acuerdos de protección de inversiones que Chile ha suscrito
Observatoire des multinationales | 19-Jun-2020
Confronté à la perte d’un contrat dans la ville d’Osorno au Chili, le groupe Suez brandit la menace d’un recours aux tribunaux arbitraux.
CIAR Global | 16-Jun-2020
Suez amenaza con llevar el conflicto que mantiene con el gobierno chileno, a raíz de la apertura de un procedimiento para finalizar el contrato de concesión de su subsidiaria ESSAL en Osorno en agosto de 2019, a arbitraje de inversiones ante el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (CIADI). | 27-Mar-2020
The hard work of protecting water and land from the long-term harms associated with gold and silver mining takes place daily on the frontlines of tenacious struggles throughout Latin America and around the world.
Ministère de l’Economie et des Finances, France | 13-Mar-2020
Le CIRDI estime que le traité de protection des investissements Espagne-Pérou n’a pas été violé et demande à Lidercón d’indemniser l’État péruvien à hauteur de 4 MUSD.
Procuraduría General del Estado - Bolivia | 5-Mar-2020
En abril de 2019, Futuro de Bolivia AFP S.A notificó a Bolivia sobre la existencia de una controversia en el marco de los acuerdos de inversión que el Estado suscribió con la Confederación Suiza y con el Reino de Suecia.
Ciar Global | 28-Feb-2020
La compañía portuguesa Mota Engil ha notificado al Gobierno paraguayo dos demandas de arbitraje internacional relacionadas con el proyecto Metrobús.
Street Insider | 26-Feb-2020
JCDecaux SA, an outdoor advertising, invited the Czech Republic to engage in discussions, as the first step in arbitration proceedings.
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.

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