Services

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).

Photo: Aqua Mechanical / CC BY 2.0

(March 2020)

bilaterals.org & GRAIN | 3-Jun-2024
Saka chibvumirano ichi chinoreveiko kuzvizvarwa zevmuAfrica zvisinavo chouviri munguva dzekuoma kunyangwe dzekusanaya kwemvura nemaguta?
bilaterals.org & GRAIN | 3-Jun-2024
Hivyo basi, makubaliano haya ya kibiashara yana maana gani kwa Muafrika wa kawaida katika wakati wa majanga makubwa ya kimazingira, kiuchumi na chakula?
bilaterals.org & GRAIN | 3-Jun-2024
Xana ntwanano wa mabindzu lawa wu vula yini eka munhu ntsena wa le Afrika hi nkarhi lowu wa mintlhontlho leyikulu ya maxelo, ikhonomi na swakudya?
MercoPress | 27-May-2024
Chilean and Canadian partners of the Montecon consortium handling operations in the port of Montevideo have started an arbitration process for “damages and losses” worth up to US$ 600 million against the Uruguayan State.
Reuters | 30-Apr-2024
A free-trade agreement between Peru and China, which has been in effect since 2009, protects investments and has allowed increased trade between the countries.
CDR | 8-Apr-2024
The subject of the arbitration is given as ‘transportation fare collection services’, and invokes the 2001 bilateral investment treaty between Turkey/Türkiye and Yugoslavia as the basis for the claim.
Myanmar Now | 5-Apr-2024
A panel has been formed in Singapore to hear Telenor’s claims for compensation from Myanmar over money lost in its controversial Myanmar exit.
Actu Transport Logistique | 4-Mar-2024
Saisi par DP World en 2017, le Centre international pour le règlement des différends relatifs aux investissements a arbitré en faveur de l’opérateur portuaire émirati dans le cadre d’un contentieux qui l’oppose au port d’Anvers au sujet de la concession au quai Deurganck.
Gulf News | 13-Feb-2024
The Kuwaiti company Agility gets another opportunity to reclaim its legacy investment in an Iraqi telecom firm. The charges brought by Agility relate to more than $380 million in diverted funds.
Al Habtoor | 10-Jan-2024
Emirati conglomerate Al Habtoor Group served a notice of an Investment Treaty Dispute against the Lebanese Republic in connection with Lebanon’s breaches of the Bilateral Investment Treaty between the United Arab Emirates and Lebanon.