Global companies are positioning themselves to use little-known rules in trade agreements to claim millions of dollars in compensation for restrictions imposed during the pandemic.
Governments’ emergency actions in the wake of COVID-19 could prompt a wave of arbitration lawsuits for billions of dollars by multinational corporations and investment lawyers.
The tribunal granted Turkmenistan’s application for security for costs, ordering the claimant to post US$3 million in security as a condition to the continuation of the arbitration.
The tribunal dismissed all claims against Turkmenistan brought by a Turkish investor, Lotus Holding Anonim Sirketi, under the Energy Charter Treaty and the Turkey-Turkmenistan bilateral investment treaty.
In 2019, arbitration finance has figured in at least 20 ICSID arbitrations. The ability to finance the pursuit of unpaid arbitration awards is perceived as the most significant benefit of arbitration finance to companies.
Peruvian officials have warned that a proposed emergency measure suspending the collection of toll fees on the country’s road network in response to the outbreak of covid-19 could result in multiple ICSID claims.
Governments are facing an imminent threat of investor–state arbitration as they take difficult decisions to support public health systems in a time of severe economic stress.