Economist slams ISDS in RCEP

August 3, 2017: Economist Smitha Francis’ article in the Indian journal Business Today has strongly criticised India’s continuing participation in the RCEP negotiations because of the challenge to India’s sovereignty from the proposed Investor-State Disputes Settlement process.

The article also provides evidence that RCEP WTO-plus provisions on tariffs, investment, intellectual property and government procurement would mean that India would lose policy space for industry development and would not improve trade balances and levels of foreign investment.

Speculative investor profits from ISDS privatisation case

An international tribunal recently ordered Argentina to pay US $324 million to shareholders in the airline Aerolineas Argentina which was nationalised in 2010. At the time the company was in massive debt and considered worthless. But the shareholders were approached by litigation funder Burford Capital, which put up U$13 million to fund an ISDS claim for US$1.6 billion, under an investment agreement between Argentina and Spain. In return Burford Capital was to receive 40 per cent of any damages awarded. It has hit the jackpot – US$140 million, even though it was never a shareholder in the airline.

As of January 2017, of the 767 ISDS cases in the United Nations Conference on Trade and Development (UNCTAD) database, at least 59 were brought against Argentina. Argentina has paid out $980 million in ISDS awards since 2002, in addition to the millions it spent to defend itself in arbitration.